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The Impact of Political Institutions on Fiscal Sustainability in NMS 11 Countries: Mediating Effects of Economic Reforms
No full textThe aim of this study is to investigate how the link between a country’s legislative and executive branches affects its ability to maintain fiscal discipline through mediating effects of economic reforms. The research bases its analysis on an investigation of NMS-11 countries between 1991 and 2022 using Quantile Mediation Analysis (QMA). It begins with an estimation of the impact of political institutions on fiscal sustainability and then continues with an investigation of the ways how political institutions influence the implementation of economic reforms through a mediator model. Moreover, in an attempt to evaluate the mediation effect, the study uses relevant coefficients taken from prior analyses to compute the indirect impact across quantile distributions. The study sheds the importance of the context in evaluating the role of political institutions and economic reforms on fiscal sustainability, highlighting the varying effects at different quantile levels. In fact, economic reforms are shown to be important when fiscal stress is at a relatively low level and are relatively less effective when the stress is high because the impact of the reforms and institutional factors differs according to the distribution of debt to GDP. This investigation shows that political stability and fiscal outcomes are interactive by segmenting this group into legislative, executive, judicial, and federal dimensions. Politicians should focus on improving the democratization processes of the lower house to facilitate accountability and decision-making when it comes to the judiciary to assist in fiscally integrating during some rough patches. They should also use specific economic actions regarding debt as well as apply the federal policies relevant to various forms of federalism to provide successful reforms
Financial Inclusion in Sub-Saharan Africa: The Case of Mobile Money
Full text linkFinancial inclusion is a mechanism that provide accessibility and application of formal financial system at an affordable cost. Mobile money as a financial service allows value to be exchanged and stored in mobile money accounts as this facilitates economic development, expand investment opportunities, increase consumer spending, encourage entrepreneurship, and boost economic growth. Mobile money appears to be a good solution for accelerating financial inclusion.Research objective: This research aims to assess how mobile money can improve financial inclusion in Sub-Saharan Africa.Design/Methodology/Approach: This study utilizes secondary data from international organizations, specifically the IMF Financial Access Survey (FAS) and World Development Indicators by the World Bank. The sample consists of 17 Sub-Saharan African countries from 2010 to 2021. Financial inclusion is measured using an index developed, with data sourced from the FAS (2019) database, while mobile money usage data is also derived from the same database. To evaluate the impact of mobile money on financial inclusion, a dynamic panel model is utilized, estimated using the systemic generalized method of moments (Sys-GMM), drawing on methodology’s framework for robust estimation.Results: The results confirm the central hypothesis, according to which the use of mobile money improves financial inclusion in Sub-Saharan Africa. It is therefore up to States and mobile network operators to intensify the use of mobile money. This intensification would be possible thanks to the development of mobile money, the regulation and security of mobile money services.Originality / Value / Practical implications: This research contributes novel insights into the role of mobile money as a transformative tool for financial inclusion in Sub-Saharan Africa. It distinguishes between registered and active mobile money accounts, assessing their effectiveness in facilitating access to traditional banking services such as loans, bill payments, savings, and overdrafts. By understanding user behaviors and engagement, this study provides a nuanced perspective on the impact of mobile money on the financial landscape of the regionImplication: The results enable the formulation of strategic recommendations for policy-makers aimed at advancing economic policies that foster the growth and utilization of mobile money services. These policies may include fostering partnerships between governments and mobile operators, enhancing digital literacy programs for users, and implementing regulatory frameworks that protect user interests while promoting innovation within the mobile money sector
Unveiling the Impact Skilled Migration has on the Creative Class: Panel Data Analysis for EU Countries
Full text linkInnovation and creativity lie at the heart of countries’ ability to grow and improve the living standards of their people. Specifically, innovative and creative individuals contribute to economic growth as they bring with them ideas that will produce new knowledge and new technologies. As such, countries have attempted to develop policies that will attract such individuals in order to facilitate and accelerate the growth process. This article examines the theoretical foundations of the creative class, their economic impact and investigates the role of skilled migrants in shaping the creative economy by using data for 22 European Union countries during the period 2007–2021. The study uses the dynamic panel data model with Arellano and Bover/Blundell and Bond System Generalized Moments (One Step SGMM and Two Step SGMM) estimators. The results demonstrate that skilled immigration, research and development expenditures and the exportation of high-tech products have a positive effect on a skilled labor force
Economic and Political Implications of De-Dollarizing Saudi Oil Transactions: An Analysis of a Panel Quantile Regression Focused on European Union Countries
Full text linkThis article explores the economic and political implications of de-dollarization in Saudi oil transactions, by focusing on the European Union countries. It examines how an increased euro usage in these transactions influences the real exchange rate of the euro against the dollar and the volume of the oil imports from Saudi Arabia. A new de-dollarization indicator is introduced, measured as the proportion of the total imports denominated in euros relative to the total imports in all currencies. By using panel data from 2000 to 2023 for 13 EU oil-importing countries, the study applies quantile regression to capture heterogeneous effects across the conditional distribution. The findings show that de-dollarization positively and significantly affects the euro’s real exchange rate at all quantiles. However, its impact on oil import volumes varies: it is negative for countries with low to moderate oil dependency (quantiles 0.25 and 0.5) but becomes insignificant for highly oil-dependent countries (quantile 0.75). Key implications for EU countries include: i) adjusting monetary policies to stabilise exchange rates, optimising reserves, and promoting the euro use in energy trade; and ii) strengthening regional energy cooperation and diversifying their supply sources in order to reduce vulnerabilities
Expenses Mastery: Thriving on Thrift for Sustainable Budgeting and Elevating Finnov
No full textThe purpose of this study was to examine the relationships between factors influencing business expense management and their impact on mastering expenses in the context of fostering sustainable budgeting and financial innovation (Finnov). The research focused on identifying critical elements that contribute to expense optimization and financial sustainability within corporations. The study employed a quantitative research design using data collected from treasurers and financial managers of 200 corporations in the Western Balkan Countries between 2020 and 2023. Analytical methods, including exploratory factor analysis, reliability analysis, and multiple regression analysis, were used to explore the relationships between various factors and their impact on expense management practices systematically. The findings revealed significant statistical relationships between expense management practices and sustainable budgeting. Key factors such as transparency, timely reimbursement, and clear communication emerged as critical for optimizing expense management. Additionally, flexibility in financial processes, enhanced financial communication, and the integration of financial and business management performance were identified as drivers of financial sustainability and innovation. This study contributes novel insights into the interplay between expense management and financial innovation, emphasizing actionable strategies for achieving financial sustainability. The results provide valuable guidance for businesses aiming to refine their expense management frameworks, support sustainable budgeting, and foster innovation in financial practices
Detecting Credit Risk in Egyptian Banks: Does Machine Learning Matter?
Full text linkThis study aims to significantly enhance the predictive modeling of credit risk within Egypt’s banking sector, particularly by differentiating between retail and corporate credit risks and categorizing banks into listed and non-listed groups. By utilizing a comprehensive dataset from Middle Eastern countries spanning 2011 to 2023, the research applies advanced machine learning techniques, including the Random Forest algorithm, to refine the predictive model.The novelty of this research lies in its detailed exploration of credit risk determinants specific to the Egyptian banking sector, providing valuable insights into emerging economies. A distinction between various types of credit risk and bank classifications is made. The findings reveal that bank-specific factors – such as the asset size, the operating efficiency, the liquidity, the income diversification, and the capital adequacy – are more significant predictors of credit risk than macroeconomic indicators. This trend holds for both listed and non-listed banks, thus highlighting the importance of internal metrics.Moreover, the Random Forest algorithm demonstrates a high accuracy rate in predicting credit risk exposures, which underscores the effectiveness of machine learning in financial settings. The analysis indicates that variations in the asset size, operating efficiency, and other characteristics are crucial in influencing retail and corporate credit risks. These insights suggest that prioritizing internal bank metrics could lead to more effective credit risk management strategies than relying solely on external economic conditions.Ultimately, this study’s predictive model is expected to enhance credit risk assessment capabilities, strengthening the financial positions of banks and fostering economic growth in the region. By bridging the gap between theoretical understanding and practical application, this research offers a novel perspective on credit risk management tailored to the unique context of the Egyptian banking sector
The Impact of Infrastructure on Employee Performance: Organizational Culture as a Mediating Variable (A Field Study in the Jordanian Income and Sales Tax Department)
Full text linkThis study aims to identify the impact of digital infrastructure in its dimensions (hardware components, software, communication networks, databases, human skills) on the performance of employees in its combined dimensions (work speed, work quality, and knowledge of work requirements) with the presence of organizational culture as an intervening variable in the Jordanian Income and Sales Tax Department. The study community may have been employees in the Jordanian Income and Sales Tax Department, and the research community was represented by a sample of (220) individuals. The simple random sample was adopted, and, in order to achieve the objectives of the study, the descriptive analytical approach was relied upon through a questionnaire that was distributed to the sample individuals and analyzed afterwards. The number of the distributed questionnaires was (250) questionnaires, of which, (220) questionnaires were deemed to be suitable for analysis, representing (48%) of the total community. The data were analyzed, and the hypotheses were tested using the (SPSS) software and adopting simple linear regression and hierarchical multiple regression. The study has yielded several results, the most important of which is the existence of a statistically significant effect at a significance level (a≤0.05) of the digital infrastructure in its dimensions on the performance of employees in its dimensions combined; it has also been established that there is a statistically significant effect of the digital infrastructure on the performance of employees with the presence of the organizational culture as an intervening variable. Several recommendations have been presented based on the results of the analysis, the most important of which are: (1) enhancing the use of advanced technological means, (2) providing opportunities for training and continuing education, and (3) providing a positive work environment
Fragile Union: A Machine Learning Analysis of Structural Heterogeneity and Divergence within the EMU
Full text linkThis paper applies unsupervised machine-learning techniques to a set of nominal and industrial sector production variables to examine the convergence of European Monetary Union (EMU) member countries, focusing on macroeconomic and structural homogeneity. Our findings reveal distinct clusters of countries based on macroeconomic stability and industrial sector characteristics, highlighting a central group of core Northern European countries and a secondary group of peripheral, mainly Southern European economies. The significant differences between these clusters, particularly when considering real factors, underscore the fragility of the EMU in the face of large or asymmetric shocks. The study emphasized the need for structural reforms and careful analysis of economic characteristics to mitigate potential risks associated with expansion, ensuring the long-term stability and resilience of the union
Banking Stability under Governance Factors in SEE: Examining Capital Adequacy, Lending Rates, and Governance Quality Using Z-Score
Full text linkThis study examines banking stability in Southeast Europe by analyzing both financial and institutional factors by using the Z-score as a key metric. On the basis of covering the period of 2012–2023, the research evaluates the impact of capital adequacy, lending rates, non-performing loans, rule of law, regulatory quality, control of corruption, judicial efficiency, and government integrity. The analysis combines static Ordinary Least Squares (OLS) and dynamic Generalized Method of Moments (GMM) methods on panel data. The key findings reveal that capital adequacy, non-performing loans, and regulatory quality positively influence banking stability, thereby suggesting the benefits of strong financial regulation. Conversely, control of corruption and weak government integrity negatively affect stability, highlighting institutional weaknesses. A novel aspect of the study lies in comparing the static and dynamic models: while OLS results show the rule of law as significant and positive and judicial effectiveness as negative, the GMM model finds these institutional variables largely insignificant. This divergence emphasizes the importance of using multidimensional empirical approaches to assess the complex interplay of governance and financial performance in the banking sector. The study ultimately demands strengthened legal and regulatory institutions to enhance banking stability in the region
Short-Run and Long-Run Determinants of Inflation Dynamics in the Visegrád Countries
No full textThis study investigates inflation dynamics in the Visegrád countries – specifically, Poland, Hungary, Czechia, and Slovakia – by using the Mean Group estimator for 2000–2023. Results show a strong long-run link between the wage growth and inflation, as a rising purchasing power fuels consumption. Global price factors significantly drive local inflation, underscoring vulnerability to external shocks, particularly amid geopolitical tensions like the Ukraine war. Government consumption, however, helps moderate inflation over time, suggesting that productive public spending can stabilize prices. In the short run, wage growth still impacts inflation – yet less intensely, while reflecting gradual price adjustments. The Ukraine conflict highlights persistent uncertainties influencing expectations. Policymakers should align wage policies with productivity gains and monitor external price pressures closely. Overall, the study provides insights into the ways how domestic and global factors interact to shape inflation in the Visegrád region, informing debates on economic stability and policy responses in Central and Eastern Europe