Emerging Markets Review最新文献

This paper examines the effects of privatizing China's state-owned enterprises (SOEs) on wage distribution and the welfare of the economy. Privatizing profitable SOEs can narrow wage inequality and improve welfare, and it is however accompanied by a business dynamism effect that can widen the skilled-unskilled wage gap. Using China's split share structure reform in 2005 as a quasi-natural experiment, we empirically demonstrate for profitable SOEs a positive relationship between partial privatization and wage gap. Our findings are consistent with the plan to wind down unprofitable SOEs that would not survive without government subsidies.

This study assesses the impact of presidential and parliamentary elections on different aspects of financial intermediation, considering ownership structure as a determining factor. Consistent with the smoothing hypothesis, state-owned banks (SOBs) observed a lending growth rate of 6.67% higher during the presidential election than private sector commercial banks and subsequently experienced a decrease. During the parliamentary election cycle, indications of reciprocal trade between SOBs and peer banks emerge. SOBs step in to address the lending gap created by competing banks' reduced credit offerings, and vice versa, until the electoral uncertainty subsides. Banks implemented a more rigorous policy about their loan practices before the election years. Deposit liabilities of foreign-owned banks grew by 11.49% in the post-parliamentary election year, while SOB witnessed a contraction in deposits in the year following the presidential election. The results have consequences for national savings, investments, and economic growth. The findings align with the level of development a country exhibits, the composition of its banking sector, and its institutional attributes.

We investigate whether fintech development expedites financial inclusion and affects the stability of the financial sector in BRICS economies. We first seek to identify the linkage between Fintech development and financial inclusion in the BRICS economies. We then explore if Fintech poses any threat to financial stability by studying the impact of Fintech on three main factors of financial stability; Country risk, Liquidity, and Price volatility to see any possible threat to financial stability. We apply the robust Global Vector Autoregressive (GVAR) model with Bayesian framework to analyze a monthly dataset ranging from 2015 to 2022. By applying a positive shock to Fintech over financial inclusion and financial stability, we reveal a positive dynamic relationship between fintech development and financial inclusion, with fintech exhibiting a long-term influence on financial inclusion in some BRICS countries than others. However, we found no significant evidence that fintech presents any threat to financial stability; at least not in the short term. We offer several policy implications and future research directions.

We propose a novel firm-level measure of speculative trading (SPT) for the Chinese stock market. Based on prior studies identifying differences of opinion as the dominant driver of speculative trading, we isolate the trading volume driven by differences of opinion from total trading volume as the speculative trading measure. We verify that SPT effectively reflects speculative trading and significantly and negatively predicts future returns. More importantly, SPT contains incremental information relative to the other speculative trading proxies. Using SPT, we further find that speculative trading plays a key role in explaining and driving the anomaly returns in the Chinese market.

This study analyzes the zero-debt decisions of BRICS firms using a bivariate probit model. The leading hypotheses are financial flexibility and financial constraints. On the demand-side, our findings reveal that managerial debt aversion, early lifecycle stage, growth opportunities, solvency, and concentrated ownership contribute to the lack of debt. Similarly, a country's institutional quality correlates with firms' debt-free status. On the supply-side, creditors fund companies with poor financial records in countries with robust markets and economic freedom. Financial flexibility and restrictions leading to zero debt are linked to firm and institutional characteristics in emerging countries.

We investigate the relationship between functional subsidies, selective subsidies, and investment efficiency through meticulous compilation of information on government subsidies, and the implementation of an innovative categorization methodology based on the nature and timing of funds (ex-ante versus ex-post). Our findings suggest that the effects of subsidies exhibit asymmetry by alleviating underinvestment while exacerbating overinvestment, and functional subsidies exert a stronger influence compared to selective subsidies. Financial constraints are found to serve as the major mechanism, and firms with easier access to financing may not effectively utilize subsidies, while those facing severe financial constraints are less prone to misusing them.

This study explores how foreign competition impacts the capital structure of domestic firms. While existing literature reveals that import competition is associated with a decrease in domestic firms' leverage, we propose a novel perspective concerning the positive effect of inward foreign direct investment (FDI) on leverage. FDI competition can boost demand for debt via productivity spillover to domestic firms, and also increase supply of debt by inducing lenders to herd toward foreign investors. Using Chinese firm-level data, we find that the positive effects of industry inward FDI on domestic firms' leverage are more pronounced in high-tech industries, industries with higher productivity growth, and industries where foreign investors exhibit a higher degree of herding behavior. Our instrument variable approach, employing industry exchange rates and import tariffs, supports these findings. Additionally, we reveal that the positive effect of FDI on local firms' leverage is amplified when the firms have stronger absorptive capacities, receive foreign capital, and experience more human capital transfers from foreign rivals.

Several bond markets in sub-Saharan Africa (SSA) are defaulting due to hiking spreads amid the stressed states introduced by the COVID-19 pandemic and the geopolitical risk tensions from the Russia-Ukraine conflict. Are there controllable factors that drive these markets? We investigate the dynamic connection shared by SSA bond markets and assess the role of investor sentiment measures, focusing on the risk aversion sentiment of international investors. Our results, across different trading horizons, are expected to aid in the formulation of policies for regulating and developing bond markets of emerging economies, particularly SSA. In terms of both return and volatility of SSA bonds, we find risk aversion sentiment an important transmitter of spillover for all investment horizons.

Based on linear and non-linear threshold modeling, we show that improving governance in all its dimensions is a factor in mitigating the adverse effects of climate change on macroeconomic stability in ten African countries. This result is a contribution to the existing literature that focuses primarily on the effect of governance and climate change on economic activity, with the addition of indirect and threshold effects. It also sheds new empirical light on this issue in a sample of African countries that are particularly exposed to climate change, cyclical fluctuations, and poor governance; countries that have not been sufficiently considered in existing empirical literature.

This study examines innovation spillovers within business groups, focusing on Korean chaebols. We find that an affiliated firm's innovation is affected positively by both within- and outside-group innovation spillover pools. Specifically, the impact of the within-group pool is more pronounced than that of the outside-group pool. We further find that within-group spillovers are stronger for affiliates with closer internal business relationships and for those whose controlling shareholders have higher group- or firm-level equity stakes. Finally, we show that greater within-group innovation spillovers lead to higher group-level innovative performance. Overall, our study suggests a pivotal role of business groups in promoting corporate innovation via effective innovation spillovers. (JEL G15, G30, O32, O33).