Pub Date : 2024-08-16DOI: 10.1016/j.econlet.2024.111899
The paper studies the influence of shadow banking on the efficiency of two important green prudential proposals for credit risk of traditional banks : the Green Supporting Factor (GSF) and the Brown Penalizing Factor (BPF). Through an environmental general equilibrium model, the paper shows that, without shadow banks in the model, the use of the BPF or GSF generates a negative relationship between banking stability and environmental benefits. By introducing shadow banks, the use of BPF allows to maintain banking stability and to generate environmental benefits at the same time. These results emphasize the need to take into account shadow banking sector in a consistent assessment of green credit risk regulation proposals.
{"title":"Shadow banking and climate change, the “hidden leaf” of green credit risk policy","authors":"","doi":"10.1016/j.econlet.2024.111899","DOIUrl":"10.1016/j.econlet.2024.111899","url":null,"abstract":"<div><p>The paper studies the influence of shadow banking on the efficiency of two important green prudential proposals for credit risk of traditional banks : the Green Supporting Factor (GSF) and the Brown Penalizing Factor (BPF). Through an environmental general equilibrium model, the paper shows that, without shadow banks in the model, the use of the BPF or GSF generates a negative relationship between banking stability and environmental benefits. By introducing shadow banks, the use of BPF allows to maintain banking stability and to generate environmental benefits at the same time. These results emphasize the need to take into account shadow banking sector in a consistent assessment of green credit risk regulation proposals.</p></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2024-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142002265","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-16DOI: 10.1016/j.econlet.2024.111909
I model resale in the context of a two-part tariff monopolist identifying two groups: low and high demand consumers. There is a group of potential intermediaries that resell the good to low demand consumers. I show that under certain circumstances resale can benefit the monopolist.
{"title":"A two-part tariff monopolist with resale","authors":"","doi":"10.1016/j.econlet.2024.111909","DOIUrl":"10.1016/j.econlet.2024.111909","url":null,"abstract":"<div><p>I model resale in the context of a two-part tariff monopolist identifying two groups: low and high demand consumers. There is a group of potential intermediaries that resell the good to low demand consumers. I show that under certain circumstances resale can benefit the monopolist.</p></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2024-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142076411","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-14DOI: 10.1016/j.econlet.2024.111926
Increases in attendance for University of Iowa's women's basketball games caused by star player Caitlin Clark have led to claims of large economic benefits for Iowa City. This paper uses daily hotel occupancy data to analyze the visitor inflow arising from Clark's stardom. The findings show a surprising pattern: hotel occupancy did increase substantially during Clark's junior season but showed a much smaller increase during her senior season, even with considerably higher game attendance. Local fans substituting from men's games to women's games, thereby leaving fewer women's basketball seats available for out-of-town visitors, appears to explain at least some of the smaller hotel occupancy effect in Clark's senior season.
{"title":"Caitlin Clark's surprising economic impact","authors":"","doi":"10.1016/j.econlet.2024.111926","DOIUrl":"10.1016/j.econlet.2024.111926","url":null,"abstract":"<div><p>Increases in attendance for University of Iowa's women's basketball games caused by star player Caitlin Clark have led to claims of large economic benefits for Iowa City. This paper uses daily hotel occupancy data to analyze the visitor inflow arising from Clark's stardom. The findings show a surprising pattern: hotel occupancy did increase substantially during Clark's junior season but showed a much smaller increase during her senior season, even with considerably higher game attendance. Local fans substituting from men's games to women's games, thereby leaving fewer women's basketball seats available for out-of-town visitors, appears to explain at least some of the smaller hotel occupancy effect in Clark's senior season.</p></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2024-08-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142058567","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-14DOI: 10.1016/j.econlet.2024.111903
We investigate the role played by the voting bias in the Eurovision Song Contest (ESC) in explaining international bilateral portfolio investments. Our analysis reveals that the voting bias in the ESC score significantly helps explain bilateral portfolio investments but only for non-professional investors, while no systematic effect is found for financial companies’ holdings. Our results undergo robustness checks related to changes in the voting system and to the inclusion of standard static indicators of cultural distance. Moreover, for non-professional investors, the effect of voting bias is larger for debt than for equities: it is consistent with an affinity/animosity bias directed to target foreign governments and then reflected in sovereign debt holdings. Our analysis highlights that financial decision making, especially for less sophisticated investors, may be driven not only by static economic and cultural proximity, but also by less predictable time-varying national subjective feelings.
{"title":"Foreign portfolio investments and voting bias in the Eurovision Song Contest","authors":"","doi":"10.1016/j.econlet.2024.111903","DOIUrl":"10.1016/j.econlet.2024.111903","url":null,"abstract":"<div><p>We investigate the role played by the voting bias in the Eurovision Song Contest (ESC) in explaining international bilateral portfolio investments. Our analysis reveals that the voting bias in the ESC score significantly helps explain bilateral portfolio investments but only for non-professional investors, while no systematic effect is found for financial companies’ holdings. Our results undergo robustness checks related to changes in the voting system and to the inclusion of standard static indicators of cultural distance. Moreover, for non-professional investors, the effect of voting bias is larger for debt than for equities: it is consistent with an affinity/animosity bias directed to target foreign governments and then reflected in sovereign debt holdings. Our analysis highlights that financial decision making, especially for less sophisticated investors, may be driven not only by static economic and cultural proximity, but also by less predictable time-varying national subjective feelings.</p></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2024-08-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142002263","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-13DOI: 10.1016/j.econlet.2024.111904
Using a sample of UK equity funded companies, we examine differences in the exit strategy of companies funded by distinct investor types and operating in various technology intensive sectors during a period of crisis. Our results corroborate the hypothesis that investor involvement through oversight and imparting expertise augments the likelihood of favourable outcomes. This is particularly evident in high technology sectors. We observe increased exit activity amidst the crisis and notable disparities, contingent upon investor type, concerning chosen exit pathways.
{"title":"Exit routes, investor type, and the Covid-19 crisis: Insights from UK equity-funded companies","authors":"","doi":"10.1016/j.econlet.2024.111904","DOIUrl":"10.1016/j.econlet.2024.111904","url":null,"abstract":"<div><p>Using a sample of UK equity funded companies, we examine differences in the exit strategy of companies funded by distinct investor types and operating in various technology intensive sectors during a period of crisis. Our results corroborate the hypothesis that investor involvement through oversight and imparting expertise augments the likelihood of favourable outcomes. This is particularly evident in high technology sectors. We observe increased exit activity amidst the crisis and notable disparities, contingent upon investor type, concerning chosen exit pathways.</p></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2024-08-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0165176524003884/pdfft?md5=4de01f721de1f9ac42888e79441eda5c&pid=1-s2.0-S0165176524003884-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142041208","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-13DOI: 10.1016/j.econlet.2024.111912
This paper examines how investors’ belief disagreement affects the firm’s debt maturity choice. We find that in the presence of belief disagreement, the firm prefers short-term debt to long-term debt. This is because short-term debt is less risky and can attract more optimistic investors, which raises the debt price and reduces the cost of debt financing. Our result is stronger when long-term debt is more risky compared to short-term debt and investors’ belief dispersion is higher.
{"title":"Belief disagreement and debt maturity structure","authors":"","doi":"10.1016/j.econlet.2024.111912","DOIUrl":"10.1016/j.econlet.2024.111912","url":null,"abstract":"<div><p>This paper examines how investors’ belief disagreement affects the firm’s debt maturity choice. We find that in the presence of belief disagreement, the firm prefers short-term debt to long-term debt. This is because short-term debt is less risky and can attract more optimistic investors, which raises the debt price and reduces the cost of debt financing. Our result is stronger when long-term debt is more risky compared to short-term debt and investors’ belief dispersion is higher.</p></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2024-08-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141998405","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-12DOI: 10.1016/j.econlet.2024.111907
Economic indicators are important tools used to assess the economic situation of a country or region and for macroeconomic control, and the decline in the accuracy of economic indicators creates potential risks. In this study, we use GDP as a proxy for economic indicators and empirically test the intrinsic correlation between its accuracy and firms’ ESG performance. Using A-share listed companies from 2013 to 2021 as our sample, and constructing a proxy for economic indicator accuracy through nighttime satellite data, we find that the accuracy of economic indicators significantly and positively impacts firms’ ESG performance. Furthermore, financial constraints and government intervention can strengthen this positive effect.
经济指标是评估一个国家或地区经济形势和进行宏观调控的重要工具,经济指标准确性的下降会带来潜在的风险。在本研究中,我们以 GDP 作为经济指标的替代指标,实证检验其准确性与企业 ESG 表现之间的内在相关性。以 2013 年至 2021 年的 A 股上市公司为样本,通过夜间卫星数据构建经济指标准确性的替代指标,我们发现经济指标的准确性对企业的 ESG 表现有显著的正向影响。此外,财务约束和政府干预也会加强这一积极影响。
{"title":"Economic indicator accuracy and corporate ESG performance","authors":"","doi":"10.1016/j.econlet.2024.111907","DOIUrl":"10.1016/j.econlet.2024.111907","url":null,"abstract":"<div><p>Economic indicators are important tools used to assess the economic situation of a country or region and for macroeconomic control, and the decline in the accuracy of economic indicators creates potential risks. In this study, we use GDP as a proxy for economic indicators and empirically test the intrinsic correlation between its accuracy and firms’ ESG performance. Using A-share listed companies from 2013 to 2021 as our sample, and constructing a proxy for economic indicator accuracy through nighttime satellite data, we find that the accuracy of economic indicators significantly and positively impacts firms’ ESG performance. Furthermore, financial constraints and government intervention can strengthen this positive effect.</p></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2024-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142076412","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-11DOI: 10.1016/j.econlet.2024.111913
It is shown that a large set of public good supply levels that arise in a Pareto optimal allocation can also be attained as public good provisions in the Nash equilibrium of a non-cooperative provision game. With a not very far-fetched assumption on agents’ preferences this result even holds for all Pareto supply levels.
{"title":"Pareto optimal provisions as outcomes of voluntary public good supply","authors":"","doi":"10.1016/j.econlet.2024.111913","DOIUrl":"10.1016/j.econlet.2024.111913","url":null,"abstract":"<div><p>It is shown that a large set of public good supply levels that arise in a Pareto optimal allocation can also be attained as public good provisions in the Nash equilibrium of a non-cooperative provision game. With a not very far-fetched assumption on agents’ preferences this result even holds for all Pareto supply levels.</p></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2024-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142002264","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-10DOI: 10.1016/j.econlet.2024.111893
In this paper, we construct a Dynamic Stochastic General Equilibrium (DSGE) model to examine the implications of dual rates for green lending. We demonstrate that implementing a distinct interest rate for banks engaged in green lending can effectively mitigate transition risks while channeling more capital towards green production sectors and firms for an immediate cut of emissions and net zero emission economy targets.
{"title":"Green targeted lending operations in the Euro Area","authors":"","doi":"10.1016/j.econlet.2024.111893","DOIUrl":"10.1016/j.econlet.2024.111893","url":null,"abstract":"<div><p>In this paper, we construct a Dynamic Stochastic General Equilibrium (DSGE) model to examine the implications of dual rates for green lending. We demonstrate that implementing a distinct interest rate for banks engaged in green lending can effectively mitigate transition risks while channeling more capital towards green production sectors and firms for an immediate cut of emissions and net zero emission economy targets.</p></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2024-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S016517652400377X/pdfft?md5=679b4f9e9a83a3295301aaa6f1211174&pid=1-s2.0-S016517652400377X-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141992960","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-10DOI: 10.1016/j.econlet.2024.111910
We examine the relationship between co-opted boards and corporate carbon performance. Results show that co-opted boards decrease GHG intensity in financially material industries with no effect in non-financially material industries. For firms in financially material industries, this relationship is time-variant and positive when we interact GHG intensity with R&D investments. This result posits inefficient R&D allocation in the presence of co-opted boards. Our findings bring a more nuanced picture concerning the influence of co-opted boards on corporate carbon performance.
{"title":"The effect of co-opted boards on corporate carbon performance: Evidence from financially material industries","authors":"","doi":"10.1016/j.econlet.2024.111910","DOIUrl":"10.1016/j.econlet.2024.111910","url":null,"abstract":"<div><p>We examine the relationship between co-opted boards and corporate carbon performance. Results show that co-opted boards decrease GHG intensity in financially material industries with no effect in non-financially material industries. For firms in financially material industries, this relationship is time-variant and positive when we interact GHG intensity with R&D investments. This result posits inefficient R&D allocation in the presence of co-opted boards. Our findings bring a more nuanced picture concerning the influence of co-opted boards on corporate carbon performance.</p></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2024-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S016517652400394X/pdfft?md5=549ea4bab2c2174ca6f81e6ea8f44227&pid=1-s2.0-S016517652400394X-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142012439","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}