Persistence of the Misery Index in African Countries

This paper deals with the analysis of the misery index in a group of 55 African countries by using fractional integration or I(d) techniques. In doing so, we can measure the degree of persistence of the index in a more flexible way than with other methods that simply use integer degrees of differentiation (zero or one). Our results indicate a large degree of heterogeneity across the countries, with some showing short memory behaviour (d?=?0); others long memory mean reverting behaviour (0?<?d?<?1) and others indicating the presence of unit roots (d?=?1). Thus, shocks will have different effects depending on the country examined. Generally, we also find a positive relationship between the levels of persistence and income.

     

Conformance and performance roles of bank boards: The connection between non-performing loans and non-performing directorships

This study evaluates how non-performing loans and different types of board turnover—which we link to performing directorship (natural turnover) and non-performing directorship (forced turnover)—impact the economic performance (ROA) of banks. The proposed model and hypotheses, based on the conformance and performance roles of boards, are tested on a rich sample that includes all banking firms operating in Costa Rica between 2000 and 2012. The results indicate that the negative effect of non-performing loans on ROA is significantly greater in banks with non-performing directorship associated with high rates of unexpected changes in the board. The findings of the study highlight that the competence of boards matters. The results also give evidence of the importance of balancing financial and non-financial goals if superior governance and economic performance are the objectives pursued by organisations.