This paper benefits from various risk-and non-risk-based regulatory capital ratios and examines their impact on bank risk and performance in the Middle East and North Africa (MENA) region. Our findings suggest that compliance with Basel capital requirements enhances bank protection against risk, and improves efficiency and profitability. The impact of capital requirements on bank performance is more pronounced for too-big-to-fail banks, banks in periods of crises and banks in countries with good governance. The results are also robust when controlling for the Arab Spring transition period. Finally, endogeneity checks, alternative risk and performance measures, a principal component analysis and other estimation techniques confirm findings.

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The econometric relationship between external public debt, exports and economic growth in Lebanon has been rarely examined. This study empirically investigates the relationship between economic growth, exports and external debt of Lebanon through an econometric analysis over the period 1970-2010 with the inclusion of a fourth macroeconomic variable that is the exchange rate. The exports were introduced in the model to test the export-led growth hypothesis for Lebanon. We explore this relationship using the vector error correction models (VECM) and we employ Granger causality technique in order to investigate the presence of causality among these variables. The results show that both short run and long run relationships exist among these variables. Moreover, the finding suggests, i) bidirectional Granger causality between GDP and external debt servicing, ii) unidirectional Granger causality that runs from external debt to exports, iii) unidirectional causality running from exports to economic growth, and iv) unidirectional causality running from exchange rate to economic growth.

The objective of this study is to determine whether a relationship exists between financial development and economic growth in Lebanon. The investigation of this link is carried out within a VECM framework over the period 1972-2012. This study uses the VECM-based Granger-causality test to provide empirical evidence of the causal relationship between financial development and economic growth. The evidence suggests that the credit market is still underdeveloped in this country and its contribution to economic growth is limited owing to a lack of financial depth. Therefore, the focus is on the banking sector to measure the financial development. The findings indicate the presence of a positive relationship between financial development and economic growth in the short run that is accompanied by bidirectional Granger causality between these variables. However this relationship is found to be insignificant in the long run. Moreover, the results indicate that the efficiency of the banking sector has an important role in the Lebanese economic growth.

While recent surveys have taken a special interest in culture to explain the failure of existing regulation, empirical evidence on the role of culture in influencing the regulation-performance link is still largely unexplored. In this paper, we ask the following: Should regulators and policy makers make room for culture as an effective tool for a successful bank regulatory environment? We identify three proxies for cultural values derived from Hofstede (1980, 2001) and the World Values Survey and investigate to what extent individualism, masculinity, and trust can enhance or impede the regulation-performance link for conventional and Islamic banks. Analyzing a panel of 729 banks operating in 33 countries from 1999 to 2013, our paper provides empirical evidence that cultural values enhance the regulationperformance link for the two bank types. Our results have important policy implications: our paper represents a first initiative and provides evidence that culture has merits and can be used as an additional tool to implement regulatory guidelines in a successful way.