The ICT environment, financial sector and economic growth: a cross-country analysis Farkhanda Shamim Article information:To cite this document: Farkhanda Shamim, (2007),"The ICT environment, financial sector and economic growth: a cross#country If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to test the hypothesis that, given the financial development of an economy (whether developed or not), e-finance technologies enhance economic growth because they lower processing costs for suppliers and information costs for consumers and therefore increase availability of finance for even low-income borrowers of remote areas. Design/methodology/approach -To analyze the indirect relationship between the level of connectivity and economic growth via its impact on financial development, generalized method of moments (GMM) is applied to cross section data of 61 countries averaged over 13 years (1990)(1991)(1992)(1993)(1994)(1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002).Findings -In all the regression results, it is found that better connectivity particularly by increasing the number of mobile phone subscribers and the number of internet users significantly enhances financial depth, which is a backbone of any country to grow. Practical implications -Based on the empirical findings of current study, it can be concluded that Claessens et al. might be right in saying that for developing countries to exploit opportunities for leapfrogging even with weak financial system, it is important to invest in the sector of information and communication technology. Originality/value -the current study is the first of its kind, which provides empirical and global evidence that the component of financial sector developed by better telecommunication infrastructure is positively associated with long run economic growth and gross capital formation.

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On the basis that risk drivers are similar to the fundamental reasons for the establishment of e-banking (cost minimization and revenue maximization), this study examines bank risk rating drivers and the degree of e-banking in 124 Japanese financial institutions for two time periods: first period covers six years (2000)(2001)(2002)(2003)(2004)(2005) of the 21st century (as an example of a less volatile market) and second period is based upon last eight years of the 20th century (as an example of more volatile market). Using a basic risk scoring model, bank risk scores are regressed against operating efficiency measures, namely cost and revenue, which are calculated using stochastic frontier approach. The results confirm that the twenty first century is very advanced in its electronic-banking actuation. There is evidence suggesting that operating costs are lower and revenues are higher when banking services are delivered through electronic means. Therefore, the results support the argument that the riskiness of the banking industry might be reduced if focus is directed to operating efficiency and then to e-banking.

Purpose The purpose of this paper is to empirically examine the direct and indirect effects of automated teller machines (ATMs) on the performance and scope economies of the Japanese financial institutions. Design/methodology/approach Stochastic frontier approach is adopted to estimate banks’ cost and profit efficiency indices and to examine the relationship between inefficiency scores and the number of ATMs. Findings The study concludes that the banks not only minimize costs and save money by using ATMs, but also spend the saved funds on hiring highly skilled staff to introduce a better product mix which allows the banks to observe scope economies. Originality/value The findings suggest that although branches would remain a crucial interaction point for relationship banking, but given their high fixed cost, shifting routine banking transactions from the branch to low-cost electronic channels can significantly reduce costs and enhance efficiency of the financial institutions.

The goal of this study is to determine the elements that contribute to the profitability of commercial banks in Saudi Arabia. The study is important due to the fact that Saudi vision 2030 foresees Saudi Arabia as a global investment powerhouse and fulfilling this objective requires a profitable banking sector. The method chosen for the study is multiple regression analysis. The sample data is taken for the period ranging 2009 and 2015 for the 12 local banks. The research concludes that bank’s internal factors specifically, bank size, liquidity, credit risk and operational efficiency are significantly determining the profitability in the banks as compared to the economy’s macro-economic variables.