Bank depositors in Arab economies amidst the COVID-19 pandemic
Abstract
This study investigates the multifaceted impacts of COVID-19, GDP, exchange rates, unemployment, and economic policy uncertainty on bank depositors in Arab economies: Algeria, Comoros, Djibouti, Egypt, Iraq, Jordan, Lebanon, Libya, Mauritania, Morocco, Palestine, Somalia, Sudan, Syria, Tunisia, and Yemen, between 2017 and 2022. Using ordinary least square analysis, the research uncovers significant relationships between these variables and banking indicators. COVID-19 has emerged as a dominant force, displaying a substantial and adverse link to the number of deposit accounts and depositors. While GDP, exchange rates, unemployment, and economic policy uncertainty also exhibit influences on banking metrics, their effects are comparatively smaller. This underscores the pandemic’s exceptional sway over banking behaviors within the region, emphasizing the pressing need to address COVID-19’s implications for financial stability and strategies to reinforce banking resilience amidst diverse economic challenges.
Keywords
Full Text:
PDFReferences
1. Saif-Alyousfi AYH. The impact of COVID-19 and the stringency of government policy responses on stock market returns worldwide. Journal of Chinese Economic and Foreign Trade Studies. 2022, 15(1): 87-105. doi: 10.1108/jcefts-07-2021-0030
2. Kotcharin S, Maneenop S, Jaroenjitrkam A. The impact of government policy responses on airline stock return during the COVID-19 crisis. Research in Transportation Economics. 2023, 99: 101298. doi: 10.1016/j.retrec.2023.101298
3. Saif-Alyousfi AYH. COVID-19 and SMEs deposits with commercial banks: evidence from African economies. Financial Economics Letters. 2024;2(3):37-50. doi: 10.58567/fel02030004
4. Saif-Alyousfi AYH. FDI inflows and bank deposits: evidence from 18 MENA economies. Competitiveness Review: An International Business Journal. 2021, 32(6): 880-914. doi: 10.1108/cr-05-2020-0078
5. Saif-Alyousfi AYH. Determinants of bank profitability: evidence from 47 Asian countries. Journal of Economic Studies. 2020, 49(1): 44-60. doi: 10.1108/jes-05-2020-0215
6. Hayakawa K, Mukunoki H. The impact of COVID-19 on international trade: Evidence from the first shock. Journal of the Japanese and International Economies. 2021, 60: 101135. doi: 10.1016/j.jjie.2021.101135
7. Nitsch V. COVID-19 and international trade: Evidence from New Zealand. Economics Letters. 2022, 217: 110627. doi: 10.1016/j.econlet.2022.110627
8. Mena C, Karatzas A, Hansen C. International trade resilience and the COVID-19 pandemic. Journal of Business Research. 2022, 138: 77-91. doi: 10.1016/j.jbusres.2021.08.064
9. Fu Y, Alleyne A, Mu Y. Does Lockdown Bring Shutdown? Impact of the COVID-19 Pandemic on Foreign Direct Investment. Emerging Markets Finance and Trade. 2021, 57(10): 2792-2811. doi: 10.1080/1540496x.2020.1865150
10. Fang J, Collins A, Yao S. On the global COVID-19 pandemic and China’s FDI. Journal of Asian Economics. 2021, 74: 101300. doi: 10.1016/j.asieco.2021.101300
11. Nawoi L, Nijangan H. The effect of COVID 19 outbreak on foreign direct investment: Do sovereign wealth funds matter? Transl Corp Rev. 2021. doi: 10.1080/19186444
12. Ho LT, Gan C. Foreign Direct Investment and World Pandemic Uncertainty Index: Do Health Pandemics Matter? Journal of Risk and Financial Management. 2021, 14(3): 107. doi: 10.3390/jrfm14030107
13. Giofré M. COVID-19 stringency measures and foreign investment: An early assessment. The North American Journal of Economics and Finance. 2021, 58: 101536. doi: 10.1016/j.najef.2021.101536
14. Saif-Alyousfi AYH. Impact of FDI inflows on bank loans in Gulf Cooperation Council economies: an empirical insight. International Journal of Emerging Markets. 2021, 18(2): 505-524. doi: 10.1108/ijoem-06-2019-0465
15. Saif-Alyousfi AYH, Saha A. Do tourism receipts affect bank profitability? Analytical evidence from 85 tourism economies. Research in International Business and Finance. 2021, 58: 101437. doi: 10.1016/j.ribaf.2021.101437
16. Saif-Alyousfi AYH, Saha A. Determinants of banks’ risk-taking behavior, stability and profitability: evidence from GCC countries. International Journal of Islamic and Middle Eastern Finance and Management. 2021, 14(5): 874-907. doi: 10.1108/imefm-03-2019-0129
17. Saif-Alyousfi AYH, Saha A. The impact of COVID-19 and non-pharmaceutical interventions on energy returns worldwide. Sustainable Cities and Society. 2021, 70: 102943. doi: 10.1016/j.scs.2021.102943
18. Saif-Alyousfi AYH, Saha A, Alshammari TR. Bank diversification and ESG activities: A global perspective. Economic Systems. 2023, 47(3): 101094. doi: 10.1016/j.ecosys.2023.101094
19. Saif-Alyousfi AYH, Saha A, Md-Rus R. The impact of bank competition and concentration on bank risk-taking behavior and stability: Evidence from GCC countries. The North American Journal of Economics and Finance. 2020, 51: 100867. doi: 10.1016/j.najef.2018.10.015
20. Saif-Alyousfi AYH, Saha A, Md-Rus R, et al. Do oil and gas price shocks have an impact on bank performance? Journal of Commodity Markets. 2021, 22: 100147. doi: 10.1016/j.jcomm.2020.100147
21. Guo WC, Tseng PL. COVID-19, bank risk, and capital regulation: The aggregate shock and social distancing. The Quarterly Review of Economics and Finance. 2023, 92: 155-173. doi: 10.1016/j.qref.2023.09.004
22. Amiri H, Aminizadeh M, Rezapour M, et al. The impact of COVID 19 pandemic on life satisfaction and health of Iranian bank employees. Heliyon. 2023, 9(9): e19088. doi: 10.1016/j.heliyon.2023.e19088
23. Susamto AA, Octavio DQ, Risfandy T, et al. Public ownership and local bank lending at the time of the COVID-19 pandemic: Evidence from Indonesia. Pacific-Basin Finance Journal. 2023, 80: 102072. doi: 10.1016/j.pacfin.2023.102072
24. Gulati R, Charles V, Hassan MK, et al. COVID-19 crisis and the efficiency of Indian banks: Have they weathered the storm? Socio-Economic Planning Sciences. 2023, 88: 101661. doi: 10.1016/j.seps.2023.101661
25. Tran DV, Bui DG, Nguyen C, et al. Bank liquidity hoarding during the COVID-19 pandemic. Finance Research Letters. 2023, 55: 104021. doi: 10.1016/j.frl.2023.104021
26. Silva TC, de Souza SRS, Guerra SM, et al. COVID-19 and bank branch lending: The moderating effect of digitalization. Journal of Banking & Finance. 2023, 152: 106869. doi: 10.1016/j.jbankfin.2023.106869
27. Gao H, Li J, Wen H. Bank funding costs during the COVID-19 pandemic: Evidence from China. Pacific-Basin Finance Journal. 2023, 79: 102006. doi: 10.1016/j.pacfin.2023.102006
28. Boubakri N, Mirzaei A, Saad M. Bank lending during the COVID-19 pandemic: A comparison of Islamic and conventional banks. Journal of International Financial Markets, Institutions and Money. 2023, 84: 101743. doi: 10.1016/j.intfin.2023.101743
29. Aizenman J, Jinjarak Y, Spiegel MM. Fiscal capacity and commercial bank lending under COVID-19. Journal of the Japanese and International Economies. 2023, 68: 101261. doi: 10.1016/j.jjie.2023.101261
30. Degryse H, Huylebroek C. Fiscal support and banks’ loan loss provisions during the COVID-19 crisis. Journal of Financial Stability. 2023, 67: 101150. doi: 10.1016/j.jfs.2023.101150
31. Anani M, Owusu F. Regulatory capital and bank risk-resilience amid the COVID-19 pandemic: How are the Basel reforms faring? Finance Research Letters. 2023, 52: 103591. doi: 10.1016/j.frl.2022.103591
32. Aliani K, Al-kayed L, Boujlil R. COVID-19 effect on Islamic vs. conventional banks’ stock prices: Case of GCC countries. The Journal of Economic Asymmetries. 2022, 26: e00263. doi: 10.1016/j.jeca.2022.e00263
33. Dursun-de Neef HÖ, Schandlbauer A. COVID-19, bank deposits, and lending. Journal of Empirical Finance. 2022, 68: 20-33. doi: 10.1016/j.jempfin.2022.05.003
34. Ҫolak G, Öztekin Ö. The impact of COVID-19 pandemic on bank lending around the world. Journal of Banking & Finance. 2021, 133: 106207. doi: 10.1016/j.jbankfin.2021.106207
35. Park CY, Shin K. COVID-19, nonperforming loans, and cross-border bank lending. Journal of Banking & Finance. 2021, 133: 106233. doi: 10.1016/j.jbankfin.2021.106233
36. Li L, Strahan PE, Zhang S. Banks as Lenders of First Resort: Evidence from the COVID-19 Crisis. The Review of Corporate Finance Studies. 2020, 9(3): 472-500. doi: 10.1093/rcfs/cfaa009
37. Acharya VV, Steffen S. The Risk of Being a Fallen Angel and the Corporate Dash for Cash in the Midst of COVID. The Review of Corporate Finance Studies. 2020, 9(3): 430-471. doi: 10.1093/rcfs/cfaa013
38. Beck T, Keil J. Are Banks Catching Corona? Effects of COVID on Lending in the U.S. SSRN Electronic Journal. 2020. doi: 10.2139/ssrn.3766831
39. Schularick M, Steffen S, Tröger TH. Bank capital and the European recovery from the COVID-19 crisis. 2020.
40. Levine R, Lin C, Tai M, et al. How Did Depositors Respond to COVID-19? Goldstein I, ed. The Review of Financial Studies. 2021, 34(11): 5438-5473. doi: 10.1093/rfs/hhab062
41. Bartik A, Bertrand M, Cullen Z, et al. How Are Small Businesses Adjusting to COVID-19? Early Evidence from a Survey. National Bureau of Economic Research, 2020. doi: 10.3386/w26989
42. Baker SR, Bloom N, Davis SJ, et al. The Unprecedented Stock Market Reaction to COVID-19. Pontiff J, ed. The Review of Asset Pricing Studies. 2020, 10(4): 742-758. doi: 10.1093/rapstu/raaa008
43. Baker SR, Farrokhnia RA, Meyer S, et al. How Does Household Spending Respond to an Epidemic? Consumption during the 2020 COVID-19 Pandemic. The Review of Asset Pricing Studies. 2020, 10(4): 834-862. doi: 10.1093/rapstu/raaa009
DOI: https://doi.org/10.59400/fefs.v2i1.338
(38 Abstract Views, 59 PDF Downloads)
Refbacks
- There are currently no refbacks.
Copyright (c) 2024 Abdulazeez Y.H. Saif-Alyousfi
This site is licensed under a Creative Commons Attribution 4.0 International License.