Moderating effect of risk committee on the relationship between risk management and financial stability in commercial banks of Pakistan

This study examines the moderating effect of risk committee on the relationship between risk management and financial stability in Pakistan. Risk management is represented by risk factors, bank’s capital regulation and governance factors, whereas financial stability is measured by ROA and ZROE. Using a sample of 28 commercial banks in Pakistan during 2007-2016, the research hypotheses are tested under panel regression models. The results show significant negative impacts of risk factors as measured by credit risk, operational risk, country risk and financial crisis on both ROA and ZROE. This signifies that the increasing trend in the risks would undermine financial stability. Conversely, governance factor of corruption control shows an adverse influence on ZROE, indicating that higher corruption creates greater instability. Meanwhile, political stability, absence of violence, government effectiveness, and voice and accountability have significant positive impacts on ZROE. The results imply, good governance could increase the banking sector financial stability. The results show a negative moderating effect of risk committee on the relationship between risk factors and ROA, indicating that higher involvement of risk committee adversely influenced the risk factors on ROA leading to lower financial stability. In contrast, capital regulation as measured by capital adequacy ratio is positively moderated with ROA, indicating stronger financial stability. Similar results are observed for ZROE that further confirmed the evidence. However, risk committee strengthens the negative relationship between market risk and ZROE, hence depressing the financial stability. The findings of the study provide insight to policy makers regarding the importance of risk committee in making strategic decisions. It is also suggested that representatives of the commercial banks should consider the above-mentioned risk factors for the betterment of the financial stability

Impact of Exports on Economic Growth- A Case of Luxemburg

The key purpose of this article is to analyze the significant impact of Exports, Government expenditures and Education expenditures on the economic growth of the developed economy of the Luxemburg, which is the member state of the EU: the biggest exporter in the world. The span of time is from the year 1975 to 2009 on yearly basis with total no. of observations of 35. Present analysis is based on the simple ordinary least square method to indentify the important linkage between the export and the growth considering the economy of Luxemburg. Experimental results reveal a significant positive relationship of exports, government spending, educational expenditure, on growth of the economy. Export shows that one unit increase in the export cause a positive change of .17 in the economic growth. In the same way government, exp. and education exp. show a coefficient of 2.67 and 9.93 with positive sign. This article identifies the association between the export and the economic growth with respect to Luxemburg

The asymmetric effect of COVID-19 outbreak, commodities prices and policy uncertainty on financial development in China: evidence from QARDL approach

COVID-19 epidemic has brought uncertainty to each sector of the global economy, including the financial sector. The widely spread disease has a drastic effect, which massively created health and financial crisis and virtually pushed the economy to the brink of recession. The study focused on the financial development of China during the COVID-19 pandemic and analyzed the long-term and short-term impact of COVID-19, oil prices, gold prices, and global economic policy uncertainty on the financial development of the country. The QARDL model, Wald test, and Granger causality tests are employed to assess the daily data of variables from January 1, 2020, to March 15, 2021. The study’s empirical results revealed that an increase in the number of COVID-19 registered patients has an unprecedented negative effect on financial development, whereas the oil prices co-moved with the financial performance. On the other hand, gold prices and global economic policy uncertainty are negatively correlated with financial development. This study offers various policy recommendations to help the investors, government, and decision-makers to make better decisions for the improvement of the financial development of China

Dynamic and casual association between green investment, clean energy and environmental sustainability using advance quantile A.R.D.L. framework

This study examines the dynamic and causal relationship between green investment (G.I.), clean energy (C.E.), economic growth, and environmental sustainability with the help of an innovative approach named as quantile autoregressive distributed lagged (Q.A.R.D.L.) model using quarterly data from Q1-1995 to Q4-2019 for China. Our preliminary findings confirm data non-normality and structural breaks in all data series. Therefore, we have applied Q.A.R.D.L. that efficiently deals with these issues. We have further applied the Granger-causality in quantiles to check the causal association among the variables of interest. The findings through Q.A.R.D.L. estimation confirm that the error correction parameter is statistically significant with expected negative sign across major quantiles. In the long run, the results confirm that both C.E., and G.I. are significant mitigants of environmental pollution, however their emissions mitigating effects varies across lower, middle, and higher emissions quantiles. Furthermore, the findings through Granger-causality test confirm the existence of two-way causality between G.I., C.E., and carbon emissions across all quantiles. These results offer valuable policy implications

Environmental sustainability targets: the role of green investment, ICT development, and economic growth

Current research investigates the role of green investment, information, and communication technology development growth in the Chinese economy’s carbon emissions from 1985-2015. This study has applied the quantile autoregressive distributed lagged (QARDL) approach and the Granger-causality in the quantiles to examine the causal linkage between the variables of interest. The findings through QARDL estimation confirm that there is an existence of significant reversion to the long-run equilibrium association between the explanatory variables and CO2. More specifically, the outcomes under long-run estimation confirm that GIN and ICT development plays a significant role in combating the issues like higher CO2 in China. At the same time, more economic growth leads to the destruction of the natural environment with higher carbon emissions. However, the square of economic growth shows some fruitful results towards fighting environmental pollution but not in all the quantiles of the study. Besides, the Granger-causality outcomes confirm the presence of a bi-directional association between green investment, ICT development, economic growth, and its square value. Based on the study findings, some policy implications are also provided. Besides, various limitations are also linked with this study. Firstly, the current study only examines the trends in CO2 emission from the context of China, whereas other regional economies are entirely neglected. Secondly, the factors like governmental influence in controlling carbon emission, environmental regulations, and governance mechanisms are entirely neglected in this research. Thirdly, the robust checking of the empirical findings is also missing in this study. Fourthly, economic uncertainty would also contribute to environmental pollution like CO2. Therefore, it is suggested that future studies should focus on these limitations to provide some meaningful suggestions and literature contributions

How Green Organizational Strategy and Environmental CSR Affect Organizational Sustainable Performance Through Green Technology Innovation Amid COVID-19

The growth of green-oriented businesses for sustainable development (SD) is no longer optional in the current dynamic world, especially for manufacturing businesses in general. Accordingly, the present study investigates the interlinkages between green organizational strategy (GOS), environmental corporate social responsibility (ECSR), and organizational sustainable performance (OSP) by exploring the key mediating role of green technology innovation (GTI). This study uses a quantitative method to gather data from Chinese manufacturing industries, employing a well-structured questionnaire. Senior and middle-level managers were the intended respondents. From the primary survey, 264 valid responses were gathered. The final data were analyzed using SmartPLS (version 3.3.9) by adopting structural equation modeling (SEM) to examine the associations between the targeted constructs, and the results add to the recent literature by offering a cohesive model of GOS, ECSR, GTI, and OSP. The findings revealed that GOS has a strong positive effect on ECSR, GTI, and OSP. Further, ECSR has a strong positive impact on GTI and OSP. Meanwhile, GTI is a key mediating variable in these relationships, which previous studies have not explored. This study innovatively integrates the three green traits, namely, GOS, ECSR, and GTI, into a comprehensive model that is understudied in existing literature in order to help businesses improve their sustainable competitive advantage. The ultimate aim is to help businesses improve their environmental performance and achieve solid sustainability over the long term

Role of green technology innovation and renewable energy in carbon neutrality: A sustainable investigation from Turkey

After the Paris Climate Conference (COP21), many countries start progressing towards carbon neutrality targets. In doing so, green technology innovations (GTIs) and clean energy are the essential factors that can help to achieve the carbon neutrality goal. Therefore, this paper examines the linkages between green technology innovation and renewable energy and carbon dioxide emissions based on the STIRPAT model in Turkey during the time of 1990–2018. The study used testing like “unit-root” to verify the variables' integrative properties containing the information for structural breaks. Also, the bootstrapping ARDL-bound testing technique is used to analyze the relationship between the variables. The causal relationship between green technology innovation, energy consumption, renewable energy, population, income per capita, and carbon dioxide emissions is tested through a Granger causality test. The empirical findings show that green technology innovation, renewable energy, energy consumption, population, income per capita, and carbon dioxide emissions are co-integrated for the long-term association. Additionally, green technology innovation and renewable energy decline carbon dioxide emissions, whereas energy consumption, population, and per capita enhance carbon emissions. This paper helps the policymakers design a comprehensive policy for strengthening environmental sustainability through green technology innovation and renewable energy, specifically in the region of Turkey

Outbreak of epidemic diseases and stock returns: an event study of emerging economy

The massive contagion diseases such as COVID-19 amongst others, has affected nearly all the economies and business concerns that leads to substantial decline in the cashflows and returns dynamics. Considering the same, this paper intends to investigate the impact of outbreak of epidemic diseases on the stock return (observed through cumulative average abnormal return (CAAR)) for the listed banks in Pakistan from 2011 to 2020. Event study method was employed and five days pre and ten days post event of each disease were observed as an event window. The results confirm that none of the epidemic disease outbreak significantly determines the CAAR for all listed banks, except COVID-19 and Dengue Fever during the event day. There is a negative and significant impact of COVID-19 on the stock returns for all the banks in Pakistan from the event day to day eight except day seven. More specifically, COVID-19 is found to be a significant indicator for the stock returns of private banks. However, in case of public listed banks, only the outbreak of HIV cases possesses significant and positive impact on CAAR at the day of event. These findings would guide all stakeholders such as investors, financial analysts, regulators, and chief risk officers specifically in banks to make strategic decisions while analyzing the relationship between epidemic outbreaks and stock returns

The nexus between COVID-19 fear and stock market volatility

This study described an empirical link between COVID-19 fear and stock market volatility. Studying COVID-19 fear with stock market volatility is crucial for planning adequate portfolio diversification in international financial markets. The study used AR (1) – GARCH (1,1) to measure stock market volatility associated with the COVID-19 pandemic. Our findings suggest that COVID-19 fear is the ultimate cause driving public attention and stock market volatility. The results demonstrate that stock market performance and GDP growth decreased significantly through average increases during the pandemic. Further, with a 1% increase in COVID-19 cases, the stock return and GDP decreased by 0.8%, 0.56%, respectively. However, GDP growth demonstrated a slight movement with stock exchange. Moreover, public attention to the attitude of buying or selling was highly dependent on the COVID-19 pandemic reported cases index, death index, and global fear index. Consequently, investment in the gold market, rather than in the stock market, is recommended. The study also suggests policy implications for key stakeholders

Capital Structure Determinants: Evidence from Banking Sector of Pakistan

Using the firm level pannel data analysis, this study develops to explore the preliminary determinants of capital structure of banking firms of Pakistan.  The findings discover the idea of major determinants from the perspective of previous theories of capital structure are size of the firm, profitability in terms of return on assets and return on equity after taxes  and Gross Domestic Product GDP over a period of time. The capital choice decision for the banking firms in Pakistan is symmetric to the pecking order theory explaining the fact that there is negative and sigfncaint association between leverage and return on equity after taxes. The significant difference across the banking firms and some financial limitation are the factors which are influencing the decision of debt-to-equity mixture. We have used Pannel Data models like least square dummy variable model LSDVM, Fixed effect mode, random effect model and pooled regression mode. Through statistical tests our results are in favor of random effect regression outcomes. Furthermore outcomes are quite beneficial for the managers while defining the optimum level of debt to equity mixture especially in the banking sector. Keywords: Leverage, GDP, size, pecking order, capital structur