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Literature on the effects of socio‐political factors and the quality of political‐economic institutions on banking performance is scarce and mixed. To contribute to this literature, this study analyzes whether democracy and economic freedom affect the banking sector in European Union member countries. We provide empirical evidence of the influence of democracy and economic freedom on banking performance using a sample of 27 countries from 2001 to 2020, and accounting‐based return on assets (ROA) and return on equity (ROE) as performance measures. A dynamic model (system GMM) was used to address issues such as heteroscedasticity, serial correlation, and endogeneity. These findings indicate that democracy is positively associated with banking performance, whereas economic freedom negatively affects it in the sample countries. Additionally, this study adds to the growing literature on the relationship between control variables (macroeconomic determinants, bank‐specific factors, or a country's legislative regime) and banking performance. This study is practically valuable for managers, investors, stakeholders, policymakers, and academicians. [ABSTRACT FROM AUTHOR]

This study is rooted in the necessity to gain a thorough comprehension of organizational capabilities essential for embedding dynamic capabilities (DC) according to the technology‐organization‐environment (TOE) within the landscape of digital transformation (DT). We have observed a surge in recent research focused on DC in the context of DT, however, there is still ample room for exploration to address the complex barriers, drivers, and routines associated with each DC capability, all crucial for achieving successful DT. Our approach employs a qualitative study involving interviews with 18 banking professionals based in Indonesia. Our study's findings have identified six DCs based on the TOE framework that can be effectively employed to facilitate successful DT including the technology capability for the technology dimension, strategy, organizational, and innovation capability for the environment perspective, and environment factor consisting of ecosystem and governance‐risk management‐ compliance (GRC). Delving into these six capabilities, we have explored the barriers, drivers, and routines linked with each. Additionally, our study has facilitated the alignment of DT benefits with expected performance outcomes, thus empowering companies to prioritize DT initiatives in alignment with their performance objectives. From a theoretical standpoint, this research contributes by offering an extensive comprehension of the factors and routines intrinsic to DC based on the TOE framework within the context of DT. From a managerial perspective, it provides guidance to companies as they navigate the realm of DT through a comprehensive lens focused on the DC. [ABSTRACT FROM AUTHOR]

Digital transformation (DT) is a crucial strategic initiative for organizations to rectify output, adapt, and keep up with the digital economy. Dynamic capability (DC) is a widely‐used model for managing opportunities and risks from digital transformation. However, there is a lack of research examining the measurement and relationship between the primary activities of dynamic capability and DT, especially within the banking sector. Acknowledging the importance of DC, we propose this research which emphasizes the significance of sensing, seizing, and transforming aptitudes in promoting DT and improving banking performance. Within this study, we specifically investigate the role of governance, risk management, and compliance (GRC) factors. By utilizing structured equation modeling (SEM) and analyzing data from 322 respondents representing 45 banks in Indonesia, our empirical findings demonstrate that all three DC activities have a significant influence on DT, in which sensing activity has the biggest impact, followed by transforming and seizing. Furthermore, we reveal that DT acts as an intermediary between DC activities and banking performance, and GRC factors further enhance the impact of DT on organizational performance. Our research offers valuable insights to assist banks in prioritizing essential capabilities, including GRC, to enhance overall performance through dynamic digital transformation capabilities. [ABSTRACT FROM AUTHOR]

This study aims to pioneer in investigating the role of two major components of governance (i.e., corruption and political stability) in banking performance in the case of 21 emerging countries. Using time‐series data from 2010 to 2017 with annual frequency, this study uses a comprehensive measure that assesses banking performance called capital‐adequacy, asset‐quality, management‐efficiency, earnings and liquidity (CAMEL). However, for empirical analysis, this study utilises the dynamic panel data modelling technique, that is, System‐GMM and Pooled‐OLS and margins plot, for robust and policy‐oriented outcomes. We find that higher corruption and political instability negatively affect asset quality, earnings, and management efficiency and positively affect the banks' liquidity. More interestingly, higher corruption is more harmful than lower political stability. It negatively affects the banking performance directly and intensifies the impact of the lower stability on banking performance. This study has implications for regulators, bankers, and investors. [ABSTRACT FROM AUTHOR]

This paper aims to conduct a comparison of the efficiency of Islamic banks (IBs) versus conventional banks (CBs) based on meta‐analysis. Empirical studies in this field, mainly in MENA or Gulf Cooperation Country regions, usually provide mixed conclusions and we do not know the reasons of this discrepancy in the results. We conduct a meta‐regression analysis (MRA) that is based on 35 studies and includes 484 estimates of efficiency scores by bank type among other characteristics. We employ Bayesian averaging technique to identify the main covariates explaining the heterogeneity of the results. Our findings suggest, first, no evidence of the superiority of one banking system over the other, neither in terms of technical, cost or profit efficiency. Second, we identify several important bank's and sample characteristics that have also important impacts on the provided efficiency estimates. Third, when we compare the studies into those who conduct a deep statistical comparison of the efficiency distributions by bank type and those who omit to do it, we find that CBs outperform IBs, suggesting a potential publication bias. Finally, with respect to the inefficiency, MRA suggests that the regions banking systems suffer from the inability of banks to maximize profit, so they are much less profitable than it should be. There are also some managerial deficiencies linked to cost minimization, rendering the region's banking system costly, compared to some deficiencies in the overall banking production process itself (technical efficiency). [ABSTRACT FROM AUTHOR]

Ordinal regression analysis is proposed as a means for evaluating banking performance over multiple attributes in the presence of non-monotonic preferences. First, a multivariate statistical analysis is applied to measure the banking performance on the basis of financial ratios that derive from the study of financial statements of a sample of Greek banks for the period 1989-1992. Then, art additive utility model is assessed to obtain the final ranking of a representative sample of Greek banks. [ABSTRACT FROM AUTHOR]