{"title":"The influence of foreign direct investment on banking stability in a dual banking system during the COVID-19 pandemic and the global financial crisis","authors":"","doi":"10.1016/j.bir.2024.06.001","DOIUrl":null,"url":null,"abstract":"<div><p>This study investigates the impact of foreign direct investment (FDI) on bank stability in the Gulf Cooperation Council (GCC) region, differentiating between Islamic and conventional banks. The results reveal a negative relationship between FDI and bank stability, and Islamic banks can mitigate this impact, enhancing overall stability. Notably, during recent crises (the global financial crisis (GFC) and the COVID-19 pandemic (COVID-19)), FDI's effect on bank stability intensified, and the GFC had a stronger influence than COVID-19. Islamic banks were more resilient to FDI during these crises, highlighting their pivotal role in strengthening the banking system across the member countries in the GCC. The study offers critical insights for regulators, policy makers, and risk managers, advising cautious supervision over FDI in order to preserve monetary and financial stability.</p></div>","PeriodicalId":46690,"journal":{"name":"Borsa Istanbul Review","volume":"24 5","pages":"Pages 1046-1058"},"PeriodicalIF":6.3000,"publicationDate":"2024-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S2214845024000929/pdfft?md5=27909295217d3b4c6b70e95014040cb4&pid=1-s2.0-S2214845024000929-main.pdf","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Borsa Istanbul Review","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S2214845024000929","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This study investigates the impact of foreign direct investment (FDI) on bank stability in the Gulf Cooperation Council (GCC) region, differentiating between Islamic and conventional banks. The results reveal a negative relationship between FDI and bank stability, and Islamic banks can mitigate this impact, enhancing overall stability. Notably, during recent crises (the global financial crisis (GFC) and the COVID-19 pandemic (COVID-19)), FDI's effect on bank stability intensified, and the GFC had a stronger influence than COVID-19. Islamic banks were more resilient to FDI during these crises, highlighting their pivotal role in strengthening the banking system across the member countries in the GCC. The study offers critical insights for regulators, policy makers, and risk managers, advising cautious supervision over FDI in order to preserve monetary and financial stability.
期刊介绍：
Peer Review under the responsibility of Borsa İstanbul Anonim Sirketi. Borsa İstanbul Review provides a scholarly platform for empirical financial studies including but not limited to financial markets and institutions, financial economics, investor behavior, financial centers and market structures, corporate finance, recent economic and financial trends. Micro and macro data applications and comparative studies are welcome. Country coverage includes advanced, emerging and developing economies. In particular, we would like to publish empirical papers with significant policy implications and encourage submissions in the following areas: Research Topics: • Investments and Portfolio Management • Behavioral Finance • Financial Markets and Institutions • Market Microstructure • Islamic Finance • Financial Risk Management • Valuation • Capital Markets Governance • Financial Regulations
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