Title: Impact of social progress on bank stability

Authors: Abderazak Bakhouche; Teheni El Ghak

Addresses: Dubai Men's College (DMC), HCT, Postal Box 15528, Academic City Road, Dubai, UAE ' LIEI, Faculty of Economic Sciences and Management of Tunis, University of Tunis El Manar, Postal Box 248, 2092 Tunis, Tunisia

Abstract: This paper examines how social progress and its dimensions, i.e., basic human needs, foundations of well-being, and opportunity, play a significant role in shaping the financial stability of banking systems. It empirically assesses the viability of three bank-level transmission channels: efficiency, diversification and competition, through which social progress propagates its effects on bank stability. Using bank-level data for 815 commercial banks from 49 countries during the 2011-2019 period, the results show that heightened social progress positively affects bank stability. Furthermore, the impact of social progress on bank stability can be realised through efficiency and diversification as conduits, with little evidence being found for the competition conduit. Findings support that policy should consider social progress-based prescriptions beyond traditional GDP growth models to bolster bank stability.

Keywords: bank stability; competition; diversification; efficiency; social progress.

DOI: 10.1504/GBER.2023.133290

Global Business and Economics Review, 2023 Vol.29 No.3, pp.332 - 379

Received: 20 Dec 2021
Accepted: 20 Jul 2022
Published online: 11 Sep 2023 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article