International Finance最新文献

This paper examines the influence of cross-border capital flows on income inequality in both origin and recipient countries. Using bilateral flow data and a panel dataset spanning 63 countries from 2005 to 2018, we employ panel regression analysis to investigate the effects of different types of capital. Our findings indicate that FDI inflows reduce income inequality in advanced countries by creating jobs and raising wages in sectors that employ lower-income individuals. Conversely, in developing countries, FDI often targets capital-intensive and high-skilled industries, increasing inequality. Portfolio investments generally increase inequality by driving up asset prices and creating instability, but can decrease inequality in emerging markets by supporting financial inclusion and reducing government financing costs. Specific scenarios, such as investments in tax havens or differences in human capital, show distinct results. Policymakers should regulate international capital flows through financial regulations, progressive taxation and international cooperation to mitigate their impact on income inequality.

We analyse the effects of the trade war between China and the United States in 2018–2019 using a Trade Sentiment Index (TSI) based on artificial intelligence–powered big data textual analysis that assesses the positive or negative tone of the Chinese media. Our results show that in this trade war, no equity market has gained. We find the TSI improves upon traditional keyword-counting methods both methodologically and in explanatory power. The TSI contributes around 10% of model capacity to explain the stock price variability of 60 equity markets in countries that are more exposed to the China–US value chain. Most of the contribution is given by the tone extracted from social media (9%), while that obtained from traditional media explains only a modest part of stock price variability (1%).

In this study, the effects of supply chain digitization (SCD) on corporate carbon disclosure within the framework of transaction cost and institutional isomorphism theory are examined. We show that SCD improves corporate carbon disclosure level (i.e., width, depth and breadth). The pivotal mechanism is reduced transaction costs, which are achieved through reducing information asymmetry, increasing risk-taking capacity and facilitating upstream and downstream collaboration. The effect is pronounced for non-SOEs, firms with stronger levels of supplier competition, and firms with higher levels of customer dependence. Our study innovatively incorporates breadth, depth and width into the carbon disclosure level and highlights the role of SCD in facilitating carbon management along the supply chain.

We propose to read wars in history as investment decisions, and develop two distinct forms of real option models in this context, one for preemption and one for reserve accumulation. We then apply these models to analyse the outbreak of wars empirically. Combining two historical data sets on wars and energy prices from 1925, we show that the inclusion of energy prices improves war forecasting. Further, considering real options on commodities helps explain both resource wars and the singularity of the petroleum order.

We bring together the largest meta-analysis ever conducted in the macroeconomic literature to investigate the effects of central bank credibility on monetary policy. With nearly 1200 surveyed effects, we first confirm that (i) conventional policy significantly affects inflation and output, and (ii) unconventional policy significantly affects capital flows and the exchange rate. We next evaluate whether different measures of credibility amplify these effects. Our findings indicate that central bank transparency has the largest payoff, as it increases policy effectiveness by 69% when dealing with foreign exchange intervention, by 59% when dealing with capital inflows, and by 14% when dealing with conventional policy. An alternative credibility measure, medium and long-term anchoring in inflation expectations, is the runner-up, increasing effectiveness by 31%, 9% and 10%, respectively. Other measures, such as central bank independence and short-term anchoring in inflation expectations, have lower and in some cases null incremental effects.

In this study, we investigate the role of ‘abnormal FDI’ as a potential driver of sudden stops during the period 2009–2019. The unexplained part of country fixed effects in a bilateral gravity regression is used to calculate the abnormal FDI. We then construct two measures of ‘FDI abnormalcy’ that assess the possible role of an economy as a financial centre or tax haven, and the contribution of ‘FDI abnormalcy’ to total FDI position. The determinants of sudden stops are analyzed using the panel probit model. We find that economies labelled as tax havens or financial centres and economies with comparatively higher shares of inward ‘abnormal FDI’ are associated with a lower incidence of sudden stops.