IJEP

Editorial The June 2026 issue of the International Journal of Economic Performance presents 10 articles focusing on critical global themes

Hichem Benhamida — 2026-06-30

Dear Readers,

It is with great pleasure that we present this new issue of our journal. Although rooted in Algeria, our publication stands as a genuinely international space for scholarly exchange. This issue bears witness to that vocation through the diversity of our authors' origins, coming from France, Saudi Arabia, Nepal, Egypt, Malaysia, Nigeria, South Africa, and Canada.

This issue brings together contributions addressing highly topical economic, financial, and managerial questions. European competitiveness in the face of the United States and China, large language models in service of financial inclusion, the trade-led growth hypothesis, internal audit and fiscal discipline in local governments, artificial intelligence in service of economic diversification in the Gulf, volatility spillovers in Macao's gaming economy, cybersecurity as a driver of banking customer loyalty, organizational citizenship behavior, government expenditure and unemployment, and DSGE modeling of the North African banking sector: these themes together illustrate the richness and relevance of the work gathered in this issue.

This diversity, both thematic and geographic, would not have been possible without the commitment of our editorial board. We express our deep gratitude to our associate editors for their rigorous scientific guidance, as well as to all our reviewers, whose expertise and rigor remain the foundation of our journal's credibility. We also thank our editorial secretariat for its meticulous work, essential to the publication of every issue.

We wish you a rich and stimulating read.

The Editor-in-Chief

Hichem Benhamida, Professor of Economics at the University of Boumerdes (ALPEC LAB).
Boumerdes, June 30, 2026

Can Europe maintain its competitiveness in a global economic landscape dominated by the United States and China? Structural analysis, comparative data, and strategic outlooks

Sofiane CHERFI — 2026-06-30

This article analyzes the European Union’s ability to preserve its economic position in the face of the dominant dynamics of the United States and China. We will address a set of recent macroeconomic data (Mario Draghi’s report in 2024), the figures from the OECD, Eurostat, and the IMF to show that the EU is currently experiencing a decline of a structural, multi-dimensional nature.

The overall productivity of the European Union’s factors of production is stable and faces a persistent shortage of investment in research and development (R&D) and in capital and digital capital. The EU’s dependence on energy and technology is increasing. Exposure to protectionist measures is growing; the GDP gap between the United States and our continent has doubled over two decades, rising from 15% to 30% in 2023.

Spending on research and development in Europe amounts to 2.13 percent of GDP, well below the 3.14 observed in the United States (more than one and a half times 1.6). This situation weakens the Eutrope’s ability to maintain its position as a leader in the fields of technology. In this article, we will analyze the reactions and institutional responses at the European level through Mario Dragui’s report, the competitiveness compass, the agreements on trade with Mercosur and Mexico, while considering their limitations.

Our finding concludes that European competitiveness is still present but maintaining it, politically, financially, and industrially requires a common political push on a scale unprecedented since the Marshall Plan.

Large Language Models in Digital Banking: A Systematic Review and Implications for Financial Inclusion (2015–2025)

Mohamed Djafar Henni — 2026-06-30

The rapid emergence of Generative Artificial Intelligence (GenAI) and Large Language Models (LLMs) is fundamentally transforming the financial sector by enabling advanced capabilities in processing large volumes of unstructured textual data. While previous studies have explored broad applications of artificial intelligence in finance, a dedicated synthesis focusing specifically on banking management and its implications for digital banking transformation remains limited. In response, this article provides a systematic state-of-the-art review of 91 studies published between 2015 and 2025, identified through the Web of Science and Scopus databases using a PRISMA-based methodology.The review synthesizes the literature across five key domains: (1) Policy Interpretation and Sentiment Analysis, (2) Risk Management and Financial Prediction, (3) Regulatory Technology (RegTech) and Compliance, (4) Operational Efficiency and Process Management, and (5) Customer-Facing Applications and Advisory Services. Bibliometric evidence reveals a rapid acceleration of scholarly interest beginning in 2023, with Risk Management and Financial Prediction representing the most prominent research stream (28.7% of publications). The findings demonstrate how LLM-driven tools are redefining traditional banking management practices by enabling contextual interpretation of central bank communications, improving financial risk forecasting, automating regulatory compliance processes, and enhancing operational decision-making. digital banking services in improving customer interaction, expanding access to financial information, and potentially supporting broader financial inclusion within increasingly digitalized financial systems. Finally, the study identifies critical limitations in the existing literature particularly regarding data privacy, model interpretability, and geographic bias and proposes a strategic roadmap outlining future research directions for responsible and inclusive AI adoption in banking.

Reflections of the trade-led-growth hypothesis on the Nepalese economy

Arjun Kumar Dahal — 2026-06-30

This study examines the effect of foreign trade on Nepal's economic growth. It comprises export, import, and total foreign trade volume as economic growth determinants. It is based on secondary data collected from numerous economic surveys of Nepal encompassing 34 data points from fiscal years 1998/99 to 2021/22. To examine the short-run and long-run relationship between export, import, and total foreign trade volume in promoting Nepal's economic growth, descriptive and exploratory research designs are utilized. EViews 12 is used to analyze the data. Graphs and some statistical tools of econometrics, like correlation analysis, Descriptive statistics, unit root testing, ARDL Bound testing approach, heteroskedasticity, serial correlation LM test, CUSUM and CUSUM square, and error correction model, are used. There is a high degree of positive correlation found between foreign trade and economic growth. The GDP, import, export, and total trade volume have long-run co-integration. In the long run, no variable has an individually statistically significant impact on determining the dependent (GDP) variable. Still, in the short run, a one percent increase in foreign trade leads to a 0.845 percent increase in the GDP of Nepal. Import and economic growth have negative relations. A one percent increase in imports decreased the GDP by 0.686 percent in Nepal. Foreign trade explains 94.92 percent of the variation in Nepal's GDP in the long run, but only 39.97 percent in the short run. Only a small number of data, countries, variables, methods, and instruments are used. Therefore, further inquiry is required.

Internal Audit, Internal Controls, and Fiscal Discipline: Empirical Insights from Strengthening Control Systems as Drivers of Financial Accountability in Nigerian Local Governments

Kayode David KOLAWOLE — 2026-06-30

The purpose of this study is to examine the effects of internal audit control and internal control systems on financial accountability in Nigerian local governments, based on a case study of Ilorin West, Kwara State. Using agency and stewardship theories as the theoretical base, a quantitative survey design was employed using purposive sampling of 125 accounting and audit staff members, with reliability analysis verifying the strength of the constructs and ordered logit regression empirically validating the hypothesised relationships. The results show that internal audit control and internal control systems have significant and positive effects on financial accountability, with internal control systems having a greater impact. These results emphasise the significance of institutionalised audit mechanisms, preventive controls, and staff commitment in maintaining transparency and fiscal discipline. The policy implications are that strengthening audit independence, strengthening compliance structures, and making use of incentive-compatible measures that combine sanctions with rewards are necessary. The study adds to the accountability and governance literature by illustrating how effective control frameworks enhance local government financial management and reinforce fiscal decentralisation and citizen confidence in public institutions.

The Impact of Artificial Intelligence Applications in Non-Oil Sectors on Economic Diversification in the Gulf Cooperation Council Countries

Loquman Mazouz — 2026-06-30

This study examines how government readiness for artificial intelligence adoption influences the growth of non-oil sectors in the Gulf Cooperation Council (GCC) countries, situating this relationship within the broader framework of economic diversification. Given the persistent vulnerability of GCC economies to oil price volatility and geopolitical uncertainty, the research investigates whether AI adoption functions as a structural driver of diversified, sustainable growth rather than a purely technological add-on. Using a balanced panel dataset covering the six GCC states (UAE, Saudi Arabia, Kuwait, Bahrain, Oman, and Qatar) over the 2020 to 2024 period, the study applies panel data estimation techniques, testing pooled OLS, fixed effects, and random effects specifications. Diagnostic procedures, including the Redundant Fixed Effects test, the Hausman test, and Pesaran's cross-sectional dependence test, were used to select the most appropriate model, with results favoring the Pooled OLS specification. Findings indicate a statistically significant positive relationship between the government AI readiness index and non-oil sector growth, alongside a strong positive effect of overall GDP growth on non-oil output. These results suggest that institutional AI readiness has moved beyond symbolic policy commitments to generate measurable economic returns, helping to offset the region's historical dependence on hydrocarbon revenues. The study contributes a region-specific, multi-country econometric framework that extends prior descriptive and single-country research, offering policymakers empirical grounds for prioritizing AI integration as a lever for sustainable economic diversification across rentier economies.

Volatility Spillovers in Macao's Gaming Economy before and after COVID-19

Lin Yihuan — 2026-06-30

Risk analyses of Macao's gaming-tourism economy have long rested on two implicit assumptions: that the co-movement between overnight visitor arrivals and gaming revenue is positive and stable, and that adverse shocks propagate no more severely than favourable ones. Using monthly data from February 2008 to July 2025 and a framework combining GJR-GARCH, Dynamic Conditional Correlation, and the Diebold-Yilmaz spillover decomposition, this paper tests both assumptions and finds that neither survives empirical scrutiny. The dynamic correlation between overnight arrivals and gaming revenue was positive and stable before 2020, effectively collapsed during the COVID-19 border closure, and has remained persistently negative since 2022, a reversal that has not self-corrected in three years of post-pandemic recovery. Separately, the spillover of bad volatility shocks between the two series is 30.6 percent, against 8.2 percent for good volatility shocks, a gap of 22.4 percentage points. Together, these results describe a gaming-tourism system in which the standard assumptions of stability and symmetry both fail simultaneously, and in which any risk model calibrated on pre-2020 data or symmetric shock mechanics will understate downside exposure by a structurally significant margin.

Cyber Security Measures as Determinants of Customers' Loyalty: Evidence from the Nigerian Banking Industry

Olota oluwayomi omotayo — 2026-06-30

With the expansion of the digital presence of financial institutions, the complexity and intensity of cybercrime has increased, forcing banks to implement more resilient security systems to protect confidential information of their customers and maintain the confidence level among the participants of the financial ecosystem. Hence, cyber security measures as determinants of customers' loyalty: evidence from the Nigerian banking industry was investigated. Specifically, it examined the effect of biometric verification, multi-factor authentication, security awareness campaigns on customer loyalty in Nigeria banking industry. Descriptive survey was adopted using questionnaire to examine a sample of 377 active customers of the selected five banks in Kwara State. The obtained data was analyzed using PLS-SEM through SmartPLS. Findings revealed that multi-factor authentication has the strongest effect on customer loyalty (β = 0.385, t = 10.312, p < 0.001), followed by security awareness campaigns (β = 0.288, t = 5.036, p < 0.001), and biometric verification (β = 0.256, t = 4.333, p = 0.001). It concluded that cyber-security measures is significantly vital for customer loyalty in Nigerian banking industry. It therefore strongly recommended that Nigerian banks should prioritize cybersecurity especially by focusing strongly on multi-factor authentication as the cornerstone of its cybersecurity strategy. This should include implementing tokenized access and adaptive authentication systems bank-wide.

Landscape of Organizational Citizenship Behavior: Insights from Bibliometric Analysis

Padam Bahadur LAMA — 2026-06-30

This research analyzes the landscape of organizational citizenship behavior through bibliometric analysis. A total of 3604 datasets from the dimension source were employed in the study. Data analysis was accomplished using R, Biblioshiny, and VOSviewer software. The main analyses included in the study are annual scientific production, average citation score, most relevant sources, Bradford’s law, prolific authors, local impact, global cited documents, relevant affiliation, scientific production of countries, most cited countries, corresponding authors’ countries, trend topics, most frequent words, thematic map, co-occurrence of network, and bibliographic coupling of authors and countries. The findings of the study revealed a rapid growth in the theme areas. The most frequent words in the thematic map, a trend topic, were human, organizational culture, social behavior, and job satisfaction. The most contributing countries were the USA and China. Prolific author revealed Kim J. with the highest publication status. This reflects that the organizational citizenship behavior emerges and has gained popularity, manifesting growing interest among research scholars. This study contributes to the theoretical foundation and establishes a benchmark for research scholars and practitioners. Thus, it advocates that research scholars could embrace mostly occurring thematic areas of the study as modern organizations concentrate on organizational culture to shape employee behavior compatible with the values, policies, and strategies of the organization.

Government expenditure and unemployment nexus in nigeria: a vecm approach

ADEJAYAN Ganiyu Kehinde — 2026-06-30

The public is scrutinizing and looking at the current unemployment rate in Nigeria despite the government's increased spending. Therefore, this study examined the relationships between government spending and unemployment in Nigeria from 1991 to 2020. The stationarity test was conducted using the Augmented Dickey-Fuller (ADF) test, and the long-term link between the variables was confirmed using Johansen co-integration. The unit root test revealed that the study's variables were stationary at the 5% level of significance, and the bound co-integration test confirmed a long-term relationship between the variables. The Vector Error Correction Model (VECM) was used to analyze the parameters of the study's variables. The finding confirmed capital expenditure (CEX) has a direct and non-significant relationship with unemployment rate (UEM) with absolute t-statistic of 0.61600 and t-value of t_0.1= 1.697 for lagged one period; while, lagged two of CEX was significant and directly related to unemployment rate (UEM). The non-significant nature of the lagged one of capital expenditure (CEX) could be attributed to the fact that most of the funds assigned for capital expenditure are not often used effectively for capital projects; hence, worsen the rate of non-engagement of economic active age within the country. Therefore, government must channel its spending to capital project and not solely rely on price stability as a means to reduce unemployment within the economy.

Simulating Banking Sector Dynamics in North Africa: Methodological Insights from DSGE Models

Kacem Sara — 2026-06-30

North African economies face a structural policy paradox, in which bank-centric financial systems and persistent public-sector dominance complicate coordinating the monetary and fiscal instruments needed for price and debt stability. This study examines how fiscal-monetary interactions shape inflation, output, and debt dynamics in the region, and evaluates which Taylor rule specification best supports stability.We develop a small-scale open-economy DSGE model, extending the Galí and Monacelli (2008) framework with Calvo price rigidities, household heterogeneity, and a monopolistically competitive banking sector subject to capital and liquidity constraints, estimated using Bayesian methods on five macroeconomic observables for North Africa spanning 2000–2022, and compare a standard output-gap Taylor rule (Model 1) with a growth-augmented rule (Model 2).Posterior estimates indicate moderate price rigidity, averaging four quarters, and confirm a monetary dominance regime with active, inflation-responsive rates and substantial interest rate smoothing, while fiscal authorities remain passive and debt-focused. Contractionary monetary shocks generate persistent negative output gaps and crowd out government spending, whereas fiscal shocks produce procyclical, debt-sensitive responses depending on the prevailing monetary rule.The growth-augmented Taylor rule delivers stronger debt stabilization and smoother adjustment, indicating that anchoring policy to output growth improves fiscal-monetary coordination in North Africa.