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Articles 1 - 18 of 18
Full-Text Articles in Business
Green Transition And Financial Stability: The Role Of Green Monetary And Macroprudential Policies And Vouchers, Ying Tung Chan, Maria Teresa Punzi, Hong Zhao
Green Transition And Financial Stability: The Role Of Green Monetary And Macroprudential Policies And Vouchers, Ying Tung Chan, Maria Teresa Punzi, Hong Zhao
Sim Kee Boon Institute for Financial Economics
This paper analyzes a mix of alternative policies in supporting the green transition and the phase-out of fossil fuels, without compromising financial stability. An environmental dynamic stochastic general equilibrium (E-DSGE) model with two sectors (green and brown) and endogenous default is developed to assess potential climate-induced financial stability threats that can be mainly generated through physical and transition risks mechanism. Those risks are evaluated through a compound capital depreciation shock and a carbon tax shock. The paper offers several findings. First of all, a too stringent carbon tax would increase the medium-term default rate in both sectors, harming financial stability …
The Influence Of Societal Nationalist Sentiment On Trade Flows, Douglas Dow, Ilya Cuypers
The Influence Of Societal Nationalist Sentiment On Trade Flows, Douglas Dow, Ilya Cuypers
Research Collection Lee Kong Chian School Of Business
In recent years, the world has witnessed a backlash against globalization and a rise in populist and nationalist movements around the world. However, there appears to be little empirical research concerning how these movements, and especially nationalist sentiment, actually influence trade. Therefore, we explore how and when nationalist sentiment within a country influences trade. Our results indicate that the effect of nationalist sentiment on imports is mediated by lower participation in free trade agreements (FTAs) but not via tariffs. Furthermore, we are unable to confirm support for a direct effect of nationalist sentiment on imports, as predicted by the consumer …
Geographic Distance And State's Grip: Information Asymmetry, State Inattention, And Firm Implementation Of State Policy, Xiyi Yang, Heli Wang, Xiaoyu Zhou
Geographic Distance And State's Grip: Information Asymmetry, State Inattention, And Firm Implementation Of State Policy, Xiyi Yang, Heli Wang, Xiaoyu Zhou
Research Collection Lee Kong Chian School Of Business
In this study, we develop the argument that geographic distance between the state and local governments undermines the state's capacity to influence the implementation of state policies by local organizations. Drawing from information economics and the attention-based view, we propose that physical distance reduces the state's monitoring effectiveness through two interrelated mechanisms: information asymmetry and state leaders' inattention to distant issues. Using data of Chinese public firms' implementation of environmental activities between 2008 and 2016, we find that firms conduct fewer environmental activities required by the state when they are regulated by local governments that are more geographically distant to …
Liquidity Constraints, Consumption, And Debt Repayment: Evidence From Macroprudential Policy In Turkey, Sumit Agarwal, Muris Hadzic, Changcheng Song, Yildirim Yildiray
Liquidity Constraints, Consumption, And Debt Repayment: Evidence From Macroprudential Policy In Turkey, Sumit Agarwal, Muris Hadzic, Changcheng Song, Yildirim Yildiray
Research Collection Lee Kong Chian School Of Business
Using account-level credit card data from a large Turkish bank, we study the impact of a unique credit card policy that increases minimum payment on consumption and debt repayment. We show that the policy reduces credit card spending and debt, boosts existing debt repayment, and reduces credit card delinquency. The credit card debt of affected consumers falls on average by 50% two years into the policy’s implementation. An increase in minimum payment has a stronger effect than does a decrease of a similar magnitude. We build a benchmark life cycle model with soft liquidity constraint to explain the reduction in …
Inflation Expectations Can Be A Self-Fulfilling Prophecy, Aurobindo Ghosh, Khyati Chauhan, Muskan Bagrodia
Inflation Expectations Can Be A Self-Fulfilling Prophecy, Aurobindo Ghosh, Khyati Chauhan, Muskan Bagrodia
Research Collection Lee Kong Chian School Of Business
In a commentary, SMU Assistant Professor of Finance (Education) Aurobindo Ghosh, SMU postgraduate student and Research Assistant for the SInDEx Project Muskan Bagrodia and International Monetary Fund Economic Research Assistant Khyati Chauhan weighed in on why inflation expectations matter as much as economic data. They discussed how inflation expectations can be a self-fulfilling prophecy, and shared the key takeaways of the quarterly DBS-Sim Kee Boon Institute’s Singapore Index of Inflation Expectations (DBS-SKBI SInDEx) survey. They concluded that effective communication on inflation control measures, in addition to credible policy decisions, will help consumers feel assured and refrain from basing purchasing decisions …
Monetary Policy Surprises, Stock Returns, And Financial And Liquidity Constraints, In An Exchange Rate Monetary Policy System, John M. Sequeira
Monetary Policy Surprises, Stock Returns, And Financial And Liquidity Constraints, In An Exchange Rate Monetary Policy System, John M. Sequeira
Research Collection Lee Kong Chian School Of Business
This study examines the impact of monetary policy surprises on the stock price behaviour of a small developed economy, whose monetary policy is based on the exchange rate. We find that monetary policy surprises associated with all contractionary policy levers and a neutral policy lever, have a consistently significant and negative impact on stock returns. In comparison, only monetary policy surprises associated with a downward re-centering policy lever, has a significantly positive effect on stock returns. Using a recalibrated classification system, we also find that monetary policy surprises differ across sectors of the economy. Our results show how monetary policy …
Becoming Citizens: Policy Feedback And The Transformation Of The Thai Rice Farmer, Jacob Ricks, Thanapan Laiprakobsub
Becoming Citizens: Policy Feedback And The Transformation Of The Thai Rice Farmer, Jacob Ricks, Thanapan Laiprakobsub
Research Collection School of Social Sciences
Over the past twenty years, Thailand’s rice farmers have become one of the country’s most important and active political constituencies, a sharp contrast from the previous decades wherein they were treated with neglect or even derision by the Thai political elite. These “political peasants” now actively advocate for and successfully receive extensive subsidies from both authoritarian and democratic governments. What has driven this change? In this essay, we draw on theories of the policy feedback loop wherein policies yield both material and cognitive benefits, which change the political behavior of populations. We argue that the Thaksin Shinawatra government’s (2001-2006) paddy …
Fomc Playbook: The Only New Game In Town?, Thomas Lam
Fomc Playbook: The Only New Game In Town?, Thomas Lam
Sim Kee Boon Institute for Financial Economics
In light of the Covid-19 pandemic, the Federal Open Market Committee (FOMC), while taking more aggressive actions, seems to have stuck more or less to the standard playbook of responding to “unusual and exigent circumstances”. This essentially calls for slashing conventional policy rates to their effective lower bound, accompanied by forward guidance, embarking on asset purchases, rolling out emergency liquidity facilities and experimenting with lending programmes. But policymakers, with the required US Treasury backstop, have also introduced more creative programmes to encourage credit extension and reached into different market segments.
Go Big With Economic Push To Fight Covid-19, David Fernandez
Go Big With Economic Push To Fight Covid-19, David Fernandez
Research Collection Lee Kong Chian School Of Business
Economic policymakers need to focus on taking bold and immediate action in order to tackle the pandemic crisis.
Likely Trajectory Of Fed Policy Far From Settled, Thomas Lam, David Fernandez
Likely Trajectory Of Fed Policy Far From Settled, Thomas Lam, David Fernandez
Research Collection Lee Kong Chian School Of Business
Markets seem to be assuming an almost pre-set path of Fed policy normalization in 2019, including hiking rates and shrinking the balance sheet. In contrast, we see many uncertainties ahead.
Assessing The Effects Of Post-Crisis Regulatory Reforms On Liquidity In The Singapore Government Securities And Mas Bills Market, John M. Sequeira
Assessing The Effects Of Post-Crisis Regulatory Reforms On Liquidity In The Singapore Government Securities And Mas Bills Market, John M. Sequeira
Research Collection Lee Kong Chian School Of Business
The FSB initiated in 2017 an evaluation of the effects of post-crisis regulatory reforms, by developing a framework to assess whether the reforms are achieving their intended outcomes and identify any material unintended consequences. In tandem, MAS established an evaluation framework, which covers four broad impact areas, comprising FIs, financial markets, financial end-users and the broader financial landscape. Internationally, there have been particular concerns over whether post-crisis reforms may have impaired liquidity conditions in specific financial markets. We provide an assessment of the effects of the reforms on liquidity in a key market in Singapore, the SGS and MAS bills …
China's "Mercantilist" Government Subsidies, The Cost Of Debt And Firm Performance, Chu Yeong Lim, Jiwei Wang, Cheng (Colin) Zeng
China's "Mercantilist" Government Subsidies, The Cost Of Debt And Firm Performance, Chu Yeong Lim, Jiwei Wang, Cheng (Colin) Zeng
Research Collection School Of Accountancy
China has been adopting a “mercantilist” policy by lavishing massive government subsidies on Chinese firms. Using hand-collected subsidy data on Chinese listed companies, we find that firms receiving more subsidies tend to have a lower cost of debt. However, such firms fail to have superior financial performance. Instead, firms with more subsidies tend to be overstaffed, which demonstrates higher social performance. These results are mainly driven by non-tax-based subsidies rather than tax-based subsidies. Overall, our results suggest that the Chinese government uses non-tax-based subsidies to achieve its social policy objectives at the expense of firms’ profitability.
Short Selling And Economic Policy Uncertainty, Xiaping Cao, Yuchen Wang, Sili Zhou
Short Selling And Economic Policy Uncertainty, Xiaping Cao, Yuchen Wang, Sili Zhou
Research Collection Lee Kong Chian School Of Business
We study the trading behavior of short sellers in the presence of economic policy uncertainty (EPU). Daily short selling activity at either the aggregate level or the individual stock level is increasing in the EPU index (Baker, Bloom and Davis, 2016). EPU has great explanatory power for short trading. Cross-sectional tests show that the increase in short interest under high political uncertainty is from shorting stocks characterized by higher mispricing, greater policy sensitivity, higher illiquidity, greater volatility or analyst dispersion. Short sellers earn abnormal profits by trading on public information related to EPU.
An Anatomy Of State Control In The Globalization Of State-Owned Enterprises, Hao Liang, Bing Ren, Sunny Li Sun
An Anatomy Of State Control In The Globalization Of State-Owned Enterprises, Hao Liang, Bing Ren, Sunny Li Sun
Research Collection Lee Kong Chian School Of Business
Integrating agency theory with institutional analysis in international business, we propose a state-control perspective to analyze government-control mechanisms in emerging economies’ globalization of state-owned enterprises (SOEs). We identify two types of state control that influence SOEs’ globalization decisions and the degree of globalization: state ownership control and executives’ political connections, both of which are contingent upon the home country’s evolving institutional environments. Using a two-step corporate globalization decision model and 17,272 firm-year observations of non-financial, Chinese-listed companies, we find a strong impact of both types of state control on SOEs’ globalization, although the impacts differ between the periods before and …
Housing Policies In Singapore: Evaluation Of Recent Proposals And Recommendations For Reform, Sock Yong Phang, David K. C. Lee, Alan Cheong, Kok Fai Phoon, Karol Wee
Housing Policies In Singapore: Evaluation Of Recent Proposals And Recommendations For Reform, Sock Yong Phang, David K. C. Lee, Alan Cheong, Kok Fai Phoon, Karol Wee
Research Collection Lee Kong Chian School Of Business
The Singapore housing market is unusual in its high homeownership rate, the dominance of HDB housing, and the extensive intervention of the government in regulating housing supply and demand in both the HDB and private housing sectors. Recent rapid population increases in a low interest rate and high global liquidity environment has resulted in accelerated house prices increases in Singapore. Earlier this year, the government launched “Our Singapore Conversation” of which discussion on housing policies constitutes one major component. This “conversation” comes in the wake of several consecutive rounds of measures to stabilize housing prices using various instruments. This paper …
Reforming China's State-Owned Farms: State Farms In Agrarian Transition, Qian Forrest Zhang
Reforming China's State-Owned Farms: State Farms In Agrarian Transition, Qian Forrest Zhang
Research Collection School of Social Sciences
China’s 2000 strong state-owned farms are experiencing a dual transition in the country’s economic reforms: the market transition (from state-owned enterprises embedded in the redistributive system to independent enterprises in the new market economy) and agrarian transition (from small-scale, household-based agriculture to large-scale, capitalist forms of agriculture that rely on market exchanges of land, labor and products). This paper highlights the results of a comparative analysis of the state farms and rural farming households in the agrarian transition to address the theoretical debate about agrarian transition. Using field research data from state farms in HeilongJIANG Province and drawing extensively from …
The Optimal Degree Of Reciprocity In Tariff Reduction, Pao Li Chang
The Optimal Degree Of Reciprocity In Tariff Reduction, Pao Li Chang
Research Collection School Of Economics
This article clari.es the roles played by trade policy, in contrast with iceberg transport cost, in the popular setting of Melitz (2003), and characterizes the optimal reciprocal trade policy in such a setting. I show that import tariffs and iceberg transport cost are not equivalent in the strength of their trade-restricting e¤ects and their welfare implications. With all the con.icting effectsof import tari¤s on welfare considered, the optimal degree of reciprocity in multilateral tari¤ reduction turns out to be free trade.
Competing At The Frontier: The Changing Role Of Technology Policy In Singapore's Economic Strategy, Winston T. H. Koh, Poh Kam Wong
Competing At The Frontier: The Changing Role Of Technology Policy In Singapore's Economic Strategy, Winston T. H. Koh, Poh Kam Wong
Research Collection School Of Economics
For an economy competing at the global frontier, an innovation-based growth strategy requires a well-developed technological infrastructure, a set of capabilities-focused technology policies, as well as an institutional environment that stimulates innovation and entrepreneurship. This paper examines the role played by science and technology policy in an economy's transition to an innovation-based growth strategy. We discuss the challenges governments face as they restructure economic institutions to deepen R&D capabilities and encourage technology creation. We review Singapore's experience in this regard and assess its ongoing efforts to remake itself to compete at the global frontier.