Impact of general trust on bank risk-taking: the moderating effect of confidence in banks

Masoud, Heba; Albaity, Mohamed

doi:10.1108/jes-09-2020-0479

Cited by 12 publications

(13 citation statements)

References 74 publications

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“…Chen et al (2017) found that Chinese firms in high trust regions were more likely to acquire bank credit than those in lower trust regions. Masoud and Albaity (2021) examined the link between the level of general trust and bank risk-taking. They found that general trust was negatively linked to bank risk-taking in developed and developing markets.…”

Section: Literature Reviewmentioning

confidence: 99%

Do trust and country governance affect credit growth in GCC countries?

Albaity

Mallek

Al‐Tamimi

et al. 2022

IMEFM

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Purpose This study aims to investigate whether quality of governance (QoG), trustworthiness and confidence impacted bank credit growth in Gulf Cooperation Council (GCC). In addition, it examined whether credit growth differed between Islamic and conventional banks in GCC countries. Design/methodology/approach Using data from 104 (56 conventional banks and 48 Islamic banks) banks located in GCC countries from 2012 to 2019, the two-step system generalized method of moments estimator was used to analyse the data. Findings Evidence was found of the influence of trust in institutions in boosting credit growth. The QoG generally expanded credit growth which instilled confidence in the economy and the banking sector. Credit growth was more pronounced for Islamic banks. This paper has contributed to the literature evaluating the determinants of credit growth in GCC. Originality/value This paper has been one of the few studies exploring the effect of trustworthiness and confidence (informal institutions) and macro governance (formal institutions) in GCC. GCC is different from other regions, as it is oil-dependent and shares similar legal, social and cultural aspects. This suggested that these might yield different results than expected.

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Section: Literature Reviewmentioning

confidence: 99%

Do trust and country governance affect credit growth in GCC countries?

Albaity

Mallek

Al‐Tamimi

et al. 2022

IMEFM

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“…The MENA countries are known for their similar cultural values, ethnic identity, and social norms (Masoud and Albaity 2021;Ayadi et al 2015;Lassoued et al 2018Lassoued et al , 2016Pitlik and Rode 2017). Similarly, the MENA region has been classified as a collectivistic community based on group-oriented decision-making (Kabasakal and Bodur 2002;Pitlik and Rode 2017).…”

Section: Introductionmentioning

confidence: 99%

“…Similarly, the MENA region has been classified as a collectivistic community based on group-oriented decision-making (Kabasakal and Bodur 2002;Pitlik and Rode 2017). In addition, the MENA region has been ranked second, after the East Asia region, in terms of banking industry development (Masoud and Albaity 2021;Bourgain et al 2012;Anzoategui et al 2010). Lastly, the majority of MENA countries have been classified as oil-rich economies representing 65% of the world's oil reserve, which might suggest why the impact of the COVID-19 pandemic might be different than for other countries (Albaity et al 2020;Mertzanis et al 2019;Mohamed et al 2015).…”

Section: Introductionmentioning

confidence: 99%

Bank Stock Return Reactions to the COVID-19 Pandemic: The Role of Investor Sentiment in MENA Countries

Albaity

Mallek

Mustafa

2022

Risks

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In this study, we investigated the impact of COVID-19 investor sentiment (CS), number of cases (CC), and deaths (CD) on bank stock returns in 16 MENA countries. In addition, we examined the interaction effects of CS with CC and CD on bank stock returns. Lastly, we looked at whether Islamic banks outperformed conventional banks during the pandemic. Based on monthly data from the Middle East and North Africa (MENA) countries from February 2020 to July 2021, we used the clustered standard error fixed effect estimation on Islamic and conventional bank stock market returns. The results suggest that CC and CD have negative impacts on bank stock market returns while CS has no effect, except for the lagged value. The interaction effect of CS with CC and CD on stock returns proved to strengthen the link in the current month and weaken the link in the previous month.

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Section: Introductionmentioning

confidence: 99%

“…Emerging economies have been the major receivers in terms of studies concerning banks performance in risk-taking and profitability and their determinants. Some of the notable studies on emerging economies are Masoud and Albaity (2021), Staehr andUusk€ ula (2020), De Moraes et al (2020), Gulati et al (2019), Wu et al (2019), Chen et al (2017), Chen et al (2015) and Soedarmano et al (2013). One of the essential determinants of a bank default-risk is bank market competition.…”

Section: Introductionmentioning

confidence: 99%

Competition, concentration and default-risk in the Indian banking industry

Khan

Ahmad

2022

JES

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PurposeThe study investigates the impact of bank market competition and concentration on the bank default-risk using the data for 36 Indian scheduled commercial banks from 1999 to 2017.Design/methodology/approachThe study adopts the dynamic panel generalised method of moments (GMM) and panel quantile models to obtain the results.FindingsBank market competition and concentration foster financial fragility in terms of high default-risk. This implies that concentration does not mean a lack of competition in the Indian banking market. The findings from the quantile model reveal that the stated relationships become weaker under the tails of the conditional distribution of the risk measure.Research limitations/implicationsThe authors recommend that non-structural measures (Lerner index and H-statistic) should be preferred over the concentration measures (HHI and CR3) to characterise bank market competition in India. Based on the evidence of persistence in the bank risk variable, from the methodological perspective, dynamic panel data models are better choices for bank-level analyses compared to the conventional panel data models.Practical implicationsTo improve the health of banks, price competition should be reduced among them. This objective should be achieved by creating new avenues to increase the banks' non-interest income parallelly with the consolidation of the market.riginality/valueFirst, it tries to answer whether concentration implies a lack of competition for a banking system like India. Second, the quantile regression technique enables us to understand the varying nature of the impact of market competition on bank risk at different locations on the latter's conditional distribution. Earlier studies have not looked at these aspects in the Indian context.

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Impact of general trust on bank risk-taking: the moderating effect of confidence in banks

Cited by 12 publications

References 74 publications

Do trust and country governance affect credit growth in GCC countries?

Do trust and country governance affect credit growth in GCC countries?

Bank Stock Return Reactions to the COVID-19 Pandemic: The Role of Investor Sentiment in MENA Countries

Competition, concentration and default-risk in the Indian banking industry

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