WHAT DRIVES BANKING INDUSTRY COMPETITION IN DEVELOPING COUNTRIES?

PurposeThe Sustainable Development Goal (SDG) 16 outlines sustainability as associated with peace, good governance and justice. The perception of international tourists about security measures and risks is a key factor affecting destination choices, tourist flow and overall satisfaction. Thus, we investigate the impact of armed forces personnel, prices, economic stability, financial development and infrastructure on tourism.Design/methodology/approachThis research used data from 130 countries from 1995 to 2019, which were divided into four income groups. This study employs a two-step generalized method of moments (GMM) technique and a novel tourism index comprising five relevant indicators of tourism.FindingsA 1% increase in armed forces personnel expands tourism in all income groups – 0.369% High Income Countries (HICs), 0.348% Upper Middle Income Countries (UMICs), 0.247% Lower Middle Income Countries (LMICs) and 0.139% Low Income Countries (LICs). The size of the tourism-safety coefficient decreases from high to low-income groups. The impact of inflation is significantly negative in all panels, excluding LICs. The reduction in tourism was 0.033% in HICs, 0.049% in UMICs and 0.029% in LMICs for a 1% increase in prices. The increase in the global tourism index is more in LICs (0.055%), followed by LMICs (0.024%), UMICs (0.009%) and HICs (0.004%) for a 1% expansion in the gross domestic product (GDP)/capita growth. However, the magnitude of the growth-led tourism impact is greater in developing countries. A positive impact of foreign direct investment (FDI) inflow was found in all panels like 0.016% in HICs, 0.050% in UMICs and 0.119% in LMICs for a 1% increase in FDI inflow. The rise in the global tourism index is 0.097% (HICs), 0.124% (UMICs) and 0.310% (LMICs) for a 1% rise in the financial development index. The increase in the global tourism index is 0.487% (HICs), 0.420% (UMICs) and 0.136% (LICs) for a 1% rise in the infrastructure index.Research limitations/implicationsEmpirical analysis infers important policy implications such as (a) establishment of a peaceful environment via recruitment of security personnel, use of safe city cameras, modern technology and law enforcement; (b) provision of basic facilities to tourists like sanitation, drinking water, electricity, accommodation, quality food, fuel and communication network and (c) price stability through different tools of monetary and fiscal policy.Originality/valueFirst, it explains the effect of security personnel on a comprehensive index of tourism instead of a single variable of tourism. Second, it captures the importance of economic stability (i.e., economic growth, financial development and FDI inflow) in the tourism–peace nexus.

Credit risk, managerial behaviour and macroeconomic equilibrium within dual banking systems: Interest-free vs. interest-based banking industries

This study aimed at investigating the nexus between government debt and its determinants in the context of sustainable economic growth for 97 countries over the period from 2004 to 2018 by employing a panel data quantile regression and comparing it across a fixed-effects model and a generalized method of moments (GMM) model. The different touches of debt on economic growth were analysed. The quantile regression estimates revealed that government debt has various impacts on economic growth, relying on the degree of economic performance. Government debt negatively affects economic growth across all the quantiles. More interestingly, the quantile regression estimates indicated that in countries with a very low level of real GDP per capita growth, government debt has a stronger pernicious effect on economic growth compared to upper-middle and high-income countries. Hence, our results provided insightful information for policy makers in designing appropriate fiscal policies particularly for low- and lower- middle-income countries to mitigate the negative effect on economic growth, and it should be maintained at a low and reasonable level to promote sustainable economic growth. JEL Classification: E61, E62, E63, H63, O4, O40

Subject. This article examines the relationship between the derivatives market and economic growth in the BRICS countries, including Russia, focusing on the analysis of the impact of macroeconomic factors such as inflation, open trade and government spending on this market. Objectives. The article aims to analyze the relationship between derivatives markets and economic growth, as well as other macroeconomic factors considering the BRICS countries, including Russia, for 2020–2024, and develop recommendations for improving the efficiency of using derivative instruments to stimulate economic growth. Methods. For the study, I used the panel data analysis methods, including the generalized method of moments (GMM), Hausman specification test, and the Pedroni test. Results. The article finds a causal relationship between the derivatives market and economic growth, and that trade openness and government expenditures have a significant impact on the derivatives market. In high-income countries, there is a two-way correlation with economic growth, while in upper-middle-income countries, it is unidirectional. In relation to Russia, such mechanisms do not function stably, therefore the research in this field is limited. Conclusions. To improve the accuracy of research and assessment of the derivatives market’s impact on macroeconomic variables in Russia, it is required to develop forecast models that take into account the national economy specifics.

This study aims to analyze how institutional quality and financial stability influence foreign direct investment (FDI) in Asian countries, examining differences across country income groups. This study utilizes data from 39 Asian countries spanning the years 2013 to 2021. The analytical tool used is the Generalized Method of Moments (GMM), consisting of first-difference GMM and system GMM. Furthermore, this study uses principal component analysis (PCA) to calculate composite variables related to the institutional quality index. The results show that institutional quality and financial stability have a positive overall impact on FDI in Asian countries. However, the impact varies depending on the country's level of income. Institutional quality has a more significant impact in high-income countries, while in lower-middle-income countries, economic growth is the primary determinant of FDI. These findings emphasize the importance of improving governance and financial stability in attracting foreign investment. Governments, particularly in lower-middle-income countries, need to strengthen law enforcement, reduce corruption, maintain political stability, and create regulations that support an investment climate to make it more attractive to foreign investors

PurposeThe purpose of this paper is to investigate the foreign direct investments (FDI)-growth nexus and the impact of natural resource abundance in the host country on the FDI-growth nexus.Design/methodology/approachFor a large data set of 104 countries for the period 1996-2015, Arellano and Bond’s GMM estimation method is applied to investigate the impact of FDI inflow on economic growth and the role of the natural resource sector on the FDI-growth relationship.FindingsThe paper found a positive and significant effect of FDI inflows on economic growth of the host country. However, the impact of FDI inflows on economic growth changes with the changes in the size of the natural resource sector. The estimated positive impact of FDI inflows on economic growth declines with the expansion in the size of natural resources. Beyond a certain limit, a further expansion in the size of natural resource sector will lead to a negative effect of FDI on economic growth.Research limitations/implicationsThe paper found a positive and significant impact of FDI inflows on economic growth of the host country. However, the impact of FDI inflows on economic growth changes with the changes in the size of the natural resource sector. The estimated positive impact of FDI inflows on economic growth declines with the expansion in the size of the natural resources. Beyond a certain limit, a further expansion in the size of the natural resource sector will lead to a negative effect of FDI on economic growth. The same analysis is repeated for groups of countries divided into different income groups. FDI inflows are found to have significant growth enhancing role in all three groups of countries. However, FDI inflows-induced growth was found to be more pronounced in the middle- and low-income countries compared to high-income countries. Further, FDI-induced economic growth is slowed down in low-income and middle-income countries by the increase in size of the natural resource sector. While in high-income countries, the size of the natural resource sector has no significant role on the FDI-growth nexus.Practical implicationsWhile countries use their natural resource sector as an instrument to attract FDI into the countries, low- and middle-income countries face the dilemma of experiencing the resource curse in the form of watered down FDI-induced growth. Therefore, low- and middle-income countries need to try at the same time to attract FDI into the non-resources sector to keep the relative size of the natural resource sector low as to avoid hampering the FDI-induced economic growth. High-income countries, on the other hand, do not experience the FDI-induced growth hampering impact of the natural resource sector. Therefore, high-income countries should attract FDI into the countries regardless of the sector attracting the foreign investments.Originality/valueThe paper is part of the author’s PhD research and is an original contribution.

Dynamics of profitability have important implications for the market structure and competition in the banking industry. There is a well-established literature on this issue comprising non-banking industries, however research on banking is comparatively small. Moreover, there is a lack of research comprising the dynamics of profitability in the developing banking industries. Hence, this paper focuses on the Turkish banking industry to analyze both the dynamics and determinants of profitability in the Turkish banking industry over the period 2006:4-2012:2. First, two competing hypotheses, persistence of profit and competitive environment hypotheses are tested using a dynamic panel data model. Variables representing bank size, credit risk, managerial efficiency, financial soundness, market competition, monetary policy and economic freedom are also incorporated in this model to investigate the determinants of bank profitability. System Generalized Method of Moments (SGMM) is used to estimate this dynamic model. The evidence from the findings indicate the validity of the persistence of profit hypothesis. Moreover, bank profitability has been mostly affected by the capital ratio which could have further implications through the Basel III period. The results also indicate positive impact of improvement in financial soundness of banks on profitability.

Purpose: High growth is expected to overcome various economic problems. Therefore, various efforts have been made by the government in synergy with other related institutions as a form of optimization of economic growth. That is why economic growth is an important indicator for the development of a country. This study aims to analyze economic growth and the factors that influence economic growth in Asia during the 2000-2019 period using dynamic panels.
 Design/methodology/approach: The independent variables in this study are the human development index (HDI), changes in exports (PEXPORT) and government spending (EXPENGOV) using the GMM system method as a model for modeling economic growth. The GMM model system is the best model with Sargan testing. The data used in this study are in the scope of Asia with the number of observational studies that are 11 (eleven) with a total panel data turned on by the state observation system 209. 
 Findings: The results show that the human development index (HDI) has a negative and significant effect on economic growth in Asia 2000-2019 period. Meanwhile, the export change variable (PEXPORT) and government expenditure (EXPENGOV) had a positive and significant effect on economic growth in Asia for the 2000-2019 period.
 Research limitations/implications: Furthermore, economic growth also strengthened the previous year's economic growth at a significance level of 1%. This shows that economic growth is economic growth, economy, economy, and state government spending.
 Originality/value: This paper is an original
 Paper type: Research paper

In the context globalization, this study analyzes the influence of digitalization on economic growth in 120 countries from 2000 to 2020 and we use the generalized methods of moments (GMM) estimators. The empirical findings showed that digitalization has a negative impact on economic growth, while the quadratic term of digitalization positively influence the economic growth. Therefore, the existence of a U-shaped relationship between digitalization and economic growth. Initially, digitalization thwarts economic growth. Once it reaches a certain level, digitalization will boost economic growth. In addition, the finding also shows that the negative effect of globalization on economic growth. However, the interaction effect of digitalization and globalization, that is digitalization mitigates the negative effect of globalization on economic growth, implies that digitalization moderates the detrimental effect of globalization on economic growth. These results are particularly interesting as the promote globalization through digitalization has created more advanced technologies to accelerate economic development in the countries. The policy implications of this study suggest that approach the global level and realizing opportunities for the industry to leverage digitalization, integrate digitalization into the workplace and provide better knowledge of digital infrastructure will improve economic performance in the digital economy era. Furthermore, the findings provide a basis for policymakers to better formulate policies to achieve the Sustainable Development Goals (SDGs).

Cloud computing is one among the emerging platforms in business, IT enterprise and mobile computing applications. Resources like Software, CPU, Memory and I/O devices etc. are utilized and charged as per the usage, instead of buying it. A Proper and efficient resource allocation in this dynamic cloud environment becomes the challenging task due to drastic increment in cloud usage. Various promising technologies have been developed to improve the efficiency of resource allocation process. But still there is some incompetency in terms of task scheduling and power consumption, when the system gets overloaded. So an energy efficient task scheduling algorithm is required to improve the efficiency of resource allocation process. In this paper an improved task scheduling and an optimal power minimization approach is proposed for efficient dynamic resource allocation process. Using prediction mechanism and dynamic resource table updating algorithm, efficiency of resource allocation in terms of task completion and response time is achieved. This framework brings an efficient result in terms of power reduction since it reduces the power consumption in data centers. The proposed approach gives accurate values for updating resource table. An efficient resource allocation is achieved by an improved task scheduling technique and reduced power consumption approach. The Simulation result gives 8% better results when comparing to other existing methods.

The relationship between population growth and economic growth appeared differently in different countries. It became a debated issue for one country group from another where each country group classified by their income level. This article draws on data of forty countries that is twenty seven years long with each income group consists of ten countries. For panel data analysis the study introduces some econometric tests such as Unit root test, Country Pedroni (2004) cointegration test, Phillips-Peron cross section test, Johansen normalized cointegrating tests and Vector error correction test. The outcome states that in low income countries both variables are in equilibrium and reveals positive relationship. By one percent rise in the growth of population, in the long run, for high income and upper middle income countries the growth rate of GDP will drop by 1.19 percent and 0.044 percent respectively. Meanwhile, significant positive results come from lower middle income and low income countries which were the growth of GDP upswing by 0.44 percent and 0.42 percent respectively by the one percent increase in the growth of population. In high income countries, growth of GDP falls due to rise of the growth of population but the growth of population needs 1.47 year to reach to the equilibrium.

This study explores sequential effects between alliances and member states’ capability growth. It argues that alliances have the effect of increasing member states’ economic and military capability growth. Alliances help member states reallocate their domestic resources more efficiently by providing security support. The improved efficiency of resource allocation has a positive effect on the economic growth of member states. In addition, alliances also increase international trade between member states, which has a positive effect on member states’ economic growth. Hence, alliances have a positive impact on the economic growth of member states through improving domestic resource reallocation and increasing trade. This economic growth, in turn, encourages member states to increase military spending without harming the efficiency of resource allocation in the long term. Alliances thus have direct and indirect positive effects on member states’ economic growth and increases in military spending. Empirical tests provide supportive evidence for this claim.

This study explores sequential effects between alliances and member states’ capability growth. It argues that alliances have the effect of increasing member states’ economic and military capability growth. Alliances help member states reallocate their domestic resources more efficiently by providing security support. The improved efficiency of resource allocation has a positive effect on the economic growth of member states. In addition, alliances also increase international trade between member states, which has a positive effect on member states’ economic growth. Hence, alliances have a positive impact on the economic growth of member states through improving domestic resource reallocation and increasing trade. This economic growth, in turn, encourages member states to increase military spending without harming the efficiency of resource allocation in the long term. Alliances thus have direct and indirect positive effects on member states’ economic growth and increases in military spending. Empirical tests provide supportive evidence for this claim.

Article history: Received October 28, 2012 Received in revised format 18 February 2013 Accepted 19 February 2013 Available online February 27 2013 An integrated risk management is a process, which enables banks to measure and manage all risks, simultaneously. The recent turbulent chaos on banking industry has increase the relative importance of risk management, more than before. This paper investigates the relationship between credit risk and liquidity risk among Iranian banks. The proposed study includes all private and governmental banks as population over the period 2005-2012. The results Pearson correlation has disclosed a positive and meaningful relationship between credit and liquidity risks. Bank size also impacts on two mentioned risk factors but we there seems to be no relationship between financial chaos and type of ownership with risk factors. © 2013 Growing Science Ltd. All rights reserved.

Objective: this research investiaged the iranian banking sector and its interaction with fintech and the effect of fintech on liquidity, credit, and market risk. Method: this research is applied research in terms of classification by purpose and descriptive-analytical in terms of execution method. The study examined the relationship between the fintech index and credit risk, liquidity, and market in banks admitted to the Tehran Stock Exchange in the 11-year period between 2010 and 2020. Findings: according to the proposed hypothesis, fintechs have a significant effect on bank liquidity risks, and fintech Index has a positive impact on market risk. Also fintech research has a significant effect on bank credit risks. Conclusion: As a result, the research findings provide a valuable insights into fintech in the banking industry and its impact on the risk dimension. While it is aligned with previous research, there are also significant contradictions that favor further research. The findings highlight the dynamic nature of the relationship between fintech acceptance and risk management and emphasize the importance of ongoing research in this field to inform strategies to enhance the stability and performance of banking institutions