Financial inclusion and stability in Ethiopia using bank-level data: A two-step system GMM estimation.

Q2 Pharmacology, Toxicology and Pharmaceutics
F1000Research Pub Date : 2025-04-15 eCollection Date: 2024-01-01 DOI:10.12688/f1000research.158461.2
Mohammed Arebo, Filmon Hando, Andualem Mekonnen
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引用次数: 0

Abstract

Background: This paper examines the impact of FI on bank stability within Ethiopian context, using panel data from 17 commercial banks over the period 2015-2023. Given the scarcity of research focused on the relationship between FI and bank stability in Ethiopia, this paper seeks to address a crucial gap by analyzing both conventional and digital aspects of FI in relation with bank stability.

Methods: A two-stage principal component analysis (PCA) was conducted to construct a composite FI index, integrating 10 conventional and 5 digital indicators. The study applied a two-step robust system generalized method of moments (GMM) to analyze the effects of FI on bank stability, tests nonlinearities using Lind and Mehlum's (2010) U-test, and examines causality through Dumitrescu-Hurlin (2012) and Juodis et al. (2021) causality tests.

Results: The result reveals an inverted U-shaped relationship between FI and bank stability. FI enhances stability up to a 30.3% threshold, beyond which increased transaction costs, information asymmetries, and adverse selection risks weaken stability. Capital adequacy moderates this effect, raising the threshold to 35.1%, but its stabilizing role diminishes at higher levels. Granger causality tests confirm a bidirectional relationship. Additionally, bank efficiency and GDP growth enhance stability, while real interest rates, total assets, and income diversification exert destabilizing effects.

Conclusions: This study makes three key contributions. First, it provides the first empirical analysis of the FI-stability nexus in Ethiopia. Second: (i), it develops a multidimensional FI index; (ii), explores both linear and nonlinear relationships, and (iii) examines macroprudential regulation as a moderating factor. Third, it tests causality, offering policy insights. To enhance stability while mitigating risks, policymakers must balance FI expansion, enforce regulatory frameworks, and implement targeted capital requirements. Regulators should strengthen consumer protection and financial literacy, while banks must optimize outreach, manage credit risk, and ensure prudent asset allocation and liquidity management to sustain financial stability.

使用银行级数据的埃塞俄比亚金融包容性和稳定性:两步系统GMM估计。
背景:本文使用2015-2023年期间来自17家商业银行的面板数据,研究了融资对埃塞俄比亚银行稳定性的影响。鉴于研究的稀缺集中在金融机构和银行稳定之间的关系在埃塞俄比亚,本文试图通过分析金融机构的传统和数字方面与银行稳定的关系来解决一个关键的差距。方法:采用两阶段主成分分析(PCA),综合10项常规指标和5项数字指标,构建综合FI指数。本研究采用两步鲁棒系统广义矩量法(GMM)分析FI对银行稳定性的影响,使用Lind和Mehlum(2010)的u检验检验非线性,并通过dumitrescui - hurlin(2012)和Juodis等人(2021)的因果检验检验因果关系。结果:结果显示FI与银行稳定性之间呈倒u型关系。FI可以在30.3%的阈值内增强稳定性,超过该阈值,交易成本增加、信息不对称和逆向选择风险会削弱稳定性。资本充足率调节了这一效应,将门槛提高到35.1%,但其稳定作用在更高的水平上减弱。格兰杰因果检验证实了一种双向关系。此外,银行效率和GDP增长增强了稳定性,而实际利率、总资产和收入多样化则具有不稳定效应。结论:本研究做出了三个关键贡献。首先,它提供了埃塞俄比亚金融稳定关系的第一个实证分析。第二,建立了多维FI指数;(ii)探讨线性和非线性关系,(iii)研究宏观审慎监管作为调节因素。第三,它检验因果关系,提供政策见解。为了在降低风险的同时增强稳定性,政策制定者必须平衡金融机构扩张、加强监管框架和实施有针对性的资本要求。监管机构应加强消费者保护和金融知识,而银行必须优化外联业务,管理信贷风险,确保审慎的资产配置和流动性管理,以维持金融稳定。
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
F1000Research
F1000Research Pharmacology, Toxicology and Pharmaceutics-Pharmacology, Toxicology and Pharmaceutics (all)
CiteScore
5.00
自引率
0.00%
发文量
1646
审稿时长
1 weeks
期刊介绍: F1000Research publishes articles and other research outputs reporting basic scientific, scholarly, translational and clinical research across the physical and life sciences, engineering, medicine, social sciences and humanities. F1000Research is a scholarly publication platform set up for the scientific, scholarly and medical research community; each article has at least one author who is a qualified researcher, scholar or clinician actively working in their speciality and who has made a key contribution to the article. Articles must be original (not duplications). All research is suitable irrespective of the perceived level of interest or novelty; we welcome confirmatory and negative results, as well as null studies. F1000Research publishes different type of research, including clinical trials, systematic reviews, software tools, method articles, and many others. Reviews and Opinion articles providing a balanced and comprehensive overview of the latest discoveries in a particular field, or presenting a personal perspective on recent developments, are also welcome. See the full list of article types we accept for more information.
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