Stock markets, banks, and economic growth: Empirical evidence from the MENA region

Over the last four decades, a wide theoretical debate is concerned with the fundamental relationship between financial development and economic growth. Recent studies shed some light on the simultaneous effect of banks and financial system development on growth rather than a separate impact. The empirical study is conducted using an unbalanced panel data from 11 MENA region countries. Econometric issues will be based on estimation of a dynamic panel model with GMM estimators. Thus, peculiarities of MENA region countries will be detected. The empirical results reinforce the idea of no significant relationship between banking and stock market development, and growth. The association between bank development and economic growth is even negative after controlling for stock market development. This lack of relationship must be linked to underdeveloped financial systems in the MENA region that hamper economic growth. Then, more needs to be done to reinforce the institutional environment and improve the functioning of the banking sector in the MENA region. Based on these results, other regions at the same stage of financial development such as Africa, Eastern Europe or Latin America should improve the functioning of their financial system in order to prevent their economies from the negative impact of a shaky financial market.     

Asset Pricing and Cost of Equity in the Tunisian Banking Sector: Panel Data Evidence

In spite of popularity and theoretical simplicity of the one-factor Capital Asset Pricing Model (CAPM) used in the valuation of financial assets, researchers are more concerned with the important extension proposed by Fama and French (1993) , that is, the Three-Factor Pricing Model (TFPM). Alongside beta, average stock returns could be explained by some size and book-to-market supplementary effects. With these two complementary models, estimation of the cost of equity is carried out for the Tunisian banking sector. In order to account for inter-individual heterogeneity, estimation of parameters is conducted according to random coefficient specifications within the context of panel data analysis.     

Energy Price Shocks and Financial Market Integration: Evidence from New Keynesian Model

International Advances in Economic Research - The purpose of this study is to examine the impact of oil price shocks on economic activity. A dynamic stochastic general equilibrium model was applied...     

Is the relationship between bank stability,competition, and intervention quality nonlinear? Evidence from North African countries

This paper highlights the existence of a nonlinear relationship between bank stability and competition and analyzes the role that government intervention plays in shaping this relationship. We used a sample of 45 banks in North African countries over the period 2005–2019. We applied a semiparametric approach based on penalized spline estimation. The results unveil the specific shape of the competition–stability relationship at different levels of competition; banks reconsider their risk-taking behavior at each level of competition. This nonmonotonic stability at different levels of competition is attributed to the quality of intervention, which is found to be an important determinant in shaping this relationship. Thus, we explain the dispersion of risk levels among North African banks in part by the quality of regulation in each country and conclude by recommending the strengthening of regulation, supervision and the macro-prudential framework.