We investigate the relationship between environmental protection public expenditure (EPE) and green total factor productivity (GTFP) across 27 EU countries from 2013 to 2022. Using the global Malmquist Luenberger index and Two-Step System GMM estimation, we test contemporaneous and lagged effects of EPE scale and structure on GTFP. The findings reveal that absolute EPE (EPEA) has a positive and significant effect on GTFP through pollution-emission reduction and clean-technology investment channels. However, expenditure intensity (EPEI) shows no significant effect. This points to a threshold issue: current spending (averaging 0.76% of GDP) likely falls below levels needed for measurable productivity gains. Neither one-period nor two-period lagged variables demonstrate significant relationships with GTFP, indicating that environmental spending impacts may require longer evaluation horizons than the observation period allows. Disaggregated analysis of individual EPE components reveals no significant effects for any single category, suggesting that integrated environmental strategies may be more effective than targeted categorical spending. Several limitations affect our findings. We cannot establish definitive causality. The observation period is relatively short. Our focus on public expenditure excludes private environmental investment. Our empirical findings suggest four policy priorities: prioritising absolute investment over intensity targets, integrating spending across categories, extending evaluation beyond 2-year horizons, and strengthening public-private coordination.  

This paper analyzes the global and European green bond markets from different perspectives. The paper uses data on green bond issues on the global and European green bond market, in the period from 2013 to 2023. Research results show that the issuance of green and other sustainability-related revenue use bonds has increased in recent years. Europe remains the largest issuance region, accounting for more than half of global issuance. Green bond issuance globally and in Europe has experienced a tumultuous couple of years after reaching record highs of USD 575 billion and USD 326 billion in 2021, respectively. In 2023, Europe's green bond issuance recovered 11% year on year to USD 341 billion. It slightly outperformed the global markets, which recorded 10% growth to reach USD 581 billion. In line with 2022, the corporate sector fueled 2023 green volume, contributing 57% of issuance. Corporate issuers in Europe are mostly dominated by the energy, utilities, automotive, transport, and building sectors, all of which have hystorically been dependent on fossil fuels. Analysis of the capital markets in Bosnia and Herzegovina (BiH) indicates that the green bond market exists, and it started in 2023 when the first issue of green bonds was announced by a commercial bank on the local capital market (Banja Luka Stock Exchange). The key barriers to the development of the green bond market are the lack of appropriate institutional arrangements for green bond management, the issue of minimum size, and the high transaction costs associated with issuing green bonds.

Background: As a complex socio-economic concept, financial inclusion is related to the improvement of access and use of formal financial products and services (such as bank deposits, loans, insurance, etc.) by all participants in the financial system. More inclusive financial systems contribute to poverty reduction, decrease in inequalities among different income groups leading to economic growth, and economies more resilient towards macroeconomic shocks. Purpose: This paper aims to assess the relationship between financial inclusion and inflation in Southeast European countries, focusing on Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Montenegro, North Macedonia, Romania, Slovenia, Serbia, and Turkey in the period from 2011 to 2021. Study design/methodology/approach: The financial inclusion index was constructed using Principal Component Analysis (PCA). The connection between the financial inclusion index and inflation was investigated using panel regression modeling (OLS, fixed-effect, and random-effect models). Findings/Conclusions: The research showed that countries with higher levels of financial inclusion are more resilient to inflation. This finding is consistent with other research implying that policymakers and other stakeholders within a financial system should contribute to promoting financial inclusion and building more inclusive financial systems. Limitations/future research: The main limitation of the research is related to data availability for multidimensional index construction. Future research should be directed to providing a better understanding of whether the relationship between financial inclusion and inflation is under the influence of other monetary policy instruments, such as interest rates.

The Carbon Border Adjustment Mechanism (CBAM) is an import fee levied by a region, i.e., the European Union (EU), that taxes carbon on goods produced in countries that do not tax carbon. This EU climate neutrality support mechanism, which should be implemented by 2050, has caused some concerns. For example, it could reduce the export of the EU’s trading partners, especially those countries largely dependent on exporting energy-intensive goods and materials to the EU. Least developed countries, due to their high risk of vulnerability and high exposure, could face particularly pronounced adverse effects from the CBAM’s introduction. Therefore, this article aims to analyze how the introduction of the CBAM will affect the EU’s external trade partners, with particular attention to its potential consequences for selected economies. Most of the literature related to the introduction of the CBAM focuses on the consequences for EU countries. However, this mechanism, which aims to decrease CO2 emissions and encourage a low-carbon transition, could disproportionately affect some countries outside the EU. That is why the article uses data on the exposure of selected non-EU countries to the CBAM, utilizing data on the export of the CBAM-affected products to the EU and CO2 emission intensity. The analysis encompasses five regions and 59 countries, using data from the year 2019. The rationale for using 2019 data is to avoid the effects of global shocks in recent years, such as the coronavirus pandemic and Russia’s invasion of Ukraine. The analysis results reveal that the exposure of regions and countries varies based on the strength on their trade relations with the EU, leading to different trade impacts from the CBAM. The lowest exposure is observed in the regions of the Americas and Australia. This article provides valuable insights to policymakers and entrepreneurs in navigating the challenges and opportunities arising from the interlinkage of environmental policies and global trade dynamism. It can help facilitate decision-making related to participation in foreign trade involving products with a higher carbon emissions.

In the past seven decades, especially since the Global Financial Crisis, the financial system’s architecture has changed significantly around the world. New financial market entrants, such as fintech start-up companies, offer financial products and services more efficiently than established financial institutions (especially banks and insurance companies), bypassing the regulatory requirements established intermediaries must comply with. Despite the heterogeneity in the fintech concept, we use this term to consider innovations in financial products and services based on emerging information and communication technologies (i.e., information technology and mobile connectivity) as solutions that are changing the financial structure worldwide. Although the share of new participants in the financial system is rather small compared to the incumbents, fintech innovations are continuously advancing (e.g., crowdfunding, marketplace lending, cryptocurrencies, copy trading, robo-advice, insurtech, etc.), and their share is growing fast. This paper provides an overview of the fintech market and its impact (actual and potential) on the financial system’s architecture based on a comprehensive review of the theoretical and empirical literature.

Purpose Explaining the sources of the differences in social performance among Islamic banks (IBs) is the motivation for this research. Consequently, the purpose of this paper is to investigate the relationship between the development of Islamic finance regulation, the development of an Islamic financial system, the proportions of affected Muslim populations and the level of competition, on the one hand, and the social performance of IBs, on the other. To the best of the authors' knowledge, this is the first study that investigates the impact of the development of regulation and the Islamic financial system on the social performance of IBs. Design/methodology/approach A balanced panel of annual data for 40 banks from 13 countries is applied, spanning 2012–2018. A social performance index with eight dimensions is constructed and measures the social performance of IBs. The index based on qualitative and quantitative data derives from IBs’ annual reports and financial statements. The linear scaling transformation method articulates the quantitative dimensions of the index. In hypotheses testing, the authors use OLS, LSDV, FEM and Random Effect Model to estimate Model (1) and panel-corrected standard errors with Prais–Winsten transformation to estimate Model (2). Findings This unique research confirms the positive impact of the development of Islamic finance regulation on the social performance of IBs. The results show that the development of Islamic finance regulation is consistently significant on all standard significance levels. IBs’ age and the presence of Muslim populations in the country are also significant in most estimators. Research limitations/implications The results of this research highlight a significant value for regulators, shareholders and the management of IBs. Without proper regulation, these banks can hardly operate under the principles and expectations of the Islamic moral economy. Originality/value This is pioneering research that explores the development of Islamic finance regulation and market concentration as a determinant of social performance of IBs. Development of Islamic finance regulation has proved significant in all estimated models, which confirms that a new variable has been discovered among determinants of the social performance of IBs.

Purpose This study aims to investigate the relationship between Islamic governance and the social performance of Islamic banks, pioneering a new aspect in terms of the impact of the National Shariah Board (NSB) on the social performance of Islamic banks. The essential body in the Islamic banks in charge of Islamic governance is the Shariah Supervisory Board (SSB). Therefore, in this study, the authors explore how the characteristics of the Shariah board and Islamic governance mechanisms influence the social performance of Islamic banks. Design/methodology/approach Panel data methods are applied to the annual data of 43 banks from 14 countries over the period 2012–2018 to explore the impact of Islamic governance on Islamic banks’ social performance. The authors have used all available bank annual reports in the given period. Social performance is measured by Maqasid al-Shariah (in terms of the goals of the Islamic moral economy) index using a comprehensive evaluation framework. Islamic governance is represented by the improved Islamic Governance Score (IG-Score) index, which measures the quality of Islamic governance in Islamic banks. In the research, the authors also introduce the frequency of SSB meetings in IG-Score. Findings The findings suggest a strong link between Islamic governance and the social performance of Islamic banks, illustrating the importance of the Shariah board in achieving maqasid. On the other hand, the research discovered that NSBs are inefficient and the existence of NSB can jeopardize the social performance of Islamic banks. The results of this research imply valuable recommendations for Islamic banks that are keen to improve their social performance. Originality/value Besides investigating the impact of SSB governance on the social performance of Islamic banks by using an improved IG score index, to the best of the authors’ knowledge, this is the first study that investigates the impact of NSBs on the social performance of Islamic banks.

This paper analyzes the linear and non-linear relationship between non-performing loans and bank profitability measured by the Net Interest Margin for a sample of 74 Middle Eastern and North African banks over the period of 2005–2020. We used the System Generalized Method of Moments (SGMM) as a linear approach and the Panel Smooth Transition Regression (PSTR) model as a non-linear approach. The empirical results of the SGMM approach indicated that the ratio of NPLs negatively affects bank profitability. The findings of the non-linear relationship based on the PSTR model confirmed the existence of a threshold effect. We found that below the threshold of 4.42%, the effect of NPLs is negative but not significant, while after surpassing this threshold, the effect becomes negative and significant. As for bank specifics, we revealed that bank size is positively and significantly associated with bank profitability. For industry factors, we found that more bank concentration decreases bank profitability. Regarding the financial environment, we concluded that the global financial crisis exerted a negative impact on bank profitability. Moreover, we revealed a positive and significant impact of GDP on bank profitability as well as a negative impact of inflation on bank profitability. This study has some limitations regarding the social, economic, and financial differences of the whole sample, which includes banks from the Middle East and others from North Africa. Hence, decomposing the whole sample into two sub-samples could improve the results of this paper.

The main purpose of this paper is to present a systematic literature review of studies on the determinants of non-performing loans (NPLs) published over the period 1987–2022. This paper reviewed 76 studies in 58 peer-reviewed journals. The provocation for this analysis is that the issue of NPLs is attributed to close attention from policymakers and is currently addressed with various measures. The authors synthesize the literature according to the following main boards: macroeconomic factors, bank-specific factors, and industry factors. This study tries to construct the main findings from the numerous studies that are performed concerning NPLs and their determinants. The authors’ motivation is to provide a detailed perspective on NPLs. Hence, this study provides a complete and coherent framework for the researchers to examine the varied NPL literature.

The purpose of this work is to show the development and evaluation of behavioural intentions of students by using mobile banking. The research goal is to explain determinants of students’ intentions towards the use of mobile banking. PLS SEM (partial least squares structural equation modeling) analysis was used for the model evaluation. The sample consists of 83 students from four higher education institutions operating in Bosnia and Herzegovina (B&H). Research results confirmed that subjective norm and attitude are significant predictors of the user’s attitude towards mobile banking acceptance, while the influence of self-efficacy was not determined. Attitudes related to mobile banking acceptance are primarily determined by perception of usefulness and self-efficacy, and to a lower degree by perception of privacy and security risk. Perception of mobile banking usefulness appeared to be the most significant predictor of attitudes, while simultaneously it influenced positively on acceptance of behavioral intention, including intervening effect of attitude variable. Digital literacy was proved to be a significant predictor for self-efficacy. From the perspective of banks, it is very important to see how a generation that a high potential for the use of modern technologies has perceives mobile banking, and what affects it to accept mobile banking. The results of this research are useful for banks to attract new younger users of mobile banking and increase their own benefits.