Despite the possession of considerable natural, financial and human resources, the Middle East and North Africa (MENA) region suffers low economic growth rates, high unemployment…
Abstract
Purpose
Despite the possession of considerable natural, financial and human resources, the Middle East and North Africa (MENA) region suffers low economic growth rates, high unemployment rates, high poverty rates and high illiteracy rates. The purpose of this paper is to find out the factors that hinder the development of economic activities in this region.
Design/methodology/approach
This study uses co-integration analysis and vector error correction model on a sample of 18 MENA countries, covering the period 2002–2016. It exploits gross domestic product (GDP) as a dependent variable, and public debt, trade balance, natural resources rents, importation of high technology, labour participation rate, military spending, population size, political instability and corruption as independent variables.
Findings
The paper finds that public borrowing, trade deficit, military expenditures, the low level of technological innovation, population, political turbulences and corruption, all hinder GDP in the long-run. Additionally, public debt, military spending and political instability obstruct GDP in the short run. The results also suggest the existence of Dutch diseases in both the short- and the long-run. On the other hand, labour market conditions do not seem to have any effect on the economic performance of the MENA countries.
Originality/value
In addition of examining an understudied sample of countries, this paper – unlike other studies on the MENA region that look at factors that boost economic growth – exploits factors that have possible negative impact on the economic situation of the region.
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Bank consolidations in many Middle East and North Africa (MENA) countries have been proceeding at a rapid pace, leading to a decline in the number of banks and an increase in…
Abstract
Purpose
Bank consolidations in many Middle East and North Africa (MENA) countries have been proceeding at a rapid pace, leading to a decline in the number of banks and an increase in market concentration. This may raise concerns regarding the impact of such increase in concentration on the behaviour of banks and consequently on the financial development. Therefore, this study aims to examine the impact of concentration on the financial development of MENA region.
Design/methodology/approach
The study adopts fully modified ordinary least squares model on a heterogeneous, non-stationary, cointegrated panel data set. The exploited panel is formed of 15 MENA countries and covers the period 1996–2014.
Findings
The empirical results show that concentration per se is not harmful for financial development. Nevertheless, concentration combined with bank market power may deteriorate the development of MENA financial systems.
Originality/value
In addition to considering an understudied region, the research presents very important findings, which suggest that if banks obtain market power, an increase in concentration following a wave of bank mergers, could weaken the financial development.
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Ali Awdeh, Chawki El Moussawi and Hassan Hamadi
Serious concerns about the stability of the international financial systems have arisen recently, resulting from the mounting inflation rates and the accompanying procedures to…
Abstract
Purpose
Serious concerns about the stability of the international financial systems have arisen recently, resulting from the mounting inflation rates and the accompanying procedures to control them. Consequently, this study aims at examining empirically the impact of inflationary pressures/shocks on the stability of banking sectors.
Design/methodology/approach
The study adopts a dynamic GMM models and exploits a sample of 188 banks operating in 14 MENA economies, over the period 1999–2021.
Findings
This research finds that high inflation does indeed harm bank financial stability and deteriorates banks credit risk. Furthermore, the examination of the impact of interaction terms between inflation and bank-specific and institutional quality variables shows that better capitalisation levels, higher liquidity buffers, larger asset size, greater market power, foreign ownership and overall political stability, all can counterbalance the impact of inflationary pressures on MENA banks financial stability.
Originality/value
In addition to empirically revealing how inflationary shocks can deteriorate financial stability, the main novelty of this research is examining how the interactions between inflation on one hand, and bank-specific and institutional quality on the other, affect bank stability.
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Charbel Bassil, Hassan Hamadi and Marion Bteich
The purpose of this paper is to examine the impact of terrorism in the Organization of the Petroleum Exporting Countries (OPEC) on the return and volatility of world price of oil.
Abstract
Purpose
The purpose of this paper is to examine the impact of terrorism in the Organization of the Petroleum Exporting Countries (OPEC) on the return and volatility of world price of oil.
Design/methodology/approach
GARCH models and daily data from 1987 till 2015 will be used.
Findings
The empirical results reveal that terrorism in the OPEC affects positively oil returns and negatively its volatility. Results also show that the different characteristics of the attacks are likely to have different impact on the return and volatility of oil prices. In overall terms, terrorism has a much larger positive impact on the return of oil prices and negative impact on its volatility if it targets the oil industry in the OPEC. This marginal effect is even greater if those attacks were successful.
Originality/value
The distinguishing feature of this paper is that the authors use a framework that takes into account different attributes for terrorism the success of the attacks, the intensity of the attacks and the associated targets.
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Ahmad Sauffi Yusof, Zainuriah Hassan, Sidi Ould Saad Hamady, Sha Shiong Ng, Mohd Anas Ahmad, Way Foong Lim, Muhd Azi Che Seliman, Christyves Chevallier and Nicolas Fressengeas
The purpose of this paper is to investigate the effect of growth temperature on the evolution of indium incorporation and the growth process of InGaN/GaN heterostructures.
Abstract
Purpose
The purpose of this paper is to investigate the effect of growth temperature on the evolution of indium incorporation and the growth process of InGaN/GaN heterostructures.
Design/methodology/approach
To examine this effect, the InGaN/GaN heterostructures were grown using Taiyo Nippon Sanso Corporation metal-organic chemical vapor deposition (MOCVD) SR4000-HT system. The InGaN/GaN heterostructures were epitaxially grown on 3.4 µm undoped-GaN (ud-GaN) and GaN nucleation layer, respectively, over a commercial 2” c-plane flat sapphire substrate. The InGaN layers were grown at different temperature settings ranging from 860°C to 820°C in a step of 20°C. The details of structural, surface morphology and optical properties were investigated using X-ray diffraction (XRD), field emission scanning electron microscope (FE-SEM), atomic force microscopy and ultraviolet-visible (UV-Vis) spectrophotometer, respectively.
Findings
InGaN/GaN heterostructure with indium composition up to 10.9% has been successfully grown using the MOCVD technique without any phase separation detected within the sensitivity of the instrument. Indium compositions were estimated through simulation fitting of the XRD curve and calculation of Vegard’s law from UV-Vis measurement. The thickness of the structures was determined using the Swanepoel method and the FE-SEM cross-section image.
Originality/value
This paper report on the effect of MOCVD growth temperature on the growth process of InGaN/GaN heterostructure, which is of interest in solid-state lighting technology, especially in light-emitting diodes and solar cell application.
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Miroslav Mateev, Ahmad Sahyouni, Syed Moudud-Ul-Huq and Kiran Nair
This study investigates the role of market concentration and efficiency in banking system stability during the COVID-19 pandemic. We empirically test the hypothesis that market…
Abstract
Purpose
This study investigates the role of market concentration and efficiency in banking system stability during the COVID-19 pandemic. We empirically test the hypothesis that market concentration and efficiency are significant determinants of bank performance and stability during the time of crises, using a sample of 575 banks in 20 countries in the Middle East and North Africa (MENA).
Design/methodology/approach
The main sources of bank data are the BankScope and BankFocus (Bureau van Dijk) databases, World Bank development indicators, and official websites of banks in MENA countries. This study combined descriptive and analytical approaches. We utilize a panel dataset and adopt panel data econometric techniques such as fixed/random effects and the Generalized Method of Moments (GMM) estimator.
Findings
The results reveal that market concentration negatively affects bank profitability, whereas improved efficiency further enhances bank performance and contributes to the banking sector’s overall stability. Furthermore, our analysis indicates that during the COVID-19 pandemic, bank stability strongly depended on the level of market concentration, but not on bank efficiency. However, more efficient banks are more profitable and stable if the banking institutions are Islamic. Similarly, Islamic banks with the same level of efficiency demonstrated better overall financial performance during the pandemic than their conventional peers did.
Research limitations/implications
The main limitation is related to the period of COVID-19 pandemic that was covered in this paper (2020–2021). Therefore, further investigation of the COVID-19 effects on bank profitability and risk will require an extended period of the pandemic crisis, including 2022.
Practical implications
This study provides information that will enable bank managers and policymakers in MENA countries to assess the growing impact of market concentration and efficiency on the banking sector stability. It also helps them in formulating suitable strategies to mitigate the adverse consequences of the COVID-19 pandemic. Our recommendations are useful guides for policymakers and regulators in countries where Islamic and conventional banking systems co-exist and compete, based on different business models and risk management practices.
Originality/value
The authors contribute to the banking stability literature by investigating the role of market concentration and efficiency as the main determinants of bank performance and stability during the COVID-19 pandemic. This study is the first to analyze banking sector stability in the MENA region, using both individual and risk-adjusted aggregated performance measures.
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Mohammad Selim and M. Kabir Hassan
This paper aims to examine how a central bank (CB) can act as a lender of last resort (LOLR) for both Islamic and conventional interest-based banks by pursuing a Qard-al-Hasan…
Abstract
Purpose
This paper aims to examine how a central bank (CB) can act as a lender of last resort (LOLR) for both Islamic and conventional interest-based banks by pursuing a Qard-al-Hasan (QH)-based monetary policy (MP).
Design/methodology/approach
The role of the CB as LOLR under QH-based MP and its effects on major macroeconomic variables, including deposits, loan creation and aggregate expenditures, are examined on theoretical grounds by using the aggregate output and aggregate expenditure model under the framework of Islamic MP.
Findings
When the CB acts as LOLR by pursuing QH-based MP, it automatically empowers Islamic banks (IBs) by providing access to borrowing funds from the CB on a QH basis. As a result, IBs will not be required to hold billions of dollars as liquid assets against liquidity risks. Thus, the lending capacity of IBs will increase and deposit expansion, loan creation and aggregate expenditures in the economy will all expand. This will in turn increase real GDP and employment while reducing the unemployment rate.
Originality/value
This is the first paper to analyze CBs acting as LOLR for both IBs and conventional interest-based banks by pursuing a QH-based MP, thus providing equal opportunities and equal access to borrowing facilities from the CB, along with equal partnership and fair competition for all and absolutely no discrimination to anyone. The LOLR service to all banks under QH-based MP will unveil a new horizon of opportunities where all financial institutions are expected to thrive. IBs will escape the constraints of the constant fear of liquidity risks and find a level-playing field.
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Raida Chakroun, Hamadi Matoussi and Sarra Mbirki
This study aims to investigate the extent and trends of voluntary corporate social responsibility (CSR) disclosure and to analyze the determinants of the listed banks’ annual…
Abstract
Purpose
This study aims to investigate the extent and trends of voluntary corporate social responsibility (CSR) disclosure and to analyze the determinants of the listed banks’ annual reports and websites in an emergent capital market, namely, Tunisia.
Design/methodology/approach
The authors examine the level of CSR disclosure by means of a manual content analysis where the sentence is used as the unit of the analysis. They use Branco and Rodrigues’ (2006 and 2008) index which includes 23 items. They focus on the annual reports of 11 Tunisian listed banks during the period from 2007 to 2012 and the information presented on their websites in December 2013. They use, also, regression analysis to identify the determinants of CSR disclosure used by Tunisian listed banks.
Findings
The results of the investigation show that Tunisian listed banks disclose CSR information primarily in a narrative form. Human resources are the main focus in the annual reports, whereas, on the websites, community involvement is the most widespread theme. With regard to the determinants, it appears that bank age, financial performance and state shareholding are the main factors that impact CSR disclosure in the Tunisian listed banks’ annual reports. Furthermore, this study finds a positive (negative) relationship between leverage (financial performance) and CSR disclosure in the banks’ websites. In this regard, the results show different determinants of CSR disclosure for the two supports. Moreover, bank size, foreign shareholding and the type of auditor are unrelated to the listed banks’ CSR disclosure either in their annual reports or on their websites.
Research limitations/implications
The sample size is small; however, it consists of all the relevant Tunisian banks. Also, this study is subject to the limitations of using manual content analysis.
Practical implications
This study enables highlights the importance of CSR disclosure and its determinants for the Tunisian banks’ stakeholders (such as regulators, investors and managers).
Originality/value
The authors contribute to the scarce literature on CSR disclosure in financial institutions. It is the first study to investigate Tunisian listed banks’ CSR disclosure. It is a first attempt to show, also, how banks’ characteristics and banks’ ownership structures impact on their CSR disclosure in their annual reports and on their websites.
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Rihab Grassa and Hamadi Matoussi
This paper aims to understand the current governance practices and governance structure of Islamic banks (IBs) in Gulf Cooperation Council (GCC) and Southeast Asia countries with…
Abstract
Purpose
This paper aims to understand the current governance practices and governance structure of Islamic banks (IBs) in Gulf Cooperation Council (GCC) and Southeast Asia countries with the purpose of providing relevant information in guiding the future development of the governance system for IBs. As well, the paper discusses and compares the state of the governance system in GCC countries (Kuwait, Bahrain, United Arab Emirates, Qatar and Saudi Arabia) and Southeast Asia countries (Malaysia and Indonesia).
Design/methodology/approach
The study utilizes descriptive analysis approach in extracting and analyzing data collected for 83 IBs observed for the period 2002-2011. The authors test for differences in means and medians of corporate governance attributes between a sample of IBs in GCC countries and another one for Southeast Asia countries. They use selected variables of corporate governance of different governance structures, namely, the ownership structure, the board of directors, the Shariah board and the CEO attributes.
Findings
The paper findings argue that there are significant differences and divergence of corporate governance structure of IBs in GCC countries and those in Southeast Asia countries. This position acknowledges that there are shortcomings to the existing governance framework for IBs which needs further improvement and standardization.
Practical implications
The paper is a very useful source of information that may provide relevant guidelines in guiding the future development of corporate governance of IBs. As well, the paper provides relevant guidelines for improving regulations and laws covering the governance of IBs.
Originality/value
This paper provides fresh data and recent information on the actual corporate governance system in IBs in GCC and Southeast Asia countries. As well, the paper discusses a significant shortage in corporate governance literature of Islamic finance.
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X.‐Z. Zhang and I. Hassan
To develop a reliable methodology and procedure of simulating the jet‐in‐crossflow using the current turbulence models and numerically investigate the cooling performance of a new…
Abstract
Purpose
To develop a reliable methodology and procedure of simulating the jet‐in‐crossflow using the current turbulence models and numerically investigate the cooling performance of a new scheme for the engines of next generation.
Design/methodology/approach
A new advanced film cooling scheme is proposed based on the literature survey and a systematic methodology developed to successfully predict the right level of heat transfer in the CFD simulation of film cooling.
Findings
The proposed cooling scheme gives considerable lower heat transfer coefficient at the centerline in the near hole region than the traditional cylindrical hole, especially at a high blowing ratio when traditional cylindrical hole undergoes liftoff.
Research limitations/implications
The number of cooling holes in the computational domain is limited by the speed of the computers used.
Practical implications
The new methodology can be used to numerically test new cooling schemes in the design of turbine blades and to provide useful information/data under actual working conditions to design engineers.
Originality/value
This paper provides some useful information on the simulation of film cooling in terms of the performance of different turbulence models and wall treatments and also sends some valuable messages regarding the design of cooling scheme of turbine blades to the technical community.