Economic policy uncertainty and financial system efficiency.
| Autor: | Aman A; Department of Finance, College of Administrative and Financial Sciences, Saudi Electronic University, Riyadh, 13316, Saudi Arabia., Anwar S; Liwa College, Abu Dhabi, United Arab Emirates., Khan MA; University of Kotil, Azad Jammu and Kashmir, Department of Commerce, Faculty of Management Sciences, City Kotli, 11100, Pakistan., Haddad H; Business Faculty, Zarqa University, Zarqa, 11831, Jordan., Al-Ramahi NM; Business Faculty, Zarqa University, Zarqa, 11831, Jordan., Khan MA; Department of Accounting, College of Administrative and Financial Sciences, Saudi Electronic University, Riyadh, 13316, Saudi Arabia. |
|---|---|
| Jazyk: | angličtina |
| Zdroj: | Heliyon [Heliyon] 2024 May 16; Vol. 10 (10), pp. e31384. Date of Electronic Publication: 2024 May 16 (Print Publication: 2024). |
| DOI: | 10.1016/j.heliyon.2024.e31384 |
| Abstrakt: | Economic policy uncertainty (EPU) adversely affects financial system functioning with potentially critical repercussions for economies and corporations worldwide. Financial system efficiency (FSE) has a vital influence on fostering optimal economic growth and development; however, the impact of EPU on FSE remains under-explored. This study investigates the effect of EPU on FSE along with its components financial institution efficiency (FIE) and financial market efficiency (FME). Using data from 22 countries over a 20-year period (2002-2021), our analysis reveals a significant negative effect of EPU on FSE, FIE and FME. Notably, our split-sample analysis highlights the accentuated adverse effects of EPU in high-EPU regimes, emphasising the importance of vigilance during periods of elevated policy uncertainty. We conduct a series of sensitivity tests, including alternative measures of EPU, FSE, FIE and FME, and apply two-stage least squares and two-step dynamic system generalised method of moments estimators and introduce additional control variables. These tests consistently reaffirm the core conclusions of our study. Finally, we discuss the implications of our findings for policymakers. Competing Interests: The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper. (© 2024 The Authors.) |
| Databáze: | MEDLINE |
| Externí odkaz: |
|