This study evaluates environmental, social, and governance (ESG) performance at the country level as well as the relationship between this factor and economic growth by reference to a large sample of European countries over the period 2011–2020. As the measurement of ESG performance is an emerging concept, we consider a range of indicators that can be used to evaluate this factor on the basis of alternative methodologies, thus allowing us to check the robustness of the results. This approach reveals that countries that joined the European Union (EU) in 2004 or later exhibited lower levels of ESG performance than did countries in Western Europe; however, the decisive factors in this context are social and governance issues rather than environmental issues. These indications are robust across various settings. Further results reveal the existence of Granger causality between ESG performance and economic growth; however, ESG performance is revealed to impact economic growth only in the middle to long term.

PurposeThis paper aims to evaluate the role of depositor-specific features in a bank resolution. As the resolution framework in the EU is rather new, there are no empirical studies referring to the efficiency of this mechanism in protecting financial stability. Thus, the authors have checked the role of societal awareness of deposit guarantee schemes and the resolution, as well as the trust in public institutions, in avoiding bank runs in the case of resolution scenarios. Design/methodology/approachThe study is based on telephone interviews conducted with 1,000 Poles, including bank customers whose banks have undergone resolution in recent years, and basic statistics of the resolved banks. The authors then apply two classes of models: binary probit regression and ordered probit regression. FindingsThe findings have indicated that the trust in public institutions and the experience gained with age play a key role in overall depositor behaviour. However, for resolutions, declared trust is replaced by case-specific trust based on the obtained information. Research limitations/implicationsThe survey is based on a sample of Polish citizens. In the future, international surveys may help diagnose cross-country differences among depositors. Moreover, studies on communication approaches may also support finding highly effective ways to reach various cohorts of depositors. Originality/valueThe existing literature on depositor behaviour in bank failure scenarios has relied on an experimental approach to test various research hypotheses. The research sample is not based on an experiment but on the responses of customers whose banks have actually undergone resolution.

We analyze the effects of the European Central Bank's (ECB) unconventional monetary policy spillovers on the inflation-targeting Central Eastern European (CEE) countries using daily panel data from 2000 to 2019. We perform an exercise to identify these spillovers on the monetary market, calculate instantaneous short rates and term spreads, and use both Bayesian averaging panel and time-series approaches. Overall, we find that the spillovers from the unconventional ECB policy are not different from the conventional spillovers and are generally insignificant. While we find a significant reaction to inflation and an insignificant reaction to the output gap, we find that none of our ECB policy measures affect the instantaneous short interest rate nor the long-run term spreads. Our main result is that the international spillovers manifest themselves through the risk-taking channel, not the bond/interest rate channel, and have the form of volatility co-movement.

Purpose The parent-subsidiary nexus has been explored since the mid-1990s, but the extent to which subsidiaries resemble their parents remains unclear. Therefore, this study examines the performance drivers for subsidiary banks in emerging markets and their parents to determine the similarities between these groups. The findings could help identify key financial performance measures that should be included in global strategies for multinational banks operating in emerging markets. Design/methodology/approach The study uses data on subsidiaries from 32 countries, including 20 European transitioning countries and 49 parent companies operating internationally from 1996 to 2015. It considers several models that distinguish between units using individual bank effects and the stochastic structure. In a robustness analysis, EU- and non-EU-based institutions are distinguished and long-term historical links between parents' and subsidiaries' countries are considered. Findings Cost control, capital adequacy and asset quality policies have similar importance for parent banks and subsidiaries and are strictly coordinated, whereas the remaining policies allow more flexibility. Subsidiaries in the EU and in countries that were politically and/or militarily influenced by parent countries do not “fall far from the tree”, which signals their strong group-wide integration and coordination. Research limitations/implications This study covers a limited number of emerging market countries due to the limited availability of long-term series data. Future studies should include more countries. Originality/value This study identifies key financial measures used on a group-wide basis for performance management while accounting for long-term relations between host and home countries and the geopolitical characteristics of host countries.

Post-global financial crisis (GFC) regulatory overhauls – where uniform solutions were adopted for various types of banks – have significantly changed the environment in which banks operate. This is especially visible in the European banking industry, whose profitability has not recovered to pre-GFC levels. Therefore, our goal is to investigate whether the determinants of bank profitability fit these uniform solutions. Accordingly, we explore the profitability of European banks in various settings from 2012 to 2016, which is the period marked by tough reforms. Since a decrease in profit may be treated as a sign of financial difficulties, we model static (i.e., loss) and dynamized (i.e., loss, moderate and severe decreases in profits) indicators of bank situations based on a sample of approximately 6700 bank-year observations. Different patterns of the determinants of profit decreases are found among different types and sizes of banks. Moreover, the determinants of loss events apparently differ from those accounting for profit decreases. These findings underline that a “one-size-fits-all” approach to regulation and supervision is not adequate for market realities.

Wydawnictwo SIGMA-NOT wydaje czasopisma fachowe informujące swoich czytelników o najnowszych osiągnięciach naukowych i nowoczesnych rozwiązaniach technicznych w Polsce i na świecie, popularyzuje problemy techniczne oraz poszerza wiedzę i kulturę techniczną.

We investigate whether increasing the education quality causes increases in economic growth allowing poorer countries to catch up. To this end, we extend Nelson-Phelps's classic paper by introducing differences in education quality (proxied by students' performance on the Program for International Student Assessment [PISA] test) in a leader-follower type of growth model with knowledge diffusion. We use students' performance in a standardized international PISA test to measure education quality's impact on economic growth using a panel Vector Error Correction allowing for cross-correlation in the co-integration analysis in a set of all countries observed over the years 1975–2018. Additionally, we consider the possible reverse causality that characterizes economic development and the quality of education. Our results confirm the relevance of education quality as a significant causal factor of economic growth. However, further analyses indicate that the discussed relation is long-run, which may have important implications for policymakers.

In a seminal article, Hanushek and Woessmann explained economic growth as a function of the quality of education. While they did not find evidence of the importance of years of schooling, they argued for the relevance of cognitive skills and a basic literacy ratio for economic growth. However, this result was based on cross-country data limited to 23 observations. In this study, we extended and modified their approach based on the results of PISA (Programme for International Student Assessment) tests to explain the GDP changes over the last 50 years. Using panel data, we considered the possible lag that characterizes this relationship, used statistical methods to address the risk of reversed causality of economic performance affecting the quality of education, and extended the model by the inclusion of other potential growth factors. The results, which also included several robustness checks, confirmed the relevance of earlier education quality as a significant growth factor. Our results suggest the significance of educational skills for GDP growth, which might be treated as a confirmation of the importance of quality primary and secondary education for economic development. We showed that our results are robust to changes in the order of lags and confirmed the validity of the conclusion with the use of specification-robust Bayesian model averaging.