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Extant literature suggests that the banking sector’s sustainability is achievable by minimizing the risk factors, in particular, credit risk (CR). Despite prior studies, there are fewer attempts to considerably probe the role of country governance settings in managing CR and ultimately achieving sustainability. Therefore, this study aims to test this nexus for the banking sector operating in BRICS developing economies. Specifically, this research attempts to explore whether country governance has a moderator role between CR and the exposure of environments to risk factors. To achieve these objectives, we conduct panel data analysis using the quantile (QR) and fixed effects (FE) estimation methods. The results show that increasing liquidity, profitability, capital requirements, and income diversification lead to decreasing CR, whereas increasing inefficiency causes an increase in CR. In addition, the results reveal that a country’s increasing vulnerability to a specific financial risk index (FRI), economic risk index (ERI), and political risk index (PRI); developing capital markets; increasing lending interest rates; and weakening country governance quality is significantly linked to increasing CR. Remarkably, the results underscore that country governance has a significant moderator role, and by enhancing the quality of country governance, the impact of country-specific FRI, ERI, and PRI on CR could be attenuated.

This study investigates the effects of environmental characteristics, namely the quality of country-level governance and domestic risk on Islamic banking capital decisions. To do so, this study selects 29 listed Islamic banks operating in Arab markets for the wide range between the 2003-2018 period by performing the System-GMM dynamic panel technique. The results underscore that higher country-level governance quality is linked with higher capital ratios and Islamic banks increase capital ratios specifically by improving methods of anti-corruption, political stability, government effectiveness, and legal systems. Moreover, the results reveal that Islamic banks increase capital ratios by the rise of a country’s vulnerability, particularly by increasing financial and economic risks. However, the results suggest that decreasing political risk also corresponds with higher capital ratios. Overall, the results confirm that environmental characteristics have a pivotal role in determining Islamic bank capital ratios. The results are robust and the findings of this study are likely to open new discussions in the banking literature.

This study aims to examine the impact of the world pandemic uncertainty index on the German stock market index (DAX index) for the 1996Q1 to 2020Q3 period while controlling real effective exchange rate, industrial production index, and consumer price index. The present study performs the Fourier Augmented Dickey-Fulle Unit Root, Fourier Engle-Granger Cointegration, Bayer-Hanck Cointegration, and Markov switching regression tests. The outcomes disclose that there is a long-run cointegration association between the stock market index and world pandemic uncertainty index, real effective exchange rate, industrial production index, and consumer price index in Germany, indicating that the combination of these factors significantly affects the German stock market index in the long-run. Moreover, in both high and low volatile regimes, the world pandemic uncertainty index and real effective exchange rate negatively affect the German stock market index while industrial production and consumer price indices impact positively.

This study aims to examine the effect of family control on the corporate financing decision of firms in Pakistan. This study uses the annual data of 100 non-financial firms listed at PSX for the period 2005-2012. To estimate the impact of family control on the corporate financing decision, we employ the ordinary least square (OLS) method. The findings of the univariate analysis show that a significant difference exists between family and nonfamily firms based on many characteristics of firms. Multivariate analysis results show that family firms maintain significantly high “total debt ratio” and “short-term debt ratio” compared to non-family firms. There are two reasons why family firms keep high debt ratios compared to non-family firms. First, family-owned firms do not want to dilute their ownership, and that is why they fulfill their major financing needs through debt instead of issuing new shares in the market. Second, family firms in Pakistan use extra cash flows for their private benefits. These findings reveal useful insights for investors, banks, regulators, and business families of Pakistan., Ovaj rad ispituje učinak obiteljske kontrole na odluke o financiranju poduzeća u Pakistanu. Korišteni su godišnji podaci 100 nefinancijskih poduzeća navedenih na PSX-u za razdoblje 2005.-2012. Za procjenu utjecaja obiteljske kontrole na odluku o financiranju poduzeća korištena je metoda običnog najmanjeg kvadrata (ordinary least square, OLS). Nalazi univarijantne analize pokazuju da postoji značajna razlika između obiteljskih i neobiteljskih poduzeća na temelju brojnih karakteristika poduzeća. Rezultati multivarijantne analize pokazuju da obiteljska poduzeća imaju značajno visok “omjer ukupnog duga” i “omjer kratkoročnog duga” u usporedbi s neobiteljskim poduzećima. Dva su razloga zašto obiteljska poduzeća drže visoke stope duga u usporedbi s neobiteljskim poduzećima. Prvo, obiteljska poduzeća ne žele razvodnjavati svoje vlasništvo i zato svoje potrebe financiranja zadovoljavaju dugovima umjesto da izdaju nove udjele na tržištu. Drugo, obiteljska poduzeća u Pakistanu koriste dodatne novčane tokove za svoje privatne koristi. Ovi nalazi otkrivaju korisne uvide za investitore, banke, regulatore i poslovne obitelji Pakistana.

This study specifically investigates the impact of economic policy uncertainty (EPU) on travel and leisure (TL) companies' debt holdings policy. To the best of our knowledge, there is a momentous gap in exclusively conducting the impact of EPU on the debt holdings policy behavior of Western European firms operating in the TL sector and its sub-sectors, namely the airlines, gambling, hotels, recreational services, restaurants and bars, and travel and tourism. In this sector, external financing is strongly needed to finance enormous investments and replace, expand, and modernize tangible and intangible assets. To fill the gap, the present study selects 92 publicly listed TL companies operating in Western Europe's top tourist destinations, namely, the UK, Germany, France, Spain, and Italy, and performs both the static and dynamic panel data estimation approaches during the 2005-2019 period. The results reveal that the EPU negatively impacts TL firms' debt holdings, implying that firms tend to decline in debt levels by rising EPU. Consequently, the results highlight that the level of EPU matters, and firms' debt ratios are relatively lower in countries having a higher EPU and vice versa. Besides, the results underscore that the EPU negatively impacts firms' debt holdings in each sub-sector; however, the negative effect is most prominent on the debt ratios of the firms, particularly those operating in gambling, hotels, travel, and tourism, and also recreational services sub-sectors. The results are robust and have important suggestions for regulatory bodies, policymakers, and firms' managers.

This study investigates the impacts of country-specific risk, namely, political and economic risks, global economic policy uncertainty, and also macroeconomic factors on the price of Turkish touris...

This study investigates specifically the effects of institutional settings and risks on dividend payout policy for banks operate in an emerging market of Nigeria. The present study measures the risk by using financial, business, credit, and default risk at the bank‐level and financial, economic, and political risk at the country level. To achieve the objective of this study, panel data random‐effects Tobit estimation methodology is employed from the period 2007–2016. Findings reveal that the weak institutional settings lead Nigerian banks to pay out fewer dividends and set their payouts corresponding to the substitution agency model of dividends. Also, results show that Nigerian banks typically pay out more dividends in cases of growth opportunity as a substitute mechanism for mitigating agency problems and for establishing a good reputation. However, by strengthening the levels of investor protection, Nigerian bank managers prefer a low payout policy and are less probable to use dividend policies as a substitute mechanism. Moreover, except for the positive effect of default risk, findings show that the risks at the bank‐level, in particular, business risk, and at the country level, particularly financial and economic risks, have a significant negative effect on dividend payouts. Results are robust to alternative estimation procedures and also document that global risk has a statistically significant negative impact on Nigerian banks' dividend payouts policy.

This study examines the effects of domestic political risk and global economic policy uncertainty factors on the profitability of Ukrainian banks during the 2005–2015 period. The empirical results ...

This study fills a gap in the relevant literature by exploring the time-frequency domain causal relationship between financial risk and economic risk for five South American countries, namely Argentina, Brazil, Colombia, Peru, and Venezuela, over the period from 1984Q1 – 2018Q4. To the best of our knowledge, the causal relationship between finance and economics has not been comprehensively explored for the case of South America within the framework of risk. Therefore, the empirical findings of this study are likely to shed light on and open a new debate regarding the nexus between financial and economic activities. Based on our aims, the time domain Toda-Yamamoto causality test is performed as a robustness check, and the wavelet coherence approach is implemented to explore the joint time-frequency domain causal relationship between financial and economic risk. The empirical findings reveal that: (1) there is a feedback causality between financial risk and economic risk in Venezuela; (2) there is a one-way causality that runs from economic risk to financial risk in Colombia and Peru, and; (3) financial risk significantly leads to changes in economic risk in Argentina and Brazil. The empirical results are crucial for policy decision making and can be used by both researchers and macro-economic policymakers to take suitable actions, if necessary, by implementing more appropriate or alternative economic and financial decisions.

One of the most controversial concerns among the researchers is the expansion of the green bond markets, so as to reduce environmental pollution. The present study estimates the factors that help drive the global green bond markets, such as energy prices, gold prices, and green energy stocks. The study has applied Quantile Autoregressive Lagged Approach (QARDL) and Quantile Granger Causality test to estimate the causal relationship among the variables for January 2010 and June 2021. The QARDL findings reveal that for all the quantiles, the error correction term is statistically significant with the predicted negative sign. This confirms the existence of a strong long-run equilibrium relationship between the relevant variables and the green bonds market on a global level. The findings revealed that gold and energy prices have a lower effect on the green bonds market on every quantile, and also from the low to medium quantiles, respectively. While at the same time, the green energy stocks have an increasing effect on the green bonds market at higher quantiles. The results of the causal examination using Granger-causality in quantiles show a bi-directional causal relationship between the green bonds, energy prices, gold prices, and green energy stocks in the world economy

This study investigated the effects of financial literacy, financial self-control, and demographic determinants on individual financial performance and behavior during the Lebanese crisis period between 2019 and 2021. To the best of our knowledge, this may be the first study that compares the determinants of financial behavior for different generations, genders, marital statuses, and education and income levels. To do so, we conducted a comprehensive survey of 328 individuals and performed a logistic regression analysis. The empirical results show that an individual’s financial performance and behavior are positively affected by financial literacy, financial self-control, and demographic factors, in particular education and income levels. In addition, when we focused on the demographic factors, the results reveal that having good financial literacy increases the likelihood of an individual’s financial performance and behavior, in particular for Generations X and Z, males and females, single and married people, low- and high-educated people, and low- and high-income individuals. However, having good financial self-control only increases the likelihood of an individual’s financial performance and behavior at highly educated levels. The results are robust and come from various performed methodologies, and the results have important policy implications. The policies should be focused on enhancing an individual’s financial behavior and helping young adults acquire skills in self-control. Policies could also motivate local financial institutions to offer a variety of financial products and investment opportunities, targeting low-income and low-educated individuals, by providing subsidized funds with parallel mandatory financial studies.

Several investigations show that remittances, renewable energy, and innovation promote the socioeconomic advancement of a nation. Nevertheless, the impacts of remittances and renewable energy on ecological quality are yet to be evaluated thoroughly. Therefore, the current investigation assesses the effects of remittances and renewable energy on CO2 emissions while taking into account the roles of technological innovation, globalization, and economic growth. Toward this end, this paper depends on yearly data between 1990 and 2019. The study employed bounds testing and its results disclosed long-term connections between CO2 and the regressors. Moreover, unlike prior studies that employ time-domain causality, we employed frequency domain causality, which considers causality at different frequencies. Furthermore, the ARDL long- and short-run results showed that economic growth amplified CO2 emissions, while green energy, remittances, and globalization lessened CO2 emissions. Lastly, the frequency domain causality approach revealed that globalization, renewable energy, economic growth, technological innovation, and remittances could predict CO2 emissions in the long-term. These findings’ sturdiness was established utilizing DOLS and FMOLS regression. Several policy recommendations are suggested in light of these ground-breaking discoveries.

The study aims to examine the volatility transmission between the West Texas Intermediate (WTI) crude oil price returns and the U.S. stock market (S&P500 index) returns for the period 2006-2016. In the empirical analyses, univariate GARCH and multivariate GARCH (BEKK-GARCH) models are employed to investigate potential volatility spillover effect of crude oil price returns on the S&P500 index returns or vice versa. The results of GARCH methods reveal that (i) volatility spill-over effect of S&P500 index returns on the crude oil returns is more significant than the volatility spillover effect of crude oil on the S&P500 index returns by using univariate GARCH model; and (ii) there is a one way volatility spillover effect that runs from S&P500 index returns to crude oil returns when we apply multivariate BEKK-GARCH model. These findings have implications for in-vestors and oil-stock portfolio holders for their portfolio decisions in order to manage their risks on their international investments. Further, crude oil investment participants should consider the changes in U.S. stock market index returns in order to predict the expected volatility in the crude oil returns.

Purpose In this study, as part of an attempt to foster sustainable development, the aim is directed at understanding the perspectives of domestic economic, financial and political risks in tourism development. On the other hand, the role of other agents of sustainable development: innovation, infrastructure, health and primary education and global crisis in tourism development, was illustrated. Design/methodology/approach To achieve this objective, the current study explored the (system) SYS-Generalized Method of Moments (GMM) technique for a panel of selected 73 economies over the period 2006–2017. This GMM approached is not undertaken without first establishing the stationarity (a preliminary test) of the employed dataset by utilizing the relevant unit root techniques. Findings First, the study found that minimizing risks from economic, financial and political aspects is significant and vital to the attractiveness of the tourism destinations and the eventual development of the tourism sector. Second, the study presents innovation or technological readiness and health and primary education as agents of sustainable development through the growth of international tourism arrivals while global crisis is significantly detrimental to tourism inflow. Originality/value Overall, the study presents the contribution of tourism as a pathway to sustainable development from unique dimensions. Investigating a large panel (of 73 countries) is a unique approach. In addition, considering the economic vulnerability of the panel countries from the aspects of risk arising from economic, financial and political aspects is another interesting dimension to the novelty of the study. Thus, this study offers relevant policies for tourism stakeholders.

This paper closes a gap in the relevant literature by investigating the role of a country’s competitiveness on international capital mobility using robust panel multiple regressions with fixed and ...

The aim of this paper is to explore the impact of the exchange rate, the gold price, and the BIST100 Borsa Istanbul Index on the price of real estate stocks in the Turkish stock market, using month...

We examine the determinants of capital inflows for a global sample of countries at various stages of economic development, namely factor‐, efficiency‐, and innovation‐driven stages. We investigate the effect of institutional quality on capital inflows. The magnitude of institutional quality effect depends on the stage of economic development. Both public and private institutional qualities positively affect capital inflows in efficiency‐ and innovation‐driven countries. Specifically, corporate ethics and accountability are pull factors for capital inflows at all stages.

Although the tourism industry has continued to exert a significant impact on economies of most destinations, the impacts of political (in) security, socioeconomic and financial dynamics in the destination countries are equally playing decisive roles. Mirroring from this perspective, this study examined the role of political risk, exchange rate and inflation rate on the inbound international tourists in the panel of 76 destinations over the period 1995–2017. By employing the Pooled OLS (Ordinary Least Square) and the Generalized Moment of Methods (GMM), the estimation results suggest that the political risk is a significant impediment to the growth of total tourism arrivals in the panel countries. In addition, high exchange and inflation rates, respectively, impact international tourism arrivals (ITAs) in a positive and negative pattern. Moreover, the findings show that the impact of political risk on ITAs is significant, and has a positive and negative effect in the low- and high-risk destinations, respectively. While the study urges for a formidable drive towards sustainable conflict resolution in destination countries, it further presents recommendations for preventing potential spillover effects in the event of the political, economic or financial crisis.

Although the tourism industry has continued to exert a significant impact on economies of most destinations, the impacts of political (in) security, socioeconomic and financial dynamics in the destination countries are equally playing decisive roles. Mirroring from this perspective, this study examined the role of political risk, exchange rate and inflation rate on the inbound international tourists in the panel of 76 destinations over the period 1995-2017. By employing the Pooled OLS (Ordinary Least Square) and the Generalized Moment of Methods (GMM), the estimation results suggest that the political risk is a significant impediment to the growth of total tourism arrivals in the panel countries. In addition, high exchange and inflation rates, respectively, impact international tourism arrivals (ITAs) in a positive and negative pattern. Moreover, the findings show that the impact of political risk on ITAs is significant, and has a positive and negative effect in the low- and high-risk destinations, respectively. While the study urges for a formidable drive towards sustainable conflict resolution in destination countries, it further presents recommendations for preventing potential spillover effects in the event of the political, economic or financial crisis.

This paper examines the time and frequency co-movement between sovereign credit ratings and economic risk for five Balkan countries, namely Bulgaria, Greece, Croatia, Romania, and Slovenia, during the 1999Q1 to 2018Q4 period. To the best of knowledge, this is the first study attempt to conduct this nexus. We measured the sovereign credit scores by using the ratings and outlooks of Standard & Poor's (S&P), Moody's, and Fitch Ratings. The empirical findings reveal that there is a one-way causality running from the sovereign credit ratings to economic risk in Bulgaria and Croatia in the long-term. Also, it shows that there is a feedback causality between sovereign credit ratings and economic risk in Greece, Romania, and Slovenia. Results are robust and similar from both the time and frequency domains causality techniques.

This study examines the dividend policy behavior of Islamic and conventional banks operating in Arab markets. These banks operate in an environment of Sharia law and low levels of investor protection. Our results support the substitution agency model of dividends for Islamic banks, and Islamic banks use the dividend policy as a substitute mechanism for alleviating relatively more significant agency problems and higher risks of expropriation by insiders. In these markets, conventional banks operate in a more competitive environment and experience relatively less significant agency problems. In contrast to Islamic banks, conventional banks follow the outcome agency model of dividends.