Geopolitical risk and global banking stability: the role of financial architecture, institutional quality, and regional integration
This paper examines how rising geopolitical risk influences bank-level financial stability and identifies the structural conditions that shape resilience. Using a global panel of more than 58,000 bank-year observations across 137 countries from 2000 to 2021, we assess stability across solvency, credit, liquidity, and asset risk. Higher geopolitical risk erodes solvency, increases credit risk, weakens liquidity buffers, and amplifies asset-return volatility, with effects most pronounced in bank-based systems. We highlight a “triangle” of modulators: financial-system architecture, institutional quality, and regional financial integration. Strong institutions and well-governed regional integration substantially dampen the transmission of geopolitical shocks, clarifying channels of financial contagion and offering policy-relevant insights for an era of growing geopolitical fragmentation.
Iddouch, K., & Loukili, S. (2026). Geopolitical risk and global banking stability: the role of financial architecture, institutional quality, and regional integration. Journal of Banking Regulation, 27, 32. https://doi.org/10.1057/s41261-026-00330-4
Population structure and digital financial inclusion
This article empirically examines the impact of population structure on digital financial inclusion, controlling for GDP-per-capita growth, inflation, unemployment, institutional governance quality, and bank stability. Using data for 216 countries from 2004 to 2023 and a two-stage system-GMM methodology, we find that digital financial inclusion is higher in urban and young populations and in countries with rapid population growth, and lower in vulnerable and non-vulnerable populations. Interaction analyses show institutional quality raises inclusion in rural populations while high inflation constrains it, high unemployment worsens inclusion among older populations, and inclusion rises among vulnerable populations during high-inflation periods. Macroeconomic and institutional factors play an important role in encouraging digital financial inclusion across population segments. To our knowledge, existing studies have not examined the effect of population structure on digital financial inclusion.
Ozili, P. K., & Iddouch, K. (2026). Population structure and digital financial inclusion. Journal of Economic Studies, ahead-of-print. https://doi.org/10.1108/JES-09-2025-0706
Rewiring finance for inclusion: digital and traditional mechanisms in African banking
We investigate how traditional and digital financial inclusion affect the financial stability of African banks, focusing on the moderating role of the gender gap. Grounded in Financial Intermediation Theory, the Technology Acceptance Model, and Gender Role Theory, we construct unique measures of digital and traditional financial inclusion. Across 37 African countries from 2011 to 2021, both traditional and digital finance significantly enhance bank stability, with stronger effects for women than men: a narrowing gender gap in traditional usage improves stability, while a widening gender gap in digital usage weakens it. These effects operate through three transmission mechanisms — improved asset quality via lower credit risk, stronger liquidity from expanded retail deposits, and more stable funding bases — and small banks benefit most. The findings underline the importance of gender-inclusive financial policies and digital infrastructure, in line with several UN SDGs, for a stable and resilient banking sector.
Elnahass, M., Iddouch, K., Rezki, S., & Eloueldrhiri, S. (2026). Rewiring finance for inclusion: digital and traditional mechanisms in African banking. Emerging Markets Review, 72, 101448. https://doi.org/10.1016/j.ememar.2026.101448
Entrepreneurial ecosystem as a catalyst for economic growth: global empirical evidence using a novel composite index
We examine the role of entrepreneurial ecosystems in driving economic growth across 107 economies from 2011 to 2023. We develop and validate a composite index capturing the efficiency of national entrepreneurship systems and assess its impact on growth. We construct six entrepreneurial sub-indexes and a composite Global Entrepreneurship Monitor Index (GEMI) in two steps: an output-oriented slacks-based-measure (SBM) data envelopment analysis (DEA), then OLS and fixed-effects panel regressions linking GEMI to GDP growth, with robustness checks using GDP per capita and alternative specifications. GEMI has a robust positive impact on growth, consistent with Entrepreneurship Ecosystem Theory. High-income countries benefit most, middle-income countries see moderate gains, and low-income countries face barriers; gains are stronger in Europe and Latin America while Sub-Saharan Africa and MENA remain constrained by weak infrastructure and governance. The findings point to strengthening regulatory frameworks, expanding access to finance, and investing in education and infrastructure to unlock entrepreneurship-led growth.
Iddouch, K., & Jaoual, O. (2025). Entrepreneurial ecosystem as a catalyst for economic growth: a global empirical evidence using a novel composite index. International Journal of Entrepreneurial Knowledge, 13(1), 106–141. https://doi.org/10.37335/ijek.v13i1.309
Landscape of research on the efficiency profiles of Islamic banks using DEA: survey, classification and critical analysis of the literature
This survey paper paints the landscape of research on the efficiency profiles of Islamic banks and their conventional counterparts, with a focus on data envelopment analysis (DEA) studies. The landscape is organised around classifications of types of efficiency measures and their analyses, types of DEA analyses, DEA modelling frameworks and models, evaluation approaches and the choice of variables for specifying DEA models, and the drivers of efficiency. To our knowledge, no survey on the drivers of efficiency had previously been conducted; we overcome this gap in the context of Islamic banking and back up prior findings with relevant theories. We also unify the literature terminology-wise and provide a critical analysis of the field, identifying methodological gaps, inconsistencies, and future research directions.
Iddouch, K., El Badraoui, K., & Ouenniche, J. (2023). Landscape of research on the efficiency profiles of Islamic banks using DEA: survey, classification and critical analysis of the literature. International Journal of Business, 28(3), 1–46. https://doi.org/10.55802/IJB.028(3).004
Productivity profiles of Islamic banks using DEA-based Malmquist Productivity Indices: survey, classification, and critical analysis
This chapter surveys the literature on the productivity profiles of Islamic banks, with a specific emphasis on Malmquist Productivity Indices (MPIs) estimated using data envelopment analysis (DEA). It examines 68 publications from 2006 to 2022 and offers a comprehensive categorization of the literature along four key aspects: the type of DEA analysis, productivity-measurement methodologies, variables for DEA model specification and corresponding evaluation approaches, and the drivers of productivity together with their theoretical foundations. The chapter also provides a critical analysis of the existing literature, identifying gaps, inconsistencies, and potential sources of discrepancy in findings, paving the way for future research to address these limitations.
Iddouch, K., El Badraoui, K., & Ouenniche, J. (2024). Productivity profiles of Islamic banks using data envelopment analysis-based Malmquist Productivity Indices (MPIs): survey, classification, and critical analysis. In A. A. Ajibesin & N. R. Vajjhala (Eds.), Data Envelopment Analysis (DEA) Methods for Maximizing Efficiency (pp. 40–81). IGI Global. https://doi.org/10.4018/979-8-3693-0255-2.ch003
Funding architecture and bank efficiency in Africa: evidence from 35 countries
This study examines the efficiency profiles of African banks using three alternative financial-intermediation models that explicitly capture distinct funding structures. Using quarterly data for 295 commercial banks across 35 African countries from 2018Q2 to 2025Q2, we apply a slack-based-measure DEA under variable returns to scale and an output orientation, and propose three conceptual intermediation models: a global model, a retail-focused model, and a wholesale-and-interbank funding model. African banks operate at moderate but highly heterogeneous efficiency, highest when funding is diversified, lower when intermediation relies primarily on retail deposits, and lowest when concentrated in wholesale and interbank markets; large and listed banks outperform smaller and unlisted ones, and North and Southern African systems show stronger profiles. By incorporating funding architecture as a structural dimension of efficiency, the study extends the conventional single-model intermediation approach with continent-wide quarterly bank-level evidence.
Iddouch, K., & Ozili, P. K. (forthcoming). Funding architecture and bank efficiency in Africa: evidence from 35 countries. International Journal of Emerging Markets. JEL: G21, C67, G24, O16, E44.
Brain economy and the entrepreneurship gap
This paper develops an integrated, efficiency-based framework to evaluate how European Union member states transform their brain-economy capabilities into entrepreneurial outcomes. Using a harmonised dataset for the 27 EU member states over 2004–2024, we construct a novel multidimensional Brain Economy Index (BEI) and its three pillars — human capital and skills, innovation and knowledge creation, and digital–cognitive infrastructure — through a two-step, output-oriented slack-based-measure DEA under variable returns to scale, then introduce a family of Brain-Economy Entrepreneurial Efficiency Models linking BEI to early-stage entrepreneurial activity (TEA). Results reveal a persistent North–South and West–East divide in capability, with Finland, Sweden, Germany, Denmark, France, and the Netherlands on the frontier, yet a different pattern in converting capability into entrepreneurship, where Estonia, Slovakia, Latvia, Lithuania, and Cyprus lead while several capability-rich Western and Nordic economies show structural inefficiencies. The study provides the first systematic evidence of a cognitive–entrepreneurial divide in Europe.
Iddouch, K., & Jaoual, O. (forthcoming). Brain economy and the entrepreneurship gap. Journal of Entrepreneurship in Emerging Economies.
Population segment and digital financial inclusion during crises
We examine how population dynamics affect digital financial inclusion during systemic crises — the Global Financial Crisis (2007–2009) and the COVID-19 pandemic (2020–2021). Using panel regression and two-stage least squares for a global panel of 200 countries and territories over the combined crisis periods, we find that during crises digital financial inclusion rises in the total, rural, older, and vulnerable populations, but falls in rapidly growing, urban, youth, and non-vulnerable populations. These operate through distinct mechanisms — population stock (scale-driven digital substitution) versus population flow (demographic capacity constraint) — and the overall direction differs by crisis: inclusion contracts during the GFC but expands during COVID-19. Institutional quality is a robust enabling determinant across all segments. The findings suggest vulnerable populations gain greater access to digital financial services during crises, with strong institutions a necessary condition for adoption.
Ozili, P. K., & Iddouch, K. (forthcoming). Population segment and digital financial inclusion during crises. Social Responsibility Journal. JEL: G21, G28, O16, J11.
The MENA GPR Index: Measuring Geopolitical Risk from Arabic-Language News
I introduce the MENA GPR Index, the first daily measure of geopolitical risk constructed entirely from Arabic-language news. Building on the Geopolitical Risk framework of Caldara and Iacoviello (2022) and the large-language-model approach of Iacoviello and Tong (2026), I read a curated corpus of leading pan-Arab outlets through GDELT from 2015 to 2026 and score geopolitical-risk content along two convergent tracks: a transparent theme-based screen and a large-language-model reading of each article. The index co-moves with the original GPR and the AI-GPR in changes while diverging in levels, and its oil component tracks the Middle East oil-risk index at a correlation of 0.82. I decompose risk by country, country pair, actor, event type, sub-national hotspot, and threats versus acts, and use daily local projections to trace how energy-risk innovations move Brent crude volatility.
Iddouch, K. (2026). The MENA GPR Index: Measuring Geopolitical Risk from Arabic-Language News. Working paper. https://doi.org/10.5281/zenodo.20813840
Full-corpus LLM scoring of the Arabic GPR
Extending the index from a theme-based screen to article-by-article large-language-model classification across the entire Arabic corpus, with calibrated threat-versus-act tagging and uncertainty estimates.
A multi-decade Arabic risk history
Pushing the daily index back across earlier decades to build a long historical series of geopolitical risk as seen through Arabic-language media, enabling event studies over major regional shocks.
Arabic GPR and financial markets
Studying how the Arabic-language risk index and its energy component forecast oil-price volatility, regional equity returns, and sovereign spreads, beyond what English-language indices capture.
Bilateral tension and conflict dynamics
Using the country-pair co-mention series to model escalation between dyads such as Iran-Israel and Saudi-Yemen, and to test whether news-based tension leads observed conflict events.