Reviewing the consequence of trade openness and financial openness on banking stability in developing countries

Q1 Social Sciences

Banks and Bank Systems Pub Date : 2024-02-29 DOI:10.21511/bbs.19(1).2024.10

Sri Hidayati, Taufiq Marwa, S. Andaiyani, Abukosim

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引用次数: 0

Abstract

The global economy has fostered a dynamic environment of economic globalization, leading to amplified interconnectedness, integration, and worldwide influence in both commercial transactions and monetary activities. This occurrence emphasizes the vital role of liberalizing capital and international trade in economic discussions, particularly in emerging economies where banking-centric systems wield considerable influence. The objective of this study is to investigate the correlation between trade liberalization and financial inclusivity, specifically concerning the resilience of the banking industry in developing nations throughout the period of 2010–2020. Utilizing the dynamic data model of Arellano-Bond’s Generalized Method of Moment Estimator, this study yields a significant revelation. The interaction between trade openness and financial transparency exerts a noticeable and advantageous impact on banking stability, with each 1% increase in openness resulting in a remarkable improvement of 98.9445 in Net Interest Margin, 116.2575 in Z score, and 119.9189 in Non-Performing Loans. Consequently, this investigation confirms the presence of a diversification effect on stability while concurrently applying the concept of voltage fragility. In essence, trade openness propels the banking sector toward heightened competitiveness due to increased demand from local businesses, while financial openness fosters heightened competition within the credit market.

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审查贸易开放和金融开放对发展中国家银行业稳定性的影响

全球经济为经济全球化创造了一个充满活力的环境，导致商业交易和货币活动的相互联系、一体化和全球影响力不断扩大。这种情况强调了资本自由化和国际贸易在经济讨论中的重要作用，尤其是在以银行系统为中心的新兴经济体中。本研究旨在探讨贸易自由化与金融包容性之间的相关性，特别是 2010-2020 年间发展中国家银行业的恢复能力。利用阿雷拉诺-邦德广义矩估计法的动态数据模型，本研究得出了重要启示。贸易开放度与金融透明度之间的交互作用对银行业的稳定性产生了明显而有利的影响，开放度每提高 1%，净利息收益率就会显著提高 98.9445，Z 值提高 116.2575，不良贷款率提高 119.9189。因此，这项调查证实了多样化对稳定性的影响，同时也应用了电压脆弱性的概念。从本质上讲，由于当地企业的需求增加，贸易开放推动了银行业竞争力的提高，而金融开放则促进了信贷市场的竞争。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Banks and Bank Systems Social Sciences-Law

CiteScore

2.60

自引率

0.00%

发文量

审稿时长

11 weeks

期刊介绍： The journal focuses on the results of scientific researches on monetary policy issues in different countries and regions all over the world. It also analyzes the activities of international financial organizations, central banks, and bank institutions. Key topics: -Monetary Policy in Different Countries and Regions; -Monetary and Payment Systems; -International Financial Organizations and Institutions; -Monetary Policy of Central Banks; -Organizational Structure, Functions and Activities of Central Banks; -State Policy and Regulation of Banking; -Bank Competitiveness; -Banks at the Financial Markets; -Bank Associations and Conglomerates; -International Payment Systems; -Investment Banking; -Financial Risks and Risk Management in Banks; -Capital and Ownership Structure, Bankruptcy and Liquidation, Mergers and Acquisitions of Banks; -Corporate Governance and Goodwill; -Personnel Management in Banks; -Econometric, Statistical Methods; Econometric Modeling of Bank Activities; -Bank Ratings.