Mohamed Ali Trabelsi’s research while affiliated with Tunis El Manar University and other places

Design/methodology/approach The aim of this paper is to examine whether Islamic finance could replace or complement the traditional financial system. To this end, we examined both risk-taking and profitability of 94 Islamic banks operating in 18 countries observed during the 2006-2013 financial crisis period. A series of bank-specific and other country-specific indicators are combined to explain profitability of Islamic banks as measured by ROA and ROE, and risk divided into credit risk measured by IMLGL and EQL, and insolvency risk measured by Z-SCORE. Indeed, a bank is stronger than another if it is stable with a higher capacity to absorb risks, on the one hand, and increased performance on the other. Findings Using dynamic panel data econometrics (GMM system), we estimated five regressions and found the following results: bank capital is found to be the main indicator that contributes to maximizing profitability and stability of Islamic banks and reducing their credit risk. However, the study of liquidity and asset quality determinants often leads to inconclusive results. Nevertheless, we found that Gulf region-operating IBs are more profitable, more solvent and less risky than those operating in the South East Asian region. At the macroeconomic level, we could not find a significant relationship between inflation rate and IBs profitability. However, unlike for IBs in Southeast Asia, we found that inflation rate improves IBs stability and reduces their credit risk level. Practical implications The results of our study have numerous implications for bank management and the different stakeholders (investors, customers...). This study identified several factors that may help bank managers to improve their financial outlook by controlling risk level and profitability. These factors could as well help to understand how macroeconomic indicators affect both banking risk and profitability, in particular Islamic banking. Likewise, portfolio managers can use these results to support their decisions to include Islamic banks in their assets portfolios to mitigate potential risk. Originality/value Our study contributes to the existing literature in two ways. First, this paper provides fresh data and recent information on Islamic banking in GCC and South East Asian countries. Second, the obtained results helped us to conclude that the Islamic financial system cannot replace but rather supplements the traditional system. This result may be explained by the fact that Muslims look for Islamic banking products, which conventional banks are not offering.

The aim of this paper is to examine whether Islamic finance could be an alternative to the traditional financial system and could guarantee stability in times of crisis. To this end, 78 Islamic banks in 12 countries have been studied over the 2004–2013 period. A series of bank-specific and other country-specific indicators are combined to explain the soundness of Islamic banking in terms of profitability as measured by ROA and ROE, and risk divided into credit risk measured by IMLGL and EQL, and insolvency risk measured by Z-SCORE. The aim is to estimate five regressions using dynamic panel data econometrics (GMM system). The results indicate that bank size and capital are the main factors responsible for increasing profitability and stability of Islamic banks and reducing their credit risk. However, the ratios forming the variable liquidity and asset quality often lead to inconclusive results. It is also found that macroeconomic variables, except inflation, are able to improve Islamic banks’ stability. This is not the case for credit risk where the ratio is still unfavorable. The conclusion is that there are no major differences between IBs and CBs in terms of their profitability and risk features.

Banks are in the business of taking risks. The 3 pillars of Basel II capital accord highlight the crucial role of informative risk disclosures in enhancing market discipline. The specific role and responsibilities of the board of directors or supervisory boards in banking institutions continue, however, to fuel debate. Findings of the literature are often inconclusive. The main contribution of this study is examining how board characteristics affect risk in banking industry. We explore this relationship by using many econometric approaches. The empirical analysis based on a sample of 11 Tunisian conventional banks over the period 2001-2011 reports the following results when using GLS RE: small and dual functions boards are associated with more insolvency risk but have no significant effect on credit and global risks. The presence of independent directors within the board generates an increase in global risk but has no significant effect on insolvency and credit risks. A lower CEO ownership has no significant effect with all measures of risks. Finally, banking capitalization is associated with more insolvency risk, and small size banks assume lower credit risk. These findings are performed by using a GMM in system approach.

The struggle against poverty and social inequality is one of the biggest challenges for developing countries. These countries should adapt themselves to a new economic world order characterized by trade liberalization and based on a desire to make globalization work for poorer people. Most empirical studies on the relationship between trade, inequality and poverty assume that trade contributes to increasing wage inequality in developing countries. In this paper, we studied the impact of trade liberalization on poverty on a sample of 106 developing countries during the period 1980-2010. The results indicate that trade is not the main factor affecting inequality and poverty persistence.

This paper aims at examining the impact of political transitions on democracy, corruption and growth in countries which knew democratic changes. The results of our study indicate that these changes positively affect implementation of democratic principles, the struggle against corruption and economic growth. We examined also the case of the Arab spring countries focusing on the main political and socio-economic challenges and most importantly the religious challenge which is a characteristic of these countries. Indeed, religion may be considered as a relevant variable in these transitions and consequently it is very difficult to claim short-term or long-term triumph of these transitions as Arabs are now in a political boiling phase where religion may gather unexpected results.

The turmoil affecting capital markets since summer 2007 and its intensification since mid-September 2008 inflicted noticeable blows to the world economy. Although the high-risk real estate American market is believed to be the immediate source of such turmoil, these last years the euro-zone capital markets and financial institutions seem to absorb a continued credit cycle phenomenon and are seriously hit by aggravating tensions. It is the first financial crisis the Eurozone witnesses. Today, the priority for member states is to quickly find and implement solutions. In this paper, we analyse the recent developments in the Eurozone, mainly the Greek and Irish financial crises and the threats the Eurozone risks. Finally, we propose some solutions for the crises.

Microcredit institutions and the battle against poverty : The pan-arab Enda initiative in Tunisia The aim of this paper is to show, jointly by means of theoretical and empirical studies and through the pan-arab Enda case installed in Tunisia, that the adoption of a policy of credit rationing makes it possible to cure the problems of information asymmetry and to ensure the performance of refunding. This may, consequently, lead to the exclusion of a part of the microcredit market’s poor borrowers. Against this background, we will develop a suitable econometric model like the credit scoring (Schreiner Mark, 2000) which can predict the behavior of a customer, requiring a microcredit, in order to distinguish between good and bad borrowers. Keywords : microcredit, microfinance, organization, social economy, poverty. JEL classification : A13, D82, L31, I32, C13.

Research Question/Issue - The aim of this article is to analyse the different measures taken by the G7 and G20 leaders to face this crisis and to show whether such decisions represent a return to protectionism. Research Findings/Insights - We proposed the introduction of a new economic system based on Islamic banks’ principle which calls for cancelling interests. This line of thinking might solve speculation problems and put this type of crisis to an end. Theoretical/Academic Implications - Our article represents a point of view on the financial crisis, the return to protectionism and the role of Islamic banking.Practitioner/Policy Implications - This financial crisis pushed most developed countries to lower their banking rates and to implement null- approximating interest rates, a move which replicates the principle adopted by Islamic banks.

Purpose - This article aims to present a new strategy of portfolio selection. Design/methodology/approach - After having made a comparative survey of different strategies of portfolio selection adopted by portfolio managers in Tunisia, we propose a new strategy, which we call weighted overreaction strategy. This strategy consists in over-weighting the stocks having bad performances in the past. Findings - The new proposed strategy turned out to be more performing than size, PER and overreaction strategies in the Tunisian stock market via a mean equality test. Those who adopt it should create a loser portfolio and should sell it at a later period (12 months) and generate average annual returns of 241.75%. Research limitations/implications - This result deserves generalization to other stock markets. As the Tunisian stock market is marked by its looseness and low capitalization, applying this strategy over similar or more developed market would open the way for research aiming to define other strategies and to select the best one for each market. Indeed, it should investigate investors’ behaviour which is certainly not the same in each stock market and outline the specific strategy for each market. Practical implications - The weighted overreaction strategy generated a considerable gain compared to other portfolios. Originality/value - The new proposed strategy turned out to be more performing than the other ones.

The inefficiency of the stock markets is often bound to the stake in evidence of anomalies noticed in the behavior of returns by several authors. These anomalies are revealing of inefficiency if their knowledge permits to make a profit ex-ante of strategies based on them. De Bondt and Thaler [1985] disclosed one stock course overreaction: assets having recorded bad performances in the past in stock market would know performances subsequently superior to the average and vice-versa for assets having recorded excellent performances. This article aims at presenting the overreaction strategy adopted by most managers in Tunisia and to put in evidence a new strategy which turned out to be the best one.