International Economics Commons^™

U.S. Cross-Listing, Institutional Investors, And Equity Returns, Yui Law

Lingnan Theses

Cross-listing refers to firms listing their equities on more than one stock exchange. Cross-listing is an interesting topic of international finance. This is because along with the deeper integration of the global financial market, we should see lesser importance of geographic factors. Thus, the motivations and effects of listing a firm on exchanges of different regions should have essential economic implications. The reputation bonding hypothesis suggests that U.S. cross-listing improves the information environment of a firm because of the higher disclosure standard and more analyst coverage. The legal bonding hypothesis argues that U.S. cross-listing improves the investor protection and corporate …

Microinsurance: A Case Study Of The Indian Rainfall Index Insurance Market, Xavier Giné, Lev Menand, Robert W. Townsend, James Vickery

Faculty Scholarship

Efforts have been made in India and other countries in recent years to develop formal insurance markets to improve diversification of weather-related income shocks. This article aims to survey the features of one of these markets, the Indian rainfall index insurance market. “Index insurance” refers to a contract whose payouts are linked to a publicly observable index; in this case, the index is cumulative rainfall recorded on a local rain gauge during different phases of the monsoon season. This form of insurance is now available at a retail level in many parts of India, although these markets are still in …

The Governance Of China’S Finance, Katharina Pistor

Faculty Scholarship

This chapter examines the governance of China's financial system, which, it shows, cannot be adequately explained using conventional paradigms that rely on ownership and legal or regulatory controls alone. Instead, China's governance regime relies heavily on human resource management, which uses control rights over the career path of top-level financial cadres. A commentary is included at the end of the chapter.

Interest Rate Policy In China: The Impact Of Suppressed Deposit Rates On Household Income From 2000-2007, Zhuliang James Zhang

Undergraduate Economic Review

An often-overlooked impact of China’s policy of maintaining low interest has been the suppression of household interest income, which has increased the propensity of households to save while decreasing their consumption rates. This paper posits that from 2000 to 2007, deposit rates in China were suppressed annually by around 720 basis points, imposing an implicit tax on annual per-capita income of 12.8% on average. Raising deposit rates will increase household income and boost consumption in the medium-term if the Chinese government is able to initiate policy shifts that distribute the gains of economic growth more equitably to households. Research advised …

Essays On An Asean Optimal Currency Area, Kathryn J. Whittaker Huff

LSU New Orleans Theses and Dissertations

Many regions of the world would like to replicate the financial and monetary integration of the European Monetary Union (EMU). Member countries of the Association of Southeast Asian Nations (ASEAN) have shown an interest in such an arrangement. ASEAN is a political, cultural, and economic association that includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Many of these nations are experiencing rapid economic development while others are still relatively poor and under developed. As such, they appear to be an unlikely group for currency unification. Older studies suggest that multiple currency union groupings may be …

The Resource Curse And Peru: A Potential Threat For The Future?, Sergio Cruz

Master's Theses

What explains the ability of some countries to successfully use their natural resources towards development and economic growth while for others stagnation and impoverishment? The resource curse theory has helped economists explain this observation. This work examines how Peru has been able to produce strong economic growth in the last 20 years despite the economy’s strong dependence on its natural resource extractive industry. Peru has been able to avoid many of the pitfalls and traps that resource curse literature considers to be detrimental to economic growth. This article examines the resource based economies of four other countries (Venezuela, Chile, Nigeria, …

Beneath And Beyond The Chinese Miracle, Singapore Management University

Perspectives@SMU

China’s rapid economic progress from an impoverished communist state to the world’s second largest economy within just three decades has enthralled many economists. That the country shifted from the classical centrally-planned command economy to one espousing free market practices while maintaining communist rule, has all given rise to this question: What exactly is the China model? Is it the hybrid of innovative state ownership and tight political control? Or is the rapid growth the result of liberal economic and political reforms?

Extreme Risks In Financial Markets And Monetary Policies Of The Euro-Candidates, Hubert Gabrisch, Lucjan T. Orlowski

WCBT Faculty Publications

This study investigates extreme tail risks in financial markets of the euro-candidate countries and their implications for monetary policies. Our empirical tests show the prevalence of extreme risks in the conditional volatility series of selected financial variables, that is, interbank rates, equity market indexes and exchange rates. We argue that excessive instability of key target and instrument variables should be mitigated by monetary policies. Central banks in these countries will be well-advised to use both standard and unorthodox (discretionary) tools of monetary policy while steering their economies out of the financial crisis and through the euro-convergence process.

Diaspora Bonds: A Viable Source Of External Financing For Nigeria?, Omolara O. Duke

Bullion

The paper examines the need for external funding, arises from the inadequacy of domestic sources of funds to meet supply gaps and balance of payments (BOP) challenges and the potentials of Nigeria sourcing external financing through the issuance of Diaspora bonds. Following this introduction, Section ll reviews conceptual and empirical literature as well as country experiences on Diaspora bonds issuance. Section lll, discusses the bond market in Nigeria. ln Section lV. the prospects and challenges of issuing Diaspora bonds in Nigeria were highlighted. Section V concludes the paper.

Introduction To The Symposium On 'Financial Risks And Economic Stability In Emerging Market Economies', Lucjan Orlowski

WCBT Faculty Publications

Developing resilience to contagion effects from global financial crises and economic recessions has been an ongoing crucial task for policymakers in emerging market economies. The recent global financial crisis of 2007-2009 has underscored the importance of pursuing disciplined macroeconomic policies and of devising sound macroprudential regulations that would strengthen the immunity of emerging markets and their institutions to various types of risks, including credit, default, sovereign, liquidity and market risks. The studies included in this symposium are not intended to provide a comprehensive overview of financial vulnerabilities in a broad spectrum of emerging markets. Rather, they share a common aim …

World Food Crisis: Imperfect Markets Starving Development, A Decomposition Of Recent Food Price Increases, Christine Costello

College of Business: Dissertations, Theses, and Student Research

The recent decade has experienced two rather substantial food price spikes. This thesis sets out to provide an in-depth look at the recent food price increases by achieving two goals: assessing the forces driving food prices, and determining the magnitude of those forces. These goals are reached by reviewing selected rhetoric on the recent food price increases, analyzing case studies, and lastly determining our modeling capabilities in decomposing food price changes. Additionally, this thesis will serve as a tool for stakeholder's to better address critical policy issues surrounding food, agriculture, and energy policies.

Adviser: Hendrik Van Den Berg

International Capital Flows With Limited Commitment And Incomplete Markets, Jürgen Von Hagen, Haiping Zhang

Research Collection School Of Economics

Recent literature has proposed two alternative types of financial frictions, i.e., limited commitment and incomplete markets, to explain the patterns of international capital flows between developed and developing countries observed in the past two decades. This paper integrates both types of frictions into a two-country overlapping-generations framework to facilitate a direct comparison of their effects. In our model, limited commitment distorts the investment made by agents with different productivity, which creates a wedge between the interest rates on equity capital vs. credit capital; while incomplete markets distort the investment among projects with different riskiness, which creates a wedge between the …

The Impact Of Public Credit Programs On Brazilian Firms, Joao Alberto Denegri, Alessandro Maffioli, Cesar M. Rodriguez

Economics Faculty Publications and Presentations

This paper analyzes the effectiveness of public credit lines in promoting the performances of Brazilian firms. We focus on the impact of the credit lines managed by BNDES and FINEP in fostering growth measured in terms of employment, labor productivity and export. For this purpose, we use a unique panel data set developed by the Instituto de Pesquisa Econômica Aplicada (IPEA), which includes information on both firm-level performances and access to public credit lines. This particular data setting allows us to use quasi-experimental techniques to control for selection bias when estimating the impact of the public credit lines. The core …

Transmission Linked To Structural Vulnerability: How Low-Income Countries Endured The Great Recession, Rachel F. Hartgen

Electronic Theses and Dissertations

The implosion of the 2008 financial crisis ignited fears that integration would transmit the crisis’ effects throughout the global system. Examining two countries, Bangladesh and Zambia, this project shows that low-income countries with relatively little integration also saw negative impacts. This occurred through three main transmission mechanisms: trade flows, rising prices and financial flows that could have possible long-term effects at the macro and micro level. The manner and impact of each transmission mechanism, however, varied among LICs according to each country’s individual structural economic and financial vulnerabilities. Bangladesh saw a delayed impact but did not avoid the crisis completely, …

Watching The Clock: Challenges For The World's Fastest Growing Economies, Singapore Management University

Perspectives@SMU

Double-digit economic growths that are set to propel it to the second biggest economy in the world, overtaking Japan, has made people see China’s rise as remarkable. So confident are the pundits that they have dubbed this to be an “Asian century” and many more are urging for the world to learn Chinese in anticipation of a new world order. But, to renowned historian Wang Gungwu, this fast-paced growth associated with China is not something that is peculiar to the Asian giant only.

The Informal Economy And Bribery In North Korea, Byung-Yeon Kim, Yumi Koh

Research Collection School Of Economics

This paper uses the data of 227 North Korean refugees who have settled in South Korea to investigate the relationship between working in the informal economy (market component of the economy) and bribe-giving, and between bribe-giving and the number of hours worked in the formal sector (planned component of the economy). The first relationship is positive, and the second relationship is negative. These results imply that widespread informal economy activities in North Korea have been undermining the socialist regime through bribery.

Government Ideology, Democracy And The Sacrifice Ratio: Evidence From Latin American And Caribbean Disinflations, Tony Caporale

Economics and Finance Faculty Publications

This study uses a sample of 34 disinflations undertaken by thirteen Latin American and Caribbean (LAC) nations to test if political institutions impact the cost of policy induced disinflations. We find, after controlling for several of the most important covariates in the literature, that disinflations are less costly for right vs. left governments and that sacrifice ratios are lower for more democratic vs. authoritarian governmental regimes. This is robust to different measures of government ideology as well as to alternative ways of computing the sacrifice ratio and lends support for political economy literature which argues that political institutions have significant …

The Wto Trade Effect, Pao Li Chang, Myoung-Jae Lee

Research Collection School Of Economics

This paper re-examines the GATT/WTO membership effect on bilateral trade flows, using nonparametric methods including pair-matching, permutation tests, and a Rosenbaum (2002) sensitivity analysis. Together, these methods provide an estimation framework that is robust to misspecification bias, allows general forms of heterogeneous membership effects, and addresses potential hidden selection bias. This is in contrast to most conventional parametric studies on this issue. Our results suggest large GATT/WTO trade-promoting effects that are robust to various restricted matching criteria, alternative GATT/WTO indicators, non-random incidence of positive trade flows, inclusion of multilateral resistance terms, and different matching methodologies.

Sanctioning Policies-Australian, American And British Cross-National Reflections And Comparisons, Harry Savelsberg

The Journal of Sociology & Social Welfare

Over the last two decades welfare policies have undergone major reforms in Anglo-Western nations such as the U.S., U.K. and Australia. Central to these reforms have been the revision of welfare recipient entitlements and responsibilities and the emergence of a responsibility and obligations agenda. The essence of this agenda is conditionality and reciprocity, and it includes the threat of punitive sanctions for failing to comply with mandatory participation requirements. This paper highlights the potent influence of the ideas of American conservatives on policy reforms in the U.S., the U.K. and Australia and provides a thematic crossnational comparison of sanctioning policies …

Risk And The Technology Content Of Fdi: A Dynamic Model, Pao Li Chang, Chia-Hui Lu

Research Collection School Of Economics

This paper incorporates risk into the FDI decisions of firms. The risk of FDI failure increases with the gap between the South's technology frontier and the technology complexity of a firm's product. This leads to a double-crossing sorting pattern of FDI firms of intermediate technology levels are more likely than others to undertake FDI. It is with the attempt to relax the upper bound of the technology content of FDI, we argue, that many FDI policies are created. The theory's predictions are consistent with the empirical pattern of FDI in China by US and Taiwanese manufacturing firms.