Investigating the effect of risk and competitiveness indicators of the banking industry on the index of economic growth and consumer inflation in iran’s economy

Subject Areas : Journal of Investment Knowledge

meysam fadaee vahed ¹ , mohammad Ali Dehghan Dehnavi ² , ali divandari ³ , meysam amiry ⁴

1 - Ph.D. Student in Financial Management, Allameh Tabatab'i University
2 - Assistant Professor, Management Faculty, Allameh Tabataba'i University
3 - Professor, Management Faculty, Allameh Tabataba'i University
4 - Assistant Professor, Management Faculty, Allameh Tabataba'i University

Received: 2020-10-08 Accepted : 2020-11-23 Published : 2023-12-22

Keywords: systemic risk, Economic growth rate, Herfindal-Hirschman index,

Abstract :

In recent years, the country's economy has faced a major challenge in the index of economic growth and inflation, and several factors have contributed to this challenge. Many theorists believe that banks and their risks have contributed significantly to these economic fluctuations. This study seeks to find an answer to the relationship between economic growth, inflation and risk and competitive banking indicators using the GMM model and quarterly data from the country's banks since 2007.The results show that there is a significant relationship between economic growth and systemic risk indicators and Herfindahl-Hirschman. With the increase in systemic risk of the banking sector and the Herfindahl-Hirschman index, the country's economic growth index has decreased; Therefore, it can be concluded that controlling and reducing the systemic risk of the banking network is very important to increase economic growth. On the other hand, banks' competition in the country's economy is not useful and effective for economic growth and destructive competition dominates the country's banking network. Regarding inflation, the relationship between the competitiveness of the banking industry and inflation is positive and one of the inflationary factors in the country's economy is the competition of banks.

References:

1. ابــرزی، مهدی، صــمدی، سعید، صــفری، علی(۱۳۸۶). نـقــش گروه‌های مرجــع در ترغیــب افــراد بــه سرمایه‌گذاری‌ در بـورس اوراق بهادار. مجله بررسی‌های حـسابداری و حسابرسی. سال ۱۴. شماره (۴۸)


2. ابونوری، عباسعلی و تیموری، منیژه (1392). بـررسی اثر توسعه‌ مالی‌ بر‌ رشد اقتصادی: مقایسه‌ای بین کشورهای‌ OECD‌ و UMI‌. پژوهش‌های رشد و توسعه اقتصادی، 3(11)، 40-29.


3. بهرامی، جابر، پهلوانی، مصیب، جانسوز، پری ناز (1391). تأثیر اعتبارات بانکی بر رشد اقتصادی در کشورهای منتخب در‌ حـال‌ تـوسعه‌ بـا استفاده از روش GMM، پژوهش‌های پولی-بانکی، 6(5)، 96-77‌.


4. حیدری، هادی؛صابریان رنجبر، سوده؛ نیلی، فرهاد؛ تأثیر متغیرهای کلان اقتصادی بر ترازنامه بانک ها با رویکرد آزمون تنش (مطالعه موردی یکی از بانک های خصوصی)، پژوهش‌های پولی و بانکی، تابستان 1390 - شماره 8، ص 43 تا 86


5. حیدری، هادی؛ احمدیان، اعظم؛ تأثیر شرایط اقتصاد کلان بر سود و زیان بانک‌ها (مطالعه موردی یکی از بانک‌های خصوصی کشور)، پژوهش‌های پولی و بانکی؛ تابستان 1391، شماره 12، ص 71 تا 100


6. راستی، محمد (1388) بررسی رابطه توسعه مالی و رشد اقتصادی در کشورهای عضو اوپک: آزمون فروض پاتریک، فصلنامه بررسیهای بازرگانی، شماره ۱۵ ،آذر و دی 1388. صفحات ۱۹-۳۳.


7. عبده تبریزی، حسین؛ و جهان خانی، علی. (۱۳۷۲). نظریه بازار کارایی سرمایه . فـصلنامه تـحقیقات مالی. سـال‌ اول‌. شماره (۱)


8. مکیان، نظام‌الدین و ایزدی، محمدرضا (1394). بررسی رابطه تـوسعه‌ نـظام‌ مـالی‌ با رشد اقتصادی. فصلنامه پژوهش‌های اقتصادی، 20(62)، 162-139.


9. Adamopoulos, A. (2010). Financial development‌ and‌ economic growth an empirical analysis for Ireland. International Journal of Economic Sciences and‌ Applied‌ Research‌, 3 (1), 75-88


10. Anwar, S. & Cooray, A. (2012). Financial development, political rights, civil liberties and economic growth‌: Evidence‌ from South Asia. Economic Modelling, 29, 974–981


11. Ben‌ Naceur, S. Blotevogel, R. Fischer, M. & Shi‌, H. (2017‌). Financial Development‌ and‌ Source‌ of Growth: New Evidence. Working Paper‌, No‌. 17/143, 1-41


12. Brownlees, C.T. Engle, R. 2012. Volatility, correlation and tails for systemic risk measurement. Working Paper.


13. Boyd, J and Prescott, E.C (1986), Financial intermediary-coalitions, Journal of Economic Theory, Elsevier, Vol, 38(2), pp:232-211.


14. Calvo, G.A, & Mishkin, F.S. (2003). The Mirage of Exchange Rate Regimes for Emerging Market Countries, Journal of Economic Perspectives, 17(4), 234-265.


15. Calvo, G.A, (1999). Contagion in Emerging‌ Markets‌: when Wall Street is the Carrier, Mimeographed, University of Maryland.


16. Calvo, G.A, (2001). Capital Markets and the Exchange Rate: with Special Reference to the Dollarization Debate in Latin America, Journal of‌ Money‌, Credit, and Banking, 33(2): 312-334.


17. Caprio, J.G, & Klingebiel D. (2003). Episodes of Systemic and Borderline Financial Crises. Washington: World Bank.


18. Compton, R. A. & Giedeman, D. C. (2011). Panel evidence on finance, institutions‌ and‌ economic growth, Applied Economics, 43, 3523‌-3547‌


19. Glosten L, Jaganathan R, and Runkle D, (1993). "Relationship between the Expected Value and Volatility of the Normal Excess Returns on Stocks", Journal of Finance, Vol. 48, pp. 1779-1802.


20. Greenwood, J and B Smith (1997), Financial Markets in Development, and the Development of Financial Markets, Journal of Economic Dynamics and Control, Vol 21, No 1. PP 145-181


21. Dawson, P.J (2003), Financial Development and Growth in Economies in Transition, Applied Economics Letters, Vol 10. PP 833-836.


22. Demetriades, P. & Hook‌ Law‌, S. (2006‌). Finance‌, institutions‌ and economic growth‌. International‌ Journal of Finance & Economics, 11(3), 245-260


23. Demetriades, P and K Hossein (1996), Does Financial Development Cause Economic Growth? Time Series Evidence from 16 countries, Journal of Development Economic.


24. Diamond, D.W (1984), Financial Intermediation and Delegated Monitoring, Review of Economic Studies, 51, pp: 393-414


25. Friedman, M and A.J Schwartz (1963), A Monetary History of the United States, Princeton University Press


26. Goldsmith, R.W. (1969). Financial structure‌ and‌ development (Yale University Press, New Haven, CT).


27. Gazdar, K. & Cherif, M. (2015). The quality of institutions and financial development in MENA countries. Borsa Istanbul Review, 15‌(3), 137‌-160


28. Glosten L. Jaganathan R. and Runkle D. (1993). "Relationship between the Expected Value and Volatility of the Normal Excess Returns on Stocks", Journal of Finance, Vol. 48, pp. 1779-1802.


29. Hardy, D, & Pazarbasioglu, C. (1998). Leading Indicators of Banking Crises: Was Asia Different. IMF Working Paper 98/91, Washington: International‌ Monetary‌ Fund‌.


30. Hasan, I. Wachtel, P. & Zhou, M. (2009). Institutional development, financial deepening and economic growth, evidence from‌ china‌. Journal of‌ Banking and Finance, 33(1), 157-170


31. Irland, P.N (1994), Money and Growth: An Alternative Approach. American Economic Review, Vol 84, No 1. PP 47-65.


32. Jung, W.S (1986), Financial Devlopment and Economic Growth: international evidence, Economic Development and Cultural Changes, 34, pp: 333-346


33. Khadraoui, N; & Smida, M. (2012). Financial development ‌‌and‌ economic growth: Static and dynamic panel data analysis. International Journal of Economics and‌ Finance‌, 4(5), 94‌-104


34. King, R.G and R.Levine (1993), Financial Intermediation and Economic Development, in financial intermediation in the construction of Europe, EdsL Colin Mayer an Xavier, pp: 156- 189.


35. Law, S. H. & Shah Habibullah, M. (2006). Financial development, institutional quality and economic performance in East‌ Asian‌ economics. Review of Applied Economics, 2(2), 201-216


36. Levine, R and S Zervos (1998), Stock Markets, Banks and Economic Growth. American Economic Review 88, pp: 537-558.


37. Lewis‌, R. (1994‌). 'From chaos to‌ complexity‌: implications for organizations'. Executive Development, Vol. 7, No. 4, pp. 16-17


38. Lucas, R.E (1988), on the mechanics of economic development, Journal OF monetary Economic, 22, pp: 3-42.


39. Luintel, Kul.B and Mosahid Khan (1999), A Quantitative Reassessment of the FinanceGrowth Nexus: Evidence from a Multivariate VAR, Journal of Development Economics, Vol 60, No 2. PP 381- 405


40. Mckinnon, R.I. (1973), Money and capital in economic development, Washington, DC: Brooking Institution.


41. Mishkin, F.S. (1996). Understanding Financial Crises‌: A Developing‌ Country‌ Perspective, Annual World Bank Conference on Development Economics.


42. Mishkin, F.S. (2003). Financial Policies and the Prevention of Financial Crises in Emerging Market‌ Countries‌. in‌ M. Feldstein (ed.) Economic and Financial Crises in Emerging‌ Market‌ Countries, 93-130. University of Chicago Press: Chicago.


43. Nabi, M. S. & Suliman, M. S. (2009‌). Institutions‌, banking‌ development, and economic growth. The Developing Economies, 47(4), 436–57


44. Patrick, H (1966), Financial Development and Economic Growth in underdeveloped countries, Economic development and cultural change, 12(2), pp: 174-89.


45. Ram, R (1999), Financial Development and Economic Growth: Additional Evidence. Journal ofDevelopment Studies, Vol 35, No 4. PP 164-74


46. Sargent, T, & Wallace, N. (1981). Some Unpleasant Monetarist Arithmetic, Federal Reserve Bank of‌ Minneapolis‌ Quarterly‌ Review, 34(2), 1-17.


47. Shaw, E.S (1973), Financial Deepeninig in Economic Development, New York: Oxford University Press.


48. Schumpeter‌, Joseph‌ A. (1912). Theorie der wirtschaftlichen Entwicklung (Dunker and Humboldt, Leipzig); translated by Redvers Opie, 1934, the theory of economic development (Harvard University Press, Cambridge, MA).


49. -Shaw, E.S. (2014). Financial deepening in‌ economic‌ development (Oxford University Press, New York, NY).


50. Stern, N (1989), The Economics of Development: a survey, Economic Jouranl, September


51. Woodford, M. (1994). Monetary Policy and Price Level‌ Determinacy in a Cash-in Advance Economy, Economic Theory, 4, 345-380.