IDEAS home Printed from https://ideas.repec.org/a/ris/apecjn/0086.html
   My bibliography  Save this article

Does Trustworthiness Matter for the Actual Lending-Deposit Spread and Perceived Financial Service Affordability?

Author

Listed:
  • Suriyanrattakorn, Savinee

    (Faculty of Management Science, Udon Thani Rajabhat University, Thailand,)

Abstract

Trustworthiness in financial systems is widely recognized as a crucial factor in fostering financial market efficiency. This research delves into the influence of trustworthiness in financial markets on both the perceived and actual costs of the financial system, drawing upon an eleven-year panel (2007-2017) encompassing 136 countries. The data was obtained from the Global Financial Development (GFD) and World Economic Forum Global Competitiveness Index (GCI). The study assesses the cost of financial systems through two key indicators: the bank lending-deposit spread and the perception of affordability in financial services. Additionally, this paper introduces a novel trustworthiness index from the GCI for estimation purposes. Three methodologies - fixed effect model, random effect model, and two-stage procedure - are applied. The findings reveal that trustworthiness shows an insignificant negative relationship with the bank lending-deposit spread. However, trustworthiness in financial systems positively impacts the perception of the cost of financial services across the overall sample, as it aids in cost reduction for financial transactions and enhances the affordability of financial services. As evident, enhancing trustworthiness within financial systems can effectively reduce the perceived cost of financial services. Policymakers should direct their efforts towards fostering trustworthiness in financial systems by implementing measures that prioritize transparency and accountability practices.

Suggested Citation

  • Suriyanrattakorn, Savinee, 2023. "Does Trustworthiness Matter for the Actual Lending-Deposit Spread and Perceived Financial Service Affordability?," Asian Journal of Applied Economics/ Applied Economics Journal, Kasetsart University, Faculty of Economics, Center for Applied Economic Research, vol. 30(2), pages 23-37, Jul-Dec.
    • Handle: RePEc:ris:apecjn:0086
    as

    Download full text from publisher

    File URL: https://so01.tci-thaijo.org/index.php/AEJ/article/view/267350/174491
    File Function: Full text
    Download Restriction: Asian Journal of Applied Economics/ Applied Economics Journal
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    trustworthiness; financial service; bank-lending deposit spread affordability;
    All these keywords.

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:apecjn:0086. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Arannee Tongjankaew (email available below). General contact details of provider: https://edirc.repec.org/data/feckuth.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.