Trustworthiness, good governance and risk taking in MENA countries

Albaity, Mohamed; Noman, Abu Hanifa Md.; Mallek, Ray Saadaoui

doi:10.1016/j.bir.2020.12.002

Cited by 21 publications

(9 citation statements)

References 109 publications

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“…Furthermore, the existing literature suggests that good governance has augmented the economic performance in terms of aggregated level and firms' level, indicating that a higher return is ensured from investment with a lower degree of risk (Billett et al, 2011;Shank et al, 2013;Qamruzzaman, 2022b;2022c;Li and Qamruzzaman, 2022;Zhuo and Qamruzzaman, 2022). The study of Albaity et al (2021), for example, disclosed that risk-assuming behavior had been indulged by the governmental quality that is good governance substantially reduces investment risk exposure in MENA countries. Corporate governance structures and processes become critical components in this context for maximizing returns on investment and minimizing risk.…”

Section: Discussion Of the Study Findingsmentioning

confidence: 99%

Do environmental quality, financial inclusion, and good governance ensure the FDI sustainably in Belt and Road countries? Evidence from an application of CS-ARDL and NARDL

Jinru

Qamruzzaman

Hangyu

et al. 2022

Front. Environ. Sci.

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Domestic capital adequacy and sustainable economic growth are heavily reliant on technological advancement, managerial know-how, and money supply in the economy. In this context, FDI has emerged and is placed at an apex position due to its unprecedented impact on achieving sustainability across the world. The motivation of this study is to scale the effects of good governance, financial inclusion, and environmental quality on inflows of FDI in BRI nations for the period from 1990 to 2020. Several panel econometrical tools have been applied, for example, CDS, CADF, CIPS, CS-ARDL, and NARDL, to investigate the association and explanatory variables elasticity on inflows of FDI in BRI nations. CDS results revealed that research units share common dynamism and second-generation panel unit root test-documented variables are stationary after the first difference. The results of the panel co-integration with an error-correction term confirmed the empirical equation’s long-run association. According to the CS-ARDL assessment, positive and statistically significant impacts have been documented, from financial inclusion, good governance, and environmental quality to FDI inflows. Study findings suggest that governmental effectiveness, easy access to financial services and benefits, and a less-regulated environmental concern economy motivate capital transfer decisions. The asymmetric assessment documented a long-run asymmetric association between FI, GG, EQ, and FDI. Referring to asymmetric shock elasticity, the study disclosed a positive and statistically significant relation to FDI inflows, especially in the long run. The directional causality test documented bidirectional causality running between FI, EQ, GG, and FDI [FI←→FDI; GG←→FDI; and EQ←→FDI] in the short-run.

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Section: Discussion Of the Study Findingsmentioning

confidence: 99%

Do environmental quality, financial inclusion, and good governance ensure the FDI sustainably in Belt and Road countries? Evidence from an application of CS-ARDL and NARDL

Jinru

Qamruzzaman

Hangyu

et al. 2022

Front. Environ. Sci.

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“…In addition, the MENA region has been ranked second, after the East Asia region, in terms of banking industry development (Masoud and Albaity 2021;Bourgain et al 2012;Anzoategui et al 2010). Lastly, the majority of MENA countries have been classified as oil-rich economies representing 65% of the world's oil reserve, which might suggest why the impact of the COVID-19 pandemic might be different than for other countries (Albaity et al 2020;Mertzanis et al 2019;Mohamed et al 2015).…”

Section: Introductionmentioning

confidence: 99%

Bank Stock Return Reactions to the COVID-19 Pandemic: The Role of Investor Sentiment in MENA Countries

Albaity

Mallek

Mustafa

2022

Risks

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In this study, we investigated the impact of COVID-19 investor sentiment (CS), number of cases (CC), and deaths (CD) on bank stock returns in 16 MENA countries. In addition, we examined the interaction effects of CS with CC and CD on bank stock returns. Lastly, we looked at whether Islamic banks outperformed conventional banks during the pandemic. Based on monthly data from the Middle East and North Africa (MENA) countries from February 2020 to July 2021, we used the clustered standard error fixed effect estimation on Islamic and conventional bank stock market returns. The results suggest that CC and CD have negative impacts on bank stock market returns while CS has no effect, except for the lagged value. The interaction effect of CS with CC and CD on stock returns proved to strengthen the link in the current month and weaken the link in the previous month.

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“…QoG i , t denotes the six quality of governance indicators (Voice and Accountability [VA]; Political Stability [PS]; Government Effectiveness [GE]; Regulatory Quality [RQ]; Control of Corruption [CC; and Rule of Law [RL])used individually and then aggregated in this paper. The aggregate index QoG as the mean value of the six indices was calculated, following Albaity et al (2021a). Finally, IS i,j,t , is a dummy variable equal to 0 if the bank is a conventional bank and 1 for an Islamic bank.…”

Section: Methodology and Empirical Modelsmentioning

confidence: 99%

“…Kanas et al (2019) studied the role of intervention quality on financial stability and found a non-linear relationship at different levels of competition. Recently, Albaity et al (2021a) investigated the role of QoG on risk-taking behaviour and found that it increased risk in MENA banks. Others, however, have suggested that substantial supervisory oversight can cause moral hazard problems leading to heightened risk (Akins et al , 2016).…”

Section: Methodology and Empirical Modelsmentioning

confidence: 99%

Do trust and country governance affect credit growth in GCC countries?

Albaity

Mallek

Al‐Tamimi

et al. 2022

IMEFM

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Purpose This study aims to investigate whether quality of governance (QoG), trustworthiness and confidence impacted bank credit growth in Gulf Cooperation Council (GCC). In addition, it examined whether credit growth differed between Islamic and conventional banks in GCC countries. Design/methodology/approach Using data from 104 (56 conventional banks and 48 Islamic banks) banks located in GCC countries from 2012 to 2019, the two-step system generalized method of moments estimator was used to analyse the data. Findings Evidence was found of the influence of trust in institutions in boosting credit growth. The QoG generally expanded credit growth which instilled confidence in the economy and the banking sector. Credit growth was more pronounced for Islamic banks. This paper has contributed to the literature evaluating the determinants of credit growth in GCC. Originality/value This paper has been one of the few studies exploring the effect of trustworthiness and confidence (informal institutions) and macro governance (formal institutions) in GCC. GCC is different from other regions, as it is oil-dependent and shares similar legal, social and cultural aspects. This suggested that these might yield different results than expected.

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Trustworthiness, good governance and risk taking in MENA countries

Cited by 21 publications

References 109 publications

Do environmental quality, financial inclusion, and good governance ensure the FDI sustainably in Belt and Road countries? Evidence from an application of CS-ARDL and NARDL

Do environmental quality, financial inclusion, and good governance ensure the FDI sustainably in Belt and Road countries? Evidence from an application of CS-ARDL and NARDL

Bank Stock Return Reactions to the COVID-19 Pandemic: The Role of Investor Sentiment in MENA Countries

Do trust and country governance affect credit growth in GCC countries?

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