Aman Arfia, Anwar Shaista, Khan Muhammad Atif, Haddad Hossam, Al-Ramahi Nidal Mahmoud, Khan Mohammed Arshad
Department of Finance, College of Administrative and Financial Sciences, Saudi Electronic University, Riyadh, 13316, Saudi Arabia.
Liwa College, Abu Dhabi, United Arab Emirates.
Heliyon. 2024 May 16;10(10):e31384. doi: 10.1016/j.heliyon.2024.e31384. eCollection 2024 May 30.
Economic policy uncertainty (EPU) adversely affects financial system functioning with potentially critical repercussions for economies and corporations worldwide. Financial system efficiency (FSE) has a vital influence on fostering optimal economic growth and development; however, the impact of EPU on FSE remains under-explored. This study investigates the effect of EPU on FSE along with its components financial institution efficiency (FIE) and financial market efficiency (FME). Using data from 22 countries over a 20-year period (2002-2021), our analysis reveals a significant negative effect of EPU on FSE, FIE and FME. Notably, our split-sample analysis highlights the accentuated adverse effects of EPU in high-EPU regimes, emphasising the importance of vigilance during periods of elevated policy uncertainty. We conduct a series of sensitivity tests, including alternative measures of EPU, FSE, FIE and FME, and apply two-stage least squares and two-step dynamic system generalised method of moments estimators and introduce additional control variables. These tests consistently reaffirm the core conclusions of our study. Finally, we discuss the implications of our findings for policymakers.
经济政策不确定性（EPU）对金融体系的运行产生不利影响，可能会对全球经济和企业造成至关重要的影响。金融体系效率（FSE）对促进最佳经济增长和发展具有至关重要的影响；然而，EPU对FSE的影响仍未得到充分研究。本研究考察了EPU对FSE及其组成部分金融机构效率（FIE）和金融市场效率（FME）的影响。利用22个国家20年（2002 - 2021年）的数据，我们的分析揭示了EPU对FSE、FIE和FME具有显著的负面影响。值得注意的是，我们的分组样本分析突出了EPU在高EPU状态下加剧的不利影响，强调了在政策不确定性升高期间保持警惕的重要性。我们进行了一系列敏感性测试，包括EPU、FSE、FIE和FME的替代度量，并应用两阶段最小二乘法和两步动态系统广义矩估计量，并引入了额外的控制变量。这些测试一致地再次证实了我们研究的核心结论。最后，我们讨论了我们的研究结果对政策制定者的启示。
