JOURNAL OF ECONOMIC STUDIES最新文献

Purpose

Deposit insurance activities aimed at achieving financial stability and depositor protection often align with financial inclusion programmes of other financial safety-net participants. However, there is limited empirical evidence in the literature on the role of deposit insurance (DIS) in financial inclusion. This study bridges this gap by analysing data from 143 countries to assess the impact of DIS on financial inclusion along the dimensions of access and usage.

Design/methodology/approach

This study uses the random effect and the generalized methods of moments (GMM) regression models to estimate the effects of deposit insurance on financial inclusion.

Findings

Our results show that, in addition to positive impacts from other policy drivers such as income per capita, economic growth and banking and financial sector development, the practice of an explicit deposit insurance system (EDIS) significantly promotes financial inclusion. However, merely having any form of DIS, as proxied by IADI membership, shows limited potential. Based on the data-informed reliability of our findings, we recommend that countries aiming to deepen financial inclusion should consider adopting or intensifying the practice of EDIS alongside existing programmes.

Originality/value

There is limited or scanty empirical evidence in the literature, if there exists any, that indicates that financial inclusion progress actually benefits from deposit insurance. This study therefore contributes to the literature by providing an empircal evidence on the positive impact of deposit insurance on financial inclusion.

Purpose

In the fashion of Martin (2012), we develop an innovative application to a standard, well-grounded methodology to investigate resilience in two critical dimensions: recovery and resistance. Our novel approach allows us to investigate the resilience performance to the 2008 financial crisis within countries of this macro-region according to their shock isolation and absorptive capacities.

Design/methodology/approach

By individually estimating six open economy DSGE models within the Central Europe and Baltic macro-region, we identify the business-cycle-volatility drivers for each country. Then, we use the outcome of our six estimates to conduct a principal component analysis to determine structural common characteristics required to explain economic resilience in the CEB macro-region.

Findings

In terms of resilience, Central European economies exhibit quite similar paths in terms of recovery, meaning they have similar economic structures. By contrast, Baltic countries behave differently, being outliers in opposite extreme positions. The contrary occurs for resistance: Baltic countries share a similar ranking, whereas Central European economies exhibit substantial differences.

Research limitations/implications

It is important to acknowledge that a limitation of the analysis is that we explicitly consider each country as a stand-alone open economy which are subject to stochastic disturbances. Precisely, we do not model trade or other interactions across countries within the CEB region and with the rest of the world. Consequently, spillover effects in the aftermath of the shock are not accounted for.

Originality/value

We estimate the relative vulnerability or sensitivity of economies within the macro-region to disturbances and disruptions (resistance) and the speed and extent of recovery from such a disruption or recession (recovery). First, we built two different kinds of measures of resilience by aggregating the estimated parameters through non-centered and centered principal component analysis. Then, we use our model to investigate the relation between financial shock and the economic resilience across the region. The approach can be applied to several case studies, parsimoniously.

Purpose

The study will add to the current discourse on the Israel-Hamas conflict by examining the impact of the war on the stock markets of trading partners. Stock market returns inevitably rise as globalization keeps integrating financial markets and economies around the world. Thus, the impact of war is assessed across a range of indicators that are similar in some way, such as geographic location, political climate or economic standing. Thus, the goal of this study is to investigate how the Israel-Hamas war affects trading partner countries' stock performance.

Design/methodology/approach

Event study methodology is applied using Morgan Stanley Capital Index (MSCI) as a benchmark index. The influence of the Israel-Hamas war on the world's major stock markets is evaluated using a market model. The study takes into account Israel and its 23 trading partners. To capture the locational asymmetry in the outcome, the countries are further categorized according to their geographic locations. The official declaration of war came on October 7, 2023, a non-trading day. Consequently, October 9, 2023, is designated as the event day in this study. The data was gathered between January 1, 2023, and December 31, 2023, with an estimation period of 140 days taken into account to minimize bias.

Findings

Asymmetric response is shown among the nations due to their economic standing, geographic proximity and trading links with Israel. While Austria, Greece, Egypt, Palestine and Israel had the greatest negative effects, Argentina, Japan and Chile saw significant beneficial effects. The remaining nations had little effect. The market quickly adjusted itself, eliminating anomalous returns.

Research limitations/implications

Taking into account the topic's criticality, the current work has certain limits. The study has used the daily data to limit its reach to the stock market exclusively. In the future, academics can combine high-frequency stock market data with data from other macroeconomic variables, such as currency or different commodities markets, to further their research. Furthermore, a cross-national comparison of the impact in terms of direction and intensity regarding developing global groups such as I2U2, LEVANT, BRICS, MIKTA, SCO, NATO, SAARC and OECD can provide a more comprehensive understanding in this context. To gain insight into the durability and adaptation of financial systems over time, longitudinal studies could be conducted to monitor the long-term effects of geopolitical crises on the stock markets of trading partner countries.

Practical implications

By better managing investment portfolios and evaluating potential risks associated with trading partners involved in such conflicts, investors and businesses can lessen the impact of geopolitical tensions on stock market perfor

Purpose

This study uses the Electronic Data Gathering Analysis and Retrieval (EDGAR) implementation as an information shock to examine its effect on corporate payout policy.

Design/methodology/approach

This study uses a generalized difference-in-differences approach to assess the causal impact of EDGAR implementation on the US publicly traded firms’ payout policy for a period from 1990 to 1999. The approach captures the difference between changes in the dividend policy of firms subjected to EDGAR implementation (treated firms) and those not subjected to the implementation (control firms).

Findings

Firms increase payout ratios and the likelihood of paying dividends after the implementation of EDGAR. Notably, these effects are more pronounced in firms characterized by high agency problems ex-ante.

Practical implications

Policies designed to improve a firm’s information environment may yield divergent effects on corporate payout policy. Consequently, in countries aiming to promote cash dividends, policymakers seeking to enhance the firm information environment should carefully consider initiatives that will improve minority investors’ access to corporate information.

Originality/value

The findings contribute to the real effects of EDGAR implementation on firm policies, addressing the ambiguity surrounding the economic consequences of EDGAR adoption. This paper also contributes to the existing literature on the impact of information shock on corporate payouts. The findings emphasize the multifaceted influence of information shock on corporate payouts.

Purpose

This paper investigates one of the potential costs of rising segregation in American cities by evaluating empirically the extent at which ethnic-based segregation contributes to the onset and the speed of propagation of the COVID-19 pandemic.

Design/methodology/approach

Regression analysis based on matched data on early incidence of COVID-19 cases, segregation and covariates. Identification resorts on variations in segregation across MSAs and heterogeneity in the geography and timing of stay-at-home orders.

Findings

One cross-MSA standard deviation increase in segregation leads to a significant and robust rise of COVID-19 cases of 8.7 per 100,000 residents across urban counties.

Originality/value

Combines spatial data on COVID-19 cases and segregation; use of a new segregation measure; focus on early incidence of the pandemic and its drivers.

Purpose

This study examines the immediate impact of the Israel-Iran conflict on global stock markets and currency pairs, focusing on how these effects vary by market maturity and geographic region.

Design/methodology/approach

This study uses the event study method to examine the immediate effect of the Israel-Iran conflict. It uses the market model across a 252-day estimation window through −257, −6 trading days and an 11-day event window through −5, +5 trading days. The primary sample includes 73 stock market indices, 7 EURO currency pairs, 14 USD currency pairs, 6 GBP currency pairs, and 7 JPY currency pairs.

Findings

The findings suggest that (1) the global stock markets are adversely affected by the Israel-Iran conflict, (2) the JPY, GBP, and EURO currency pairs are least affected, (3) the USD currency pairs exhibit positive abnormal returns suggesting flight to safety, (4) the frontier and standalone markets experience most adverse effects, followed by developed and emerging markets, (5) the pan-American stock markets experience more pronounced effects of the conflict, followed by the Europe, Middle East, and African stock markets and the Asia Pacific stock markets.

Research limitations/implications

The findings advise investors to manage risk during geopolitical uncertainty through diversification and hedging. Policymakers should monitor developments and enact responsive measures. Market participants can capitalize on insights for strategic investment.

Originality/value

The study contributes to the extant war literature by exploring the impact of the Israel-Iran conflict on global stock markets and currency pairs. This study serves as the first to examine the effects of the escalating conflict due to Iran’s attack on Israel.

Purpose

The purposes of the paper are as follows: (1) Analysing the effect of financial inclusion on financial stability. (2) Examining whether financial inclusion non-linearily impacts financial stability. (3) Analysing whether the effect of financial inclusion varies across quantiles of financial stability. (4) Investigating whether dimensions of financial inclusion affect financial stability differently. (5) Examining whether the effect of financial inclusion on financial stability depends on competitiveness of the banking industry.

Design/methodology/approach

Using panel data for 19 African countries for the period 2006–2022, we first developed multidimensional index of financial inclusion using two-stage indexing approach. Then employing panel semiparametric regression, we analyse the non-linear nexus between financial stability and financial inclusion. We further employ panel quantile regression to investigate the differential effect of financial inclusion at different quantiles of financial stability. We also employed two-stage least squires, and alternative measurement of financial stability as robustness checks.

Findings

Employing panel semiparametric regression, we demonstrate that the financial inclusion-stability nexus exhibits non-linearity: below (above) threshold level financial inclusion promotes (reduces) financial stability. Employing panel quantile regression, we find that the effect of financial inclusion increases at higher quantiles of financial stability. We further demonstrate that the effect of financial inclusion on financial stability is pronounced in a more competitive bank industry. The findings are robust to two-stage least squares estimation, and alternative measurement of financial stability. The results suggest that keeping a balance between achieving stable and inclusive financial system, and ensuring a competitive banking industry are essential to achieve bank soundness while promoting financial inclusion.

Originality/value

The study incrementally contributes to the literature related to the financial inclusion – stability nexus in four-fold. First, unlike studies that relied on some indicators of financial inclusion, we employed the effect of multidimensional financial inclusion on financial stability and further examined whether or not the effect varies across financial inclusion dimensions. Second, unlike studies that assumed a linear nexus between financial inclusion and stability, employing panel semiparametric regression, we investigated for non-linear relationship between the two. Employing a novel panel quantile estimation approach, we further scrutinised whether the effect of financial inclusion varies across quantiles of financial stability. Third, to our knowledge, our study is the first to examine the effect of multidimensional financial inclusion on bank soundness in

Purpose

This paper aims to contribute to the current debate between the mainstream and the non-mainstream literature on the effect of the growth of finance on the level of income inequality, for which the empirical evidence has also been providing mixed results.

Design/methodology/approach

We estimate a linear model and a non-linear model by employing a panel autoregressive distributed lag approach and relying on the dynamic fixed-effects estimator because of the existence of variables that are stationary in levels and stationary in the first differences.

Findings

Our findings confirm that finance, economic growth, educational attainment and degree of trade openness have a positive long-term effect on the level of income inequality in the European Union countries, whilst government spending has a negative impact in the short term.

Research limitations/implications

Our findings imply that policy makers should rethink the functioning of the financial system in order to restore a supportive relationship between finance and income inequality and adopt public policies that are more in favour of the poor in order to constrain the growth of income inequality in the European Union countries.

Originality/value

To the best of our knowledge, this is the first paper that, simultaneously, focuses on the European Union countries, assesses the nexus between finance and income inequality, uses three different variables as proxies for the level of income inequality (the Gini coefficient, the top 1% income share and the top 10% income share), measures the variables that are proxies for the level of income inequality in terms of pre-tax and pre-transfer values and as post-tax and post-transfer values, takes into account four different variables as proxies for the role of finance (credit, credit-to-deposit ratio, liquid liabilities and stock market capitalisation) and identifies the long-term and short-term determinants of income inequality.

Purpose

This paper investigates the distinctive role of the US stock exchanges in the process of international consolidation. Besides the USA's leading role in financial markets, the focus on the country is motivated by its uniqueness within the stock exchange consolidation landscape, since, on the one hand, it has been involved in two different stock exchange mergers – with Nasdaq and NYSE – and, on the other hand, it has experienced a “reversal”, having joined and then left the Euronext-NYSE platform.

Design/methodology/approach

To investigate the effect of the NYSE-Euronext split on cross-border holdings and the role of the US as a member of the consolidated platform, we adopt a feasible Generalized Least Squares specification correcting for both heteroskedasticity and general correlation of observations across destination-countries, with standard errors adjusted for two-way clustering at the investing-country and year levels.

Findings

Differently from other mergers, we find a weak sensitivity of US inward and outward cross-border investments to stock exchange consolidation, and, consequently, to its reversal. The data suggest that the larger, the more liquid and the more visible the involved stock exchanges are, the less sensitive cross-border investment is to consolidation. Drawing on the cross-listing and cross-delisting literature, we formulate the conjecture that this evidence can be explained by decreasing returns of foreign investment to consolidation: the extraordinary large size, liquidity and visibility of the US stock exchanges diminishes the value of the role played by stock exchange consolidation in reducing cross-border barriers among member countries, so that it makes also the effects of its retreat non-significant.

Originality/value

This paper is the first, to best of our knowledge, to investigate the mirror phenomenon, that is, the “consolidation reversal” process of the NYSE stock exchange, the purpose being to understand its consequences for cross-border holdings. In the first part of this paper, we document no significant effect of the 2014 reversal on cross-border investments. The apparent absence of this effect could be due either to a level of cross-border investments remaining equally high (denoting persistence in investors' behavior) or to an equally non-significant effect of consolidation and reversal of the US stock exchanges on cross-border equity investments. The evidence supports the latter hypothesis and reveals an overall weak sensitivity of US cross-border investments (inward or outward) to stock exchange consolidation and, consequently, to its reversal. We formulate the conjecture, tested in the second part of the paper, that this evidence is due to the presence of diminishing returns of exchange consolidation's scale for foreign investors: the extraordinary large size, liquidi

Purpose

This paper investigates whether and to what extent operating in inner areas affects the profitability of innovative Italian small and medium-sized enterprises (SMEs) over 2012–2018.

Design/methodology/approach

Guided by the National Strategy for Inner Areas and the “Investment Compact,” this study distinguishes between inner and core innovative SMEs. It employs various econometric models to estimate a regression for the return on assets of SMEs, differentiating between firms operating in inner and non-inner areas of northwest, northeast, centre and south Italy.

Findings

Findings reveal that innovative SMEs in inner areas generally exhibit lower profitability compared to those in non-inner municipalities. However, huge heterogeneity in results is observed across the country. Specifically, innovative SMEs in the inner areas of the south register lower profitability than those operating in non-inner zones. Conversely, innovative SMEs located in the inner municipalities of northwest and northeast Italy show higher profitability than their peers in non-inner areas. The results imply that targeted policies for inner areas are crucial. However, due to the diversity of local impacts, a differentiated approach, depending on the geographic context, is necessary.

Originality/value

The study aims to explore the relationship between inner areas and the performance of innovative SMEs in Italy. More precisely, it examines the effect of operating in a municipality located within an inner area on the profitability of innovative SMEs. This issue has been overlooked in existing literature. Importantly, we aim to determine whether there is a heterogeneous impact based on geographical localisation, specifically in the Northwest, the Northeast, the Centre and the South of the country. Therefore, this paper contributes to the literature by investigating the factors influencing the performance of innovative SMEs and suggesting new policy recommendations for developing inner areas in Italy.