Pub Date : 2021-01-01DOI: 10.17811/ebl.10.3.2021.240-248
Shahid W. Anjum
Basel penalties originate from VaR violations where a bank may end up either holding more capital or will risk to be reverted to standardized approach. Regulatory capital charge can have a huge impact on banks’ profitability which depends on the estimation of VaR thresholds which is evaluated by the approaches like hypothesis tests, back-testing procedures and Basel Accord regulatory calculations for penalty zones are used. A multi-criteria performance measure has been introduced in this study in order to select the optimal internal model based on performance evaluation techniques which could possibly help in reduction in the VaR violations and thus may leave more capital with banks.
{"title":"Basel violations, volatility model variants and value at risk: Optimization of performance deviations in banks","authors":"Shahid W. Anjum","doi":"10.17811/ebl.10.3.2021.240-248","DOIUrl":"https://doi.org/10.17811/ebl.10.3.2021.240-248","url":null,"abstract":"Basel penalties originate from VaR violations where a bank may end up either holding more capital or will risk to be reverted to standardized approach. Regulatory capital charge can have a huge impact on banks’ profitability which depends on the estimation of VaR thresholds which is evaluated by the approaches like hypothesis tests, back-testing procedures and Basel Accord regulatory calculations for penalty zones are used. A multi-criteria performance measure has been introduced in this study in order to select the optimal internal model based on performance evaluation techniques which could possibly help in reduction in the VaR violations and thus may leave more capital with banks.","PeriodicalId":43184,"journal":{"name":"Economics and Business Letters","volume":"1 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67430128","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 : 2021-01-01DOI: 10.17811/ebl.10.3.2021.178-190
Mohamed Elheddad, M. Bassim, Rizwan Raheem Ahmed
This paper investigates the impact of sectoral foreign direct investment (FDI) on economic growth by validating the resource curse hypothesis in the Gulf Cooperation Council (GCC) countries. Applying OLS (Fixed and Random effects), Instrumental Variables (IV) and Limited Information Maximum Likelihood (LIML) estimations, empirical results indicate that resource-FDI inflows hinder economic growth in the GCC economies, while non-resource FDI has an insignificant effect on growth. Moreover, the total Greenfield FDI inflows deter economic growth in GCC economies. These results give evidence on the crowding-out effect of resource-FDI. This paper opens new insights for policymakers in designing a comprehensive policy on direct FDI inflows (resource and non-resource) for attaining sustainable economic development for the long run.
本文通过验证海湾合作委员会(GCC)国家的资源诅咒假说，研究了部门外国直接投资(FDI)对经济增长的影响。运用OLS (Fixed and Random effects)、工具变量(IV)和有限信息最大似然(LIML)估计，实证结果表明，资源型FDI流入阻碍了GCC经济体的经济增长，而非资源型FDI对增长的影响不显著。此外，绿地外国直接投资流入总额阻碍了海湾合作委员会经济体的经济增长。这些结果为资源型fdi的挤出效应提供了证据。本文为政策制定者设计直接外国直接投资(资源和非资源)综合政策以实现长期可持续经济发展提供了新的见解。
{"title":"FDI and economic growth in the GCC: does the oil sector matter?","authors":"Mohamed Elheddad, M. Bassim, Rizwan Raheem Ahmed","doi":"10.17811/ebl.10.3.2021.178-190","DOIUrl":"https://doi.org/10.17811/ebl.10.3.2021.178-190","url":null,"abstract":"This paper investigates the impact of sectoral foreign direct investment (FDI) on economic growth by validating the resource curse hypothesis in the Gulf Cooperation Council (GCC) countries. Applying OLS (Fixed and Random effects), Instrumental Variables (IV) and Limited Information Maximum Likelihood (LIML) estimations, empirical results indicate that resource-FDI inflows hinder economic growth in the GCC economies, while non-resource FDI has an insignificant effect on growth. Moreover, the total Greenfield FDI inflows deter economic growth in GCC economies. These results give evidence on the crowding-out effect of resource-FDI. This paper opens new insights for policymakers in designing a comprehensive policy on direct FDI inflows (resource and non-resource) for attaining sustainable economic development for the long run.","PeriodicalId":43184,"journal":{"name":"Economics and Business Letters","volume":"1 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67430021","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 : 2021-01-01DOI: 10.17811/ebl.10.3.2021.274-283
Thong Trung Nguyen, X. Vo
This study explores the economic factors of foreign direct investment (FDI) from China to Europe. By drawing data over 8 years and dataset from the International Monetary Fund (IMF) and World Bank (WB), we found that Chinese FDI outflows to Europe are driven by the recipient country's fundamentals (trade openness, resource, institutional quality, and economic growth). These findings confirm the current literature while asserting counterintuitive facts. One of many points is that China is less likely to seek out the investment channel in the large economic status. More importantly, this study differs from extant literature by using the disaggregated panel data of bilateral FDI and trade openness. Therefore, our results would draw policy implications in terms of international finance.
{"title":"Why do the Chinese make direct investment in the Europe? Insights from disaggregated bilateral data","authors":"Thong Trung Nguyen, X. Vo","doi":"10.17811/ebl.10.3.2021.274-283","DOIUrl":"https://doi.org/10.17811/ebl.10.3.2021.274-283","url":null,"abstract":"This study explores the economic factors of foreign direct investment (FDI) from China to Europe. By drawing data over 8 years and dataset from the International Monetary Fund (IMF) and World Bank (WB), we found that Chinese FDI outflows to Europe are driven by the recipient country's fundamentals (trade openness, resource, institutional quality, and economic growth). These findings confirm the current literature while asserting counterintuitive facts. One of many points is that China is less likely to seek out the investment channel in the large economic status. More importantly, this study differs from extant literature by using the disaggregated panel data of bilateral FDI and trade openness. Therefore, our results would draw policy implications in terms of international finance.","PeriodicalId":43184,"journal":{"name":"Economics and Business Letters","volume":"1 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67430223","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 : 2021-01-01DOI: 10.17811/ebl.10.3.2021.299-309
David Boto‐García
Due to the outbreak of the COVID-19 disease, many countries have been forced to impose non-pharmaceutical policy interventions such as lockdowns to stop community transmission. We investigate public support for the lockdown policy in Spain, one of the countries most affected by the pandemic and with the strictest lockdown in Europe. Based on survey data collected during the first weeks of March and April 2020, we investigate how public support for the lockdown relates to the number of confirmed cases in the province of residence, personal institutional trust and concern about the severity of coronavirus. We find that public approval of the lockdown significantly relates to the evolution of COVID cases, institutional trust, political ideology and personal economic situation.
{"title":"Public support for lockdown policies","authors":"David Boto‐García","doi":"10.17811/ebl.10.3.2021.299-309","DOIUrl":"https://doi.org/10.17811/ebl.10.3.2021.299-309","url":null,"abstract":"Due to the outbreak of the COVID-19 disease, many countries have been forced to impose non-pharmaceutical policy interventions such as lockdowns to stop community transmission. We investigate public support for the lockdown policy in Spain, one of the countries most affected by the pandemic and with the strictest lockdown in Europe. Based on survey data collected during the first weeks of March and April 2020, we investigate how public support for the lockdown relates to the number of confirmed cases in the province of residence, personal institutional trust and concern about the severity of coronavirus. We find that public approval of the lockdown significantly relates to the evolution of COVID cases, institutional trust, political ideology and personal economic situation.","PeriodicalId":43184,"journal":{"name":"Economics and Business Letters","volume":"1 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67430331","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 : 2021-01-01DOI: 10.17811/ebl.10.3.2021.191-199
N. Hung
This study uses a novel perspective to examine the causal connectedness between green bonds and other conventional assets, including clean energy, price of CO2 emission allowances, Bitcoin, and the S&P 500 stock market covering from January 2013 to March 2019. We apply the Multilayer Perceptron Neural Network Non-linear Granger causality and Transfer Entropy to detect possible changes in the causal direction between green bonds and other considered variables. We find a bidirectional relationship between green bonds, S&P 500, and Bitcoin markets, while green bonds have a unidirectional connection with the price of CO2 emission allowances.
{"title":"Nexus between green bonds, financial and environmental indicators","authors":"N. Hung","doi":"10.17811/ebl.10.3.2021.191-199","DOIUrl":"https://doi.org/10.17811/ebl.10.3.2021.191-199","url":null,"abstract":"This study uses a novel perspective to examine the causal connectedness between green bonds and other conventional assets, including clean energy, price of CO2 emission allowances, Bitcoin, and the S&P 500 stock market covering from January 2013 to March 2019. We apply the Multilayer Perceptron Neural Network Non-linear Granger causality and Transfer Entropy to detect possible changes in the causal direction between green bonds and other considered variables. We find a bidirectional relationship between green bonds, S&P 500, and Bitcoin markets, while green bonds have a unidirectional connection with the price of CO2 emission allowances.","PeriodicalId":43184,"journal":{"name":"Economics and Business Letters","volume":"1 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67430034","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 : 2021-01-01DOI: 10.17811/ebl.10.3.2021.200-207
Huong Trang Kim
An under-researched question in the current literature is to what extent managers’ emotional intelligence (EQ) play a role in driving business practices. To explore this question, we carried out a survey with 320 textile and garment SMEs in Vietnam. We find that one standard deviation increase in EQ of managers is related to 3.87% increase in business practices adoption. Notably, EQ levels of managers have different impact on adoption of each business practices. These effects on marketing practices are strongest, while EQ level of managers has modest effect on financial planning practices.
{"title":"Do managers’ emotional intelligence matter for SMEs’ business practices?","authors":"Huong Trang Kim","doi":"10.17811/ebl.10.3.2021.200-207","DOIUrl":"https://doi.org/10.17811/ebl.10.3.2021.200-207","url":null,"abstract":"An under-researched question in the current literature is to what extent managers’ emotional intelligence (EQ) play a role in driving business practices. To explore this question, we carried out a survey with 320 textile and garment SMEs in Vietnam. We find that one standard deviation increase in EQ of managers is related to 3.87% increase in business practices adoption. Notably, EQ levels of managers have different impact on adoption of each business practices. These effects on marketing practices are strongest, while EQ level of managers has modest effect on financial planning practices.","PeriodicalId":43184,"journal":{"name":"Economics and Business Letters","volume":"1 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67430074","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 : 2021-01-01DOI: 10.17811/ebl.10.3.2021.229-239
Tung Bui, H. Nguyen, V. Ngo
This study examines the link between capital structure and firm performance (measured by ROA and ROE), focusing on a large sample of SMEs in Vietnam during the postcrisis period (2008-2016). Empirical results from various panel data models confirm the nonlinear relationship between debt financing and firm profitability. This relationship takes the form of an inverted-U shape. Firm profitability only increases to a certain level of leverage. When the debt ratio becomes too high, firm performance starts to decrease. These results highlight the role of financial distress costs in debt financing for SMEs. Furthermore, the paper also confirms the heterogeneity between state-owned firms and private ones. Policy implications are also discussed.
{"title":"Financial leverage and performance of SMEs in Vietnam: Evidence from the post-crisis period","authors":"Tung Bui, H. Nguyen, V. Ngo","doi":"10.17811/ebl.10.3.2021.229-239","DOIUrl":"https://doi.org/10.17811/ebl.10.3.2021.229-239","url":null,"abstract":"This study examines the link between capital structure and firm performance (measured by ROA and ROE), focusing on a large sample of SMEs in Vietnam during the postcrisis period (2008-2016). Empirical results from various panel data models confirm the nonlinear relationship between debt financing and firm profitability. This relationship takes the form of an inverted-U shape. Firm profitability only increases to a certain level of leverage. When the debt ratio becomes too high, firm performance starts to decrease. These results highlight the role of financial distress costs in debt financing for SMEs. Furthermore, the paper also confirms the heterogeneity between state-owned firms and private ones. Policy implications are also discussed.","PeriodicalId":43184,"journal":{"name":"Economics and Business Letters","volume":"1 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67430091","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 : 2021-01-01DOI: 10.17811/ebl.10.3.2021.331-335
C. Baek, Thomas Jackman
The recent stock market downturn is differentiated from the previous ones as it is due to an economic, rather than a financial occurrence (the COVID-19 Pandemic). The purpose of our study is to examine gold, bitcoin, and U.S. Treasury bonds as a safe haven during the COVID-19 bear market. Unlike many studies that support gold as a traditional safe haven for stocks, our study finds that bitcoin and Treasury bonds perform better as a safe haven than gold during the recent COVID-19 bear market.
{"title":"Safe-haven assets for U.S. equities during the 2020 COVID-19 bear market","authors":"C. Baek, Thomas Jackman","doi":"10.17811/ebl.10.3.2021.331-335","DOIUrl":"https://doi.org/10.17811/ebl.10.3.2021.331-335","url":null,"abstract":"The recent stock market downturn is differentiated from the previous ones as it is due to an economic, rather than a financial occurrence (the COVID-19 Pandemic). The purpose of our study is to examine gold, bitcoin, and U.S. Treasury bonds as a safe haven during the COVID-19 bear market. Unlike many studies that support gold as a traditional safe haven for stocks, our study finds that bitcoin and Treasury bonds perform better as a safe haven than gold during the recent COVID-19 bear market.","PeriodicalId":43184,"journal":{"name":"Economics and Business Letters","volume":"1 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67429904","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 : 2021-01-01DOI: 10.17811/ebl.10.3.2021.262-273
H. Hoang, N. Vu, L. Nguyen
A diverse board has been seen as an important factor contributing to the success andsustainability of a company. Therefore, policies to enhance the diversity of the boards havebeen implemented in many countries around the globe. However, previous findings on theimpact of female leaders on firm performance still remain inconclusive. Using a dataset of 20Vietnamese commercial banks over the period from 2013 to 2019, this paper examines whether the gender of the bank leaders such as CEOs or members of Management Team (MT), Board of Directors (BOD) have an impact on bank profitability and bank stability in Vietnam. Our findings suggest that banks with female CEOs tend to be more profitable and more stable than those with male CEOs. However, more women appointed to MT do not necessarily result in more profitable or more stable banks. More interestingly, the presence of women on banks’ board of directors implies lower profitability and more vulnerability for banks. Obtained findings imply important bank governance policies toward better performance and stability for commercial banks in Vietnam. Keywords: gender diversity; bank profitability; bank stability; female leadersJEL Classification Codes: G21, G32, M14, J16, J24
{"title":"Do female leaders influence bank profitability and bank stability? Evidence from Vietnamese banking sector","authors":"H. Hoang, N. Vu, L. Nguyen","doi":"10.17811/ebl.10.3.2021.262-273","DOIUrl":"https://doi.org/10.17811/ebl.10.3.2021.262-273","url":null,"abstract":"A diverse board has been seen as an important factor contributing to the success andsustainability of a company. Therefore, policies to enhance the diversity of the boards havebeen implemented in many countries around the globe. However, previous findings on theimpact of female leaders on firm performance still remain inconclusive. Using a dataset of 20Vietnamese commercial banks over the period from 2013 to 2019, this paper examines whether the gender of the bank leaders such as CEOs or members of Management Team (MT), Board of Directors (BOD) have an impact on bank profitability and bank stability in Vietnam. Our findings suggest that banks with female CEOs tend to be more profitable and more stable than those with male CEOs. However, more women appointed to MT do not necessarily result in more profitable or more stable banks. More interestingly, the presence of women on banks’ board of directors implies lower profitability and more vulnerability for banks. Obtained findings imply important bank governance policies toward better performance and stability for commercial banks in Vietnam. Keywords: gender diversity; bank profitability; bank stability; female leadersJEL Classification Codes: G21, G32, M14, J16, J24","PeriodicalId":43184,"journal":{"name":"Economics and Business Letters","volume":"1 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67430208","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 : 2020-12-23DOI: 10.17811/ebl.9.4.2020.326-333
M. Cantavella
This paper examines the influence of services activity in the environmental Kuznets curve (EKC) model regarding carbon dioxide (CO2) emissions. The analysis is applied for Spain during the period 1940-2014. It compares the standard environmental Kuznets curve model and its modification by isolating the evolution of services effect. The results through the autoregressive distributed-lag (ARDL) estimation strategy confirm that even though all economic activities tend to be more and more sustainable, it is the evolution of services sector that becomes fundamental in the reduction of per capita CO2 emissions.
{"title":"The role of services in the environmental Kuznets curve","authors":"M. Cantavella","doi":"10.17811/ebl.9.4.2020.326-333","DOIUrl":"https://doi.org/10.17811/ebl.9.4.2020.326-333","url":null,"abstract":"This paper examines the influence of services activity in the environmental Kuznets curve (EKC) model regarding carbon dioxide (CO2) emissions. The analysis is applied for Spain during the period 1940-2014. It compares the standard environmental Kuznets curve model and its modification by isolating the evolution of services effect. The results through the autoregressive distributed-lag (ARDL) estimation strategy confirm that even though all economic activities tend to be more and more sustainable, it is the evolution of services sector that becomes fundamental in the reduction of per capita CO2 emissions.","PeriodicalId":43184,"journal":{"name":"Economics and Business Letters","volume":" ","pages":""},"PeriodicalIF":0.9,"publicationDate":"2020-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43410083","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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