Threshold Effects of Banking Risk Management on the Cost of Capital in Banks Listed on the Tehran Stock Exchange with an Emphasis on the Competitiveness Index
Keywords:
Banking risk management, Cost of capital, Operational risk, Fintech index, Competitiveness indexAbstract
The present study examines the threshold effects of external debt on sustainable economic growth while taking into account the heterogeneity in regulatory quality and government institutional quality. Using a Panel Smooth Transition Regression (PSTR) model in which external debt is considered the transition variable, the sustainable development function is modeled. Following confirmation of the nonlinear model, the results of the nonlinear section are analyzed. According to the estimated nonlinear model, the coefficient of external debt (ED) is 0.49, indicating a negative effect of external debt on sustainable development in the selected countries. Given the corresponding probability value of this coefficient (0.0069), which is less than 0.05, this effect is statistically significant at the 95% confidence level. Furthermore, the coefficients and computed probability values for institutional quality, regulatory quality, and rule of law are 0.016, 0.089, and 0.235, with corresponding probability values of 0.0355, 0.0015, and 0.0053, respectively. These results indicate that the effects of regulatory quality, institutional quality, and the rule of law on improving sustainable development are positive and statistically significant.
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Copyright (c) 2025 Ehsan Hemmat Abiri (Author); Mojtaba Dastoori; Saeed Moradpour (Author)
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