Institutional perspective of financial sector development: A multidimensional assessment

Khan, Muhammad Atif; Gu, Lulu; Khan, Muhammad Asif; Bhatti, M. Ishaq

doi:10.1016/j.ecosys.2022.101041

Cited by 14 publications

(11 citation statements)

References 79 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The results show the instrumented institutional quality, and its constituent factors have a significant positive impact on the financial system efficiency and are consistent with the baseline results. These findings also complement the growing body of literature on institutional quality and various dimensions of financial development for example, [ 9 , 11 – 13 , 20 , 22 , 27 , 53 , 55 , 62 , 63 ] among others. Overall, after addressing endogeneity our results still hold.…”

Section: Resultssupporting

confidence: 79%

“…A better institutional and governance environment brings foreign investment-through mergers and acquisitions-to the country which may bring more efficient financial management skills and techniques to the host country and improves the financial system efficiency [35]. Hence, institutional quality increases competition that may derive and force financial institutions and markets to be more innovative and efficient [53] Moreover, a strong institutional framework can also increase the efficiency of the financial system by reducing systemic risk and promoting the safety and stability of the financial sector. Financial stability results in greater efficiency as resources are saved from being used to manage systemic risks.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…A better institutional and governance environment brings foreign investment―through mergers and acquisitions―to the country which may bring more efficient financial management skills and techniques to the host country and improves the financial system efficiency [ 35 ]. Hence, institutional quality increases competition that may derive and force financial institutions and markets to be more innovative and efficient [ 53 ]…”

Section: Literature Review and Hypothesismentioning

confidence: 99%

See 2 more Smart Citations

Country-level institutional quality and financial system efficiency: An international evidence

Khan,

Khan

et al. 2023

PLoS ONE

Self Cite

View full text Add to dashboard Cite

The optimum economic outcome of financial system development depends on its level of efficiency. The purpose of this study is to investigate the effect of institutional quality on financial system efficiency. For empirical analysis, we have used a panel dataset of 108 countries from 1996–2020 and employed fixed effect regression and two stages least squares (2SLS) regression methods. The empirical results show that institutional quality has a significant positive effect on financial system efficiency. Particularly all the constituting elements—voice and accountability, political stability and absence of violence, regulatory quality, government effectiveness, rule of law, and control of corruption—of institutional quality are found to have a significant positive impact on financial system efficiency. Moreover, we found that the effect of institutional quality is more pronounced in countries with low-income levels and strong institutional quality. These findings are robust across several robustness tests conducted using additional controls, alternative methodologies, an alternative measure of institutional quality, and financial system efficiency. The results of the study suggest that policy makers should prioritize both enhancing and sustaining institutional quality to promote the efficiency of the financial system, which is crucial for sustainable growth and development.

show abstract

Section: Resultssupporting

confidence: 79%

Section: Theoretical Frameworkmentioning

confidence: 99%

Section: Literature Review and Hypothesismentioning

confidence: 99%

See 1 more Smart Citation

Country-level institutional quality and financial system efficiency: An international evidence

Khan,

Khan

et al. 2023

PLoS ONE

Self Cite

View full text Add to dashboard Cite

show abstract

“…This, in turn, can encourage the use of formal channels for remittance transfers and enhance the ability of recipient households to save and invest in productive activities, ultimately leading to greater FI. Furthermore, the presence of well-functioning nancial institutions can facilitate the intermediation of remittances, allowing for increased lending to households and rms, and contributing to nancial deepening and broader economic growth (Khan et al, 2022). Conversely, countries with weak institutional arrangements may experience higher transaction costs, limited access to nancial services, and a higher prevalence of informal remittance channels, driven by the lack of con dence in the formal sector and its ability to provide reliable and affordable services can undermine FI.…”

Section: Remittances and Financial Inclusion-the Role Of Iqmentioning

confidence: 99%

Remittances and Financial Inclusion: The Role of Institutional Quality in Belt and Road Initiative Economies

Liaqat,

Hashmi,

Khan

et al. 2024

Preprint

Self Cite

View full text Add to dashboard Cite

This study examines the remittances and financial inclusion nexus by subsuming the critical role of institutional quality in the unique settings of Belt and Road Initiative (BRI) economies. The existing literature pertaining to the role of institutional quality in remittances and financial inclusion has placed less emphasis on the multidimensional nature of financial inclusion. Therefore, this study contributes to the debate on the role of institutions in explaining the nexus between remittances and financial inclusion. By adopting two-stage least squares (2SLS) and generalized methods of moments (GMM) estimation techniques, the empirical findings show that institutional quality plays a significant role in explaining the relationship between remittances and financial inclusion across various dimensions. The overall findings are further confirmed by applying a series of robustness checks such as the adoption of alternative measure of financial inclusion and institutional quality, alternative instruments and alternative estimator. The study offers useful policy implications for governments, regulatory agencies, and other stakeholders in BRI partners economies. GEL Classification: F24; G15; G28

show abstract

“…However, the other authors also employ the aggregated indices compiled by Svirydzenka [2016]. For instance, Khan et al [2022] used these indices to examine the relationship between institutional quality and financial sector development for 85 emerging and developing economies during the 1996-2018 period.…”

Section: Review Of the Literaturementioning

confidence: 99%

A Comparison of the Financial Sector and Macroeconomic Performance Using Turning Points Analysis

Bernardelli,

Próchniak

2023

pefim

View full text Add to dashboard Cite

Loss of financial potential is one of the most serious risks enterprises face. The risk management system for the loss of financial potential helps enterprises identify, evaluate and manage risks that may affect their financial condition. This system allows enterprises to reduce the possibility of financial losses andensures more efficient work with financial resources. The purpose of the article is to identify the main imperatives, which are the basis for ensuring the development of financial potential and the justification of measures to neutralise the risks of business entities in the agricultural sector in Ukraine. The main sources of loss of financial potential of enterprises in the agricultural sector of the economy of Ukraine have been identified. It has been established that currently, the biggest threats are: low business activity, a low level of technological equipment and innovation, negative profitability and slow turnover of capital, lack of access to credit for small- and medium-sized enterprises and climate changes. Agricultural enterprises are subject to various risks of loss of financial potential, which may be associated with changes in weather conditions, animal epidemics, changes in legislation, currency risks, etc. Neutralisation of these risks is an important element of effective management of an agricultural enterprise and ensuring its stability. It has been proven that one of the ways to neutralise risks is to create a reserve fund in case of unexpected events that may lead to the loss of financial potential. Such a fund may include funds that can be used for replanting crops, repairing infrastructure, reimbursing losses from animal epidemics and other needs. It is proposed to minimise the risks with the help of insurance. Insurance can be provided at different levels: from crop insurance to emergency insurance. Having insurance allows the company to reduce financial losses in case of unexpected events. In addition, the enterprise can use financial instruments to reduce currency risks. These tools will enable you to protect the company from changes in exchange rates.

show abstract

Institutional perspective of financial sector development: A multidimensional assessment

Cited by 14 publications

References 79 publications

Country-level institutional quality and financial system efficiency: An international evidence

Country-level institutional quality and financial system efficiency: An international evidence

Remittances and Financial Inclusion: The Role of Institutional Quality in Belt and Road Initiative Economies

A Comparison of the Financial Sector and Macroeconomic Performance Using Turning Points Analysis

Contact Info

Product

Resources

About