Abstract In spatial decision-making, real estate developers should research the residential stratifications of people at different income levels. With some public services tied strictly to homeownership, and minimum size requirement for house purchasers, both completed stratification and mixed stratification exist in the model. In both patterns, developers should invest more in suburbs when the supply of urban land decreases (or the suburban land supply increases), or when the commuting cost of suburban residents decreases (or urban public services deteriorate). The quantity of property buyers with rigid demand under the mixed stratification is more than that under the completed stratification. Ignoring them, therefore, would lead to an underestimation of suburban profits when the commuting cost is reduced (or when the urban land supply decreases), and an overestimation of urban profits when the urban public services improve (or when the suburban land supply decreases), misleading the investment of developers as result.
{"title":"Spatial Investments in the Real Estate Industry: Based on the Population Flow within the City","authors":"Xiaozhong Yang, Cheng Zhang","doi":"10.2139/ssrn.3866380","DOIUrl":"https://doi.org/10.2139/ssrn.3866380","url":null,"abstract":"Abstract In spatial decision-making, real estate developers should research the residential stratifications of people at different income levels. With some public services tied strictly to homeownership, and minimum size requirement for house purchasers, both completed stratification and mixed stratification exist in the model. In both patterns, developers should invest more in suburbs when the supply of urban land decreases (or the suburban land supply increases), or when the commuting cost of suburban residents decreases (or urban public services deteriorate). The quantity of property buyers with rigid demand under the mixed stratification is more than that under the completed stratification. Ignoring them, therefore, would lead to an underestimation of suburban profits when the commuting cost is reduced (or when the urban land supply decreases), and an overestimation of urban profits when the urban public services improve (or when the suburban land supply decreases), misleading the investment of developers as result.","PeriodicalId":153840,"journal":{"name":"Emerging Markets: Finance eJournal","volume":"285 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115218087","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 purpose of this study is 1.) To analyze the influence of foreign investment on the development of the Indonesian capital market. 2).To analyze the influence of the Exchange Rate on the Development of the Indonesian Capital Market. 3).To analyze the influence of the Interest Rate on the Development of the Indonesian Capital Market. 4).To analyze the influence of the Dow Jones Stock Market Index on the Development of the Indonesian Capital Market. 5).To analyze the influence of the Covid-19 Pandemic (dummy variable) on the Development of the Indonesian Capital Market.6). In this study, secondary data and library research were used as a technique for collecting data, using semi-annual data for the period 1990-2020. The research was processed using the EViews 11 program with the multiple linear regression method. The results of the research are known if 1.) Foreign Direct Investment has a significant and positive effect on Capital Market Development. 2.) Exchange Rates have a significant and positive influence on the Development of the Indonesian Capital Market. 3.) Interest Rates have a significant and negative effect on the Development of the Indonesian Capital Market. 4.) The Dow Jones Stock Market Index has a significant and positive effect on the Development of the Indonesian Capital Market. 5.) The Covid-19 pandemic had a significant and negative effect on the Development of the Indonesian Capital Market in the period 1990 to 2020. The results of this study are expected to contribute to policy holders regarding the role of macroeconomic variables on the development of the capital market, so that in the future it can be one of the references in conducting the policy mix so as to improve the development of the Indonesian capital market.
{"title":"Impact of Macroeconomic Variables, American Stock Market Index and COVID-19 Pandemic on Indonesia Capital Market Development (Time Series Study 1990-2020)","authors":"Almira Rizqia, P. Astuty, Heru Subiyantoro","doi":"10.31219/osf.io/hg7j9","DOIUrl":"https://doi.org/10.31219/osf.io/hg7j9","url":null,"abstract":"The purpose of this study is 1.) To analyze the influence of foreign investment on the development of the Indonesian capital market. 2).To analyze the influence of the Exchange Rate on the Development of the Indonesian Capital Market. 3).To analyze the influence of the Interest Rate on the Development of the Indonesian Capital Market. 4).To analyze the influence of the Dow Jones Stock Market Index on the Development of the Indonesian Capital Market. 5).To analyze the influence of the Covid-19 Pandemic (dummy variable) on the Development of the Indonesian Capital Market.6). In this study, secondary data and library research were used as a technique for collecting data, using semi-annual data for the period 1990-2020. The research was processed using the EViews 11 program with the multiple linear regression method. The results of the research are known if 1.) Foreign Direct Investment has a significant and positive effect on Capital Market Development. 2.) Exchange Rates have a significant and positive influence on the Development of the Indonesian Capital Market. 3.) Interest Rates have a significant and negative effect on the Development of the Indonesian Capital Market. 4.) The Dow Jones Stock Market Index has a significant and positive effect on the Development of the Indonesian Capital Market. 5.) The Covid-19 pandemic had a significant and negative effect on the Development of the Indonesian Capital Market in the period 1990 to 2020. The results of this study are expected to contribute to policy holders regarding the role of macroeconomic variables on the development of the capital market, so that in the future it can be one of the references in conducting the policy mix so as to improve the development of the Indonesian capital market.","PeriodicalId":153840,"journal":{"name":"Emerging Markets: Finance eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130802905","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}
An increasing amount of assets is managed by benchmark-tracking investment funds. This study investigates how benchmarking changes affect portfolio compositions in the cross-section of different investor types and stock characteristics. To that end, we exploit the phased introduction of Chinese A-shares to the MSCI Emerging Markets index, which was announced in June 2017 and implemented over the period from May 2018 to November 2019. This change presents a rare opportunity to estimate the impact of index changes and to shed light on cross-sectional implications. We document that particularly passive funds systematically deviate from the benchmark. Market capitalization, stock liquidity and stock volatility affect how benchmark changes translate to portfolio adjustments of mutual funds and ETFs. We then study how the changes in benchmark weights affect financial market outcomes, more specifically the comovement of returns. We find that these characteristics moderate the impact of benchmarking changes on financial market outcomes, suggesting that deviations from benchmarks matter.
{"title":"How do Funds Deviate from Benchmarks? Evidence from MSCI's Inclusion of Chinese A-shares","authors":"Lennart Dekker, Jasmin Gider, Frank de Jong","doi":"10.2139/ssrn.3937986","DOIUrl":"https://doi.org/10.2139/ssrn.3937986","url":null,"abstract":"An increasing amount of assets is managed by benchmark-tracking investment funds. This study investigates how benchmarking changes affect portfolio compositions in the cross-section of different investor types and stock characteristics. To that end, we exploit the phased introduction of Chinese A-shares to the MSCI Emerging Markets index, which was announced in June 2017 and implemented over the period from May 2018 to November 2019. This change presents a rare opportunity to estimate the impact of index changes and to shed light on cross-sectional implications. We document that particularly passive funds systematically deviate from the benchmark. Market capitalization, stock liquidity and stock volatility affect how benchmark changes translate to portfolio adjustments of mutual funds and ETFs. We then study how the changes in benchmark weights affect financial market outcomes, more specifically the comovement of returns. We find that these characteristics moderate the impact of benchmarking changes on financial market outcomes, suggesting that deviations from benchmarks matter.","PeriodicalId":153840,"journal":{"name":"Emerging Markets: Finance eJournal","volume":"319 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116422492","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 In this paper, we investigate the relationship between balance sheet size and leverage (i.e., leverage pro-cyclicality) and the pro-cyclicality of systemic risk using three systemic risk measures such as Δ C o V a R (Adrian and Brunnermeier (2016)), MES (Acharya et al. (2017)), SRISK (Brownlees and Engle (2016)). We conduct an extensive panel data analysis using a sample of 264 Chinese listed financial institutions (43 commercial banks, 74 finance services and 147 real estate finance services) over 2005:4–2019:4. We also study the impact of different phases of the financial turmoil by considering three subperiods, the “Global Financial Crisis” (2007:1–2009:4), the “Monetary Policy Restriction” (2010:1–2014:4), and the “2015 Chinese Stock Crash” (2015:1–2019:4). We find that leverage pro-cyclicality mainly affects CBs, in particular during the global financial crisis and the monetary policy restriction. We also find that larger financial institutions increase systemic risk, in particular commercial banks, which from 2016 started increasing shadow banking activities, and the real estate financial services with their activity closer to commercial banking.
本文采用Δ C o V a R (Adrian and Brunnermeier(2016))、MES (Acharya et al.(2017))、SRISK (Brownlees and Engle(2016))三种系统风险指标，研究了资产负债表规模与杠杆(即杠杆顺周期性)以及系统风险的顺周期性之间的关系。我们对2005年至2019年期间的264家中国上市金融机构(43家商业银行、74家金融服务机构和147家房地产金融服务机构)进行了广泛的面板数据分析。我们还通过考虑三个子时期，即“全球金融危机”(2007:1-2009:4)、“货币政策限制”(2010:1-2014:4)和“2015年中国股灾”(2015:1 - 2019:4)，研究了金融动荡不同阶段的影响。我们发现杠杆顺周期性主要影响商业银行，特别是在全球金融危机和货币政策限制时期。我们还发现，规模较大的金融机构增加了系统性风险，特别是商业银行，从2016年开始增加影子银行活动，以及与商业银行活动更接近的房地产金融服务。
{"title":"Leverage and Systemic Risk Pro-Cyclicality in the Chinese Financial System","authors":"Peter Cincinelli, Elisabetta Pellini, G. Urga","doi":"10.2139/ssrn.3927318","DOIUrl":"https://doi.org/10.2139/ssrn.3927318","url":null,"abstract":"Abstract In this paper, we investigate the relationship between balance sheet size and leverage (i.e., leverage pro-cyclicality) and the pro-cyclicality of systemic risk using three systemic risk measures such as Δ C o V a R (Adrian and Brunnermeier (2016)), MES (Acharya et al. (2017)), SRISK (Brownlees and Engle (2016)). We conduct an extensive panel data analysis using a sample of 264 Chinese listed financial institutions (43 commercial banks, 74 finance services and 147 real estate finance services) over 2005:4–2019:4. We also study the impact of different phases of the financial turmoil by considering three subperiods, the “Global Financial Crisis” (2007:1–2009:4), the “Monetary Policy Restriction” (2010:1–2014:4), and the “2015 Chinese Stock Crash” (2015:1–2019:4). We find that leverage pro-cyclicality mainly affects CBs, in particular during the global financial crisis and the monetary policy restriction. We also find that larger financial institutions increase systemic risk, in particular commercial banks, which from 2016 started increasing shadow banking activities, and the real estate financial services with their activity closer to commercial banking.","PeriodicalId":153840,"journal":{"name":"Emerging Markets: Finance eJournal","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-09-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127965851","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 : 2021-09-09DOI: 10.47992/ijcsbe.2581.6942.0124
Sonia Lobo, Ganesh Bhat
Purpose: Indian stock markets are channelizing financial resources for the economic progress of the country. The Indian Financial Services sector is the subset of the stock market which is playing a key role in stock trading. The Indian Financial Services industry is multifaceted and is growing rapidly both in terms of the robust growth of existing firms and the entry of new players playing a stellar role. This surge in growth of the Financial Services sector led many investors to divert their investment towards the financial services segment. To construct an attractive portfolio, the individual investor should perform a risk-return analysis well in advance. This will assist the investor in determining the risk-return relationship in various securities. Given this background, the study is undertaken to evaluate the risk-return patterns of the Indian Financial Services sector securities. Design/Methodology/Approach: The risk and return of sample group of companies belonging to the Indian Financial Services sector are analyzed to arrive at a monthly return by taking the monthly closing price of five financial investment companies belonging to the Standard & Poor’s BSE Finance Index for the period January 2020 to July 2021. To achieve the objectives various statistical tools such as descriptive statistics, correlation, and Beta are adopted. Also, a paired t-test is performed to check the validity of the hypothesis. Findings: The study has brought to light that India Infoline Finance Ltd (IIFL Finance) has provided the highest monthly returns with a high beta value. Further, the tested hypothesis reveals that there exists a significant difference in the monthly returns of the S&P BSE Finance Index and JSW Holdings.Originality/value: The study emphasizes the risk-return analysis of selected stocks of the Indian Financial Services sector. Potential investors will benefit from this equity analysis because it will enable them to make more intelligent and accurate investment decisions. Paper Type: A case study of the Indian Financial Services Industry
{"title":"Risk Return Analysis of Selected Stocks of Indian Financial Sector","authors":"Sonia Lobo, Ganesh Bhat","doi":"10.47992/ijcsbe.2581.6942.0124","DOIUrl":"https://doi.org/10.47992/ijcsbe.2581.6942.0124","url":null,"abstract":"Purpose: Indian stock markets are channelizing financial resources for the economic progress of the country. The Indian Financial Services sector is the subset of the stock market which is playing a key role in stock trading. The Indian Financial Services industry is multifaceted and is growing rapidly both in terms of the robust growth of existing firms and the entry of new players playing a stellar role. This surge in growth of the Financial Services sector led many investors to divert their investment towards the financial services segment. To construct an attractive portfolio, the individual investor should perform a risk-return analysis well in advance. This will assist the investor in determining the risk-return relationship in various securities. Given this background, the study is undertaken to evaluate the risk-return patterns of the Indian Financial Services sector securities. \u0000Design/Methodology/Approach: The risk and return of sample group of companies belonging to the Indian Financial Services sector are analyzed to arrive at a monthly return by taking the monthly closing price of five financial investment companies belonging to the Standard & Poor’s BSE Finance Index for the period January 2020 to July 2021. To achieve the objectives various statistical tools such as descriptive statistics, correlation, and Beta are adopted. Also, a paired t-test is performed to check the validity of the hypothesis. \u0000Findings: The study has brought to light that India Infoline Finance Ltd (IIFL Finance) has provided the highest monthly returns with a high beta value. Further, the tested hypothesis reveals that there exists a significant difference in the monthly returns of the S&P BSE Finance Index and JSW Holdings.\u0000Originality/value: The study emphasizes the risk-return analysis of selected stocks of the Indian Financial Services sector. Potential investors will benefit from this equity analysis because it will enable them to make more intelligent and accurate investment decisions. \u0000Paper Type: A case study of the Indian Financial Services Industry","PeriodicalId":153840,"journal":{"name":"Emerging Markets: Finance eJournal","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-09-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121180423","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}
Spanish Abstract: En esta nota se consideran los riesgos ante las variaciones del tipo de cambio que enfrentan las instituciones financieras en el contexto de una economía dolarizada, con referencias específicas al caso venezolano. English Abstract: This note considers the risks faced by financial institutions due to exchange rate variations in the context of a dollarized economy, with specific references to the Venezuelan case.
{"title":"Riesgo cambiario en el sistema financiero en una economía bimonetaria (Exchange Risk in the Financial System in a Bimonetary Economy)","authors":"Luis Zambrano Sequín","doi":"10.2139/ssrn.3913255","DOIUrl":"https://doi.org/10.2139/ssrn.3913255","url":null,"abstract":"Spanish Abstract: En esta nota se consideran los riesgos ante las variaciones del tipo de cambio que enfrentan las instituciones financieras en el contexto de una economía dolarizada, con referencias específicas al caso venezolano. English Abstract: This note considers the risks faced by financial institutions due to exchange rate variations in the context of a dollarized economy, with specific references to the Venezuelan case.","PeriodicalId":153840,"journal":{"name":"Emerging Markets: Finance eJournal","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127172926","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 is a draft of Part 1 for the textbook on Applied Corporate finance developed for the benefit of WIUT students. So far, it covers the basics of capital budgeting and special cases of investment projects (costs-only projects, contigent projects), containing training exercises and case-studies for students.
{"title":"Applied Corporate finance textbook: Part 1 (draft)","authors":"A. Artemenkov","doi":"10.2139/ssrn.3909425","DOIUrl":"https://doi.org/10.2139/ssrn.3909425","url":null,"abstract":"This is a draft of Part 1 for the textbook on Applied Corporate finance developed for the benefit of WIUT students. So far, it covers the basics of capital budgeting and special cases of investment projects (costs-only projects, contigent projects), containing training exercises and case-studies for students.","PeriodicalId":153840,"journal":{"name":"Emerging Markets: Finance eJournal","volume":"33 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116161299","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 study explored the impact of the COVID-19 pandemic on the operational and financial performance of the Ghanaian insurance industry using secondary and quantitative data from NIC, in a quarterly form from year 2018 to first quarter of 2021. Using descriptive, graphical and trend analysis, the findings of the study uncover the negative impact of the COVID-19 pandemic on the operational and financial performance growth of the insurance industry and options for policy recommendations. More specifically, the findings show that in the wake of the COVID-19 pandemic, the number of policy holders in both life and non-life declined as well as the value of both life and non-life policy underwritten by insurance firms. Moreover, there was a higher rate of decline in the life aspect of underwritten policy than that of the non-life. Also, both of life and non-life gross premiums experienced a dip in performance growth in the COVID-19 era which can be attributed to the decline in the number of policy holders in the wake of the COVID-19 pandemic. Furthermore, the value of total assets for both life and non-life segment of the industry experienced a declining growth rate within the survey period, while investment growth and performance of the insurance industry was also negatively impacted for both life and non-life consistently despite some periods of ups and downs. With respect to the operational aspect of the insurance industry, the findings show that claims benefits paid had declined consistently in the pandemic period whereas managerial efficiency in terms of management expenses had declined with the arrival of the COVID-19 pandemic and this may suggest a general level of improvement in the managerial efficiency in the industry. Policy recommendations for future studies were offered.
{"title":"The Impact of COVID-19 on Emerging Insurance Industry: The Ghanaian Evidence","authors":"James Ntiamoah Doku, Ellen Dzokoto, Aisha Kudolo","doi":"10.2139/ssrn.3908216","DOIUrl":"https://doi.org/10.2139/ssrn.3908216","url":null,"abstract":"This study explored the impact of the COVID-19 pandemic on the operational and financial performance of the Ghanaian insurance industry using secondary and quantitative data from NIC, in a quarterly form from year 2018 to first quarter of 2021. Using descriptive, graphical and trend analysis, the findings of the study uncover the negative impact of the COVID-19 pandemic on the operational and financial performance growth of the insurance industry and options for policy recommendations. More specifically, the findings show that in the wake of the COVID-19 pandemic, the number of policy holders in both life and non-life declined as well as the value of both life and non-life policy underwritten by insurance firms. Moreover, there was a higher rate of decline in the life aspect of underwritten policy than that of the non-life. Also, both of life and non-life gross premiums experienced a dip in performance growth in the COVID-19 era which can be attributed to the decline in the number of policy holders in the wake of the COVID-19 pandemic. Furthermore, the value of total assets for both life and non-life segment of the industry experienced a declining growth rate within the survey period, while investment growth and performance of the insurance industry was also negatively impacted for both life and non-life consistently despite some periods of ups and downs. With respect to the operational aspect of the insurance industry, the findings show that claims benefits paid had declined consistently in the pandemic period whereas managerial efficiency in terms of management expenses had declined with the arrival of the COVID-19 pandemic and this may suggest a general level of improvement in the managerial efficiency in the industry. Policy recommendations for future studies were offered.","PeriodicalId":153840,"journal":{"name":"Emerging Markets: Finance eJournal","volume":"89 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132664729","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 highlights the ways that stock market investors react to the fluctuations in stocks whether it be good or bad news for the investor. It discusses the role of different human emotions such as fear, panic, worry, over-confidence and greed play in how stock prices and valuations are shaped. It discusses the different types of investors that are in the market and what their attitude is towards money and investing. There are also different demographics that investors have that can affect their financial literacy and how that impacts the way that they view money. The role of social media, specifically Reddit is also discussed and how social media can influence the investor to behave a certain way and take certain actions within the stock market.
{"title":"Impact of the Stock Market on Investors","authors":"Katie DeRiso","doi":"10.2139/ssrn.3906111","DOIUrl":"https://doi.org/10.2139/ssrn.3906111","url":null,"abstract":"This paper highlights the ways that stock market investors react to the fluctuations in stocks whether it be good or bad news for the investor. It discusses the role of different human emotions such as fear, panic, worry, over-confidence and greed play in how stock prices and valuations are shaped. It discusses the different types of investors that are in the market and what their attitude is towards money and investing. There are also different demographics that investors have that can affect their financial literacy and how that impacts the way that they view money. The role of social media, specifically Reddit is also discussed and how social media can influence the investor to behave a certain way and take certain actions within the stock market.","PeriodicalId":153840,"journal":{"name":"Emerging Markets: Finance eJournal","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114980720","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 studies the impact of shadow banking regulation on the financial system and the real economy. For identification, I exploit a policy – “New Asset Management Rules” (NAMR) – that restrict the issuance and investment directions of wealth management products (WMPs) in China. I find that depositors substitute the WMPs with deposits, leading to an increase in bank loans. I provide evidence the substitution is imperfect and the net credit supply of banks declines. Using a bank-firm linked database, I show that private-owned enterprises (POEs) with high shadow banking or WMP exposure experienced a decline in investments, the growth rate of total assets, liabilities, and revenue. The province-level data shows the aggregate impact of the NAMR is sizable. A counterfactual analysis shows that the investment growth rate would have been 1.6 percentage points higher, translating to a 1 percentage point higher GDP growth rate in 2018.
{"title":"Best Laid Plans: Economic Consequences of Shadow Banking Crackdown","authors":"Bo Jiang","doi":"10.2139/ssrn.3905079","DOIUrl":"https://doi.org/10.2139/ssrn.3905079","url":null,"abstract":"This paper studies the impact of shadow banking regulation on the financial system and the real economy. For identification, I exploit a policy – “New Asset Management Rules” (NAMR) – that restrict the issuance and investment directions of wealth management products (WMPs) in China. I find that depositors substitute the WMPs with deposits, leading to an increase in bank loans. I provide evidence the substitution is imperfect and the net credit supply of banks declines. Using a bank-firm linked database, I show that private-owned enterprises (POEs) with high shadow banking or WMP exposure experienced a decline in investments, the growth rate of total assets, liabilities, and revenue. The province-level data shows the aggregate impact of the NAMR is sizable. A counterfactual analysis shows that the investment growth rate would have been 1.6 percentage points higher, translating to a 1 percentage point higher GDP growth rate in 2018.","PeriodicalId":153840,"journal":{"name":"Emerging Markets: Finance eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131247822","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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