Is Economic Uncertainty a Risk Factor in Bank Loan Pricing Decisions? International Evidence

Ashraf, Badar Nadeem

doi:10.3390/risks9050081

Cited by 11 publications

(8 citation statements)

References 49 publications

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“…Additionally, Cui et al ( 2021 ) found that the effect of EPU on corporate innovation investment is negatively significant. Ashraf ( 2021 ) using data from World Uncertainty Index (WUI) on a bank-panel of 88 countries found that high uncertainty raises interest rates on bank loans, which in turn, reduces investments.…”

Section: Literature Reviewmentioning

confidence: 99%

Economic policy uncertainty, governance institutions and economic performance in Africa: are there regional differences?

Ekeocha

Ogbuabor

Ogbonna

et al. 2023

Econ Change Restruct

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In recent years, the global economy has witnessed several uncertainty-inducing events. However, empirical evidence in Africa on the effects of economic policy uncertainty (EPU) on economic activities remains scanty. Besides, the moderating effect of governance institutions on the uncertainty-economic performance relationship in Africa and the likelihood of regional differences in the response of economic activities to EPU on the continent are yet to be investigated. To address these gaps, we applied system GMM and quantile regressions on a panel of forty-seven African countries from 2010 to 2019. We find that while global EPU and EPUs from China, USA and Canada exert considerable influence on economic performance in Africa, the effects of domestic EPU and EPUs from Europe, UK, Japan, and Russia were negligible, suggesting that African economies are resilient to these sources of uncertainty shocks. We also find that governance institutions in Africa are not significantly moderating the uncertainty-economic performance relationship. However, our results highlighted regional differences in the response of economic activities to uncertainty, such that when compared to East and West Africa, economic performance in Central, North and Southern Africa is generally more resilient to global EPU and EPUs from China, USA, Europe and UK. We highlighted the policy implications of these findings.

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Section: Literature Reviewmentioning

confidence: 99%

Economic policy uncertainty, governance institutions and economic performance in Africa: are there regional differences?

Ekeocha

Ogbuabor

Ogbonna

et al. 2023

Econ Change Restruct

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“…They are in a position that requires significant dependence on fluctuating natural conditions, placing them at higher economic risk than formal employment. The concept of uncertainty in economic theory (Ashraf, 2021), which explains how individuals make decisions in situations with incomplete or changing information, can provide insights into how river rock gatherers manage the risks associated with their work.…”

Section: Working Hoursmentioning

confidence: 99%

River Rock Gathering Practices and Their Impact on the Taliabo Village Community

Irmayani,

Hapsa,

Marzuki

et al. 2023

sjss

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This research aims to understand how the Taliabo Village community utilizes the potential of Sausu River rocks, identify the challenges faced by rock gatherers, and explore the socio-economic dynamics of the village in addressing these challenges. This research uses an inductive qualitative analysis. Inductive analysis is an approach that begins with field facts, analyzes them based on relevant theories and arguments, and ultimately yields a conclusion. The results show that gathering rocks in the Sausu River of Taliabo Village is a vital economic activity supporting the livelihood of part of the community. Adapting to natural conditions and using traditional tools like tire rafts and gate-gate demonstrate the community’s resilience and creativity in utilizing local resources. Although flexible working hours offer adaptation to uncertainties, the pricing structure of rocks based on their size provides significant economic opportunities. However, challenges such as natural conditions in the dry season and health issues add difficulties to this work. Furthermore, socio-economic aspects such as the culture of mutual aid underscore the importance of communal cooperation in overcoming hardships. At the same time, limitations in meeting education and housing needs reflect broader challenges faced by the river rock gatherer community in Taliabo Village. Therefore, the Government of Parigi Moutong Regency is recommended to support the rock gathering activities in the Sausu River as an essential part of Taliabo Village’s local economy. It could include providing training and access to more efficient technology to enhance productivity and work safety for river rock gatherers. Additionally, rock gatherers are advised to adopt safer and more sustainable work practices, including ergonomic tools and attention to occupational health and safety. For the Taliabo Village community, it is recommended that the existing mutual aid system be strengthened. These joint initiatives can help address some of the socio-economic challenges the river rock gatherer community faces while strengthening communal resilience against economic and natural uncertainties.

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“…In addition to addressing the question of how to measure EPU, scholars have studied the impact of EPU on macro-and microeconomic fluctuations. In macro studies, uncertainty shocks are found to raise bank lending rates and lead to sharp fluctuations in the stock market [31,32]. Such shocks may also depress GDP growth, leading to a macroeconomic downturn [33], which, in turn, affects economic recovery [34].…”

Section: Literature Reviewmentioning

confidence: 99%

Economic Policy Uncertainty, Social Financing Scale and Local Fiscal Sustainability: Evidence from Local Governments in China

Xia

Zhen-xing

2022

Sustainability

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The motivation for this paper is to investigate a previously unexplored exogenous shock to fiscal sustainability from economic policy uncertainty. To control for the impact of local government institutional and cultural factors on fiscal sustainability, we select data from 30 Chinese provinces for the 2012–2020 period for empirical analysis. We find that economic policy uncertainty shocks have a robust negative effect on fiscal sustainability after controlling for endogeneity. Economic policy uncertainty has an impact on fiscal sustainability mainly through the mediating variable of the social financing scale. To cope with the impact of uncertain economic policies, corporations reduce the scale of investment and financing, and residents have defensive savings motivations, reducing consumption and increasing savings. Therefore, economic policy uncertainty can lead to a reduction in the social financing scale. A reduction in the social financing scale can reduce government revenue and increase the debt scale. Ultimately, this leads to a decrease in the fiscal sustainability of local governments. This paper can provide a theoretical reference for reducing the negative impact of government policy adjustments and improving fiscal sustainability.

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Is Economic Uncertainty a Risk Factor in Bank Loan Pricing Decisions? International Evidence

Cited by 11 publications

References 49 publications

Economic policy uncertainty, governance institutions and economic performance in Africa: are there regional differences?

Economic policy uncertainty, governance institutions and economic performance in Africa: are there regional differences?

River Rock Gathering Practices and Their Impact on the Taliabo Village Community

Economic Policy Uncertainty, Social Financing Scale and Local Fiscal Sustainability: Evidence from Local Governments in China

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