Financial System Risk Tolerance Capacity and Economic Growth: Evidence from a Cross-country Analysis

Zhang, Ling; Zhang, Sheng; Tao, Na

doi:10.1080/1226508x.2015.1124343

Cited by 15 publications

(15 citation statements)

References 32 publications

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“…Jeanne (2012) and Reinhart and Tashiro (2013) show that control of the capital account (i.e., net capital inflows) and the official exchange rate (i.e., reserve accumulation) allow the current 4 According to current price data in US$, the Chinese economy has grown from being 7% of the size of the US economy in 1990 to 56% in 2013 (IMF, 2014). 5 Related to this, the risk tolerance capacity of the financial system is also important in determining the effect of greater exchange rate flexibility on financial risks (Zhang et al, 2016). Liu et al (2016) show that the interaction of insurance and credit markets in Chinese regions is also important for financial risks and economic growth.…”

Section: China's Capital Account Policymentioning

confidence: 99%

Capital Account Liberalisation by China and the Effects on Global FDI and Trade

Verikios

2018

Global Economic Review

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We model the partial liberalisation of the capital account by China using a dynamic computable general equilibrium model of the world economy. Our results indicate that a reduced capital controls on FDI would lead to a significant increase in FDI capital in China and a significant reduction in the cost of capital in China relative to the rest of the world. Further, we observe an increase in capital stocks in most regions, which benefits most regions in terms of GDP and GNP. The Chinese economy grows by 3.3% driven by a significant fall in the rental price of capital that, in turn, lowers domestic costs, causes a real depreciation of the exchange rate and thus increased exports relative to other regions. We also observe an across-the-board increase in the saving rate driven by the rise in the price of consumption relative to investment (saving) in all regions. JEL codes:C68, E22, F21, F23, F38, F40.

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Section: China's Capital Account Policymentioning

confidence: 99%

Capital Account Liberalisation by China and the Effects on Global FDI and Trade

Verikios

2018

Global Economic Review

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“…For this reason, well-functioning financial entities, banks in particular, are usually considered to be a necessary condition to a country's economic growth. In competition with the stock market, banks are the most important participants in the financial System (Diallo, 2018;Belke et al, 2016;Cevik et al, 2016;Zhang et al, 2016). It is important to study the efficiency of the banks to ensure the positive results on economic growth, saving, investment and the most important macroeconomic indicators.…”

Section: Introductionmentioning

confidence: 99%

Corporate Governance Features and Efficiency: Evidence from the Saudi Arabian Banks

Bogari¹

2019

IJEF

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The aim of this article is to examine the effect of the Corporate Governance features as measured by the Independence of the board of directors, the board size and the ownership structure (private ownership/State ownership and foreign ownership) on the banking efficiency of Saudi Arabian banks. A data set of the twelve biggest banks for the period 2000 to 2017 is used. As for banking efficiency scores, the methodology is based on the Data Envelopment Analysis (DEA). It allows for Technical Efficiency, Pure Technical Efficiency and Scale Efficiency scores. The results of this study point to the significant role of The Independence (INDEP) variable supported by a positive and significant effect on efficiency in all regressions, indicating a positive relationship with the Technical Efficiency (TE) and the Pure Technical Efficiency (PTE). In the contrary, the independence of the board directors has a negative and significant effect on scale efficiency (SE). According to Board Size variable, results related to this later reveal a negative and a significant effect on technical efficiency (TE), Pure Technical Efficiency (PTE) and Scale Efficiency (SE) in all regressions. Finally, as for the ownership structure variables, results confirm that Private Ownership (OWEN-P) provides positive and significant effects on both the Technical and the Scale Efficiency. This effect seems to be turn to be negative and significant when it is correlated to the Pure Technical Efficiency. State Ownership (OWEN-S) impacts positively and significantly the Technical Efficiency, the Pure Technical Efficiency and Scale Efficiency separately. As for the Foreign Ownership (OWEN-F) variable, except for the Pure Technical Efficiency (PTE), we note a positive and significant effect on the Technical and Scale Efficiency. This study implies better Corporate Governance practices should be supported to improve the overall efficiency and its components. This includes in particular, the Board Size and the Ownership structure variables.

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“…The banking sector is considered as the most important link in the chain of financial intermediation, with the greatest weight in the financial sector. Some authors closely connect the bank sector efficiency with the risk management performance (Cvilikas and Jurkonyte-Dumbliauskiene 2016;Zhang et al 2016;Chen et al 2013). Zhang et al (2016) indicate that financial system risk tolerance capacity has a positive effect on long-term growth.…”

Section: Introductionmentioning

confidence: 99%

“…Some authors closely connect the bank sector efficiency with the risk management performance (Cvilikas and Jurkonyte-Dumbliauskiene 2016;Zhang et al 2016;Chen et al 2013). Zhang et al (2016) indicate that financial system risk tolerance capacity has a positive effect on long-term growth. The results of the previous research carried out in this field show that the banking risk management efficiency increases with the increased size of the financial institution, but this growth is decelerating (Cvilikas and Jurkonyte-Dumbliauskiene 2016).…”

Section: Introductionmentioning

confidence: 99%

“…Nowadays, well-functioning financial markets and banking institutions are usually considered to be a condition favourable to economic growth (Diallo 2018;Belke et al 2016;Cevik et al 2016;Zhang et al 2016;Destefanis et al 2014;Roghanian et al 2012;Ferreira 2012;Balkevicius 2012;Waheed and Younus 2010). Banks, being among the most important participants in the financial system, play an important role in it.…”

Section: Introductionmentioning

confidence: 99%

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Measuring the Efficiency in the Lithuanian Banking Sector: The DEA Application

Novickytė

Droždz

2018

IJFS

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Abstract:The purpose of this study is to examine the efficiency of the banks in Lithuania by employing the DEA method and evaluate bank performance in a low interest rate environment. The efficiency scores were calculated with a non-parametric frontier input-oriented DEA technique with the variable returns to scale (VRS) and the constant returns to scale (CRS) assumptions. Five alternative models with different input-output combinations were developed, based on production, profitability and intermediation dimensions. The main bank profitability measure-the return on assets (ROA) ratio-was employed to validate the results obtained using the DEA method. The Lithuanian bank's efficiency analysis based on the VRS assumption shows that better results are demonstrated by the local banks. The technical efficiency analysis based on the CRS assumption shows other results: the banks owned by the Nordic parent group and the branches have higher pure efficiency than local banks and have success at working at the right scale. Based on this, it stated that during the 2012-2016 period the larger Lithuanian banks (subsidiaries) applied a more appropriate business model than smaller (local) banks operating in Lithuania. Additionally, this research contributes to the scholarly literature in the field of determinants of bank business performance in concentrated markets dominated by foreign banks and, in particular, from one region.

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Financial System Risk Tolerance Capacity and Economic Growth: Evidence from a Cross-country Analysis

Cited by 15 publications

References 32 publications

Capital Account Liberalisation by China and the Effects on Global FDI and Trade

Capital Account Liberalisation by China and the Effects on Global FDI and Trade

Corporate Governance Features and Efficiency: Evidence from the Saudi Arabian Banks

Measuring the Efficiency in the Lithuanian Banking Sector: The DEA Application

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