Effects of political risk on the performance of commercial banks in Zimbabwe.
- Author
- Chiunda, Tanyaradzwa
- Title
- Effects of political risk on the performance of commercial banks in Zimbabwe.
- Abstract
- Affected by political instability and policy uncertainty, political risk determines the inter-temporal expectations and decisions of economic units, and affects microeconomic, mesoeconomic and macroeconomic fields. Thereby, impacts of political risks that occur frequently in Zimbabwe over bank profitability are specified in this study. At first, the reasons of political risk and political instability in Turkey are analyzed. Secondly, the mechanisms that transfer the impacts of political risk to bank profitability are specified. Then, panel ARDL method is used to determine the effects of political instability on bank profitability in Zimbabwe . In addition to the variable of political risk index, some endogenous, macroeconomic and financial variables that affect bank profitability are also included and these variables are found to have a significant effect on bank profitability in accordance with the literature. In the context of the aim of the study, we find negative effect of the political risk on the bank profitability. Also, by separating banks as public and private banks, this effect is examined and the negative effect of political risk on public banks is found stronger. According to these results, it can be argued that implementations towards political stability should be worked as soon as possible for steady economic growth, in terms of the financing of real sector more favorably and the requirement of financial stability.
- Date
- 2024
- Publisher
- BUSE
- Keywords
- Political risk, Commercial banks
- Supervisor
- NIL
- Item sets
- Department of Banking and Finance
- Media
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