Eurasian Economic Review最新文献

This article raises the question of whether the European Insider Trading and Market Manipulation Regulation (Market Abuse Regulation—MAR) affected the behaviour of investors around the date of the final financial report announcement. The MAR is a relatively recent regulation in the European Union and provides stricter rules for information disclosure than the previous Market Abuse Directive. One can expect that this regulation should improve the information flow from companies to investors, lowering the volatility of stock returns and abnormal rate of return around the date of the final report. To verify this hypothesis, the panel regressions and ANOVA analysis were applied to the stock prices of 60 medium and large-size companies listed on the Warsaw Stock Exchange in the years 2013–2018. The analysis demonstrates that implementing the regulation has increased the average volatility of stock prices, whereas prices in the period before and after the publication period of annual financial reports remained unaffected. It indicates that the information provided was of lower quality, despite the increase in the information available to the public. Therefore, the anti-abusive regulation requires a modification of rules applied to small stock markets as they do not meet their objectives.

This paper contributes to the understanding of sovereign credit default swap (CDS) markets by examining the response of CDS spreads to macroeconomic factors and exploring extreme value dependence and its relation to economic cycles. The study focuses on four emerging countries in the Asia–Pacific sovereign CDS markets from 2009 to 2023 and utilises a dynamic quantile autoregressive distributed lag (QARDL) approach to account for statistical stylized facts. The findings reveal significant relationships between economic growth, inflation, volatility index (VIX), interest rates and real effective exchange rate on CDS spreads, with varying effects across quantiles and countries. Additionally, the study explores the impact of economic expansion and contraction on CDS spreads, highlighting the significant negative effects of the expansion in certain countries and the positive impacts of contraction phases. These findings provide valuable insights for policymakers in risk management and policy decision-making, emphasizing the need for policies that promote sustainable growth; manage market risks during volatile periods and consider the implications of interest rates, exchange rates and economic phases on financial stability. The empirical model used is evaluated for dynamic stability, and policy implications are discussed in light of the research outcomes.

This paper estimates macroeconomic connectedness in the CIS (the Commonwealth of Independent States) through risk spillovers via the exchange rates. We collect high frequency daily data on exchange rates from January 2006 to July 2020 and use the Diebold-Yilmaz method of variance decomposition, as well as the Barunik-Krehlik method of frequency variance decomposition, for the analysis. We find that macroeconomic risk in the region increases significantly during macroeconomic shocks and that it has maintained a higher average level since 2015, a difficult year full of regional and global challenges. Our findings also show that currencies managed by more flexible exchange rate regimes on average transmit macroeconomic risk in the region. Frequency variance decomposition demonstrates that while the majority of risk transmission is smaller-scale and short-lived, spillovers from main regional and global crises are bigger and more persistent. Although short-term connectedness dominates the overall variance of the system, more severe macroeconomic shocks resonate greatly on all time horizons, i.e. they impact the system for a longer period of time and more deeply.

The current analysis explores the effect of external debt on economic growth and how better governance interacts with this relationship. For empirical assessment, we sample 20 years of data (2000–2019) of South Asian economies and consider the FMOLS and DOLS models to model the regression among the variables. The statistical analysis reveals a significant negative effect of both long- and short-term external debts, while governance has a significant positive effect on economic growth. In addition, the positive moderating role of governance was also observed in the nexus of external debt and economic growth. Enhancing governance can make external borrowing beneficial for economic progress. The empirical analysis posits multiple policies regarding the reduction of external borrowings, enhancement of the quality of governance, and effective utilization of external debt for development projects through better governance systems. By exploring the empirical relationship between external debt, governance, and economic growth, this study provides original evidence on how to enhance the utilization of external debt to ensure economic growth.

Asia has constantly been in the spotlight regarding economic development as it has been the fastest-growing global region over recent decades. This study investigated the effect of financial development on economic growth in selected Asian countries at various stages of economic development. A recently introduced approach, the Dynamic Common Correlated Effects (DCCE) method, was applied to 12 Asian countries/areas covering 26 years (1995–2020). The 12 countries/areas were divided into three groups based on their current economic development status: underdeveloped, moderately, and highly developed. The study results indicated that the effect of financial development on economic growth varied for countries at different economic levels. The association between financial development and economic growth was strongly negative for underdeveloped countries. However, a positive relationship existed between the sampled moderately and highly developed countries/areas. This situation implied that financial development should not be considered a viable way to boost economic growth for countries with underdeveloped economies. Instead, countries with a higher economic status should priorities financial development to promote economic prosperity effectively.

This special issue of the Eurasian Economic Review delves into the critical relationships between macro-financial policy frameworks and environmental sustainability, emphasizing the urgent challenges posed by climate change, biodiversity loss, and environmental degradation. These environmental crises pose significant threats to global economic and financial stability, underscoring the necessity of integrating environmental considerations into macro-financial policies to foster sustainability and resilience in economic policymaking. Through a collection of research papers, this issue explores innovative strategies for developing comprehensive policy frameworks that harmonize monetary, financial, and fiscal policies with environmental objectives. It emphasizes the need for advanced methods to assess and manage the financial risks of climate change and environmental degradation. Underscoring the need for a multidisciplinary approach, the research advocates for the collaboration of economists, environmental scientists, policymakers, and stakeholders to develop effective macro-financial policies. These policies aim to mitigate environmental risks, enhance environmental sustainability, and preserve biodiversity. The issue calls for further research to refine models that accurately predict the macro-financial impacts of environmental risks and assess the effectiveness of policy measures, paving the way for a sustainable future in the face of escalating environmental challenges.

In recent years central bankers have devoted increased attention to the question of whether and how to intervene to address the growing environmental and climate crisis. The climate intervention debate gained momentum during a period of low inflation and loose monetary policy in core economies – a time characterised by near zero interest rates and large asset purchase programmes. Since 2021, however, the macroeconomic context has changed. Against this background, the paper analyses the contradictory and problematic nature of the direction monetary policy has taken in reaction to higher inflation. It argues that higher interest rates delay the green transformation by raising the cost of sustainable investments, and that the resulting delay also hampers prospects for achieving price stability. The paper concludes that the present macroeconomic environment demands a ‘greener and cheaper’ monetary policy approach designed to address the environmental and climate crisis and also to simultaneously fight inflation.

The application of environmental, social and governance (ESG) criteria has now become a more than essential requirement in the financial world. Therefore, it is necessary to understand, select and assess the risks of these ESG criteria and evaluate how they can impact a product or investment decision. Thus, the main objective of this article is to analyze ESG (Environmental, Social and Governance) indicators and their potential impacts in the framework of non-financial information. Current regulatory developments, such as the European Corporate Sustainability Reporting Directive (CSRD), are pushing to make ESG indicators (within this triple perspective: social, environmental and governance risks) a key set of information to be used for reporters and users of information. This article will study in further detail the main implications these regulations will have in how corporations will reflect social and ecological footprint information in their external reporting. Since these ESG indicators could have relevant financial impacts on the financial drivers of a corporation, stakeholders will be concerned on how enterprises are dealing with these ESG risks. Therefore, this ESG data will increase transparency and would mean a better understanding on how companies and investors have a sustainability compromise to evolve to a neutral carbon economy. In order to understand a company’s commitment with these ESG criteria, stakeholders would have to assess different aspects of the information reported. In this sense, this article will focus on how credit rating agencies incorporate these risks in their assessments. Credit rating agencies are becoming important actors in the sustainability criteria, as they incorporate ESG risks in their assessments, transmitting the importance of these indicators to investors and to markets. This study will look into the different time horizons between financial profitability and sustainability indicators. Current tendency and huge demand of non-financial indicators do not have the same profoundness, framework and tradition as financial indicators. This could lead to a situation in which it would be necessary a period to adapt both worlds and make them join and connect together in a sense in which one need the other one.

Abstract

This study presents an in-depth exploration of the intricate relationship between wealth distribution patterns and a nation's economic development trajectory. Leveraging the characteristics of the Burr distribution, we meticulously analyzed the wealth per adult across a broad spectrum of countries. Our findings unequivocally establish that the geometric patterns of wealth distribution are inextricably linked to a country’s development status. In higher-development contexts, a sharper L-shaped wealth distribution emerges. Conversely, in less developed environments, wealth distribution gravitates towards a unimodal pattern. Notably, the research demonstrates that all highly developed and the majority of developed economies predominantly exhibit an L-shaped wealth distribution. The implications of these findings are profound, offering insights into how wealth disparities influence a myriad of economic, social, and political factors. By understanding these nuances, policymakers and stakeholders can better navigate the complex interplay between wealth distribution and broader economic strategies, ultimately steering nations toward sustainable and inclusive growth.

After the corona crisis, and even more so when the war in Ukraine struck, the price levels of all goods in the US and Europe rose surprisingly quickly and persistently. The FED began in March 2022 and the ECB in July 2022 with historically unique interest rate increases to combat the wage-price spiral that had not yet begun. In this article we show that energy, commodities and food were the main drivers of inflation. For this reason, central banks' goal of weakening demand for labor through historically large interest rate hikes seems unwise. We argue that the current measures cannot achieve all of their objectives: slowing inflation, stabilizing financial markets and sustaining growth. If interest rates remain high, but external forces emerge with a lasting effect and keep inflation rates high, especially in smaller emerging countries, it will be difficult to counteract this on a country or regional basis through high interest rate policy and national control of the price- and wage-Phillips curve. Significant negative side effects of interest rate hikes increase the risk of not making the necessary investments and, in particular, weaken the bargaining power of particularly vulnerable employment groups. Other tools are needed to curb inflation and keep it under control, for example more investment in sectors with supply disruptions and a massive expansion of investment in renewable energy.