Finance Commons^™

Analisis Dampak Kebijakan Insentif Fiskal Terhadap Tingkat Komponen Dalam Negeri (Tkdn) Industri Manufaktur Di Indonesia, Muhammad Muhammad, Riyanto Riyanto

Jurnal Kebijakan Ekonomi

Over the last decade, the manufacturing sector's contribution to Indonesia's economy has declined. In 2010, it was 29.10% of GDP, but by 2022, it had dropped to 19.14%. Employment in the sector also fell, from 14.91% of the workforce in 2010 to 13.80% in 2022. To reverse this trend, the government introduced a policy to boost the Domestic Component Level (DCL) in manufacturing. By offering fiscal incentives to industries meeting certain DCL targets, the government aims to drive economic growth and job creation. A study using BPS data from 2008-2019 shows that this policy raised DCL by 23.5%.

The Cost Of Capital Calculation In The Project Finance Settings, Paweł Mielcarz, Dmytro Osiichuk, Adrian Struciński

Journal of Banking and Financial Economics

The paper aims at elucidating and solving the methodological problems around the estimation of the cost of capital in the project finance settings. By convention, capital budgeting analysts evaluate project finance ventures using the free cash flow for equity (FCFE) method, whereby cash flows, including cash, whose distribution is limited by debt covenants, are discounted with the project’s cost of equity. We argue that this approach is erroneous. From the standpoint of the sponsor company, only distributable cash flows should be taken into consideration when evaluating project finance ventures. In turn, the discount rate should be equal to the weighted …

Nba Player Types And Salaries: Assessing The Disparities In Pay, Nick Riccardi, Rodney J. Paul

Sport Management - All Scholarship

The purpose of this study was to identify player types that exist in the modern National Basketball Association (NBA), test whether player types are paid differently controlling for performance and other factors and construct successful rosters with cheaper payrolls.
We collected performance statistics and salary data for players and teams across five seasons (2018-19 to 2022-23). Cluster analysis is leveraged to group together player-seasons to identify the player types that exist in the NBA. Linear regression models are run to test for differences in pay by cluster membership while controlling for performance, age, and contractual details. Linear programming simulation models …

Trump Administration Trade Policy: A Historical Perspective And Key Questions & Takeaways, Matthew P. Schaefer

Yeutter Institute International Trade Policy Review

Offers a historical perspective with key questions and takeaways about the Trump Administration's trade policy. Covers the periods of the first Trump Presidency (2017-2021), the Biden Administration (2021-2025), and the second Trump Administration (2025-).

Low Beta Anomaly In Some European Emerging Markets, Tadeusz Winkler-Drews, Mateusz Mogilski

Journal of Banking and Financial Economics

The aim of the study was to identify the low beta anomaly and analyse the causes of its occurrence in five European emerging markets that were components of the MSCI Emerging Markets Europe index in the period 2010–2019. It was hypothesized that the determinants of the low beta anomaly in the analysed markets are factors from at least two of the three categories of variables. Using the Betting Against Beta model proposed by A. Frazzini and L. H. Pedersen (2014), we found that this phenomenon was not identified in three markets, but occurred in the remaining two markets, for which …

Real Earnings Management Among Industries: Does Market Competition Matter?, Michał Comporek

Journal of Banking and Financial Economics

This paper investigates real earnings management (REM) practices in public non-financial companies listed on the Warsaw Stock Exchange (WSE) from 2014 to 2023, focusing on sectoral differences and the influence of market competition. REM, defined as deviations from normal business operations aimed at manipulating reported earnings, can distort financial information and harm long-term firm value. This study contributes to the existing literature in two key ways. First, it examines variations in abnormal levels of production costs, sales, and discretionary expenditures – REM proxies based on Roychowdhury’s methodology – across sectors classified according to the WSE’s industry framework. This sectoral classification, …

Falling Short In The Digital Age: Evaluating The Performance Of Data Center Etfs, Davinder K. Malhotra, Ivar Kirkhorn, Frank Ragone

School of Business Faculty Papers

This study evaluates the performance of U.S. data center Exchange-Traded Funds (ETFs) relative to major equity and technology benchmarks, using monthly returns from January 2000 through December 2024, with particular emphasis on the COVID-19 period and the subsequent post-vaccine era. Data center ETFs have not provided better risk-adjusted returns even though they are often advertised as access points to the digital economy. Digital infrastructure demand increased through the pandemic but did not improve the performance of these funds which stayed weak across both traditional and conditional multi-factor asset pricing models. These ETFs struggle with asset selection and market timing proficiency, …

Constructing A State: Canals And The Transformation Of The Economy, Politics, And Finance In Nineteenth-Century New York, Youwei Xing

All Dissertations

This dissertation consists of three essays in economic history, unified by a focus on one of America's earliest transportation infrastructures, the canal system, in nineteenth-century New York. Each chapter explores a different aspect of the state's transformation: its economy, politics, and finance, each of which helped construct New York as the Empire State.

The first chapter studies the economic impact of canals on economic modernization from three aspects: sectoral transition, urbanization, and banking development. Contrary to much of the modern literature finds transportation infrastructure leads to decentralization, I find the opposite-evidence of centralization. Specially: (1) canal towns experienced a transition …

Is R&D Rivalry Slowing The Growth Of Productive Firms?, Yoshiki Ando, James Bessen, Xiupeng Wang

Research Collection School Of Economics

The reallocation of jobs to more productive firms is a substantial component of aggregate productivity growth, yet job reallocation rates have declined substantially in the United States. This paper explores the hypothesis that greater technological rivalry has exacerbated adjustment costs, slowing reallocation. Using microdata at the US Census and estimates of technological rivalry in firm growth regressions, we find that technological rivalry slows firm responses to productivity shocks. Firms do not expand as rapidly in the face of higher obsolescence risk. Estimating counterfactual firm growth from 1997-2018, we find that growing technological rivalry accounts for most of the decline in …

Loan Restructuring And Deposit Growth: Evidence From The Market Discipline During The Covid-19 Outbreak, Indra Tumbelaka

Bulletin of Monetary Economics and Banking

Amid the COVID-19 pandemic, banks boosted loan restructuring efforts to offer borrowers assistance and preserve credit quality. This study employs dynamic and static panel data from Indonesian commercial banks to include restructured loans as a metric for assessing market discipline prior to and during the pandemic. Depositors shown discipline about banks’ credit risk during the COVID-19 period and exhibited heightened sensitivity to restructured loans. Subsequent analysis indicates that the association between deposit growth and restructured loans was more pronounced in government, small, and publicly listed banks during the outbreak

The Use Of Burt’S Method In Rationalizing The Cost Of Time And Evaluating The Performance Companies: An Applied Study In State Company For Textile And Leather Industries - Hilla Textile Factory, Aqeel Jaber Kadhim

Muthanna Journal of Administrative and Economics Sciences

Burt’s method is a significant process research method that provides information that directly affects the scheduling process of complex projects and planning and monitoring their completion. As a result, it has gained notoriety among practitioners in the field of specialization and offers additional advantages through computer systems for completion. It seeks to finish the project as quickly as possible while using the resources and capabilities that are available and at the lowest feasible cost. The evaluation of the performance of companies is represented in the extent of the ability of the company’s management to evaluate the performance of its activities …

Can Esg Reduce Credit Risk? An Empirical Investigation Across Asean-5 Markets, Arrafif Pratama Zaini, Maria Ulpah

The Indonesian Capital Market Review

Based on stakeholder theory and signaling theory, companies with strong ESG performance send signals to various stakeholders, thus building trust and influencing better credit risk evaluation. This study empirically examines the effect of Environmental, Social, and Governance (ESG) performance on the credit risk of non-financial public companies in ASEAN-5 countries (Indonesia, Malaysia, Philippines, Singapore, and Thailand) over the period 2019-2023. Corporate credit risk is measured using 2 main approaches: the accounting-based and market-based models. Merton's KMV model calculates the probability of default (PD) using a market-based approach. In contrast, the Altman Z-Score predicts bankruptcy risk based on financial ratios in …

Multi-Period Portfolio Allocation: A One-Shot Stochastic Optimization Approach, Peng Liu, Chyng Wen Tee, Xiaofei Xu

Research Collection Lee Kong Chian School Of Business

Multi-period portfolio optimization is a central problem in finance, yet it is computationally intractable for traditional dynamic programming methods due to the curse of dimensionality. This paper develops a tractable and theoretically grounded 'one-shot' stochastic optimization framework that recasts the sequential decision problem into a single, high-dimensional optimization task. Our approach models the predictive distribution of factor returns using Gaussian Processes (GPs), allowing it to capture complex, non-linear market dynamics. We make three primary contributions. First, for the special case of a linear GP kernel, we derive an analytical solution for the optimal portfolio path, providing a clear economic interpretation …

Do Search Costs Explain Persistent Investment In Active Mutual Funds?, Aljoscha Janssen, Jurre Thiel

Research Collection School Of Economics

Active funds, though losing market share since the 1990s, make up nearly half of all mutual funds but charge more without better performance. We analyze fund data and a search model, highlighting the impact of search costs and active fund preferences. From 1993 to 2018, reduced search costs expanded the market and heightened competition, while a preference shift from active to passive funds increased the latter's market share. However, investors who choose active funds, facing higher search costs, and continue to show a strong preference for them, allow these funds to keep charging higher fees.

Lessons Learned: Luis Jácome, Mercedes Cardona

Journal of Financial Crises

Luis Jácome was appointed president of the board of Ecuador’s central bank in 1998 by newly elected President Jamil Mahuad. He and other members of the board resigned in 1999 in protest against a number of crisis-intervention measures they saw as threatening the bank’s independence to set monetary policy. Since the 1970s, Ecuador’s economy had experienced a period of growth fueled by oil exports, but by the mid-1990s the economy was reeling from a series of shocks, among them: a sharp drop in the price of oil, the effects of severe flooding on the country’s agricultural production, and the cost …

Lessons Learned: Vincenzo La Via, Mercedes Cardona

Journal of Financial Crises

Vincenzo La Via joined the World Bank Group in 2005 as chief financial officer, in charge of financial reporting, accounting, strategic planning and budgeting, credit risk, corporate finance, market risk, liquidity and asset management, and product development. During his tenure, La Via took part in the bank’s response to the Global Financial Crisis (GFC) and the subsequent European Sovereign Debt Crisis. He left the bank in 2012 to become director general of the Treasury in the Italian Ministry of Economy and Finance as the Italian government took on reform of the banking sector. He left the public sector in 2019 …

Lessons Learned: Miguel Carcaño, Mercedes Cardona

Journal of Financial Crises

During the Global Financial Crisis (GFC), Miguel Carcaño served as head of the Spanish Treasury’s Fund for Orderly Bank Restructuring, the authority in charge of managing the restructuring process of the country’s credit institutions. The fund, known today as the Spanish Executive Resolution Authority, is integrated into the European network led by the Single Resolution Board (SRB) of the European Union’s banking union. Carcaño has held a number of posts within the SRB and in 2022 became head of the Single Resolution Fund, the SRB’s emergency fund, which serves as backstop for institutions across the banking union’s 21 countries.

Lessons Learned: Benoît Cœuré, Mercedes Cardona

Journal of Financial Crises

Benoît Cœuré held several positions in the French Treasury in the years leading to the Global Financial Crisis (GFC). He was an economic adviser to the director general of the French Treasury from 1997–2002, deputy chief executive and chief executive of the French debt management office from 2002–2007, and assistant secretary for multilateral affairs, trade, and development from 2007–2009. He served as chief economist and deputy director general in 2009–2011. He joined the European Central Bank (ECB) during the European Sovereign debt Crisis and was responsible for market operations, market infrastructure supervision and European and international relations as a member …

Lessons Learned: Ignazio Angeloni, Mercedes Cardona

Journal of Financial Crises

Ignazio Angeloni was an adviser on financial integration, financial stability, and monetary policy to the Executive Board of the European Central Bank during the European Sovereign Debt Crisis and later became director general of financial stability. He coordinated the preparations for establishing the Single Supervisory Mechanism (SSM), a component of the European banking union. The SSM was created to address macroprudential gaps identified during the Global Financial Crisis and the Sovereign Debt Crisis. Angeloni has advocated in his academic papers for completing the work of the SSM by establishing a regional deposit insurance scheme that would backstop the work of …

Lessons Learned: Mark Branson, Mercedes Cardona

Journal of Financial Crises

Mark Branson joined the Swiss Financial Market Supervisory Authority (FINMA) as head of the banking division in 2010, during the European Sovereign Debt Crisis. He became deputy director of FINMA in 2013 and was named director a year later. Although Switzerland is not a member of the European Union (EU) or its banking union, the nation participates in bilateral agreements that govern trade with the EU, its largest trading partner. In the wake of the Global Financial Crisis (GFC), it enacted a number of regulations to improve oversight of the financial sector. Branson left FINMA in 2021 to become head …

How Us Bank Regulation Failed Svb And Its Supervisors, Greg Feldberg, Carey K. Mott, Jill Cetina

Journal of Financial Crises

It is well known that Silicon Valley Bank (SVB) failed in March 2023 because of a toxic combination of uninsured deposits and underwater securities. This article argues that the bank’s failure could have been avoided if SVB had been subject to two global standards established by the Basel Committee on Banking Supervision. First, the interest-rate risk in the banking book (IRR-BB) standard, never fully implemented in the United States, would have identified the bank’s extremely risky asset-liability management strategy and required remedial action 10 quarters before it failed. Second, the liquidity coverage ratio (LCR), from which US regulators had exempted …

Emergency Liquidity Assistance And Monetary Financing In The European Union: A Case Study In Fiscal Cooperation?, Vincient Arnold

Journal of Financial Crises

In the European Union (EU), primary EU treaty law prohibits central banks from engaging in monetary financing, which includes lending to insolvent firms. This legal prohibition exists alongside, and in parallel to, various regulatory provisions of the Eurosystem. As a result, EU Member State central banks face unique legal limitations when acting in their roles as lenders of last resort, providing emergency liquidity assistance (ELA). In practice, European central banks—both members of the Eurosystem and not—lend to firms of questionable solvency with some frequency, often creatively employing fiscal guarantees to limit their balance sheet exposure and shift the lending risk …

United States: Rhode Island Limited Bank Holiday, 1991, Ayodeji George, Sophia Alden

Journal of Financial Crises

In 1990, the Rhode Island Share and Deposit Indemnity Corporation (RISDIC) was a private mutual deposit insurance corporation funded by member institutions. Late that year, after the failures of two of its insured institutions in July and October, other RISDIC member institutions faced large depositor withdrawals, as concerns began to focus on the financial health of RISDIC itself. RISDIC had maintained inadequate reserves, and on December 31, 1990, it found itself lacking the resources to cover depositor withdrawals from member institutions. RISDIC leadership requested a state-appointed conservator, which meant that all its member institutions no longer had the deposit insurance …

United States: Reserve Primary Fund Suspension, 2008, Anmol Makhija

Journal of Financial Crises

In 2008, the Reserve Primary Fund was the world’s third-largest money market fund with $62.5 billion in assets. Following Lehman Brothers’ bankruptcy filing on September 15, the Primary Fund’s $785 million position in Lehman debt securities was underwater, and the fund faced severe redemption pressures from investors. In just two days, redemption requests surpassed $40 billion. Owing to the fund’s inability to liquidate assets at or above par value in the frozen markets and the inability of its sponsor, the Reserve Management Company, Inc. (RMCI), to support investors, the Reserve announced on September 16 that the Primary Fund had “broken …

United States: National Bank Holiday, 1933, Ayodeji George

Journal of Financial Crises

By mid-February 1933, the United States was in the depths of the Great Depression and the banking system faced sustained depositor runs and currency hoarding. On February 14, the governor of Michigan declared a holiday for all banks and trusts in the state. There followed a wave of declared bank holidays and bank runs across the country. The public withdrew $1.8 billion in gold and currency from banks in February and early March, with nearly two-thirds of those withdrawals occurring in the week ended Friday, March 3. By that date, 25 of 48 states had implemented bank holidays or restricted …

India: Yes Bank Moratorium, 2020, Salil Gupta

Journal of Financial Crises

By December 2019, Yes Bank’s capital levels had dropped below the Reserve Bank of India’s (RBI) mandated threshold, as the bank was facing a combination of deposit withdrawals, losses from extraordinary credit provisions, and overexposure to stressed sectors. On March 5, 2020, India’s Ministry of Finance (MoF) and the RBI placed Yes Bank under a 30-day moratorium that restricted most banking functions and limited deposit withdrawals to INR 50,000 per person (USD 663). The purpose of this moratorium was to allow the RBI time to design a plan of reconstruction or amalgamation for Yes Bank to allow depositors limited access …

Greece: National Bank Holiday, 2015, Stella Schaefer-Brown

Journal of Financial Crises

In December 2014, deposit outflows from Greek banks intensified owing to political uncertainty following the announcement of a snap presidential election and a subsequent crash of the Greek stock market. This led to a liquidity crisis in the first half of 2015. Intensifying political uncertainty, worsening liquidity, and volatility in the macroeconomic and financial markets environment peaked in the first half of 2015. The crisis was exacerbated by a February decision by the European Central Bank (ECB) that made it difficult for Greek banks to continue borrowing from its monetary policy-related liquidity programs. On June 28, 2015, the ECB announced …

Cyprus: National Bank Holiday, 2013, Stella Schaefer-Brown

Journal of Financial Crises

The Greek government debt crisis was especially hard on the two largest Cypriot banks. Bank of Cyprus (BoC) and Laiki Bank lost EUR 1.8 billion and EUR 2.3 billion, respectively, on their Greek government bonds after the European Union (EU) decision in October 2011 to haircut the bonds. Over the next year, Laiki Bank faced severe liquidity problems from depositor withdrawals, the Central Bank of Cyprus (CBC) extended to it significant emergency liquidity assistance, and the government owned 84% of the bank after injecting EUR 1.8 billion. The Cypriot economy also suffered negative effects and in March 2013, authorities negotiated …

Ecuador: National Bank Holiday, 1999, Bailey Decker

Journal of Financial Crises

After a series of exogenous shocks hit Ecuador’s economy in 1997 and 1998, foreign creditors reduced external credit lines to the country, draining liquidity. The newly created Deposit Guarantee Agency (Agencia de Garantía de Depósitos, AGD) administered deposit insurance and a new blanket guarantee and had the authority to resolve failing banks. Despite these actions, bank runs continued. After depositors reportedly withdrew USD 400 million from banks over a two-week period, on Monday, March 8, 1999, one hour before banks were supposed to open, the bank superintendent declared a surprise bank holiday effective that day; banks reopened a week later …

Argentina: National Bank Holidays, 2001, Owen Heaphy

Journal of Financial Crises

Starting in 1991, Argentina operated a currency board regime under which the central bank guaranteed a one-to-one peg of the Argentine peso to the US dollar. But in 2001, markets became increasingly concerned that the central bank would be unable to maintain the peg and would allow the peso to devalue against the dollar. At that time, more than two-thirds of Argentine bank deposits were denominated in dollars. Throughout 2001, depositors withdrew funds from banks; by November, peso deposits had declined by more than one-third and dollar deposits had fallen by one-tenth. On November 28, 2001, the systemwide banking run …