Commodity price volatility, inflation uncertainty and political stability

Inflation uncertainty, macroeconomic instability and the efficiency of financial institutions

“…The approach adopted in this study differs significantly from that in related studies. For instance, Abaidoo and Agyapong (2022a, b) verified conditions or factors influencing the efficiency of financial institutions, with a specific focus on institutional quality dynamics and macroeconomic uncertainty. However, the approach adopted in this study is significantly different from that of Abaidoo and Agyapong (2022a, b) in terms of the proxies for the key variables examined, model specification procedures and estimation methodology.…”

“…For instance, Abaidoo and Agyapong (2022a, b) verified conditions or factors influencing the efficiency of financial institutions, with a specific focus on institutional quality dynamics and macroeconomic uncertainty. However, the approach adopted in this study is significantly different from that of Abaidoo and Agyapong (2022a, b) in terms of the proxies for the key variables examined, model specification procedures and estimation methodology. Again, while Abaidoo and Agyapong (2022a, b) focused mainly on the effect of institutional quality, the current study predominantly examines the impact of macroeconomic instability (risk) on the efficiency of financial institutions.…”

“…However, the approach adopted in this study is significantly different from that of Abaidoo and Agyapong (2022a, b) in terms of the proxies for the key variables examined, model specification procedures and estimation methodology. Again, while Abaidoo and Agyapong (2022a, b) focused mainly on the effect of institutional quality, the current study predominantly examines the impact of macroeconomic instability (risk) on the efficiency of financial institutions. Consequently, the present study reviews interactions and relationships not readily found in the reviewed literature.…”

“…For instance, the macroeconomic risk variable examined in our inquiry is unique to this study; the variable, constructed using a principal components analysis (PCA) procedure, is significantly different given the underlying base variables employed in the construction process. While Abaidoo and Agyapong (2022a, b) used volatility associated with gross domestic product (GDP) growth to capture macroeconomic uncertainty, the current study uses specific base variables to construct a macroeconomic risk index using PCA methodology. In order words, the variables examined in this study differ significantly from that of Abaidoo and Agyapong (2022a, b) and are not readily available in any known database.…”

“…While Abaidoo and Agyapong (2022a, b) used volatility associated with gross domestic product (GDP) growth to capture macroeconomic uncertainty, the current study uses specific base variables to construct a macroeconomic risk index using PCA methodology. In order words, the variables examined in this study differ significantly from that of Abaidoo and Agyapong (2022a, b) and are not readily available in any known database.…”