Goodness of governance effect on European banking efficiency

Pérez-Cárceles, María Concepción; Gómez-García, Juan; Gallego, Juan Cándido Gómez

doi:10.1016/j.iref.2019.05.016

Cited by 7 publications

(6 citation statements)

References 47 publications

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“…Economic freedom indicators such as property rights, contract enforcement, and investment freedom increase foreign direct investment (FDI) activities in the country [13]. Consistent with prior studies, we argue that combine efforts of governance quality and economic freedom could transfer the unbanked population to formal financial institutions [8,16,53].…”

Section: Literature Reviewsupporting

confidence: 81%

“…Regulatory frameworks and effective enforcement are necessary to promote market development and competition as they restore consumer confidence and trust in banks which influence financial access [28]. In the absence of a strong rule of law, government effectiveness, regulatory quality, political stability, and accountability, financial transactions cannot be performed coherently [53,67]. Thus, Pandya [49] argued that financial inclusion is less of a financial issue compared to a governance issue.…”

Section: Literature Reviewmentioning

confidence: 99%

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Does strong governance stimulate the effect of economic freedom and financial literacy on financial inclusion? a cross-country evidence

2021

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This study examines the interlinkages between financial literacy, economic freedom, government quality, and financial inclusion using cross-sectional and panel data analysis. Using a sample of 98 countries from the year 2007 to 2018, OLS and system GMM estimators were used to analyze the results. The estimation results indicate that financial literacy and government quality positively influence financial inclusion. Results also find that governance quality strengthens the effect of financial literacy on financial inclusion. The results derived from the dynamic panel model also reasonably conclude the positive effect of economic freedom on financial inclusion while government quality acts as a catalyst for their link. Our results are also robust to sub-panels based on the level of country risk.

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Section: Literature Reviewsupporting

confidence: 81%

Section: Literature Reviewmentioning

confidence: 99%

Does strong governance stimulate the effect of economic freedom and financial literacy on financial inclusion? a cross-country evidence

2021

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“…More specifically, the direct effects are positive, whereas the spatial spillovers are negative. The positive direct effect of Funding rate shows that as the CCB raises the funding interest rate offered, it is forced to improve its efficiency because of the implied balance sheet constraints (Pérez‐Cárceles et al, 2019; Roman & Şargu, 2013). The negative coefficients of the spatial lagged terms indicate that as interest rates rise, competition increases to the point where bank operability deteriorates, thereby supporting the “banking specificities” hypothesis (Pruteanu‐Podpiera et al, 2016).…”

Section: Resultsmentioning

confidence: 99%

“…As CCBs face resource constraints in the financial market, bank management makes use of this price lever to capture customer share. To mitigate the rising interest expenses, we may expect these banks to increase their operational performance (Pérez-Cárceles et al, 2019;Roman & S ¸argu, 2013).…”

Section: Data and Empirical Specificationmentioning

confidence: 99%

Spatial dependence in the technical efficiency of local banks

Algeri

Anselin

Forgione

et al. 2022

Papers in Regional Science

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Cooperative banks primarily compete with one another because they target niche markets that large banks typically ignore. The current study shows that in this competitive environment, the connection between financial intermediaries affects the operational efficiency of small banks. The findings indicate that the capitalization, diversification strategies, funding costs, liquidity, credit quality, and risk of bank neighbors have spillover effects on technical efficiency. Thus, bank networks trigger a cascading effect that demands the attention of bank stakeholders.

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“…However, no results were found addressing this relationship specifically. Government effectiveness was related to several other factors, such as environment (Sofia, 2019), finance (Olubiyi, 2013;Pérez-Cárceles & Gómez-García, 2019;Ibrahim, 2019), socioeconomic indicators (Marino et al, 2016), entrepreneurship (Friedman, 2011;Friedman, 2014), health (Hu & Mendoza, 2014;Batniji, 2014;Ciccone, Vian, Maurer & Bradley, 2014) and GDP (Han, Khan & Zhuang, 2014). Sofia (2019) analyzed the relationship between governance and environmental performance and concluded that governance measures, including government effectiveness, have no effect on environmental practices.…”

Section: Government Effectiveness and Investmentsmentioning

confidence: 99%

Governmental Effectiveness: Analysis of State-Owned Enterprises Investments

Júnior

Damasceno

Lôbo

2019

CGG

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Objective: analyze the relationship between the effectiveness of the government and the investments made by state-owned enterprises. Method: this study makes use of a quasi-experiment using the Difference-inDifferences technique. The variables used to analyze the investments were: Increase in Investments, Number of Employees, Intangible Assets, Short-Term Investment and Return on Investments. Originality/Relevance: little attention was paid to comparisons between countries regarding government effectiveness, and no studies addressing the relationship between government effectiveness and state-owned enterprise investments were found. Results: companies with the government as the majority shareholder only invest more in relation to private companies when they are in environments with low government effectiveness. Theoretical/Methodological contributions: in theoretical terms, the research addressed a new perspective that may be crucial in explaining state-owned enterprise investments: the effectiveness of government. The main methodological contribution was the use of a comparative study on government effectiveness (in terms of using multiple measures and the analysis of many countries).

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Goodness of governance effect on European banking efficiency

Cited by 7 publications

References 47 publications

Does strong governance stimulate the effect of economic freedom and financial literacy on financial inclusion? a cross-country evidence

Does strong governance stimulate the effect of economic freedom and financial literacy on financial inclusion? a cross-country evidence

Spatial dependence in the technical efficiency of local banks

Governmental Effectiveness: Analysis of State-Owned Enterprises Investments

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