Khalfaoui Hamdi and Guenichi Hassen
This paper examines the effect of economic policy uncertainty (EPU) on credit risk, lending decisions and banking performance of Tunisian listed banks over the period 1999–2019.
Abstract
Purpose
This paper examines the effect of economic policy uncertainty (EPU) on credit risk, lending decisions and banking performance of Tunisian listed banks over the period 1999–2019.
Design/methodology/approach
To identify the relationship between EPU, credit risk, lending decisions and banking performance, we have proceeded with a fixed effects panel regression model over the period 1999–2019.
Findings
Our empirical analysis showed a significant positive effect of EPU on credit risk and a significant negative effect on loan size and performance. We have also found that state-owned banks were the most affected by increasing EPU. Their credit risk has increased and their returns have decreased. While highly leveraged private banks have recorded a sharp decline in their results.
Research limitations/implications
Facing increasing credit risks, generated by EPU, Tunisian banks are allowed to revise their lending decisions to ensure consequently their sustainability and performance.
Practical implications
Tunisian resident banks should set up a monitoring system and an early-warning system of credit risk in order to guarantee both, their performance and the sustainability of the economy's financing.
Social implications
A good banking governance and a stable economic and political environment are the key factors that improve the allocation of credit, credit risk diversification and the creation of added value for the different activity sectors.
Originality/value
On the theoretical as well as on the empirical level, the analysis of the Tunisia EPU on credit risk, bank lending strategy and banking performance was not handled previously in the literature. It was noted that state banks are more influenced by the increase of EPU. Their credit risk has increased and their returns have declined. However, private banks with a high leverage effect have recorded a net decrease in their results. Since the 2011 revolution, invisibility and EPU have largely influenced the bank lending decisions and subsequently banking performance.
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Keywords
Kais Baatour, Khalfaoui Hamdi and Hassen Guenichi
Illicit trade is pervasive in many nations and may be influenced by the level of national IQ. The current interdisciplinary paper aims to study the association between national…
Abstract
Purpose
Illicit trade is pervasive in many nations and may be influenced by the level of national IQ. The current interdisciplinary paper aims to study the association between national intelligence and illicit trade across nations.
Design/methodology/approach
The illicit trade index scores for 84 countries, developed by the Economics Intelligence Unit, are used to measure the dependent variable. The independent variable is national intelligence, while economic development, unemployment and Hofstede’s cultural dimensions are the control variables. Two-level hierarchical linear models (HLMs) are used to empirically test the above-mentioned association.
Findings
The empirical results suggest that the higher the degree of national intelligence, the lower is the degree of illicit trade across nations. In addition, economic development, unemployment and national culture play an important role in explaining cross-country differences in illicit trade.
Practical implications
Regulatory authorities should find the results of this cross-national research useful in evaluating the likelihood of illicit trade from a cognitive perspective, and in implementing reforms to curb this type of economic crimes.
Originality/value
This interdisciplinary study makes novel contributions to the literature on economic and financial crimes. First, for the first time to the best of the authors’ knowledge, an association between national intelligence and illicit trade is examined. A second original contribution of this study compared to earlier research is related to the use of two-level HLMs. Third, the investigation of the association between intelligence and illicit trade takes a new control variable into consideration, i.e. unemployment, a variable which is found to have a significant effect on illicit trade and that has not been used directly in relationship with illicit trade so far.
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Guenichi Hassen and Khalfaoui Hamdi
This paper examines the effect of oil price uncertainty on corporate social responsibility (CSR) for 507 US firms over the period 1985–2019.
Abstract
Purpose
This paper examines the effect of oil price uncertainty on corporate social responsibility (CSR) for 507 US firms over the period 1985–2019.
Design/methodology/approach
To investigate the nexus between oil price uncertainty and CSR, we have proceeded with a fixed-effects panel regression model over the period 1985–2019.
Findings
Using a dataset of 507 US firms, different specifications of CSR and two alternatives measures of oil price uncertainty, we show that oil price uncertainty negatively influences the CSR in the global US panel and firm's characterized panel. This negative effect is dependent on firms' size, firm's age and value of book share of firms.
Research limitations/implications
US firms are exposed to more risk when carrying high levels of debt, resulting in reduced spending to improve social and environmental conditions. While the negative effect of oil price uncertainty on CSR is exacerbated in economic crisis periods.
Practical implications
US firms are influenced by energy price volatility especially by oil price fluctuations which are the main factor of American economic growth. The rise of oil price uncertainty reduces sustainable corporate development and investment in the green economy.
Social implications
Rethinking renewable energies as an alternative solution in order to guarantee the performance and sustainability of social, environmental and cultural activities.
Originality/value
Young and small firms, lower-share outstanding firms and high book value per share firms are the most negatively affected by oil price uncertainty and therefore their social responsibilities are reduced. However, by introducing interaction variables in the main model, we find that the most indebted firms on one hand and big firms and high-number shares outstanding firms, on the other hand, are the most influenced by oil price uncertainty which consequently limits their social and environmental responsibility.