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The aim of this article is to investigate the dynamic relationship between corruption, investment, and economic growth in Tunisia within a multivariate framework. In the empirical section, we use a...

The purpose of this paper is to study the effect of trade openness on the environmental quality by taking into consideration the role of institutions. We used a panel of 143 countries observed duri...

This article analyzes whether trade openness and foreign direct investment are driving factors for human development in the Middle East and North African region. We used data of 13 MENA countries o...

The aim of this paper is to define the optimal level of liquidity and to investigate its impact on the overall bank profitability. To achieve these goals, we use a large sample of 127 countries over the period 2005-2015. The whole sample is divided in two sub-samples. The first covers 46 high income countries and the second includes 81 low and middle income countries. We performed the Panel Smooth Transition Regression (PSTR) as econometric approach. Empirical results show that the optimal level of liquidity that affects bank profitability is 24.18% for high income countries and 40.45% for low and middle income countries. Findings also indicate that credit risk decreases significantly the level of profitability of the two groups of countries.

The main purpose of this study is to investigate the interaction between financial liberalization, banking crisis and economic growth by taking into consideration the role of institutions. Our sample covers 15 Middle East and North African observed during the period 2000–2013. Using a dynamic panel data framework, our findings reveal that financial liberalization contributed to improve economic growth in MENA countries while banking crisis had harmful effects on MENA economies. The quality of institutions did not have a clear impact except for rule and order and democratic institution. These results have important policy implications. To grow output and avoid the occurrence of banking crisis, MENA countries should reinforce their institutions quality by adopting good practice of governance and regulation.

The main purpose of this paper is to investigate the relationship between financial sector development and economic growth taking into consideration the role of institutions quality. Our sample is on a group of 143 countries observed during the period of 2006-2013. The sample is dived into 100 developing and 43 developed countries. Using structural GMM the paper shows that financial sector plays a crucial role in economic development and growth for the whole sample as well as for developed and developing countries. However, the results show that unlike developing countries, developed countries enjoyed the presence of proper institutions in their countries which in turn have contributed further to the development of their financial sector.

Resume Cette etude vise a tester empiriquement la relation entre la diversification des revenus et le pouvoir de marche ainsi que la relation entre le pouvoir de marche, la diversification des revenus et la stabilite financiere bancaire. En se basant sur une base de donnees de 10 banques commerciales Tunisiennes sur la periode allant de 1990 a 2013, on demontre qu'il existe une relation significative et positive entre le pouvoir de marche et la stabilite financiere. Ceci vient renforcer les resultats des recherches anterieures portant sur differents systemes bancaires dans plusieurs pays.

We investigate the impact of foreign equity and debt on the occurrence of banking crises in 61 lower-income and middle-income economies during the 1984-2010 period. We also focus on the effects of domestic institutions on banking crises and whether they mitigate or exacerbate the impact of the external liabilities. We find that FDI liabilities lower the probability of a crisis, while debt liabilities increase their incidence. However, institutions that lower financial or political risk partially offset the impact of debt liabilities, as does government stability. A decrease in investment risk directly reduces the incidence of banking crises.

Background The objective of this paper is threefold. First, we test the most important factors that determine the level of non-interest income for Tunisian banks. Second, we study the impact of non-interest income on banks’ profitability measured by both return on assets (ROA) and return on equity (ROE). Finally, we investigate the relationship between non-interest income and the level of risk taking. Methods To achieve this goal, we used annual data of 20 Tunisian banks during the period 2005-2012. In the empirical section we performed a Dynamic Panel Data model. Results Empirical results indicate that the main determinants of non-interest income are: relative performance (RROA and RROE), bank size, loan specialization and new e-payments channels, automatic teller machine (ATM) and credit cards). We also find that diversification increases bank performance for both ROA and ROE measures. Eventually, non-interest income appears to be negatively and significantly correlated with the effect on the level of risk. Conclusions Tunisian banks are invited to more diversify their activities and do not focus only on the traditional activity. The noninterest income seems to be associated with a higher level of profitability and a lower risk.

Purpose The purpose of this paper is to analyze the effects of corruption on investment and growth in 15 Middle East and North African (MENA) countries during the period 1985-2013. The authors used the International Country Risk Guide (ICRG) corruption index and conducted a panel cointegration analysis and Granger causality procedure to detect the dynamic relationships between the variables. Results indicate that corruption is a serious hurdle to economic growth in MENA countries since it affects investment activities and foreign direct investment inflows. In this case, policymakers have to implement effective anti-corruption strategies to avoid the epidemic of corruption. Design/methodology/approach The authors used the ICRG corruption index and conducted a panel cointegration analysis and Granger causality procedure to detect the dynamic relationships between the variables. Findings The main findings of this paper show that corruption is a serious hurdle to economic growth in MENA countries since it affects investment activities and foreign direct investment inflows. In this case, policymakers have to implement effective anti-corruption strategies to avoid the epidemic of corruption. Research limitations/implications Unfortunately, in this study the authors did not use institutional variables to see their role and to judge whether governments should enhance the quality of institution and improve the corporate governance. This would be an opportunity to expand the sample and to conduct a new research in the near future to assess the real costs of corruption in the MENA region. Practical implications Governments and policymakers need to apprehend and admit that corruption is an important issue that deters foreign direct investment and threats the economic development and growth. Corruption can also deteriorate the infrastructure and increase the cost of doing business for both government and private sector which in turn will lower the growth (Tanzi and Doovi, 1997). It is worth recalling that during the past five years, a large part of the MENA region has witnessed multiple social upheavals. Hence, corruption must be tackled effectively and coherently to avoid further social tensions. It is the proper time to take serious steps and strict policy actions within a zero-tolerance framework to fight corruption and its widespread. New rules, laws, and anti-corruption procedures are among the most important initiatives that governments should implement. The governments should also increase the public awareness of the multiple drawbacks of corruption by publishing official reports and data on the most corrupted sector in the country. In this case, media will have a key role to diffuse the necessary information. Originality/value While most of the previous studies have employed GMM and OLS techniques, the authors opt a panel vector error correction model and cointegration technique to detect causality between the variables used in the model for the present study.

The goal of this study is to investigate the causal relationship between financial development and economic growth in Gulf Cooperation Council (GCC) countries, i.e. Bahrain, Oman, Kuwait, Qatar, United Arab Emirates and Saudi Arabia, over the period 1980-2012. We employ panel unit root tests, and Error Correction Model and cointegration techniques to detect long-run and short-run causalities between the variables used in our study. The overall empirical results reveal that the financial sector development contributes significantly to economic growth in the GCC countries. Our results could be of great interest for policymakers since the financial sector could play a crucial role in lowering the dependency of the governments to oil revenues and could contribute significantly to spur economic growth.

The aim of this paper is to examine whether financial liberalization has triggered banking crises in some developing countries. We focus in particular on the role of capital flows as their volatilities threat economic stability and growth. In the empirical model, based on panel logit estimation, we use the two common financial liberalization indicators (defacto and dejure) for a panel of 58 developing countries observed during the period 1984–2007. Unlike the previous studies, this paper reveals that both indicators of financial liberalization did not trigger banking crises. However, the results show that foreign debt liabilities to total liabilities and foreign direct investment liabilities to total liabilities increase the likelihood of banking crises.

In this paper, we examine whether there exist a linkage between the duration of a bank enterprise relationship and the performance of Tunisian firms. To this end, we collected data of 100 Tunisian companies for the period 2000-2007. By, applying panel data technique, our results reveal that the cost of credit decrease the performance of Tunisian firms while the duration of bank relationships improves their performance and increase their profitability.

The aim of this paper is to empirically examine the dynamic relationships between oil revenues, government spending and economic growth in the Kingdom of Bahrain. Oil revenues are the main source of financing government expenditures and imports of good and services. Increasing oil prices in the recent years have boosted public expenditures on social and economic infrastructure. In this paper, we investigate whether the huge government spending has enhanced the pace of economic growth or not. To this end, we use a multivariate cointegration analysis and error-correction model and data for 1960–2010. Overall results suggest that oil revenues remain the principal source for growth and the main channel which finance the government spending.

In this paper we analyze factors that determine the duration of the bank-enterprise relationships in Tunisia. Our study is based on data of 100 companies during the period 2000-2007. By adopting panel data estimation, our results show that only firm characteristics, the number of banks, and the credit rationing have significant effects on the duration of banking relationships. However, the characteristics of the banking system did not have any major consequences on the duration of the bank-enterprise relationships.

The aim of this paper is twofold. First, the paper aims to analyze the relationship between the number of bank enterprise relationships and the cost of credit for some Tunisian firms. Using an econometric model based on panel data analysis, results show that the number of bank financing lenders increases the cost of credit. Second, the paper aims to determine the rapport between the number of bank partners and the availability of the credit. By using a qualitative model based on the logit estimation, results show that the number of banks affects negatively and significantly the availability of credit.

This paper studies the dynamic relationships between government revenues, government expenditures and economic growth in Portugal, Italy, Ireland, Greece and Spain (PIIGS henceforth). To this end we use a multivariate econometric model based on the Toda-Yamamoto (1995) procedure. Our empirical results reveal a bidirectional relationship between government revenues and government expenditures in Portugal only. Greece is the only county in which government expenditures Granger cause government revenues. Therefore, there is no evidence for spend-and-tax hypothesis for three countries of our sample. For Italy there is a unique unidirectional relationship running from government revenues to GDP while a unique unidirectional relationship was found running from government revenues to government expenditures for Ireland. Results for Spain show a double bidirectional relationships running from government revenues to GDP and from government expenditures to GDP. Moreover, there exists a unidirectional causal relationship between government revenues and government expenditures. Again, there is no evidence for tax-and-spend hypothesis for three countries of our sample.

The aim of this paper is to examine the inter-temporal relationship between government revenues and expenditures within a trivariate framework by modeling them together with gross domestic product. Our sample is based on a panel of 6 countries of the Gulf Cooperation Council (GCC) i.e. Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Oman and Bahrain, for the period from 1990 to 2010. We perform an econometric model based on the Toda and Yamamoto procedure. Our empirical results show that government expenditures Granger cause government revenues for Qatar and the United Arab Emirates only, while government revenues Granger cause government expenditures for Saudi Arabia only. We also found a unidirectional causality running from government expenditures to GDP in Bahrain only. Regarding Kuwait, Qatar and Saudi Arabia, GDP Granger cause government revenues while GDP Granger cause government expenditures for Oman and Qatar.