The effect of regulatory quality on the nexus between foreign direct investment and bank stability in a dual banking system
This paper examines the influence of regulatory quality (RQ) on the link between foreign direct investment (FDI) and bank stability in Gulf Cooperation Council (GCC) countries. Through panel data analysis for 128 banks (Islamic and conventional) from the six GCC countries, the study reveals that FDI...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Taylor & Francis Group
2025-12-01
|
| Series: | Cogent Business & Management |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23311975.2025.2532119 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1849715499007475712 |
|---|---|
| author | Lubna Alzarooni Mohammad Al-Shboul Aktham Maghyereh |
| author_facet | Lubna Alzarooni Mohammad Al-Shboul Aktham Maghyereh |
| author_sort | Lubna Alzarooni |
| collection | DOAJ |
| description | This paper examines the influence of regulatory quality (RQ) on the link between foreign direct investment (FDI) and bank stability in Gulf Cooperation Council (GCC) countries. Through panel data analysis for 128 banks (Islamic and conventional) from the six GCC countries, the study reveals that FDI adversely affects bank stability of the GCC region; stability of Islamic banks shows a greater exposure to the adverse effect of FDI compared the stability of conventional banks. However, higher RQ weakens the adverse effects of FDI on the stability of banks in the GCC region. Islamic banks display a more significant role in allowing RQ to mitigate the detrimental effect of FDI on the stability of the overall banking system. This finding underscores the role of Islamic banks in stabilizing the GCC’s financial system. The study offers clear understandings for regulators, policymakers, and risk managers, emphasizing the need for careful regulatory quality management, particularly during increased foreign capital inflows to safeguard monetary and financial stability amidst FDI. |
| format | Article |
| id | doaj-art-54afbbadbcc0498090bf1c9cd6161be3 |
| institution | DOAJ |
| issn | 2331-1975 |
| language | English |
| publishDate | 2025-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Business & Management |
| spelling | doaj-art-54afbbadbcc0498090bf1c9cd6161be32025-08-20T03:13:22ZengTaylor & Francis GroupCogent Business & Management2331-19752025-12-0112110.1080/23311975.2025.2532119The effect of regulatory quality on the nexus between foreign direct investment and bank stability in a dual banking systemLubna Alzarooni0Mohammad Al-Shboul1Aktham Maghyereh2Department of Finance and Economics, College of Business Administration, University of Sharjah, Sharjah, United Arab EmiratesDepartment of Finance and Economics, College of Business Administration, University of Sharjah, Sharjah, United Arab EmiratesDepartment of Economics & Finance, College of Business and Economics, United Arab Emirates University, Al Ain, United Arab EmiratesThis paper examines the influence of regulatory quality (RQ) on the link between foreign direct investment (FDI) and bank stability in Gulf Cooperation Council (GCC) countries. Through panel data analysis for 128 banks (Islamic and conventional) from the six GCC countries, the study reveals that FDI adversely affects bank stability of the GCC region; stability of Islamic banks shows a greater exposure to the adverse effect of FDI compared the stability of conventional banks. However, higher RQ weakens the adverse effects of FDI on the stability of banks in the GCC region. Islamic banks display a more significant role in allowing RQ to mitigate the detrimental effect of FDI on the stability of the overall banking system. This finding underscores the role of Islamic banks in stabilizing the GCC’s financial system. The study offers clear understandings for regulators, policymakers, and risk managers, emphasizing the need for careful regulatory quality management, particularly during increased foreign capital inflows to safeguard monetary and financial stability amidst FDI.https://www.tandfonline.com/doi/10.1080/23311975.2025.2532119Banking stabilityforeign direct investmentIslamic banksGCCregulatory qualityrule of law |
| spellingShingle | Lubna Alzarooni Mohammad Al-Shboul Aktham Maghyereh The effect of regulatory quality on the nexus between foreign direct investment and bank stability in a dual banking system Cogent Business & Management Banking stability foreign direct investment Islamic banks GCC regulatory quality rule of law |
| title | The effect of regulatory quality on the nexus between foreign direct investment and bank stability in a dual banking system |
| title_full | The effect of regulatory quality on the nexus between foreign direct investment and bank stability in a dual banking system |
| title_fullStr | The effect of regulatory quality on the nexus between foreign direct investment and bank stability in a dual banking system |
| title_full_unstemmed | The effect of regulatory quality on the nexus between foreign direct investment and bank stability in a dual banking system |
| title_short | The effect of regulatory quality on the nexus between foreign direct investment and bank stability in a dual banking system |
| title_sort | effect of regulatory quality on the nexus between foreign direct investment and bank stability in a dual banking system |
| topic | Banking stability foreign direct investment Islamic banks GCC regulatory quality rule of law |
| url | https://www.tandfonline.com/doi/10.1080/23311975.2025.2532119 |
| work_keys_str_mv | AT lubnaalzarooni theeffectofregulatoryqualityonthenexusbetweenforeigndirectinvestmentandbankstabilityinadualbankingsystem AT mohammadalshboul theeffectofregulatoryqualityonthenexusbetweenforeigndirectinvestmentandbankstabilityinadualbankingsystem AT akthammaghyereh theeffectofregulatoryqualityonthenexusbetweenforeigndirectinvestmentandbankstabilityinadualbankingsystem AT lubnaalzarooni effectofregulatoryqualityonthenexusbetweenforeigndirectinvestmentandbankstabilityinadualbankingsystem AT mohammadalshboul effectofregulatoryqualityonthenexusbetweenforeigndirectinvestmentandbankstabilityinadualbankingsystem AT akthammaghyereh effectofregulatoryqualityonthenexusbetweenforeigndirectinvestmentandbankstabilityinadualbankingsystem |