International Review of Economics & Finance最新文献

This paper proposes two metrics to correctly measure under optimal capital structures the impact of corporate statutory tax rates (a) on the effective tax rate, and (b) on the operational risk of capital investment projects and their parent firm's project portfolio. For illustrative and explanatory purposes as well as for ensuring a realistic coverage of a wide spectrum of risky capital investment projects, both metrics are applied to a stationary in mean and variance stochastic $NP{V}^{\tau }$ model under the Canadian open-class corporate taxation system. The Marshallian partial equilibrium adjustment mechanism is brought into play to ensure through efficient financial markets that firms operating within any domestic economic sector are concomitantly subjected to financial equilibrium conditions, thereby enabling firms to converge in the very short run to an optimal after-tax leveraged net cost of capital. This paper concludes that current macroeconomic neo-classical rate-based marginal effective tax rate (METR) metrics systematically and significantly underestimate business organizations' microeconomic $NP{V}^{\tau }$-based corporate effective tax rates. Furthermore, increasing both the corporate statutory tax rate and the cross-correlation coefficient between portfolio projects will markedly increase a parent firm's project portfolio operational risk while impeding its capacity to reduce it.

This article investigates the impact of the COVID-19 pandemic on household food waste management behavior. By utilizing 1.6 million dining transactions at 87 restaurants in 10 Chinese cities, we find that an average 8.4 percent reduction in plate waste in restaurants associated with new COVID-19 infections at the national level during the pandemic. Further evidence shows that this change in behavior is not permanent, as the level of plate waste tends to revert to pre-pandemic levels once the pandemic came under control. We test several explanations for the empirical findings and conclude that salience bias is the most plausible explanations. This insight into waste management behavior highlights the importance of utilizing salience-friendly policy instruments to effectively implement resource conservation and waste management policy goals.

We examine the effects of the US-China trade dispute on price spillovers and interdependencies among the ten most liquid agricultural futures contracts traded on China's commodity exchanges by employing the time-varying connectedness framework modified by Antonakakis, Chatziantoniou, and Gabauer (2020). We find that the overall market frictions increase modestly due to the clustering of mixed informational disturbances caused by the trade dispute. This lowers the gross spillovers in the entire asset system by reducing the efficiency of general price signal transmission. Notably, subsidiary products of rapeseed and soybean contribute the most to the total and net directional spillovers in the whole market, acting as shock transmitters before the trade dispute. The RBD palm market gains a dominant role as a shock transmitter during the trade dispute and its role strengthens further after the trade agreement was reached. Additionally, the average intensity of pairwise spillovers declines considerably during the trade dispute, suggesting weakening asset interconnectedness. The responsiveness of shock transmission channels to the trade dispute impacts is found to vary across industrial chains and the presence of delayed economic effects is detected in the structural changes of market interdependences.

Green exports are key in propelling China's foreign trade toward high-quality development. Based on rigorous theoretical analysis, this article employs comprehensive data from the International Federation of Robotics (IFR) from 2006 to 2014, along with data from the China Customs and industrial enterprise databases, to evaluate the impact of industrial robot utilization on fostering the green transformation of exports. The results reveal that the application of industrial robots unequivocally contributes to advancing the eco-friendly transformation of exports. This conclusion withstands endogeneity and robustness tests. In particular, industrial robots directly promote the green transformation of exports and exert an indirect influence through technological and scale effects. Technological effects can be divided into technological progress and green production, while scale effects relate to enterprise size and industry competitiveness. In terms of heterogeneity, the promoting effect of industrial robot utilization on the green transformation of exports is more pronounced in foreign-funded enterprises, technology-intensive enterprises, and enterprises in the eastern region. To efficiently leverage policy effects and facilitate the green transformation of exports, this article suggests strengthening policy guidance, providing special funds, tax incentives, and rewards, enhancing enterprise research and development capabilities, and encouraging domestic and non-technology-intensive enterprises, and enterprises in the eastern region to utilize industrial robots.

This paper explores the effect of inflation supply and demand shocks on government debt for a sample of 32 advanced economies and 24 emerging markets from 1970 to 2022. The shocks are identified using a sign-restricted structural vector autoregression model with quarterly data. Estimations of dynamic panel regressions and local projections suggest that supply shocks lead to persistent increases in government debt, while demand shocks result in long-lasting declines. Furthermore, high debt levels amplify the impacts of both supply and demand shocks by more than three times. Specifically, supply shocks contribute to an increase in debt through elevated borrowing costs and prolonged depreciation, whereas demand shocks erode debt through persistent improvements in the primary balance, driven by increased revenues.

The high frequency and strong intensity of climate change pose a huge influence on the banking system. To clarify the correlation between climate change and banks' asset quality, this study evaluated the impact of temperature fluctuations on the non-performing loan (NPL) ratios of commercial banks and their heterogeneity and mechanisms using a dynamic panel data model with 31 provinces in China from 2005 to 2020. The empirical results showed that climate change had a significant positive impact on the NPL ratio, with the adverse effect being stronger in provinces with lower per capita income and environmental infrastructure investment. Moreover, there was an obvious transmission channel of “climate change—labor productivity—income—NPL ratio”. Climate change decreased incomes by lowering labor productivity, thereby weakening economic agents’ ability to repay loans. Furthermore, rising insurance levels and climate-related fiscal expenditure facilitated the diversification and transfer of climate-related default risk. This research supplements the empirical evidence on climate-related financial risks at the provincial level in China, and the findings provide useful insights for enhancing the quality management of climate-sensitive banking assets and maintaining financial stability.

Using 891 venture capitalist- and 1777 deal-level samples of China, we find that venture capitalists with business experience significantly promote their portfolio-firm's corporate social responsibility (CSR) performance better than those without business experience. To explore the mechanisms, we perform DID test and heterogeneity analysis. First, we find venture capitalists with business experience increase the CSR performance of firms in hazardous industries following a shock that raised awareness of CSR, which indicates that the venture capitalists have more social consciousness. Second, the effects of business experience on CSR are stronger if venture capitalists invest in earlier stages of firms or have greater equity ownerships, in which cases the venture capitalists have more and better opportunities to display their abilities in CSR activities. Overall, our findings highlight the effects of venture capitalists' human capital on sustainable investments.

This study examines the higher-order moment co-movement and connectedness between China's stock and commodity markets across time and frequency domains. We propose wavelet decomposition to develop a multiscale time-varying parameter vector autoregression (TVP-VAR) approach for measuring higher-order moment connectedness. Our empirical findings are as follows: First, the co-movement of stock-commodity varies over time and across different frequencies, exhibiting heterogeneity at different moments. Stocks demonstrate robust co-movement with commodities over the medium- and long-term periods. Second, higher-order moment connectedness is stronger than return connectedness, whereas weaker than volatility connectedness. Finally, higher-order moment connectedness is highly event-dependent, peaking at COVID-19 onset. And long-run factors have the greatest effect on dynamic moment connectedness.

Does digital finance (DIF) in the digital age mitigate the economic challenges stemming from the resource curse and facilitate low-carbon development? This paper extends the theoretical framework of endogenous economic growth to investigate the interactive relationship among economic growth, low-carbon development, and the resource curse. Furthermore, it explores the pivotal role of DIF within this context. Subsequently, this paper employs Chinese provincial data from 2011 to 2020 to empirically examine the theoretical assumptions through econometric methods. The findings are as follows. First, DIF has the potential to stimulate economic growth, whereas resource endowment can impede it. Second, DIF significantly reduces carbon emission intensity (CEI); however, a high degree of resource endowment does not foster low-carbon development. Third, in the mechanism by which resource endowment influences economic growth, DIF exhibits a single threshold effect. When the DIF level surpasses 361.46, the negative relationship between resource endowment and economic growth shifts to a significant positive correlation. Regarding the mechanisms by which resource endowment impacts CEI, DIF shows a double-threshold effect. When DIF surpasses the second threshold, the significant positive impact of resource endowment on CEI becomes significantly negative. Fourth, DIF and resource endowment indirectly influence CEI through economic development. Fifth, the impact of DIF on CEI and the influence of resource endowment on economic growth are marked by resource endowment heterogeneity. DIF exhibits a double-threshold effect on the influence of resource endowment on economic growth in non-resource endowment regions. In resource-rich areas, as the DIF level rises, the significant positive effect of resource endowment on CEI intensifies. Conversely, in non-resource endowment regions, as the DIF level increases, the significant positive effect of resource endowment on CEI transforms into a significant negative effect.