International Finance and Banking

Journal Information
EISSN : 23742089
Current Publisher: Macrothink Institute, Inc. (10.5296)
Total articles ≅ 70
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Latest articles in this journal

Marius Kounou
International Finance and Banking, Volume 7; doi:10.5296/ifb.v7i1.15582

Abstract:
Many studies have been done on the impact of Foreign Direct Investment on economic growth and poverty reduction in developing countries, however there is a lack of empirical studies of FDI impact on poverty reduction in South Africa which is the second largest FDI recipients of one of the poorest regions in the world (sub Saharan Africa). We used time series data from 1990 to 2017 with the ARDL method to evaluate the impact of FDI Inflow on HDI in the country. The results show that FDI inflow has no significant impact on HDI both in the short run and long run on the country. This result is consistent with findings reported in the literature.
Nisreen Mohammed Said Almaleeh
International Finance and Banking, Volume 7; doi:10.5296/ifb.v7i1.16865

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Adjei Gyamfi Gyimah, Annette Serwaa Agyeman, Solomon Adu-Asare
International Finance and Banking, Volume 7; doi:10.5296/ifb.v7i1.15753

Abstract:
Microfinance institutions contribute significantly to the development of a country, and many of these institutions are found in most developing countries including Ghana. However, many challenges have been alleged to stifle the efforts of microfinance companies in their attempt to make their all-important contribution to the development of nations. This study explored the effect of operational flaws on the performance of microfinance institutions in Ghana. The results discovered flaws and challenges associated with the operations of the MFIs in many areas including corporate governance, credit risk management, credit administration, regulatory challenges, and training programs. The study also revealed that such flaws and challenges do harm the overall performance of the MFIs. Based on the findings, it is recommended that MFIs put in place a well-composed and resourceful credit committee to perform the duty of credit risk management in the institutions. The institutions could also reduce their interest rates to encourage their clients to apply for more loans. Lastly, it is recommended that the MFIs take all necessary steps to ensure that they reduce the flaws and challenges they face to mitigate the negative impact of such deficiencies on their performance.
Ly Phuong Tran, Binh Thi Thanh Dao
International Finance and Banking, Volume 7; doi:10.5296/ifb.v7i1.16436

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Mohammad Niaz Morshed, Sardar Md Humayun Kabir, Muhibbullah, Rafia Afroz, Fadhilah Binti Abdullah Asuhaimi
International Finance and Banking, Volume 7; doi:10.5296/ifb.v7i1.15710

Abstract:
Corporate governance is the system by which organizations are directed, monitored and controlled. It is an oversight mechanism to ensure the management team efficiently allocates the organizational resources, so as to protect the interest of shareholders and stakeholders. There is a need for good corporate governance practice to stabilize the performance of financial institutions. This study investigated the influence of corporate governance in banking performance. Panel data analysis has been conducted for the top nine public and private commercial banks operating in Bangladesh for a period of 2009 to 2017. Board size, structure of internal audit committee and capital adequacy ratio were being taken as independent variables to measure the effects of corporate governance whereas return on asset, return on equity and earnings per share were being taken as dimensions for measuring bank performance. Correlation and regression analysis techniques were being used to examine the relationships between corporate governance practices and bank performance. The results indicated that CAR has the greater impact on Bank performance. The information derived from this study can be valuable and will help to enhance the understanding of the governing bodies of financial institutions for accelerating banking performance.
Musaed S. Alali
International Finance and Banking, Volume 6; doi:10.5296/ifb.v6i2.16035

Abstract:
This study aims to compare the financial performance between Islamic and conventional banks listed at Kuwait stock exchange over the period 2011-2018 using the modified DuPont model of financial analysis which is based on the analysis of return on equity (ROE). Unlike previous studies where researchers compared the performance on a bank-to-bank basis, this study examines the aggregate ratios of Islamic banks and compare it to aggregate ratios of conventional banks. The study also adds volatility into the model since consistency in returns indicated a more stable sector. Results obtained from this study showed that conventional banks in Kuwait had a better mean performance during the study period in terms of both return on assets (ROA) and return in equity (ROE), Islamic banks also showed a higher deviation in these two ratios resulting in a lower Sharpe ratio. While the results showed no statistically significant mean difference between Islamic and conventional banks in terms of return on assets (ROA), the results also showed a statistically significant difference in mean return on equity (ROE) between the two sub-sectors. On the other hand, Islamic banks showed an impressive improvement in their ratios during the last three years of the study period which impose a real threat to conventional banks in the future.
Peter Ayunku
International Finance and Banking, Volume 6; doi:10.5296/ifb.v6i2.14928

Abstract:
This paper investigate whether macroeconomics indicators influences stock price behavior in Nigerian stock market, using an annual time series data spanning from 1985-2015. The study employed some econometric tools such as Augmented Dicker Fuller (ADF) Unit Root test, Johansen’s co integration test, Vector Error Correction Model (VECM) to analyze the variables of interest. The study found out that Money Supply (MS) has an inverse but statistically significant influence on stock prices in Nigerian stock market also Treasury Bill Rate (TBR) has an inverse and statistically insignificant influence on stock market prices. While on the other hand, Market Capitalization (MCAP) has a positive and statistically significant influence on stock prices while Exchange Rate (EXR) has positive but statistically insignificant relationship with stock prices in the Nigerian Stock Market. In view of the above, the study recommends amongst others that monetary authorities should try as much as possible to implement sound macroeconomic policies that would enhance stock market growth and development in Nigeria.
Gazmend Nure
International Finance and Banking, Volume 6; doi:10.5296/ifb.v6i2.14897

Abstract:
This work investigated the impact of the bank's liquidity management in the profitability of the bank, considering the fact that different research has found that their relationship is negative in some other positive research. The relationship between these two components depends on the variables used to measure them. In this study are included commercial banks operating in southern and central Europe for the period 2009-2017. Following the study, it was possible to determine which is the optimal level of liquidity that gives us the highest level of profitability, and the results showed that not necessarily the high-level liquidity banks can achieve high-level profitability. The data had non-normal distribution, so as a technique of analysis non-parametric tests were used.
Peter Ayunku
International Finance and Banking, Volume 6; doi:10.5296/ifb.v6i1.14883

Abstract:
This study examined the relationship between interest rate liberalization and credit to private sector in Nigeria, using annual time series data spanning from 1986 to 2016. The study employed ARDL (p,q) model as suggested by Pesaran and Shin (1997) to analyzed the data. The study commenced with the Augmented Dickey Fuller (ADF) unit root test and the results reveal that all the variables were integrated at order I (1). While the result of the estimated coefficient reveals that interest rate with the first lag was positive and statistically insignificant. And that a percent increase will lead to a 0.087 percent increase in the dependent variable (interest rate). In the same vain Inflation rate has a negative influence on interest rate and was not statistically significant. A percentage change in inflation will lead to 0.08 percent decrease in interest rate.The coefficient of determination (R2 = 0.78) of the estimated model ARDL(1,2,4,1) shows that about 78 percent of the systematic variation in interest rate(INT) is totally explained and well accounted for by the independent variables. This implies that the ARDL (1, 2, 4, 1) model is of goodness of fit and is quite adequate. Base on the findings the study recommends amongst others that monetary authority should pursue interest rate liberalization policies so as to enhance credit to private sector growth that would further engender economic growth and development in Nigeria.
Melita Charitou
International Finance and Banking, Volume 6; doi:10.5296/ifb.v6i1.14384

Abstract:
In this study we examine the determinants of the capital adequacy ratios of the US financial institutions over the period 2012-2017. Using a dataset of 2135 bank-year observations, results show that financial institutions with high operating expenses as a percentage of revenues have lower capital adequacy ratios. This is an indication that bank inefficiencies are an impediment to robust capital adequacy ratios. Moreover, results show that more profitable banks have higher CARs. Evidence shows that additional two risk related variables affect positively CARs, namely, earnings coverage of net charge off and loss allowance to loans. These results should be of great importance to bank executives, bank regulators and to major stakeholders such as investors and financial analysts, especially after the latest global financial crisis and the collapse of giant US financial institutions.
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