Pub Date : 2025-03-10DOI: 10.1016/j.ememar.2025.101278
Yonggen Luo , Na Tian , Dongmin Kong , Huijie Cui
Culture is formed as a response to the demands of the environment. We investigate how managers' individualistic culture affects firms' trade credit. Our findings show a positive link between the two. Cross-sectional analyses demonstrate that the positive relation is enhanced in regions with better legal systems but attenuated if the firm has a higher supplier concentration. To address the concern of endogeneity, we adopt an instrumental variable approach. Our findings remain in robustness checks. Overall, this paper takes a deep dive into the chairperson's farming culture in developing countries and reveals how this informal tradition is priced into corporate decisions.
{"title":"Managers' individualistic culture and trade credit","authors":"Yonggen Luo , Na Tian , Dongmin Kong , Huijie Cui","doi":"10.1016/j.ememar.2025.101278","DOIUrl":"10.1016/j.ememar.2025.101278","url":null,"abstract":"<div><div>Culture is formed as a response to the demands of the environment. We investigate how managers' individualistic culture affects firms' trade credit. Our findings show a positive link between the two. Cross-sectional analyses demonstrate that the positive relation is enhanced in regions with better legal systems but attenuated if the firm has a higher supplier concentration. To address the concern of endogeneity, we adopt an instrumental variable approach. Our findings remain in robustness checks. Overall, this paper takes a deep dive into the chairperson's farming culture in developing countries and reveals how this informal tradition is priced into corporate decisions.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"66 ","pages":"Article 101278"},"PeriodicalIF":5.6,"publicationDate":"2025-03-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143636548","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-05DOI: 10.1016/j.ememar.2025.101276
Shuitu Qian, Hang You, Xiaoyuan Zhang
In this paper, we utilize the interbank market, inter-firm transaction linkages, and inter-bank lending connections to construct a dual-layered network that interconnects banks and firms. Subsequently, we develop a theoretical model of systemic risk by integrating system dynamics, aiming to explore the patterns of systemic risk between banks and firms. Furthermore, we employ the LASSO-ΔCoVaR method to construct indicators of network topology and systemic risk, and empirically analyze the characteristics of time-varying tail risk spillovers between banks and firms in China from 2013 to 2022. The theoretical study reveals a steady state of default risk within the dual-layered risk contagion network. When banks and firms form a quasi-regular dual-layered network structure, an analytical solution for the expected loss of the dual-layered network can be derived. The empirical results indicate: (1) A strong correlation and linkage between tail risk spillovers of banks and firms. (2) Significant asymmetry in risk spillover between banks and firms. (3) Higher levels of systemic risk exposure and contribution for firms compared to banks. This paper offers theoretical support for identifying risks between banks and firms and provides methods for preventing systemic risks.
{"title":"Systemic risk between banks and firms in dual-layer dynamic networks","authors":"Shuitu Qian, Hang You, Xiaoyuan Zhang","doi":"10.1016/j.ememar.2025.101276","DOIUrl":"10.1016/j.ememar.2025.101276","url":null,"abstract":"<div><div>In this paper, we utilize the interbank market, inter-firm transaction linkages, and inter-bank lending connections to construct a dual-layered network that interconnects banks and firms. Subsequently, we develop a theoretical model of systemic risk by integrating system dynamics, aiming to explore the patterns of systemic risk between banks and firms. Furthermore, we employ the LASSO-ΔCoVaR method to construct indicators of network topology and systemic risk, and empirically analyze the characteristics of time-varying tail risk spillovers between banks and firms in China from 2013 to 2022. The theoretical study reveals a steady state of default risk within the dual-layered risk contagion network. When banks and firms form a quasi-regular dual-layered network structure, an analytical solution for the expected loss of the dual-layered network can be derived. The empirical results indicate: (1) A strong correlation and linkage between tail risk spillovers of banks and firms. (2) Significant asymmetry in risk spillover between banks and firms. (3) Higher levels of systemic risk exposure and contribution for firms compared to banks. This paper offers theoretical support for identifying risks between banks and firms and provides methods for preventing systemic risks.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"66 ","pages":"Article 101276"},"PeriodicalIF":5.6,"publicationDate":"2025-03-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143643089","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-04DOI: 10.1016/j.ememar.2025.101275
Li Wang , Shangda Li , Zhan Fa , Yanan Wang
This paper investigates the connection between liquidity creation and bank digital innovation using panel data from 129 Chinese banks between 2010 and 2021. The macroprudential policy sentiment is also introduced into our model to explore how it affects the impact of bank digital innovation on liquidity creation. The results show that bank digital innovation can promote their liquidity creation, and this is primarily achieved through improving the profitability and asset quality of the banks. The sentimental effect of macroprudential policy communication strengthens this promotion, and the effect is significant both among banks in regions with strong financial regulation and high financial disintermediation, as well as banks that are not systemically important. The conclusions provide policy implications for utilizing digital innovation in banks effectively in order to cultivate new quality productive forces.
{"title":"Enhancing bank liquidity creation through digital innovation: Exploring the impact of macroprudential policy sentiments","authors":"Li Wang , Shangda Li , Zhan Fa , Yanan Wang","doi":"10.1016/j.ememar.2025.101275","DOIUrl":"10.1016/j.ememar.2025.101275","url":null,"abstract":"<div><div>This paper investigates the connection between liquidity creation and bank digital innovation using panel data from 129 Chinese banks between 2010 and 2021. The macroprudential policy sentiment is also introduced into our model to explore how it affects the impact of bank digital innovation on liquidity creation. The results show that bank digital innovation can promote their liquidity creation, and this is primarily achieved through improving the profitability and asset quality of the banks. The sentimental effect of macroprudential policy communication strengthens this promotion, and the effect is significant both among banks in regions with strong financial regulation and high financial disintermediation, as well as banks that are not systemically important. The conclusions provide policy implications for utilizing digital innovation in banks effectively in order to cultivate new quality productive forces.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"66 ","pages":"Article 101275"},"PeriodicalIF":5.6,"publicationDate":"2025-03-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143601098","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-18DOI: 10.1016/j.ememar.2025.101265
Lars Norden , Thiago Ribeiro
We investigate the effects of digital connectivity and education on local credit to small businesses and individuals in Brazil, using multivariate panel data regression analysis. By examining how broadband access and basic education influence local credit, we aim to understand how these factors help to mitigate informational asymmetries and transaction costs. Our findings indicate that both higher digital connectivity and better educational levels are significantly associated with higher credit availability at the municipality and regional levels. We contribute to the broader discussion about financial inclusion and offer policy implications on how to improve access to credit in emerging economies.
{"title":"Local credit in Brazil: The role of digital connectivity and education","authors":"Lars Norden , Thiago Ribeiro","doi":"10.1016/j.ememar.2025.101265","DOIUrl":"10.1016/j.ememar.2025.101265","url":null,"abstract":"<div><div>We investigate the effects of digital connectivity and education on local credit to small businesses and individuals in Brazil, using multivariate panel data regression analysis. By examining how broadband access and basic education influence local credit, we aim to understand how these factors help to mitigate informational asymmetries and transaction costs. Our findings indicate that both higher digital connectivity and better educational levels are significantly associated with higher credit availability at the municipality and regional levels. We contribute to the broader discussion about financial inclusion and offer policy implications on how to improve access to credit in emerging economies.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"65 ","pages":"Article 101265"},"PeriodicalIF":5.6,"publicationDate":"2025-02-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143464977","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-16DOI: 10.1016/j.ememar.2025.101263
Eduardo A. Cavallo , Juan M. Hernández , María José González Jaramillo , Andrew Powell
Despite an initial reversal of capital inflows, the COVID-19 pandemic resulted in relatively mild impacts on net capital flows to Emerging and Developing Economies. In contrast to previous crises, gross capital inflows offset residents' outflows, resulting in modest required current account adjustments. Liquid international markets, access to official resources and sound fundamentals in several countries allowed for capital inflows, preventing the additional costs of widespread Sudden Stops during the pandemic. We demonstrate that a parsimonious empirical model is able to discriminate quite well, to show that those countries with weaker fundamentals suffered Sudden Stops in net flows.
{"title":"The dog that didn't bite: Sudden Stops in Emerging and Developing Economies during COVID-19","authors":"Eduardo A. Cavallo , Juan M. Hernández , María José González Jaramillo , Andrew Powell","doi":"10.1016/j.ememar.2025.101263","DOIUrl":"10.1016/j.ememar.2025.101263","url":null,"abstract":"<div><div>Despite an initial reversal of capital inflows, the COVID-19 pandemic resulted in relatively mild impacts on net capital flows to Emerging and Developing Economies. In contrast to previous crises, gross capital inflows offset residents' outflows, resulting in modest required current account adjustments. Liquid international markets, access to official resources and sound fundamentals in several countries allowed for capital inflows, preventing the additional costs of widespread Sudden Stops during the pandemic. We demonstrate that a parsimonious empirical model is able to discriminate quite well, to show that those countries with weaker fundamentals suffered Sudden Stops in net flows.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"65 ","pages":"Article 101263"},"PeriodicalIF":5.6,"publicationDate":"2025-02-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143487470","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-11DOI: 10.1016/j.ememar.2025.101264
Nico Oefele, Dirk G. Baur, Lee A. Smales
This study is the first to systematically examine the impact of currency risk on crypto asset utilization in an emerging market, using Turkish lira-denominated crypto trading volume as a proxy. Our findings highlight the dominance of a single exchange and the sustained growth of stablecoin trading. Daily trading volume is largely driven by global crypto market capitalization. However, we find no systematic link between trading volume and significant lira depreciations, inflation shocks, or policy rate changes. Contrary to policymakers' concerns about domestic currency substitution with crypto assets, our results suggest only weak, short-lived evidence related to currency risk in Türkiye.
{"title":"The effect of currency risk on crypto asset utilization in Türkiye","authors":"Nico Oefele, Dirk G. Baur, Lee A. Smales","doi":"10.1016/j.ememar.2025.101264","DOIUrl":"10.1016/j.ememar.2025.101264","url":null,"abstract":"<div><div>This study is the first to systematically examine the impact of currency risk on crypto asset utilization in an emerging market, using Turkish lira-denominated crypto trading volume as a proxy. Our findings highlight the dominance of a single exchange and the sustained growth of stablecoin trading. Daily trading volume is largely driven by global crypto market capitalization. However, we find no systematic link between trading volume and significant lira depreciations, inflation shocks, or policy rate changes. Contrary to policymakers' concerns about domestic currency substitution with crypto assets, our results suggest only weak, short-lived evidence related to currency risk in Türkiye.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"65 ","pages":"Article 101264"},"PeriodicalIF":5.6,"publicationDate":"2025-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143422174","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-08DOI: 10.1016/j.ememar.2025.101262
Samet Gunay, Barbara Dömötör, Attila András Víg
This study investigates the relationship between Emerging Markets Financial Stress Index (EMFSI) and currency returns, uncertainty and liquidity of eight emerging economies, using MODWT, Wavelet Coherence, TVP-VAR analyses. The results indicate that interactions become more pronounced during political events rather than economic developments. Energy market developments also appear to be significant periods for the interaction of variables, especially for Saudi Arabia and the UAE. Finally, the findings related to investment horizon suggest that short-term spillovers may be linked to medium- to long-term correlations between the EMFSI and currency pairs. This could serve as an early warning for policymakers and investors.
{"title":"Investigation of emerging market stress under various frequency bands: Evidence from FX market uncertainty and liquidity","authors":"Samet Gunay, Barbara Dömötör, Attila András Víg","doi":"10.1016/j.ememar.2025.101262","DOIUrl":"10.1016/j.ememar.2025.101262","url":null,"abstract":"<div><div>This study investigates the relationship between Emerging Markets Financial Stress Index (EMFSI) and currency returns, uncertainty and liquidity of eight emerging economies, using MODWT, Wavelet Coherence, TVP-VAR analyses. The results indicate that interactions become more pronounced during political events rather than economic developments. Energy market developments also appear to be significant periods for the interaction of variables, especially for Saudi Arabia and the UAE. Finally, the findings related to investment horizon suggest that short-term spillovers may be linked to medium- to long-term correlations between the EMFSI and currency pairs. This could serve as an early warning for policymakers and investors.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"65 ","pages":"Article 101262"},"PeriodicalIF":5.6,"publicationDate":"2025-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143479042","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-05DOI: 10.1016/j.ememar.2025.101261
Liang Yinghao, Yan Jiajia
In this paper, we utilize panel data encompassing 44 emerging market countries from 1996 to 2020 to investigate the impact of openness on financial development and rethink the interrelationship between trade openness and financial openness. Our findings indicate that openness contributes to the promotion of financial development. Furthermore, this paper extends and refines the classification of open relationships by considering three distinct types of policymakers: prudent, radical, and discretionary. Through this categorization, we shed light on the ambiguity of the marginal effects of trade and financial opening policies.
{"title":"The impact of the openness of trade and finance on financial development: Evidence from emerging markets","authors":"Liang Yinghao, Yan Jiajia","doi":"10.1016/j.ememar.2025.101261","DOIUrl":"10.1016/j.ememar.2025.101261","url":null,"abstract":"<div><div>In this paper, we utilize panel data encompassing 44 emerging market countries from 1996 to 2020 to investigate the impact of openness on financial development and rethink the interrelationship between trade openness and financial openness. Our findings indicate that openness contributes to the promotion of financial development. Furthermore, this paper extends and refines the classification of open relationships by considering three distinct types of policymakers: prudent, radical, and discretionary. Through this categorization, we shed light on the ambiguity of the marginal effects of trade and financial opening policies.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"65 ","pages":"Article 101261"},"PeriodicalIF":5.6,"publicationDate":"2025-02-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143438280","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.ememar.2025.101260
Ziyao San , Shuai Wang , Zongfeng Xiu , Ling Zhou , Zejiang Zhou
We find that Chinese state-owned enterprise (SOEs) with Disciplinary Commission members on the board experience lower stock price crash risk than their counterparts. This effect is less pronounced for SOEs with more shares held by non-state large shareholders. The results are robust after addressing potential endogeneity issues related to the appointment of the board of directors. Additional analysis suggests that the inclusion of Disciplinary Commission members on the board of directors reduces crash risk by mitigating agency costs, curtailing overinvestment, and improving financial reporting transparency. Collectively, our findings support the notion that the presence of Disciplinary Commission members on the board of directors strengthens the governance of SOEs.
{"title":"Political control, corporate governance and stock-price crash risk: Evidence from China","authors":"Ziyao San , Shuai Wang , Zongfeng Xiu , Ling Zhou , Zejiang Zhou","doi":"10.1016/j.ememar.2025.101260","DOIUrl":"10.1016/j.ememar.2025.101260","url":null,"abstract":"<div><div>We find that Chinese state-owned enterprise (SOEs) with Disciplinary Commission members on the board experience lower stock price crash risk than their counterparts. This effect is less pronounced for SOEs with more shares held by non-state large shareholders. The results are robust after addressing potential endogeneity issues related to the appointment of the board of directors. Additional analysis suggests that the inclusion of Disciplinary Commission members on the board of directors reduces crash risk by mitigating agency costs, curtailing overinvestment, and improving financial reporting transparency. Collectively, our findings support the notion that the presence of Disciplinary Commission members on the board of directors strengthens the governance of SOEs.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"65 ","pages":"Article 101260"},"PeriodicalIF":5.6,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143164426","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-31DOI: 10.1016/j.ememar.2025.101259
Suruchi Shrimali, Wasim Ahmad
The emerging market economies have revamped their monetary policy frameworks and adopted prudent policy communication, bearing in mind their structural challenges. Thus, it is crucial to examine the efficacy of the central bank communication as a policy tool in these economies. This study leverages natural language processing and textual analysis procedures to quantify the tone of the monetary policy statements by the Reserve Bank of India (RBI) – India's central bank, and answer the following questions: Does the tone of RBI's policy communication contain information indicating future policy decisions? Does the stock market respond to the tone of RBI's policy communication? The study answers the above questions and shows that the RBI's policy statements contain forward-looking information about future policy decisions and their effectiveness in manoeuvring the Indian stock market.
{"title":"On the communication efforts of the central banks in emerging economies: The case of India","authors":"Suruchi Shrimali, Wasim Ahmad","doi":"10.1016/j.ememar.2025.101259","DOIUrl":"10.1016/j.ememar.2025.101259","url":null,"abstract":"<div><div>The emerging market economies have revamped their monetary policy frameworks and adopted prudent policy communication, bearing in mind their structural challenges. Thus, it is crucial to examine the efficacy of the central bank communication as a policy tool in these economies. This study leverages natural language processing and textual analysis procedures to quantify the tone of the monetary policy statements by the Reserve Bank of India (RBI) – India's central bank, and answer the following questions: Does the tone of RBI's policy communication contain information indicating future policy decisions? Does the stock market respond to the tone of RBI's policy communication? The study answers the above questions and shows that the RBI's policy statements contain forward-looking information about future policy decisions and their effectiveness in manoeuvring the Indian stock market.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"65 ","pages":"Article 101259"},"PeriodicalIF":5.6,"publicationDate":"2025-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143210746","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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