Interconnection between bank capitalization and macroeconomic stability in the countries of South-West Asia

  • 276 Views
  • 45 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

The paper aims to define the specifics of the mutual interconnection between bank capitalization and indicators of macroeconomic stability. This is achieved by the following methods: grouping, analysis and synthesis, analysis of descriptive statistics, and canonical correlation analysis. The study was carried out based on eight bank capitalization indicators and five macroeconomic stability indicators in seventeen South-West Asian countries from 2010 to 2020. The information base of the research is the dataset from the World Bank. The selected list of indicators is determined by the availability of statistical information for the countries participating in the study. It was found that there is a close canonical correlation between the level of bank capitalization and the macroeconomic stability of the countries under investigation – 0.97 (2010) and 0.99 (2020). The variation of the investigated indicators of macroeconomic stability (68.95% (2010) and 70.64% (2020)) is determined by the change in bank capitalization indicators. On the other hand, the difference in macroeconomic stability indicators of countries by 48.66% (2010) and 42.79% (2020) is due to changes in bank capitalization indicators. Four indicators exert the most significant favorable influence on the level of bank capitalization: Bank return on assets – 0.303 (2010) and 13.033 (2020), Bank return on equity – 0.446 (2010) and 13.387 (2020), Bank regulatory capital to risk-weighted assets – 0.812 (2010), and Bank deposits to GDP – 1.580 (2020). The macroeconomic stability of countries is determined by two indicators: GNI – 3.311 (2010) and 3.461 (2020); GDP – 4.748 (2010) and 4.672 (2020).

view full abstract hide full abstract
    • Figure 1. Diagram of the range of bank capitalization variables and macroeconomic stability variables
    • Figure 2. Scatter diagram of bank capitalization variables (left set) and macroeconomic stability variables (right set) in 2010 and 2020
    • Table 1. Array of input data
    • Table 2. Results of checking compliance with the normal law of the distribution of variables of bank capitalization and macroeconomic stability based on the Shapiro-Wilk test
    • Table 3. Descriptive statistics
    • Table 4. Results of the correlation analysis for the studied groups of variables
    • Table 5. Canonical analysis summary
    • Table 6. Resulting values of the Chi-Square coefficients, canonical R2 and p-values (2010 and 2020)
    • Table 7. Structure of factor loadings of variables within Root 1 for groups of variables of bank capitalization and macroeconomic stability in 2010 and 2020
    • Table 8. Canonical weights of variables of bank capitalization and macroeconomic stability within Root 1 in 2010 and 2020
    • Conceptualization
      Nigar Ashurbayli-Huseynova, Yevgeniya Garmidarova
    • Formal Analysis
      Nigar Ashurbayli-Huseynova
    • Funding acquisition
      Nigar Ashurbayli-Huseynova, Yevgeniya Garmidarova
    • Investigation
      Nigar Ashurbayli-Huseynova, Yevgeniya Garmidarova
    • Methodology
      Nigar Ashurbayli-Huseynova
    • Project administration
      Nigar Ashurbayli-Huseynova
    • Supervision
      Nigar Ashurbayli-Huseynova
    • Validation
      Nigar Ashurbayli-Huseynova, Yevgeniya Garmidarova
    • Writing – original draft
      Nigar Ashurbayli-Huseynova, Yevgeniya Garmidarova
    • Writing – review & editing
      Nigar Ashurbayli-Huseynova
    • Data curation
      Yevgeniya Garmidarova
    • Resources
      Yevgeniya Garmidarova
    • Software
      Yevgeniya Garmidarova
    • Visualization
      Yevgeniya Garmidarova
Related Articles

  • Perceived health risk, online retail ethics, and consumer behavior within online shopping during the COVID-19 pandemic

    Yuniarti FihartiniORCID , Arief HelmiORCID , Meydia HassanORCID , Yevis Marty OesmanORCID doi: http://dx.doi.org/10.21511/im.17(3).2021.02
    Innovative Marketing Volume 17, 2021         Issue #3         pp. 17-29 Views: 4519 Downloads: 1730 TO CITE АНОТАЦІЯ

    The risk of virus contracting during the COVID-19 pandemic has changed consumer preference for online shopping to meet their daily needs than shopping in brick-and-mortar stores. Online shopping presents a different environment, atmosphere, and experience. The possibility of ethical violations is higher during online than face-to-face transactions. Therefore, this study was conducted to investigate the influence of perceived health risk and customer perception of online retail ethics on consumer online shopping behavior during the COVID-19 pandemic, involving seven variables, namely perceived health risk, security, privacy, non-deception, reliability fulfillment, service recovery, and online shopping behavior. The data were collected through an online survey by employing the purposive sampling technique to a consumer who has shopped online during the COVID-19 pandemic in Indonesia. 315 valid responses were obtained and analyzed through quantitative method using SEM-Amos. The results showed that perceived health risk and four variables of online retail ethics including security, privacy, reliability fulfillment, and service recovery affected online shopping behavior. Meanwhile, non-deception was found to have an insignificant effect. The coefficient value proved perceived health risk to be more dominant in influencing online shopping behavior than the variables of online retail ethics. Thus, consumers pay more concern for their health during online shopping. However, positive consumer perceptions of the behavior of online retail websites in providing services also can encourage consumers to shop online during this pandemic.

  • Environmental Performance Index: relation between social and economic welfare of the countries

    Tetyana PimonenkoORCID Researcher ID, Oleksii LyulyovORCID Researcher ID, Olena ChygrynORCID Researcher ID, Maksim Palienko doi: http://dx.doi.org/10.21511/ee.09(3).2018.01
    Environmental Economics Volume 9, 2018         Issue #3         pp. 1-11 Views: 3587 Downloads: 549 TO CITE АНОТАЦІЯ

    The paper deals with the analysis of methodology of Environmental Performance Index. The authors analyzed and systematized the main existing integrated indices, which were used for evaluation of environmental, social and economic situation in the countries. The authors allocated the environmental performance index as a basis for analyzing the environmental policy of the country. In this direction, the authors analysed the main features, structure and indicators of environmental performance index. The authors allocated the world-leader countries with huge level of CO2 emissions. According to the results, the authors aproved that these countries should improve their environmental policy. Accordingly, they occupied less position in environmental performance index. For the purpose to analyze the relation between ecological, social and economic welfare, the authors analyzed score of sustainable development goal index, social progress index and gross domestic product per capita. The comparison analysis of findings showed that countries with good position on environmental performance index have the strong position on sustainable development goal index and social progress index. The authors suggested that Ukraine should orient to the EU countries with purpose to improve the environmental policy.

  • Positive contribution of the good corporate governance rating to stability and performance: evidence from Indonesia

    RR. Iramani , Muazaroh Muazaroh , Abdul MongidORCID doi: http://dx.doi.org/10.21511/ppm.16(2).2018.01
    Problems and Perspectives in Management Volume 16, 2018         Issue #2         pp. 1-11 Views: 3212 Downloads: 314 TO CITE АНОТАЦІЯ

    This paper aims to examine the impact of Good Corporate Governance (GCG) practice on bank stability and performance. Governance is measured using the GCG rating that covers eleven aspects. The authors apply instrumental regression to link governance to performance and stability. The study covers a sample of 150 banks. The result shows that bank stability can mediate bank governance and bank performance. On the determinant of bank performance, it can be concluded that the GCG rating is positive and directly influences bank performance. Bank stability is also positive for bank performance indicating the indirect contribution of the GCG rating to bank performance. NPL, LDR, CAR and bank’s size (LASSET) are all negative and significant. The aim of this paper is to provide strong empirical evidence on the importance of governance and stability for performance. The limitations of this paper are the size of the sample and that it only covers public banks which are theoretically required to apply better governance in all aspects of their business by the Capital Market Authority.

Download Preview
Close
Banks and Bank Systems
Banks and Bank Systems