Nexus of governance, macroeconomic conditions, and financial stability of banks: a comparison of developed and emerging countries

Financial Innovation

Table 2 Pesaran CIPS unit root test

Sr	CPIS with trend and constant (C and CT)
Sr	Variables	Level	1st difference	Decision order
(1)	FSI	− 3.279 ***	–	I(0)
(2)	INFL	− 2.221	− 3.257***	I(1)
(3)	IR	− 1.379	− 2.258**	I(1)
(4)	MS	− 1.583	− 2.802**	I(1)
(5)	GDPG	− 2.557*	− 3.601***	I(0)
(6)	V & A	− 2.509	− 2.967***	I(1)
(7)	PS	− 1.874	− 3.879**	I(1)
(8)	GE	− 2.841**	–	I(0)
(9)	RQ	− 2.699**	–	I(0)
(10)	RL	− 2.397	− 3.522***	I(0)
(11)	CC	− 2.862	− 3.3245***	I(1)

^***, **, * indicate significance at 1%, 5%, and 10% levels, respectively
FSI Financial Stability Index, INFL Inflation, IR Interest Rate, MS Money Supply, GDPG GDP growth, PS Political Stability and Absence of Violence/Terrorism, V&A Voice and Accountability, GE Government Effectiveness, RG Regulatory Governance, RL Rule of Law, CC Control of Corruption). Terms here after onwards