Pub Date : 2020-07-25DOI: 10.5373/jardcs/v12sp7/20202353
A. Sankarkumar, M. Selvam, I. Gunasekaran, A. P, Dhanasekar Dhamotharan
The aim of this study was to throw light on the relationship between the Exchange Rate and Macro Economic Performance in South Asian Region (Afghanistan, Bangladesh, Bhutan, India and Sri Lanka). The results indicated that there was causal relationship (unidirectional) between Exchange Rate and Imports, Government Total Expenditure and Total Investment in Bangladesh. The correlation analysis also confirmed that Bangladesh is only country, which recorded positive correlation between Exchange Rate and Macro Economic Performance (except Total Investment) of South Asia Region. The findings of this study would be useful to the retail investors and policymakers, to monitor the exchange rate movements.
{"title":"Exchange Rate and Macroeconomic Performance in South Asian Region","authors":"A. Sankarkumar, M. Selvam, I. Gunasekaran, A. P, Dhanasekar Dhamotharan","doi":"10.5373/jardcs/v12sp7/20202353","DOIUrl":"https://doi.org/10.5373/jardcs/v12sp7/20202353","url":null,"abstract":"The aim of this study was to throw light on the relationship between the Exchange Rate and Macro Economic Performance in South Asian Region (Afghanistan, Bangladesh, Bhutan, India and Sri Lanka). The results indicated that there was causal relationship (unidirectional) between Exchange Rate and Imports, Government Total Expenditure and Total Investment in Bangladesh. The correlation analysis also confirmed that Bangladesh is only country, which recorded positive correlation between Exchange Rate and Macro Economic Performance (except Total Investment) of South Asia Region. The findings of this study would be useful to the retail investors and policymakers, to monitor the exchange rate movements.","PeriodicalId":13701,"journal":{"name":"International Corporate Finance eJournal","volume":"65 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-07-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90846039","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Policymakers have employed a range of fiscal and monetary tools to address the economic and financial fallout from COVID-19. From ultra-accommodative monetary policy, loan guarantees to income transfers, these policies have averted a depression and supported the private sector. This paper investigates the effectiveness of monetary policy from a crisis-averse and growth-centric standpoint. A qualitative review finds the design of monetary policy to be “crisis-averse” visà-vis COVID-19, with targeted credit and lending incentives from central banks in advanced economies serving as anchors for the financial system. It finds weaker pass-through to the real economy due to the heterogeneity like the shock but finds the current design of monetary policy to be consistent with a gradual convergence of inflation towards the symmetric 2.0% target and at, but slightly below 2.0% for the ECB.
{"title":"COVID-19: Crisis-Averse versus Growth-Centric Monetary Policy","authors":"H. Kouam","doi":"10.2139/ssrn.3655315","DOIUrl":"https://doi.org/10.2139/ssrn.3655315","url":null,"abstract":"Policymakers have employed a range of fiscal and monetary tools to address the economic and financial fallout from COVID-19. From ultra-accommodative monetary policy, loan guarantees to income transfers, these policies have averted a depression and supported the private sector. This paper investigates the effectiveness of monetary policy from a crisis-averse and growth-centric standpoint. A qualitative review finds the design of monetary policy to be “crisis-averse” visà-vis COVID-19, with targeted credit and lending incentives from central banks in advanced economies serving as anchors for the financial system. It finds weaker pass-through to the real economy due to the heterogeneity like the shock but finds the current design of monetary policy to be consistent with a gradual convergence of inflation towards the symmetric 2.0% target and at, but slightly below 2.0% for the ECB.","PeriodicalId":13701,"journal":{"name":"International Corporate Finance eJournal","volume":"44 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86122090","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper briefly discusses the impact of COVID-19 impact on world economy and suggests an Interest Free Financing System (IFF) that can provide impetus to the
本文简要讨论了新冠肺炎疫情对世界经济的影响，并提出了建立无息融资体系的建议
{"title":"Interest Free Financing and Its Relevance to Indian Economy in Post COVID Virus Pandemic","authors":"Seema Bushra, D. Rao, Krity Gulati","doi":"10.2139/ssrn.3655130","DOIUrl":"https://doi.org/10.2139/ssrn.3655130","url":null,"abstract":"The paper briefly discusses the impact of COVID-19 impact on world economy and suggests an Interest Free Financing System (IFF) that can provide impetus to the","PeriodicalId":13701,"journal":{"name":"International Corporate Finance eJournal","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79028302","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Using a sample of firms from 40 countries cross-listed in the U.S. during the 1982–2018 period, we find that the discrepancy between a firm's home industry valuation and its corresponding U.S. industry valuation—the relative industry valuation—is an important factor in the listing decision and valuation after listing. International firms whose home market industries are undervalued relative to the corresponding U.S. industries are more likely to cross-list. They also enjoy permanent valuation gains after listing. These firms issue more equity, invest more, and realize higher growth rates.
{"title":"Relative Industry Valuation and Cross-Border Listing","authors":"Kee‐Hong Bae, Yi Ding, Xiaoqiao Wang","doi":"10.2139/ssrn.3112222","DOIUrl":"https://doi.org/10.2139/ssrn.3112222","url":null,"abstract":"Abstract Using a sample of firms from 40 countries cross-listed in the U.S. during the 1982–2018 period, we find that the discrepancy between a firm's home industry valuation and its corresponding U.S. industry valuation—the relative industry valuation—is an important factor in the listing decision and valuation after listing. International firms whose home market industries are undervalued relative to the corresponding U.S. industries are more likely to cross-list. They also enjoy permanent valuation gains after listing. These firms issue more equity, invest more, and realize higher growth rates.","PeriodicalId":13701,"journal":{"name":"International Corporate Finance eJournal","volume":"210 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76263539","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This chapter examines spillover effects of global monetary shocks on lending by foreign banks in an emerging country, South Korea. Foreign banks play a significant role by providing additional domestic credit and foreign currency liquidity and directing international capital flows via the banking sector. Using macroeconomic and banking data for the period of 2000Q1–2016Q2, the authors present evidence that foreign bank branches in Korea have responded in providing their foreign currency loans with one-quarter (three months) time lag to changes in monetary policies in their home countries (mainly, the United States and the Euro area). This short-run spillover effect of monetary policy shocks from the home countries to foreign banks in Korea seems consistent with the main findings from our bank-level data analysis. This chapter also discusses useful policy implications.
{"title":"Spillover Effects of Global Monetary Shocks on Foreign Banks: Evidence From an Emerging Economy","authors":"B. Jeon, Hosung Lim, Ji (George) Wu","doi":"10.2139/ssrn.3751800","DOIUrl":"https://doi.org/10.2139/ssrn.3751800","url":null,"abstract":"This chapter examines spillover effects of global monetary shocks on lending by foreign banks in an emerging country, South Korea. Foreign banks play a significant role by providing additional domestic credit and foreign currency liquidity and directing international capital flows via the banking sector. Using macroeconomic and banking data for the period of 2000Q1–2016Q2, the authors present evidence that foreign bank branches in Korea have responded in providing their foreign currency loans with one-quarter (three months) time lag to changes in monetary policies in their home countries (mainly, the United States and the Euro area). This short-run spillover effect of monetary policy shocks from the home countries to foreign banks in Korea seems consistent with the main findings from our bank-level data analysis. This chapter also discusses useful policy implications.","PeriodicalId":13701,"journal":{"name":"International Corporate Finance eJournal","volume":"19 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88914423","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper shows how prediction accuracy for forward exchange rate negotiated for a forward contract can be a major reason to help entities avoid the risk of loss and understating or overstating income and financial position. I used a double exponential smoothing model to predict the forward exchange rate for US dollar to Canadian dollar. I find prediction accuracy when running the model to the time series of the exchange rate.
{"title":"Predicting the Forward Exchange Rate and the Effectiveness of Hedging Accounting","authors":"Tamer Aly El Nashar","doi":"10.2139/ssrn.3645945","DOIUrl":"https://doi.org/10.2139/ssrn.3645945","url":null,"abstract":"This paper shows how prediction accuracy for forward exchange rate negotiated for a forward contract can be a major reason to help entities avoid the risk of loss and understating or overstating income and financial position. I used a double exponential smoothing model to predict the forward exchange rate for US dollar to Canadian dollar. I find prediction accuracy when running the model to the time series of the exchange rate.","PeriodicalId":13701,"journal":{"name":"International Corporate Finance eJournal","volume":"77 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77816026","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Valuation theory predicts that, all else equal, expected investment should be negatively related to expected returns. We study the relation between expected investment and expected stock returns globally. We show that recent asset growth is a systematic proxy for future investment not only in the US, but also in developed ex US and emerging markets. Using this proxy, we find a negative investment effect across developed and emerging markets as well as across sectors in those regions, consistent with the prediction of valuation theory. Globally, the effect is much stronger among small caps than large caps and is mainly driven by the underperformance of high investment firms. Examining the different components of asset growth related to raising of capital as well as those related to use of capital, we find that all components contribute to the investment effect.
{"title":"Investment and Expected Stock Returns","authors":"Savina Rizova, N. Saito","doi":"10.2139/ssrn.3646575","DOIUrl":"https://doi.org/10.2139/ssrn.3646575","url":null,"abstract":"Valuation theory predicts that, all else equal, expected investment should be negatively related to expected returns. We study the relation between expected investment and expected stock returns globally. We show that recent asset growth is a systematic proxy for future investment not only in the US, but also in developed ex US and emerging markets. Using this proxy, we find a negative investment effect across developed and emerging markets as well as across sectors in those regions, consistent with the prediction of valuation theory. Globally, the effect is much stronger among small caps than large caps and is mainly driven by the underperformance of high investment firms. Examining the different components of asset growth related to raising of capital as well as those related to use of capital, we find that all components contribute to the investment effect.","PeriodicalId":13701,"journal":{"name":"International Corporate Finance eJournal","volume":"90 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83917514","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-07-03DOI: 10.1108/jfc-06-2020-0113
Daniel Dupuis, Kimberly Gleason
The purpose of this study is to describe the opportunities and limitations of cryptocurrencies as a tool for money laundering through six currently available “open doors” (exchange mechanisms). The authors link the regulatory dialectic paradigm to KYC (Know Your Customer) and AML (Anti-Money Laundering) evasion techniques, highlight six tactics to launder funds with virtual assets and investigate potential law enforcement and regulatory alternatives used to reduce the incidence of money laundering with digital coins.
Design/methodology/approach: The methodology used is the analysis of significant recent events, the availability of “fintech” crime-fighting tools, and a literature review focusing on the application of the Regulatory Dialectic to existing crypto-asset markets that make them compelling to money launderers.
Findings: We examine the illicit use of cryptocurrency through Kane’s Regulatory Dialectic paradigm, identify a number of avenues that are still available for those seeking to launder money using digitized coins, review recently “closed doors” and make recommendations regarding the regulation of crypto-related markets that may assist in making them less desirable for potential criminals.
Originality/value: To the authors’ knowledge, there are yet no broad overview regarding the feasibility of money laundering across crypto-related assets within the paradigm of the Regulatory Dialectic.
{"title":"Money Laundering with Cryptocurrency: Open Doors and the Regulatory Dialectic","authors":"Daniel Dupuis, Kimberly Gleason","doi":"10.1108/jfc-06-2020-0113","DOIUrl":"https://doi.org/10.1108/jfc-06-2020-0113","url":null,"abstract":"The purpose of this study is to describe the opportunities and limitations of cryptocurrencies as a tool for money laundering through six currently available “open doors” (exchange mechanisms). The authors link the regulatory dialectic paradigm to KYC (Know Your Customer) and AML (Anti-Money Laundering) evasion techniques, highlight six tactics to launder funds with virtual assets and investigate potential law enforcement and regulatory alternatives used to reduce the incidence of money laundering with digital coins. <br><br>Design/methodology/approach: The methodology used is the analysis of significant recent events, the availability of “fintech” crime-fighting tools, and a literature review focusing on the application of the Regulatory Dialectic to existing crypto-asset markets that make them compelling to money launderers. <br><br>Findings: We examine the illicit use of cryptocurrency through Kane’s Regulatory Dialectic paradigm, identify a number of avenues that are still available for those seeking to launder money using digitized coins, review recently “closed doors” and make recommendations regarding the regulation of crypto-related markets that may assist in making them less desirable for potential criminals. <br><br>Originality/value: To the authors’ knowledge, there are yet no broad overview regarding the feasibility of money laundering across crypto-related assets within the paradigm of the Regulatory Dialectic.<br>","PeriodicalId":13701,"journal":{"name":"International Corporate Finance eJournal","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88900734","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates how communications between regulators and firms affect the outcomes of large asset transactions (“restructurings”) in China. Examining stock exchange-issued comment letters that target individual restructuring filings, I find that characteristics indicating controlling shareholders’ expropriation of minority shareholders are associated with the severity of comment letters (“Severity”). The market reacts negatively to Severity. Severity predicts voluntary deal cancellation by management, and indirectly increases the probability of deal withdrawal and lengthens the processing time for equity-funded deals through affecting the approving body’s scrutiny level. Severity is also associated with lower post-letter disclosure quality rating. Textual analysis reveals that more concerns about a disguised reverse takeover, appraisal valuation and target assets quality are the most impactful, and demand for more disclosures is associated with larger revisions to restructuring filings. These findings are opposite to those of studies on comment letters and mergers and acquisitions in the U.S. (Liu et al., 2020; Johnson et al., 2020), reflecting the different role of comment letters under different institutions.
本文研究了中国监管机构与企业之间的沟通如何影响大型资产交易(“重组”)的结果。研究了针对个别重组申请的证券交易所发布的意见书，我发现表明控股股东征用小股东的特征与意见书的严重性(“严重性”)有关。市场对严重性反应消极。严重性预示着管理层自愿取消交易，通过影响审批机构的审查水平，间接增加了交易撤回的可能性，延长了股权融资交易的处理时间。严重性还与较低的信件披露质量评级有关。文本分析显示，对变相反向收购、评估估值和目标资产质量的担忧最具影响力，对更多信息披露的需求与重组文件的大幅修订有关。这些发现与美国对意见书和并购的研究结果相反(Liu et al.， 2020;Johnson et al.， 2020)，反映了不同制度下评论信的不同作用。
{"title":"Comment Letters and Large Asset Transactions: Evidence From an Emerging Market","authors":"Shuo Yang","doi":"10.2139/ssrn.3641297","DOIUrl":"https://doi.org/10.2139/ssrn.3641297","url":null,"abstract":"This paper investigates how communications between regulators and firms affect the outcomes of large asset transactions (“restructurings”) in China. Examining stock exchange-issued comment letters that target individual restructuring filings, I find that characteristics indicating controlling shareholders’ expropriation of minority shareholders are associated with the severity of comment letters (“Severity”). The market reacts negatively to Severity. Severity predicts voluntary deal cancellation by management, and indirectly increases the probability of deal withdrawal and lengthens the processing time for equity-funded deals through affecting the approving body’s scrutiny level. Severity is also associated with lower post-letter disclosure quality rating. Textual analysis reveals that more concerns about a disguised reverse takeover, appraisal valuation and target assets quality are the most impactful, and demand for more disclosures is associated with larger revisions to restructuring filings. These findings are opposite to those of studies on comment letters and mergers and acquisitions in the U.S. (Liu et al., 2020; Johnson et al., 2020), reflecting the different role of comment letters under different institutions.","PeriodicalId":13701,"journal":{"name":"International Corporate Finance eJournal","volume":"17 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77217355","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper argues that tax avoidance by large corporations has contributed to the 25% increase in concentration among U.S. firms since the mid-1990s. Corporate tax avoidance gives large firms a competitive edge, which translates into larger market shares and an increase in the granularity of the economy. We develop IV and difference-in-differences strategies that show the causal impact of tax avoidance on firm-level sales. Had firms not resorted to tax avoidance in 2017, our results imply that the average industry concentration would have been 8.3% lower, which is around its early 2000 level.
{"title":"Corporate Tax Avoidance and Industry Concentration","authors":"Julien Martin, Mathieu Parenti, F. Toubal","doi":"10.2139/ssrn.3671255","DOIUrl":"https://doi.org/10.2139/ssrn.3671255","url":null,"abstract":"This paper argues that tax avoidance by large corporations has contributed to the 25% increase in concentration among U.S. firms since the mid-1990s. Corporate tax avoidance gives large firms a competitive edge, which translates into larger market shares and an increase in the granularity of the economy. We develop IV and difference-in-differences strategies that show the causal impact of tax avoidance on firm-level sales. Had firms not resorted to tax avoidance in 2017, our results imply that the average industry concentration would have been 8.3% lower, which is around its early 2000 level.","PeriodicalId":13701,"journal":{"name":"International Corporate Finance eJournal","volume":"61 1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90373510","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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