Financial capability is an important factor that contributes to consumer financial wellbeing. In the research literature, financial capability has multiple meanings that could refer to financial literacy, financial behavior, financial access, and/or financial outcome, depending on different research purposes and conceptualizations. The purpose of this review is to examine the literature on consumer financial capability with a focus on conceptual definitions. After reviewing 250 research papers on financial capability published in 2007-June 2021 and retrieved from Scopus, five conceptual definitions of financial capability are identified and discussed. Based on the discussion, in this review, financial capability is defined as an individual ability to apply appropriate financial knowledge, perform desirable financial behaviors, and take available financial opportunities for achieving financial wellbeing. A conceptual framework on the antecedents, construct, and outcomes of financial capability is then presented and propositions based on this framework and relevant literatures are proposed. Finally, implications for future research are discussed.
{"title":"Financial Capability: A Conceptual Review, Extension, and Synthesis","authors":"J. Xiao, Jin Huang","doi":"10.2139/ssrn.3943629","DOIUrl":"https://doi.org/10.2139/ssrn.3943629","url":null,"abstract":"Financial capability is an important factor that contributes to consumer financial wellbeing. In the research literature, financial capability has multiple meanings that could refer to financial literacy, financial behavior, financial access, and/or financial outcome, depending on different research purposes and conceptualizations. The purpose of this review is to examine the literature on consumer financial capability with a focus on conceptual definitions. After reviewing 250 research papers on financial capability published in 2007-June 2021 and retrieved from Scopus, five conceptual definitions of financial capability are identified and discussed. Based on the discussion, in this review, financial capability is defined as an individual ability to apply appropriate financial knowledge, perform desirable financial behaviors, and take available financial opportunities for achieving financial wellbeing. A conceptual framework on the antecedents, construct, and outcomes of financial capability is then presented and propositions based on this framework and relevant literatures are proposed. Finally, implications for future research are discussed.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"225 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-07-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124475065","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}
I study how banks and other financial intermediaries can use information disclosure to prevent self-fulfilling bank runs. I begin with a finite-agent version of Diamond and Dybvig (1983) with correlated liquidity shocks and sequential service. I allow the intermediary to inform each investor about the withdrawal decisions of previous investors. Adding information disclosure creates a withdrawal game with sequential signaling, and I argue using examples that it is natural to introduce an equilibrium concept placing restrictions on agents’ off equilibrium beliefs. I use the concept of forward induction equilibrium (Cho, 1987) that generalizes the “intuitive” criterion. I provide conditions under which the induced withdrawal game has a unique forward induction equilibrium and no bank run occurs. In other words, disclosing withdrawal information can promote financial stability.
{"title":"Information Disclosure and Financial Fragility","authors":"Xuesong Huang","doi":"10.2139/ssrn.3884384","DOIUrl":"https://doi.org/10.2139/ssrn.3884384","url":null,"abstract":"I study how banks and other financial intermediaries can use information disclosure to prevent self-fulfilling bank runs. I begin with a finite-agent version of Diamond and Dybvig (1983) with correlated liquidity shocks and sequential service. I allow the intermediary to inform each investor about the withdrawal decisions of previous investors. Adding information disclosure creates a withdrawal game with sequential signaling, and I argue using examples that it is natural to introduce an equilibrium concept placing restrictions on agents’ off equilibrium beliefs. I use the concept of forward induction equilibrium (Cho, 1987) that generalizes the “intuitive” criterion. I provide conditions under which the induced withdrawal game has a unique forward induction equilibrium and no bank run occurs. In other words, disclosing withdrawal information can promote financial stability.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"92 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-07-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128365791","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}
After the removal of geographic restrictions on branching in 2006, China’s city commercial banks (CCBs) can apply for permission to branch outside their province. This paper shows that CCBs report higher loan loss provisions before filing an application, thereby increasing the provision coverage ratio of nonperforming loans and making the bank look safer to regulators.Our finding is robust to controlling for possible endogeneity of the branching application decision by employing propensity score matching estimators, and it is confirmed when we consider a quasi-natural experiment of deregulation reversal.
{"title":"Bank Branching Applications and Window Dressing: Evidence on Banks’ Strategic Use of Loan Loss Provisions","authors":"Di Gong, H. Huizinga, Tianshi Li, Jigao Zhu","doi":"10.2139/ssrn.3882259","DOIUrl":"https://doi.org/10.2139/ssrn.3882259","url":null,"abstract":"After the removal of geographic restrictions on branching in 2006, China’s city commercial banks (CCBs) can apply for permission to branch outside their province. This paper shows that CCBs report higher loan loss provisions before filing an application, thereby increasing the provision coverage ratio of nonperforming loans and making the bank look safer to regulators.Our finding is robust to controlling for possible endogeneity of the branching application decision by employing propensity score matching estimators, and it is confirmed when we consider a quasi-natural experiment of deregulation reversal.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121042637","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}
In this paper we use non-parametric envelopment methods to determine whether the demographic composition of the board of directors effects the efficiency in which credit unions offer loans and savings products to their members. We find strong evidence credit unions with boards where the majority of directors are either women or racial and ethnic minorities improves the provision of financial services among the largest and most complex credit unions. We also observe strong evidence that credit unions with minority governed boards operate more efficiently than their counterparts in communities that are more racially diverse, while female governed boards are more efficient in communities where there is greater parity of economic opportunity across genders. These findings suggest greater inclusion of minorities and women on boards of credit unions is not only of importance to these firms’ survival, but is also important to the efficient provision of financial services to their members.
{"title":"Demographic Composition of the Board and the Managerial Efficiency of Credit Unions","authors":"C. Goenner","doi":"10.2139/ssrn.3874079","DOIUrl":"https://doi.org/10.2139/ssrn.3874079","url":null,"abstract":"In this paper we use non-parametric envelopment methods to determine whether the demographic composition of the board of directors effects the efficiency in which credit unions offer loans and savings products to their members. We find strong evidence credit unions with boards where the majority of directors are either women or racial and ethnic minorities improves the provision of financial services among the largest and most complex credit unions. We also observe strong evidence that credit unions with minority governed boards operate more efficiently than their counterparts in communities that are more racially diverse, while female governed boards are more efficient in communities where there is greater parity of economic opportunity across genders. These findings suggest greater inclusion of minorities and women on boards of credit unions is not only of importance to these firms’ survival, but is also important to the efficient provision of financial services to their members.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"11 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-06-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128637708","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}
English Abstract: Until now, the banking sector has been one of the strong points of Poland’s economy. In contrast to banks in the U.S. and leading Western European economies, lenders in Poland came through the 2008 global financial crisis without a scratch, without needing state financial support. But in recent years the industry’s problems have been growing, creating a threat to economic growth and gains in living standards.
For an economy’s productivity to increase, funds can’t go to all companies evenly, and definitely shouldn’t go to those that are most lacking in funds, but to those that will use them most efficiently. This is true of total external financing, and thus funding both from the banking sector and from parabanks, the capital market and funds from public institutions. In Poland, in light of the relatively modest scale of the capital market, banks play a clearly dominant role in external financing of companies. This is why the author of this text focuses on the bank credit allocation efficiency.
The author points out that in the very near future, conditions will emerge in Poland which – as the experience of other countries shows – create a risk of reduced efficiency of credit allocation to business. Additionally, in Poland today, bank lending to companies is to a high degree being replaced by funds from state aid, which reduces the efficiency of allocation of external funds to companies (both loans and subsidies), as allocation of government subsidies is not usually based on efficiency. This decline in external financing allocation efficiency may slow, halt or even reverse the process, that has been uninterrupted for 28 years, of Poland’s convergence, i.e. the narrowing of the gap in living standards between Poland and the West.
Polish Abstract: Sektor bankowy był dotychczas silną stroną polskiej gospodarki. W przeciwieństwie do banków w USA i czołowych gospodarkach Europy Zachodniej, banki w Polsce przeszły „suchą nogą” światowy kryzys finansowy po roku 2008 i nie potrzebowały wówczas wsparcia finansowego państwa. Jednakże w ostatnich latach w sektorze bankowym narastają problemy, które stwarzają zagrożenie dla rozwoju gospodarki i wzrostu poziomu życia obywateli.
Po to, by rosła produktywność gospodarki, środki finansowe powinny trafiać nie do wszystkich firm po równo i wcale nie do tych, którym najbardziej ich brakuje, lecz do tych, które wykorzystują je bardziej efektywnie. Dotyczy to łącznego finansowania zewnętrznego firm, a więc zarówno z sektora bankowego i parabankowego, rynku kapitałowego, jak i środków z instytucji publicznych. W Polsce ze względu na relatywnie nieduże rozmiary rynku kapitałowego, zdecydowanie dominującą rolę w zewnętrznym finansowaniu przedsiębiorstw pełnią banki. Dlatego Stefan Kawalec, autor niniejszej publikacji, skupia się na efektywności alokacji kredytu bankowego.
Autor zwraca uwagę, że w najbliższym czasie występować będą w Polsce okoliczności, kt
摘要:到目前为止，银行业一直是波兰经济的强项之一。与美国和西欧主要经济体的银行不同，波兰的银行毫发无损地度过了2008年的全球金融危机，也不需要政府的财政支持。但近年来，该行业的问题日益严重，对经济增长和生活水平的提高构成了威胁。要提高一个经济体的生产率，资金不可能均匀地流向所有的企业，更不应该流向那些最缺乏资金的企业，而应该流向那些最能有效利用资金的企业。外部融资总额是如此，因此来自银行业和准银行、资本市场和公共机构的资金都是如此。在波兰，由于资本市场规模相对较小，银行在企业的外部融资中发挥着明显的主导作用。这就是本文作者关注银行信贷配置效率的原因。作者指出，在不久的将来，波兰将出现一些情况- -正如其他国家的经验所显示的那样- -造成向企业分配信贷效率降低的风险。此外，在今天的波兰，银行对公司的贷款在很大程度上被国家援助资金所取代，这降低了向公司分配外部资金(包括贷款和补贴)的效率，因为政府补贴的分配通常不是基于效率。外部融资分配效率的下降可能会减缓、停止甚至逆转波兰已经持续了28年的趋同进程，即波兰与西方之间生活水平差距的缩小。摘要:sector bankowy byzodotychczas silnostroonopolskiej gospodarki。W przeciwieństwie do banków W USA i czołowych gospodarkach Europy Zachodniej, banki W Polsce przeszły " suchonogje " światowy kryzys finansowy po roku 2008 i nie potrzebowały wówczas wsparcia finansowego państwa。Jednakże w ostatnich latach w sektorze bankowym narastajoproblem, które stwarzajozagrożenie dla rozwoju gospodarki i wzrostu poziomu życia obywateli。Po to, by rosła produktywność gospodarki， środki finansowe powwinny trafinido wszystkich firm Po równo i wcalnido tych, którym najbardziejich brakuje, lecz do tych, które wykorzystujjejebardziejefektywnie。Dotyczy到łącznego finansowania zewnętrznego公司，więc zarówno z sektora bankowego i parabankowego, rynku kapitałowego, jak i środków z instytucji publicznych。W polsze względu na relatitywnie nieduże rozmiary rynku kapitałowego, zdecydowanie dominującą rolze W zewnętrznym finansowaniu przedsiębiorstw pełnią banki。latego Stefan Kawalec，作者niiejszej publikacji, skupia siona efektywności alokacji kredytu bankowego。Autor zwraca uwagoże w najbliższym czasie występować będą w Polsce okoliczności, które według doświadczeń światowych stwarzajoryzyko obniżenia efektywności alokacji kredytu dla przedsiębiorstw。Dodatkowo, kredyt bankowy国防后勤局przedsiębiorstw jest obecnie w Polsce w dużym stopniu zastępowany przezśrodki z pomocy publicznej, co powoduje obniżenie efektywności alokacji wszystkichśrodkow zewnętrznych docierają进入做公司(zarowno w formie kredytow,木菠萝我subwencji rządowych), gdyżalokacja subwencji rządowych zazwyczaj聂jest kierowana efektywnością。Skutkiem trwałego obniżenia efektywności alokacji zewnętrznego finansowania przedsiębiorstw może byki spowolnienie, zatrzymanie lub wręcz odwrócenie trwającego nieprzerwanie od 28后期处理konwergencji, czyli zmnieszania luki w poziomie życia między polskokia Zachodem。
{"title":"Problems at Poland’s Banks are Threatening the Economy (Problemy banków zagrażają rozwojowi polskiej gospodarki)","authors":"Stefan Kawalec","doi":"10.2139/ssrn.3873981","DOIUrl":"https://doi.org/10.2139/ssrn.3873981","url":null,"abstract":"<b>English Abstract:</b> Until now, the banking sector has been one of the strong points of Poland’s economy. In contrast to banks in the U.S. and leading Western European economies, lenders in Poland came through the 2008 global financial crisis without a scratch, without needing state financial support. But in recent years the industry’s problems have been growing, creating a threat to economic growth and gains in living standards.<br><br>For an economy’s productivity to increase, funds can’t go to all companies evenly, and definitely shouldn’t go to those that are most lacking in funds, but to those that will use them most efficiently. This is true of total external financing, and thus funding both from the banking sector and from parabanks, the capital market and funds from public institutions. In Poland, in light of the relatively modest scale of the capital market, banks play a clearly dominant role in external financing of companies. This is why the author of this text focuses on the bank credit allocation efficiency.<br><br>The author points out that in the very near future, conditions will emerge in Poland which – as the experience of other countries shows – create a risk of reduced efficiency of credit allocation to business. Additionally, in Poland today, bank lending to companies is to a high degree being replaced by funds from state aid, which reduces the efficiency of allocation of external funds to companies (both loans and subsidies), as allocation of government subsidies is not usually based on efficiency. This decline in external financing allocation efficiency may slow, halt or even reverse the process, that has been uninterrupted for 28 years, of Poland’s convergence, i.e. the narrowing of the gap in living standards between Poland and the West.<br><br><b>Polish Abstract:</b> Sektor bankowy był dotychczas silną stroną polskiej gospodarki. W przeciwieństwie do banków w USA i czołowych gospodarkach Europy Zachodniej, banki w Polsce przeszły „suchą nogą” światowy kryzys finansowy po roku 2008 i nie potrzebowały wówczas wsparcia finansowego państwa. Jednakże w ostatnich latach w sektorze bankowym narastają problemy, które stwarzają zagrożenie dla rozwoju gospodarki i wzrostu poziomu życia obywateli.<br><br>Po to, by rosła produktywność gospodarki, środki finansowe powinny trafiać nie do wszystkich firm po równo i wcale nie do tych, którym najbardziej ich brakuje, lecz do tych, które wykorzystują je bardziej efektywnie. Dotyczy to łącznego finansowania zewnętrznego firm, a więc zarówno z sektora bankowego i parabankowego, rynku kapitałowego, jak i środków z instytucji publicznych. W Polsce ze względu na relatywnie nieduże rozmiary rynku kapitałowego, zdecydowanie dominującą rolę w zewnętrznym finansowaniu przedsiębiorstw pełnią banki. Dlatego Stefan Kawalec, autor niniejszej publikacji, skupia się na efektywności alokacji kredytu bankowego.<br><br>Autor zwraca uwagę, że w najbliższym czasie występować będą w Polsce okoliczności, kt","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"74 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-06-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134591338","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 status of the City of London as a global financial center has been at the heart of much speculation over the past five years, following the outcome of the Brexit referendum. One of the key questions that has been debated in both media and academic outlets is related to the capacity of the City to attract business, especially once the rights flowing from the EU Passport system cease to be in place (1st January 2021). Effectively, the new regulatory scenario emerging from the post-Brexit world is likely to put the City of London in more direct competition vis-à-vis other European markets.
Questions of competition have come to the fore more recently, in March 2021, with the Review of the UK listing regime, produced by Lord Hill. This deals with aspects of UK financial regulation, and more specifically with the UK listing process and its effectiveness in attracting companies, both domestic and overseas. It is fair to say that, together with investor protection concerns, the Review has a distinctive competitive objective, which transpires from its focus. It is also evident that the implementation of this Review would cause a departure of the UK from a number of EU legal and regulatory standards.
在英国脱欧公投结果公布后的过去五年里，伦敦金融城作为全球金融中心的地位一直是诸多猜测的核心。媒体和学术机构一直在争论的一个关键问题与伦敦金融城吸引企业的能力有关，尤其是在欧盟护照系统(2021年1月1日)不再生效的情况下。实际上，英国脱欧后世界出现的新监管情景，可能会使伦敦金融城与-à-vis其他欧洲市场展开更直接的竞争。最近，在2021年3月，随着希尔勋爵(Lord Hill)撰写的《英国上市制度审查报告》(Review of the UK listing regime)的发布，竞争问题开始浮出水面。本文涉及英国金融监管的各个方面，更具体地说，是英国上市程序及其在吸引国内外公司方面的有效性。公平地说，与投资者保护问题一起，《评估》有一个独特的竞争目标，这体现在其关注的焦点上。同样明显的是，这项审查的实施将导致英国脱离欧盟的一些法律和监管标准。
{"title":"The City of London Post-Brexit: Can Dual-Class Shares Be a Game-Changer?","authors":"Vincenzo Bavoso","doi":"10.2139/ssrn.3850072","DOIUrl":"https://doi.org/10.2139/ssrn.3850072","url":null,"abstract":"The status of the City of London as a global financial center has been at the heart of much speculation over the past five years, following the outcome of the Brexit referendum. One of the key questions that has been debated in both media and academic outlets is related to the capacity of the City to attract business, especially once the rights flowing from the EU Passport system cease to be in place (1st January 2021). Effectively, the new regulatory scenario emerging from the post-Brexit world is likely to put the City of London in more direct competition vis-à-vis other European markets.<br><br>Questions of competition have come to the fore more recently, in March 2021, with the Review of the UK listing regime, produced by Lord Hill. This deals with aspects of UK financial regulation, and more specifically with the UK listing process and its effectiveness in attracting companies, both domestic and overseas. It is fair to say that, together with investor protection concerns, the Review has a distinctive competitive objective, which transpires from its focus. It is also evident that the implementation of this Review would cause a departure of the UK from a number of EU legal and regulatory standards.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126102385","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 discussion paper investigates the differences existing between the Single Point of Entry and the Multiple Point of Entry resolution models and links this question to the issue of support that bank subsidiaries can expect from their parent companies both in resolution and in normal insolvency proceedings. Given that parental support remains imperfect in these two resolution models, the paper concludes that existing safeguards aiming at preserving the corporate interests of subsidiaries remain needed and justified. The paper then identifies potential avenues that could be further explored to reinforce the support model and thereby reduce incentives to adopt ring-fencing measures.
{"title":"When Trust is Not Enough: Bank Resolution, SPE, Ring-fencing and Group Support","authors":"M. Dewatripont, Marie Montigny, G. Nguyen","doi":"10.2139/ssrn.3850103","DOIUrl":"https://doi.org/10.2139/ssrn.3850103","url":null,"abstract":"This discussion paper investigates the differences existing between the Single Point of Entry and the Multiple Point of Entry resolution models and links this question to the issue of support that bank subsidiaries can expect from their parent companies both in resolution and in normal insolvency proceedings. Given that parental support remains imperfect in these two resolution models, the paper concludes that existing safeguards aiming at preserving the corporate interests of subsidiaries remain needed and justified. The paper then identifies potential avenues that could be further explored to reinforce the support model and thereby reduce incentives to adopt ring-fencing measures.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"56 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121674220","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 : 2021-05-11DOI: 10.1108/978-1-80043-968-920211015
A. Syed
Originality/Value: As there are very few studies that provide a detailed viewpoint on NPLs and its determinants in this area, this research will provide a concise and detailed framework for the researchers to analyses the diverse literature on NPLs and its determinates.
{"title":"Determinants of Nonperforming Loans: A Review of Empirical Evidence","authors":"A. Syed","doi":"10.1108/978-1-80043-968-920211015","DOIUrl":"https://doi.org/10.1108/978-1-80043-968-920211015","url":null,"abstract":"Originality/Value: As there are very few studies that provide a detailed viewpoint on NPLs and its determinants in this area, this research will provide a concise and detailed framework for the researchers to analyses the diverse literature on NPLs and its determinates.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117207736","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}
Can we expect shocks in trade openness to affect the quality of the domestic political process, and in what way? Isolating cross-country heterogeneity in the distributional effects of trade shocks for different relative factor endowments as a critical element for theory development, the paper tackles the puzzle by formally developing and solving a new probabilistic model to link the distributional effects of shocks to endogenous institutional change via induced conflict between a capital-intensive and a labour-intensive coalition. The model of distributional conflict combines a political selection stage to select the rate of income redistribution by majority voting and a constitutional conflict stage among factor-intensive coalitions whose steady state outcome determines the level of institutional inequality assigning the “rules“ of political selection. The former is modelled via a canonical weighted median voter setup with the (infinitely many) weights-distributions induced by the value of the steady state outcome of the constitutional conflict stage, while the latter is modelled as a Tullock contest with an endogenous contest success function and the heterogeneous coalition prizes equalling the expected value of the contest to each coalition as a function of the coalitions' efforts. Closed form solutions are derived for (i) the expected outcome of distributional conflict in terms of institutional quality and (ii) the intensity of conflict. Via comparative static analysis based on the Stolper Samuelson theorem in Heckscher-Ohlin trade theory, it is formally shown that positive shocks in trade openness always induce higher institutional inequality irrespective of heterogeneity in the underlying distributional effects, but that the expected mechanisms driving the drop in quality differ across capital-abundant and labour-abundant countries.
{"title":"On Trade, Distributional Conflict, and Endogenous Regime Change","authors":"Biagio Rosso","doi":"10.2139/ssrn.3848964","DOIUrl":"https://doi.org/10.2139/ssrn.3848964","url":null,"abstract":"Can we expect shocks in trade openness to affect the quality of the domestic political process, and in what way? Isolating cross-country heterogeneity in the distributional effects of trade shocks for different relative factor endowments as a critical element for theory development, the paper tackles the puzzle by formally developing and solving a new probabilistic model to link the distributional effects of shocks to endogenous institutional change via induced conflict between a capital-intensive and a labour-intensive coalition. The model of distributional conflict combines a political selection stage to select the rate of income redistribution by majority voting and a constitutional conflict stage among factor-intensive coalitions whose steady state outcome determines the level of institutional inequality assigning the “rules“ of political selection. The former is modelled via a canonical weighted median voter setup with the (infinitely many) weights-distributions induced by the value of the steady state outcome of the constitutional conflict stage, while the latter is modelled as a Tullock contest with an endogenous contest success function and the heterogeneous coalition prizes equalling the expected value of the contest to each coalition as a function of the coalitions' efforts. Closed form solutions are derived for (i) the expected outcome of distributional conflict in terms of institutional quality and (ii) the intensity of conflict. Via comparative static analysis based on the Stolper Samuelson theorem in Heckscher-Ohlin trade theory, it is formally shown that positive shocks in trade openness always induce higher institutional inequality irrespective of heterogeneity in the underlying distributional effects, but that the expected mechanisms driving the drop in quality differ across capital-abundant and labour-abundant countries.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128093702","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}
We examine subjective supervisory assessments of performance in the banking industry. Results of empirical tests show that better assessments are: 1) positively associated with decisions made by supervisors to upgrade objective performance ratings; 2) negatively associated with decisions made by supervisors to downgrade objective performance ratings; and 3) positively associated with decisions made by bank holding company managers to allocate capital among subsidiary banks. These findings are consistent with a production of soft information in the examination process whose usefulness is validated in decisions about banks that are made both internally (by bankers) and externally (by supervisors).
{"title":"Subjective Supervisory Assessment of Management Performance And Decision Making in Banking","authors":"D. Dahl, D. Coster","doi":"10.2139/ssrn.3915796","DOIUrl":"https://doi.org/10.2139/ssrn.3915796","url":null,"abstract":"We examine subjective supervisory assessments of performance in the banking industry. Results of empirical tests show that better assessments are: 1) positively associated with decisions made by supervisors to upgrade objective performance ratings; 2) negatively associated with decisions made by supervisors to downgrade objective performance ratings; and 3) positively associated with decisions made by bank holding company managers to allocate capital among subsidiary banks. These findings are consistent with a production of soft information in the examination process whose usefulness is validated in decisions about banks that are made both internally (by bankers) and externally (by supervisors).","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"70 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132615507","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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