The Role of Corruption, Transparency, and Regulations on Asian Banks’ Performance: An Empirical Analysis

Nasreen, Samia; Gulzar, Mehwish; Afzal, Muhammad; Farooq, Muhammad Umar

doi:10.1007/s13132-023-01153-8

Cited by 1 publication

(1 citation statement)

References 86 publications

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“…Furthermore, ref. [29] showed that a country's decreasing governance responsibility (e.g., rising corruption) negatively affects banks' profitability and stability.…”

Section: Individual Sovereign Esg Performance 231 Sovereign Governanc...mentioning

confidence: 99%

Examining the Quadratic Impact of Sovereign Environmental, Social, and Governance Practices on Firms’ Profitability: New Insights from the Financial Industry in Gulf Cooperation Council Countries

Athari,

Saliba,

Abboud

et al. 2024

Sustainability

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The present study particularly aims to probe the quadratic effects of the combined and individual sovereign environmental, social, and governance (ESG) activities on the banking sector’s profitability. Furthermore, we attempt to shed light on the channels through which sovereign ESG practices impact the banking sector’s profitability. Unlike the vast majority of prior works that investigated the sustainability practice–firms’ profitability nexus from the firm level, this study originally probes this relationship from the country level by considering the sovereign ESG sustainability activities. To attain this purpose, we focus on banking sectors operating in Gulf Cooperation Council (GCC) economies and employ the panel-fixed effects and panel-corrected standard errors approaches between 2000 and 2022. Remarkably, the findings uncover that the nexus between combined sovereign ESG and profitability is a non-linear and inversed U-shape (concave), implying that investing in sovereign ESG enhances the banking sector’s profitability. However, after exceeding an inflection point (0.349), its effect turns out to be negative and it develops into activities of destruction. Furthermore, the findings underscore that the association between individual sovereign environmental responsibility and the banking sector’s profitability is a non-linear U-shape (convex), while an inversed U-shaped (concave) nexus is uncovered for the individual sovereign social and governance activities. Moreover, the significant non-linear inverted U-shape for the combined sovereign ESG–stability nexus corroborates that financial stability is a channel through which sovereign ESG significantly impacts profitability.

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“…Furthermore, ref. [29] showed that a country's decreasing governance responsibility (e.g., rising corruption) negatively affects banks' profitability and stability.…”

Section: Individual Sovereign Esg Performance 231 Sovereign Governanc...mentioning

confidence: 99%

Examining the Quadratic Impact of Sovereign Environmental, Social, and Governance Practices on Firms’ Profitability: New Insights from the Financial Industry in Gulf Cooperation Council Countries

Athari,

Saliba,

Abboud

et al. 2024

Sustainability

View full text Add to dashboard Cite

show abstract

The Role of Corruption, Transparency, and Regulations on Asian Banks’ Performance: An Empirical Analysis

Cited by 1 publication

References 86 publications

Examining the Quadratic Impact of Sovereign Environmental, Social, and Governance Practices on Firms’ Profitability: New Insights from the Financial Industry in Gulf Cooperation Council Countries

Examining the Quadratic Impact of Sovereign Environmental, Social, and Governance Practices on Firms’ Profitability: New Insights from the Financial Industry in Gulf Cooperation Council Countries

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