https://cribfb.com/journal/index.php/ijibm en-US [email protected] (Dr. Arjantin) [email protected] (Help Desk) Thu, 04 Jul 2024 18:03:41 +0000 OJS 3.1.1.4 http://blogs.law.harvard.edu/tech/rss 60 https://cribfb.com/journal/index.php/ijibm/article/view/2220 <p style="text-align: justify;"><em>The nature of the relationship between equity and risk as well as equity and profitability has been the subject of two basic hypotheses in the literature: the structure-behavior-performance (SCP) approach for the capital-profitability relationship and the moral hazard approach for the capital-risk relationship. The objective of this article is to study the relationship between equity and risk and equity and profitability for 215 banks from 18 emerging countries. This study focuses on Islamic banks and conventional banks. We use a GMM estimator. The results obtained for Islamic banks regarding the relationship between equity and risk did not confirm the moral hazard hypothesis. Indeed, equity has a positive effect on risk with the three measures used (the variance of average economic profitability, the variance of average financial profitability, and the logarithm of Z-Score). The same goes for conventional banks. An increase (decrease) in capital leads to an increase in risk (decrease). As for the relationship between equity and profitability, we found a difference in results for the two types of banks studied (Islamic and conventional). Indeed, for Islamic banks, the SCP (structure-behavior-performance) theory is not verified. An increase (or decrease) in capital leads to a decrease (or increase) in profitability. This was found for the three profitability specifications used (average economic profitability, average financial profitability, and net interest margin). For conventional banks, equity positively affects profitability with its different measures, which is consistent with the structure-behavior-performance paradigm.</em></p> <p><strong>JEL Classification Codes: </strong>G21, C23.</p> Arafet Hamida, Amira Lanouar ##submission.copyrightStatement## http://creativecommons.org/licenses/by/4.0 https://cribfb.com/journal/index.php/ijibm/article/view/2220 Thu, 04 Jul 2024 00:00:00 +0000 https://cribfb.com/journal/index.php/ijibm/article/view/2222 <p style="text-align: justify;"><em>Promoting sustainable development is one of the main objectives in emerging nations. In actuality, these nations desperately require significant investments. Exchange rate volatility is one of the many dangers foreign investors face. This volatility is an essential element that could restrict trading volume and reduce investment. Such fluctuations, which arise in industrialized nations, lead to instability on a worldwide scale. The present article studies the relationship between absolute exchange rate volatility and foreign direct investment (FDI). This study covers 13 developing countries over the period 1980–2022. The model used in this work is an Auto Regressive Distributed Lag (ARDL) to estimate the impact of the Real Exchange Rate and its Volatility on FDI. Our results indicate that the exchange rate volatility hurts FDI both in the short and long term. A positive relationship between FDI and REER has also been approved. The findings of this study suggest that developing countries must implement monetary policies to ensure a stable exchange rate that attracts more foreign direct investment.</em></p> <p><strong>JEL Classification Codes: </strong>C130, F310, G150.</p> Arafet Hamida ##submission.copyrightStatement## https://creativecommons.org/licenses/by/4.0/ https://cribfb.com/journal/index.php/ijibm/article/view/2222 Wed, 17 Jul 2024 00:00:00 +0000