Pub Date : 2020-06-11DOI: 10.1080/20954816.2020.1769897
Dong Lu, Erzhuo Liu
Abstract This paper examines the role of financial openness for currency internationalisation. We provide a theoretical synthesis on the economic and financial channels that financial openness might affect currency internationalisation. Historical experiences from the UK, the US, Japan and Germany show the essential role played by financial policies to promote one currency’s international status. We collect recent data of a panel of countries to provide an in-depth empirical analysis on how financial openness would affect a currency’s acceptance in international official reserves. We find strong evidence that portfolio positions generally have a larger impact on the currency’s share in international reserves than FDI. Moreover, portfolio positions in the liability side, especially foreign investments in domestic debt securities, have a statistically significant and economically important effect on currency internationalisation. Our results have implications for China, highlighting the specific effects of financial policies on RMB internationalisation.
{"title":"In search of currency internationalisation: a perspective from financial openness","authors":"Dong Lu, Erzhuo Liu","doi":"10.1080/20954816.2020.1769897","DOIUrl":"https://doi.org/10.1080/20954816.2020.1769897","url":null,"abstract":"Abstract This paper examines the role of financial openness for currency internationalisation. We provide a theoretical synthesis on the economic and financial channels that financial openness might affect currency internationalisation. Historical experiences from the UK, the US, Japan and Germany show the essential role played by financial policies to promote one currency’s international status. We collect recent data of a panel of countries to provide an in-depth empirical analysis on how financial openness would affect a currency’s acceptance in international official reserves. We find strong evidence that portfolio positions generally have a larger impact on the currency’s share in international reserves than FDI. Moreover, portfolio positions in the liability side, especially foreign investments in domestic debt securities, have a statistically significant and economically important effect on currency internationalisation. Our results have implications for China, highlighting the specific effects of financial policies on RMB internationalisation.","PeriodicalId":44280,"journal":{"name":"Economic and Political Studies-EPS","volume":"8 1","pages":"312 - 330"},"PeriodicalIF":2.4,"publicationDate":"2020-06-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/20954816.2020.1769897","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45656734","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-05-19DOI: 10.1080/20954816.2020.1757569
Kerry Liu
Abstract The China–US trade war during 2018–2019 has attracted attentions from academics, policy makers, businesses and investors around the world. Unlike previous researches which are mainly based on hypothetical scenarios, this study looks at the real effects of the China–US trade war on the Chinese economy. Based on either weekly or monthly data during January 2018–December 2019 including creatively using the Google Trends data to measure the severity of the trade war, this study examines the effects of the China–US trade war on Chinese Renminbi, China–US bilateral trade and stock markets.
{"title":"The effects of the China–US trade war during 2018–2019 on the Chinese economy: an initial assessment","authors":"Kerry Liu","doi":"10.1080/20954816.2020.1757569","DOIUrl":"https://doi.org/10.1080/20954816.2020.1757569","url":null,"abstract":"Abstract The China–US trade war during 2018–2019 has attracted attentions from academics, policy makers, businesses and investors around the world. Unlike previous researches which are mainly based on hypothetical scenarios, this study looks at the real effects of the China–US trade war on the Chinese economy. Based on either weekly or monthly data during January 2018–December 2019 including creatively using the Google Trends data to measure the severity of the trade war, this study examines the effects of the China–US trade war on Chinese Renminbi, China–US bilateral trade and stock markets.","PeriodicalId":44280,"journal":{"name":"Economic and Political Studies-EPS","volume":"8 1","pages":"462 - 481"},"PeriodicalIF":2.4,"publicationDate":"2020-05-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/20954816.2020.1757569","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48003260","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-05-15DOI: 10.1080/20954816.2020.1759765
Wuqing Wu, Dongliang Xu, Yue Zhao, Xinhai Liu
Abstract The peer-to-peer lending industry has experienced recent turmoil, posing risks to fintech companies and banks. Based on a random sample of 33,669 borrowers who had downloaded peer-to-peer lending platforms prior to submitting loan applications to a well-known fintech company, Du Xiaoman Financial (formerly Baidu Finance), this article evaluates the predictive power of borrowers’ internet behaviours on credit default risk. After controlling for borrowers’ basic characteristics that are widely used in academic research and enterprise practices, the coefficients of key factors selected from 3,100 variables are economically and statistically significant. The average Kolmogorov-Smirnov value of the prediction model calculated using the hold-out method is approximately 37.09%. The results remain robust in several additional analyses. This study indicates the importance of non-credit information, particularly borrowers’ internet behaviours, in supplementing borrowers’ credit records for both fintech companies and banks.
{"title":"Do consumer internet behaviours provide incremental information to predict credit default risk?","authors":"Wuqing Wu, Dongliang Xu, Yue Zhao, Xinhai Liu","doi":"10.1080/20954816.2020.1759765","DOIUrl":"https://doi.org/10.1080/20954816.2020.1759765","url":null,"abstract":"Abstract The peer-to-peer lending industry has experienced recent turmoil, posing risks to fintech companies and banks. Based on a random sample of 33,669 borrowers who had downloaded peer-to-peer lending platforms prior to submitting loan applications to a well-known fintech company, Du Xiaoman Financial (formerly Baidu Finance), this article evaluates the predictive power of borrowers’ internet behaviours on credit default risk. After controlling for borrowers’ basic characteristics that are widely used in academic research and enterprise practices, the coefficients of key factors selected from 3,100 variables are economically and statistically significant. The average Kolmogorov-Smirnov value of the prediction model calculated using the hold-out method is approximately 37.09%. The results remain robust in several additional analyses. This study indicates the importance of non-credit information, particularly borrowers’ internet behaviours, in supplementing borrowers’ credit records for both fintech companies and banks.","PeriodicalId":44280,"journal":{"name":"Economic and Political Studies-EPS","volume":"8 1","pages":"482 - 499"},"PeriodicalIF":2.4,"publicationDate":"2020-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/20954816.2020.1759765","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45586213","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-05-15DOI: 10.1080/20954816.2020.1760764
Jianbo Song, Haiqing Zhang, Zihao Su
Abstract Environmental subsidies are important means for the government to promote companies to fulfil environmental protection responsibilities. Employing a text analysis method, this study obtains the data on government subsidies for environmental protection of A-share listed companies in China from 2007 to 2016. Empirical estimates show that the subsidies received by companies promote their environmental inputs. Additionally, analyst tracking and internal control enhance the positive effect of subsidies on the companies’ environmental investments. The above results are still valid after testing the Heckman two-stage model and the Propensity-Score-Matching and Difference-in-Difference model. This paper provides evidential support for the effectiveness of government subsidies and explores feasible ways to improve the efficiency of government subsidies based on the corporate governance channels.
{"title":"Environmental subsidies and companies’ environmental investments","authors":"Jianbo Song, Haiqing Zhang, Zihao Su","doi":"10.1080/20954816.2020.1760764","DOIUrl":"https://doi.org/10.1080/20954816.2020.1760764","url":null,"abstract":"Abstract Environmental subsidies are important means for the government to promote companies to fulfil environmental protection responsibilities. Employing a text analysis method, this study obtains the data on government subsidies for environmental protection of A-share listed companies in China from 2007 to 2016. Empirical estimates show that the subsidies received by companies promote their environmental inputs. Additionally, analyst tracking and internal control enhance the positive effect of subsidies on the companies’ environmental investments. The above results are still valid after testing the Heckman two-stage model and the Propensity-Score-Matching and Difference-in-Difference model. This paper provides evidential support for the effectiveness of government subsidies and explores feasible ways to improve the efficiency of government subsidies based on the corporate governance channels.","PeriodicalId":44280,"journal":{"name":"Economic and Political Studies-EPS","volume":"9 1","pages":"477 - 496"},"PeriodicalIF":2.4,"publicationDate":"2020-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/20954816.2020.1760764","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44825783","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-04-26DOI: 10.1080/20954816.2020.1814548
Kerry Liu
Abstract Coronavirus disease 2019 (COVID-19), the disease caused by the novel coronavirus SARS-CoV-2, has greatly affected financial markets, economies and societies worldwide. This study focusses on the Chinese stock markets. Based on Google Trends data during the period from 1 January 2020 to 12 April 2020, and using the exponential generalised autoregressive conditional heteroskedastic (EGARCH) model, this study finds that the higher uncertainty resulting from the COVID-19 pandemic is significantly associated with the drop in China’s composite index, but this impact varies by sectors. Simultaneously, the higher uncertainty due to COVID-19 is significantly associated with greater volatility in stock returns for both the composite index and sector indices.
{"title":"The effects of COVID-19 on Chinese stock markets: an EGARCH approach","authors":"Kerry Liu","doi":"10.1080/20954816.2020.1814548","DOIUrl":"https://doi.org/10.1080/20954816.2020.1814548","url":null,"abstract":"Abstract Coronavirus disease 2019 (COVID-19), the disease caused by the novel coronavirus SARS-CoV-2, has greatly affected financial markets, economies and societies worldwide. This study focusses on the Chinese stock markets. Based on Google Trends data during the period from 1 January 2020 to 12 April 2020, and using the exponential generalised autoregressive conditional heteroskedastic (EGARCH) model, this study finds that the higher uncertainty resulting from the COVID-19 pandemic is significantly associated with the drop in China’s composite index, but this impact varies by sectors. Simultaneously, the higher uncertainty due to COVID-19 is significantly associated with greater volatility in stock returns for both the composite index and sector indices.","PeriodicalId":44280,"journal":{"name":"Economic and Political Studies-EPS","volume":"9 1","pages":"148 - 165"},"PeriodicalIF":2.4,"publicationDate":"2020-04-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/20954816.2020.1814548","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46123935","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Pillar 1B (individual accounts) of the Chinese basic pension fund (BPF) has suffered from substantial underfunding due to a series of challenges such as rising longevity, conservative investment policies, and the fragmentation of the pension system. Using an asset–liability model (ALM), we investigate the effects of the pre-2015 and post-2015 limits, as well as no limits, on asset allocations. We also investigate the likely effect on investment performance of transferring the pillar 1B funds to the Council of National Social Security Fund (NSSF) and raising the retirement age to 65. We find that an ALM is superior to an assets-only analysis, and removing the limits on investment in domestic assets (but not foreign assets) would be beneficial, as would transferring the assets to the NSSF and raising the retirement age. Finally, the official notional rate on individual accounts should be set at a realistic level.
{"title":"Asset–liability models and the Chinese basic pension fund","authors":"Zucheng Zhao, C. Sutcliffe","doi":"10.2139/ssrn.3548718","DOIUrl":"https://doi.org/10.2139/ssrn.3548718","url":null,"abstract":"Abstract Pillar 1B (individual accounts) of the Chinese basic pension fund (BPF) has suffered from substantial underfunding due to a series of challenges such as rising longevity, conservative investment policies, and the fragmentation of the pension system. Using an asset–liability model (ALM), we investigate the effects of the pre-2015 and post-2015 limits, as well as no limits, on asset allocations. We also investigate the likely effect on investment performance of transferring the pillar 1B funds to the Council of National Social Security Fund (NSSF) and raising the retirement age to 65. We find that an ALM is superior to an assets-only analysis, and removing the limits on investment in domestic assets (but not foreign assets) would be beneficial, as would transferring the assets to the NSSF and raising the retirement age. Finally, the official notional rate on individual accounts should be set at a realistic level.","PeriodicalId":44280,"journal":{"name":"Economic and Political Studies-EPS","volume":"9 1","pages":"186 - 216"},"PeriodicalIF":2.4,"publicationDate":"2020-04-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44808207","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-04-02DOI: 10.1080/20954816.2020.1736373
Yuanyuan Luo, Lianyun Zeng
Abstract This study investigates the impact of digital financial capabilities on household business ownership and business innovation. Utilising the 2015 China Household Finance Survey (CHFS) data, this paper constructs robust capabilities scores and finds positive associations between digital financial capabilities and household entrepreneurship. After specifying instrumental variables, the results still hold. In addition, we compare the driving forces of the impact through componential dimensions, and discuss the different function channels that digital financial capabilities affect business ownership and business innovation. What’s more, we add the interaction term of digital capability and financial capability, illustrate its role in improving the goodness of fit of the models, and further discuss the interaction effect both generally and at each level of the capabilities scores. Finally, we conduct robustness checks across socioeconomic groups and provide policy implications. This study highlights the different function channels of digital financial capabilities concerning different entrepreneurial activities, as well as the importance of interaction effect in understanding how digital financial capabilities affect household entrepreneurship.
{"title":"Digital financial capabilities and household entrepreneurship","authors":"Yuanyuan Luo, Lianyun Zeng","doi":"10.1080/20954816.2020.1736373","DOIUrl":"https://doi.org/10.1080/20954816.2020.1736373","url":null,"abstract":"Abstract This study investigates the impact of digital financial capabilities on household business ownership and business innovation. Utilising the 2015 China Household Finance Survey (CHFS) data, this paper constructs robust capabilities scores and finds positive associations between digital financial capabilities and household entrepreneurship. After specifying instrumental variables, the results still hold. In addition, we compare the driving forces of the impact through componential dimensions, and discuss the different function channels that digital financial capabilities affect business ownership and business innovation. What’s more, we add the interaction term of digital capability and financial capability, illustrate its role in improving the goodness of fit of the models, and further discuss the interaction effect both generally and at each level of the capabilities scores. Finally, we conduct robustness checks across socioeconomic groups and provide policy implications. This study highlights the different function channels of digital financial capabilities concerning different entrepreneurial activities, as well as the importance of interaction effect in understanding how digital financial capabilities affect household entrepreneurship.","PeriodicalId":44280,"journal":{"name":"Economic and Political Studies-EPS","volume":"8 1","pages":"165 - 202"},"PeriodicalIF":2.4,"publicationDate":"2020-04-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/20954816.2020.1736373","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41743724","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-04-02DOI: 10.1080/20954816.2020.1738031
Liang Guo, Erzhuo Liu, Yanjuan Dai
Abstract In this paper, we investigate the reasons for the establishment and operation models of China’s Local Government Financing Vehicles (LGFVs). We also outline the current literature on the structural arrangement and the developments of LGFVs. Moreover, we employ the empirical analysis to examine the driving factors of the financial performance of LGFVs. Using 1,042 LGFVs that issued debt securities during the period 2011–2016, we find that the financial performance of LGFVs is positively associated with local tax revenues, local education levels, local saving deposits, and firm size but negatively associated with local government spending and firm leverage ratios. Based on our empirical findings, we finally propose policy recommendations for the establishment of relevant investment and financing platforms.
{"title":"Structural design and performance analysis of China’s Local Government Financing Vehicles","authors":"Liang Guo, Erzhuo Liu, Yanjuan Dai","doi":"10.1080/20954816.2020.1738031","DOIUrl":"https://doi.org/10.1080/20954816.2020.1738031","url":null,"abstract":"Abstract In this paper, we investigate the reasons for the establishment and operation models of China’s Local Government Financing Vehicles (LGFVs). We also outline the current literature on the structural arrangement and the developments of LGFVs. Moreover, we employ the empirical analysis to examine the driving factors of the financial performance of LGFVs. Using 1,042 LGFVs that issued debt securities during the period 2011–2016, we find that the financial performance of LGFVs is positively associated with local tax revenues, local education levels, local saving deposits, and firm size but negatively associated with local government spending and firm leverage ratios. Based on our empirical findings, we finally propose policy recommendations for the establishment of relevant investment and financing platforms.","PeriodicalId":44280,"journal":{"name":"Economic and Political Studies-EPS","volume":"8 1","pages":"203 - 223"},"PeriodicalIF":2.4,"publicationDate":"2020-04-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/20954816.2020.1738031","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48227107","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This paper attempts to explore the direct effects and spill-overs of COVID-19 on stock markets. Using conventional -tests and non-parametric Mann–Whitney tests, we empirically analyse daily return data from stock markets in the People’s Republic of China, Italy, South Korea, France, Spain, Germany, Japan and the United States of America. Our empirical results show that (i) COVID-19 has a negative but short-term impact on stock markets of affected countries and that (ii) the impact of COVID-19 on stock markets has bidirectional spill-over effects between Asian countries and European and American countries. However, there is no evidence that COVID-19 negatively affects these countries’ stock markets more than it does the global average. The findings contribute to the research on economic impact of the pandemic by providing empirical evidence that COVID-19 has spill-over effects on stock markets of other countries. The results also provide a basis for assessing trends in international stock markets when the situation is alleviated worldwide.
{"title":"The impact of COVID-19 on stock markets","authors":"Qing He, Junyi Liu, Sizhu Wang, Jishuang Yu","doi":"10.2139/ssrn.3676045","DOIUrl":"https://doi.org/10.2139/ssrn.3676045","url":null,"abstract":"Abstract This paper attempts to explore the direct effects and spill-overs of COVID-19 on stock markets. Using conventional -tests and non-parametric Mann–Whitney tests, we empirically analyse daily return data from stock markets in the People’s Republic of China, Italy, South Korea, France, Spain, Germany, Japan and the United States of America. Our empirical results show that (i) COVID-19 has a negative but short-term impact on stock markets of affected countries and that (ii) the impact of COVID-19 on stock markets has bidirectional spill-over effects between Asian countries and European and American countries. However, there is no evidence that COVID-19 negatively affects these countries’ stock markets more than it does the global average. The findings contribute to the research on economic impact of the pandemic by providing empirical evidence that COVID-19 has spill-over effects on stock markets of other countries. The results also provide a basis for assessing trends in international stock markets when the situation is alleviated worldwide.","PeriodicalId":44280,"journal":{"name":"Economic and Political Studies-EPS","volume":"8 1","pages":"275 - 288"},"PeriodicalIF":2.4,"publicationDate":"2020-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48060716","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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