Economics Commons^™

Embracing Digital Transformation In Accounting And Finance, Poh Sun Seow, Clarence Goh, Gary Pan, Melvin Yong, Joanna Chek

Research Collection School Of Accountancy

Digital transformation involves the integration of digital technologies and business processes. Recent developments in digital technologies have provided organisations with the tools to embark on digital transformation encompassing a wide range of business processes and activities. Organisations that can leverage on technology to digitally transform themselves stand to put themselves at a significant competitive advantage relative to their competitors.

The Impact Of Temperature On Labor Quality: Umpire Accuracy In Major League Baseball, Eric Fesselmeyer

Research Collection College of Integrative Studies

Using data from Major League Baseball, I compute an objective measure of the home plate umpire's work quality-the accuracy of his ball and strike calls during a game-and measure how it varies with temperature. I find that an increase in game-time temperature from between 70 and 80 degrees F to above 95 degrees F decreases an umpire's accuracy by a little less than a percentage point, which is a 5.5% increase in the pitch-calling error rate when evaluated at the mean error rate of 13.3%. Restricting the sample to borderline pitches increases the magnitude of the hot-weather effect on accuracy …

Government Support For Smes In Response To Covid-19: Theoretical Model Using Wang Transform, Shaun Shuxun Wang, Jing Rong Goh, Didier Sornette, He Wang, Esther Yang

Research Collection School Of Economics

Purpose: Many governments are taking measures in support of small and medium-sized enterprises (SMEs) to mitigate the economic impact of the COVID-19 outbreak. This paper presents a theoretical model for evaluating various government measures, including insurance for bank loans, interest rate subsidy, bridge loans and relief of tax burdens. Design/methodology/approach: This paper distinguishes a firm's intrinsic value and book value, where a firm can lose its intrinsic value when it encounters cash-flow crunch. Wang transform is applied to (1) calculating the appropriate level of interest rate subsidy payable to incentivize banks to issue more loans to SMEs and to extend …

Digital Innovation: A Catalyst And Enabler Of Achieving Business Sustainability, Clarence Goh, Gary Pan, Poh Sun Seow, Shankararaman, Venky

Research Collection School Of Accountancy

Today, many companies are actively incorporating sustainability principles into their business strategies. This movement is likely to have resulted from an ongoing shift in the demands and behaviours of customers, employees, partners, governments, investors and other stakeholders that expect companies to act with integrity and in a way that benefits wider society. The emphasis on achieving sustainability goals has led to increasing adoption of “triple bottom line”, which suggests that companies ought to pay attention to more than just the bottom-line, but also measure their environmental and societal impacts that may help to achieve long-term business growth. Typically, companies with …

A Unified Market Model For Swaptions And Constant Maturity Swaps, Chyng Wen Tee, Jeroen Kerkhof

Research Collection Lee Kong Chian School Of Business

Internal-rate-of-return (IRR) settled swaptions are the main interest rate volatility instruments in the European interest rate markets. Industry practice is to use an approximation formula to price IRR swaptions based on Black model, which is not arbitrage-free. We formulate a unified market model to incorporate both swaptions and constant maturity swaps (CMS) pricing under a single, self-consistent framework. We demonstrate that the model is able to calibrate to market quotes well, and is also able to efficiently price both IRR-settled and swap-settled swaptions, along with CMS products. We use the model to illustrate the difference in implied volatilities for IRR-settled …

Information Avoidance And Medical Screening: A Field Experiment In China, Yufeng Li, Juanjuan Meng, Changcheng Song, Kai Zheng

Research Collection Lee Kong Chian School Of Business

Will individuals, especially high-risk individuals, avoid a disease test because of information avoidance? We conduct a field experiment to investigate this issue. We vary the price of a diabetes test (price experiment) and offer both a diabetes test and a cancer test (disease experiment) after eliciting participants’ subjective beliefs about their disease risk. We find evidence that, first, some people avoid the test even when there is neither a monetary nor a transaction cost, and second, both low- and high-risk individuals select out of the test as the price increases. We explain our findings using three classes of models of …

Generalized Local-To-Unity Models, Liyu Dou, Ulrich K. Müller

Research Collection School Of Economics

We introduce a generalization of the popular local‐to‐unity model of time series persistence by allowing for p autoregressive (AR) roots and p − 1 moving average (MA) roots close to unity. This generalized local‐to‐unity model, GLTU(p), induces convergence of the suitably scaled time series to a continuous time Gaussian ARMA(p,p − 1) process on the unit interval. Our main theoretical result establishes the richness of this model class, in the sense that it can well approximate a large class of processes with stationary Gaussian limits that are not entirely distinct from the unit root benchmark. We show that Campbell and …

Adam Smith, Settler Colonialism, And Limits Of Liberal Anti-Imperialism, Onur Ulas Ince

Research Collection School of Social Sciences

Recent scholarship has claimed Adam Smith's frontal attack on the mercantile system as a precocious expression of liberal anti-imperialism. This paper argues that settler colonialism in North America represented an important exception and limit to Smith’s anti-imperial commitments. Smith spared agrarian settler colonies from his invective against other imperial practices like chattel slavery and trade monopolies because of the colonies’ evidentiary significance for his “system of natural liberty.” Smith’s embrace of settler colonies involved him in an ideological conundrum insofar as the prosperity of these settlements rested on imperial expansion and seizure of land from the indigenous peoples. Smith navigated …

Hedonic Price Of Housing Space, Sumit Agarwal, Yanying Chen, Li Jing, Yi Jin Tan

Research Collection School Of Economics

This article estimates hedonic prices for different levels of housing space, by exploiting a unique space‐adding project in Singapore that added a uniform amount of space to each existing housing unit regardless of the original size. This space adding program was carried out if sufficient residents vote in favor of space adding. Using a difference‐in‐differences (DiD) strategy after restricting our sample to narrow margins around the voting cutoff, we find that the additional space increased the resale price of a housing unit by 7% on average, and the extent of price appreciation varied significantly across the original size of the …

Connectedness Of Asia Pacific Forex Markets: China's Growing Influence, Hwee Kwan Chow

Research Collection School Of Economics

This paper investigates the degree of connectedness of Asia Pacific forex markets post global financial crisis and relates it to developments in the renminbi markets. The connectedness measure developed by Diebold and Yilmaz (2014) reveal the strength of linkages across the US dollar currency pairs of twelve currencies, namely offshore renminbi, onshore renminbi, euro, yen, Australian dollar, Indian rupee, Korean won, Malaysian ringgit, New Zealand dollar, Singapore dollar, Thai baht and Taiwan dollar. With the gradual liberalization of China’s exchange rate system, shocks from the renminbi markets contribute more to fluctuations in almost all individual Asia Pacific currency markets vis-a-vis …

Are Simple Mechanisms Optimal When Agents Are Unsophisticated?, Jiangtao Li, Piotr Dworczak

Research Collection School Of Economics

We study the design of mechanisms involving agents that have limited strategic sophistication. The literature has identified several notions of simple mechanisms in which agents can determine their optimal strategy even if they lack cognitive skills such as predicting other agents' strategies (strategy-proof mechanisms), contingent reasoning (obviously strategy-proof mechanisms), or foresight (strongly obviously strategy-proof mechanisms). We examine whether it is optimal for the mechanism designer who faces strategically unsophisticated agents to offer a mechanism from the corresponding class of simple mechanisms. We show that when the designer uses a mechanism that is not simple, while she loses the ability to …

The Missing Middle In Product Price Distribution, Pao-Li Chang, Xin Yi, Haeyeon Yoon

SMU Economics and Statistics Working Paper Series

The IO literature has typically studied the supply-side factors that determine the price structure of products/services competing in a market. This paper pro-poses that the demand-side demographics could play an important role in shaping the product price structure. In particular, we document a “missing middle” phe-nomenon in both the income and the product price distributions in the U.S., based on the IPUMS ACS dataset (2005–2017) and the Nielsen Retail Scanner Data (2006–2017), for a large set of goods sold in the U.S. at the national, state, or commuting-zone level. We show that the lagged population share of the middle-income class …

Three Essays On Preferential Trade Agreement And Trade Policy, Kefang Yao

Dissertations and Theses Collection (Open Access)

This dissertation consists of three chapters on Preferential Trade Agreements (PTAs) and trade policies. Increasing in numbers rapidly since 1990s, PTAs have extended their traditional focus on tariff reduction to deeper policy integration in areas such as competition policy, intellectual property rights, investment, and movement of capital. The first chapter of the dissertation uses a recently released dataset of PTA contents to quantify impacts of the horizontal depth of trade agreements on bilateral trade flows and national welfare for the period of 1980-2015. The results indicate that agreements that are deeper (covering a wider range of policy areas) contribute to …

Essays On Economic Development And Environmental Sustainability, Rohan Ray

Dissertations and Theses Collection (Open Access)

The first chapter is a randomized controlled trial study that uses loss framing and information nudges to increase secondary school attendance in Bangladesh. Conditional cash transfers (CCTs) have become one of the most common policy interventions to increase school attendance, but the cost-effectiveness of such interventions has not attracted the attention it deserves. Hence, in addition to a standard CCT implementation, our rich unique dataset on daily attendance allows us to experimentally study two potential ways to improve the cost-effectiveness of school attendance interventions: (i) SMS information nudges and (ii) loss framing in CCTs. The former provides school attendance information …

Three Essays On Panel And Factor Models, Ji Feng

Dissertations and Theses Collection (Open Access)

The dissertation includes three chapters on panel and factor models.

In the first chapter, we introduce a two-way linear random coefficient panel data models with fixed effects and the cross-sectional dependence. We follow the idea of the within-group fixed effects estimator to estimate parameters of interests. We establish the limiting distributions of the estimates and also propose the two-way heterogeneity bias test to check the desirability of the estimation strategy. The specification tests then are constructed to examine the existence of the slope heterogeneity and time-varyingness. We study the asymptotic properties of the specification tests and employ two bootstrap schemes …

On Financial Quotient: Theory And Empirical Analysis, Gang Sun

Dissertations and Theses Collection (Open Access)

Financial Quotient (FQ) has become a common topic of concern in the global academic, business and social communities, but at this stage, academic research on FQ and its education are still immature, theoretical depth and empirical support basis are shortage, and influence factors of FQ and the degree of influence of each factor have not been systematically studied. Therefore, there is a large gap between research and practice.

The purpose of this Paper is to construct a set of scientific and reasonable FQ index for individuals, to find factors that can influence or predict personal financial quotient (PFQ), and to …

Competitive Information Disclosure In Random Search Markets, Wei He, Jiangtao Li

Research Collection School Of Economics

We analyze the role of competition in information provision in random search markets. Multiple symmetric senders compete for the receiver’s investment by disclosing information about their respective project qualities, and the receiver conducts random search to learn about the qualities of the projects. We show that in any symmetric Nash equilibrium, each sender chooses a strategy with the lowest possible reservation value. The receiver does not benefit from the competition of the senders, as the receiver’s expected payoff does not change when the number of senders increases.

Japanese Monetary Policy And Its Impact On Stock Market Implied Volatility During Pleasant And Unpleasant Weather, Marinela Adriana Finta

Research Collection Lee Kong Chian School Of Business

We investigate the effect of Japan's Monetary Policy Meeting releases on the intraday dynamics of the Nikkei Stock Average Volatility Index and its futures during pleasant and unpleasant weather. We show that at the time of a monetary policy release when the temperature is pleasant, there is a significant decline in Japanese equities' implied volatility and futures, which lasts for about 10 min and 5 min, respectively. This decline is longer and exhibits a greater variation when releases occur during cold days. Finally, we emphasize the achievable economic profits and losses, given the reaction of Nikkei VI futures to the …

Happy Lottery Winners And Lottery-Ticket Bias, Seonghoon Kim, Andrew J. Oswald

Research Collection School Of Economics

The world spends a remarkable $250 billion a year on lottery tickets. Yet, perplexingly, it has proved difficult for social scientists to show that lottery windfalls actually make people happier. This is the famous and still unresolved paradox due initially to Brickman and colleagues. Here we describe an underlying weakness that has affected the research area, and explain the concept of lottery‐ticket bias (LT bias), which stems from unobservable lottery spending. We then collect new data—in the world’s most intense lottery‐playing nation, Singapore—on the amount that people spend on lottery tickets (n = 5626). We demonstrate that, once we correct …

High-Frequency Internet Survey Of A Probability Sample Of Older Singaporeans: The Singapore Life Panel, Rhema Vaithianathan, Bryce Hool, Michael D. Hurd, Susann Rohwedder

Research Collection School Of Economics

Facing a rapidly ageing population, Singapore is presented with urgent policy challenges. Yet there is very little data on the economic, health and family circumstances of older Singaporeans. In response, the Centre for Research on the Economics of Ageing (CREA) at Singapore Management University has been collecting monthly data on a panel of Singaporeans aged between 50 and 70 years. We detail the methodology by which the Singapore Life Panel® (SLP) was constructed using a population-representative sampling frame from the Singapore Department of Statistics. Contact was made with 25,000 households through postal, phone and in-person canvassing. More than 15,200 respondents …

Latent Local-To-Unity Models, Jun Yu

SMU Economics and Statistics Working Paper Series

This paper proposes a class of state-space models where the state equation is a local-to-unity process. The large sample theory is obtained for the least squares (LS) estimator of the autoregressive (AR) parameter in the AR representation of the model under two sets of conditions. In the first set of conditions, the error term in the observation equation is independent and identically distributed (iid), and the error term in the state equation is stationary and fractionally integrated with memory parameter H ϵ 2 (0; 1). It is shown that both the rate of convergence and the asymptotic distribution of the …

Three Essays On International Trade, Renjing Chen

Dissertations and Theses Collection (Open Access)

In the first chapter, we develop an estimation procedure to identify the partial (direct) effects of the GATT/WTO membership on variable and fixed trade costs, respectively. This procedure extends the techniques of Anderson and Van Wincoop (2003) on the structural relationship of multilateral resistance terms and of Helpman, Melitz and Rubinstein (2008) on the structural modeling of trade incidence. We then develop a general equilibrium framework (that allows for the presence of zero trade) to simulate the impact of variable, fixed, and total trade cost changes on the firm-level trade structure (including the bilateral export productivity cutoff, the weighted/unweighted extensive …

Studying Successful Ageing: A Showcase Of The Singapore Life Panel, Jee Yuen Yew, Jia Wei Gwee, Anirudh Srivathsan

ROSA Research Briefs

In this special issue of the ROSA Research Brief Series, we showcase two aspects of the work being done at the Centre for Research on Successful Ageing (ROSA). Firstly, we showcase the capabilities of the Singapore Life Panel (SLP) and the data that the SLP is able to obtain and measure on a monthly basis. Secondly, we showcase the amazing work of the SGUnited Traineeship Programme’s Research Assistants at ROSA who have proven themselves to be incredible assets in helping further ROSA’s aims of enabling successful ageing in Singapore. ROSA aims to measure well-being among older adults holistically in order …

Technology And Sustainability: The New Business Playing Field, Havovi Joshi

Asian Management Insights

Two topics that have consistently cropped up in conversations among business leaders during the pandemic are technology, in the context of the pervasiveness and quickening pace of digital transformation, and sustainability, especially how we should be doing business without harming the environment and society. The collective belief is that both topics will continue to rise on the world’s agenda, reshaping entire industries while creating new ones. They have changed the way of doing business. So what does the new playbook look like?

Three Essays On Nonstationary Financial Econometrics, Yajie Zhang

Dissertations and Theses Collection (Open Access)

This dissertation consists of three essays that contribute to the theory of nonstationary time-series analysis.

The first chapter explores the inference procedures for predictive regressions with time-varying characteristics. We extend the self-generated instrumentation, called IVX, to incorporate persistent regressors of functional local-to-unity, functional mildly explosive, and functional mildly stationary roots. The asymptotic distributions of IVX estimators under time-varying parameters are novel and nonpivotal but lead to pivotal distributions of the corresponding Wald statistics that are robust across various roots. The numerical experiments justify the robustness of IVX testing procedures in finite samples. We also verify the existence of time-varying coefficients …

Two Essays On Innovation And Growth In China, Qiugu He

Dissertations and Theses Collection (Open Access)

This dissertation studies China’s economic growth from a perspective of industry dynamics. In chapter 1, I introduce the background and policies relating to China’s economic growth after 1978. In chapter 2, I find that the elasticity of the average R&D expenditure of firms on competition is -0.29 in weak-IPR (intellectual property right) provinces, and -0.06 in strict-IPR provinces. Next, I use the Schumpeterian growth model to explain this finding: When the market becomes more competitive, a firm prefers imitation to innovation to a larger extent, as a means of getting new technology. Due to enforcement of IPR laws, the imitation …

The Response Of The Chinese Economy To The U.S.-China Trade War: 2018-2019, Pao-Li Chang, Kefang Yao, Fan Zheng

Research Collection School Of Economics

In this paper, we follow the micro-to-macro approach of Fajgelbaum et al. (2020) and analyze the impacts of the 2018–2019 U.S.-China trade war on the Chinese economy. We use highly disaggregated trade and tariff data with monthly frequency to identify the demand/supply elasticities of Chinese imports/exports, combined with a general equilibrium model for the Chinese economy (that takes into account input-output linkages, and regional heterogeneity in employment and sector specialization) to quantify the partial and general equilibrium effects of the tariff war at the product/sector/region/aggregate levels. This complements the studies that focus on the ex post response of the U.S. …

Business Cycles, Trend Elimination, And The Hp Filter, Peter C. B. Phillips, Sainan Jin

Research Collection School Of Economics

Trend elimination and business cycle estimation are analyzed by finite sample and asymptotic methods. An overview history is provided, operator theory is developed, limit theory as the sample size n → ∞ is derived, and filtered series properties are studied relative to smoothing parameter (λ) behavior. Simulations reveal that limit theory with λ =O(n4) delivers excellent approximations to the HP filter for common sample sizes but fails to remove stochastic trends, contrary to standard thinking in macroeconomics and thereby explaining ‘spurious cycle’ effects of the HP filter. The findings are related to the long run effects of the GFC.

Boosting: Why You Can Use The Hp Filter, Peter C. B. Phillips, Zhentao Shi

Research Collection School Of Economics

We propose a procedure of iterating the HP filter to produce a smarter smoothing device, called the boosted HP (bHP) filter, based on L2-boosting in machine learning. Limit theory shows that the bHP filter asymptotically recovers trend mechanisms that involve integrated processes, deterministic drifts, and structural breaks, covering the most common trends that appear in current modeling methodology. A stopping criterion automates the algorithm, giving a data-determined method for data-rich environments. The methodology is illustrated in simulations and with three real data examples that highlight the differences between simple HP filtering, the bHP filter, and an alternative autoregressive approach.

In-Fill Asymptotic Theory For Structural Break Point In Autoregression, Liang Jiang, Xiaohu Wang, Jun Yu

Research Collection School Of Economics

This article obtains the exact distribution of the maximum likelihood estimator of structural break point in the Ornstein–Uhlenbeck process when a continuous record is available. The exact distribution is asymmetric, trimodal, dependent on the initial condition. These three properties are also found in the finite sample distribution of the least squares (LS) estimator of structural break point in autoregressive (AR) models. Motivated by these observations, the article then develops an in-fill asymptotic theory for the LS estimator of structural break point in the AR(1) coefficient. The in-fill asymptotic distribution is also asymmetric, tri-modal, dependent on the initial condition, and delivers …