Pub Date : 2025-03-01DOI: 10.1016/j.ecosys.2024.101248
Axelle Heyert , Laurent Weill
This paper examines the impact of trust in banks on financial inclusion in a cross-country framework. We use micro-level data informing on trust in banks and financial inclusion for a dataset of about 61,000 observations from 28 countries. We find evidence for the positive impact of trust in banks on financial inclusion. We find that the positive impact of trust in banks on financial inclusion affects all individuals, regardless of their socio-demographic characteristics and of their financial situation, and is not conditional to the country or the year. Overall, we provide support to enhance trust in banks in the perspective of promoting financial inclusion worldwide.
{"title":"Trust in banks and financial inclusion: Micro-level evidence from 28 countries","authors":"Axelle Heyert , Laurent Weill","doi":"10.1016/j.ecosys.2024.101248","DOIUrl":"10.1016/j.ecosys.2024.101248","url":null,"abstract":"<div><div>This paper examines the impact of trust in banks on financial inclusion in a cross-country framework. We use micro-level data informing on trust in banks and financial inclusion for a dataset of about 61,000 observations from 28 countries. We find evidence for the positive impact of trust in banks on financial inclusion. We find that the positive impact of trust in banks on financial inclusion affects all individuals, regardless of their socio-demographic characteristics and of their financial situation, and is not conditional to the country or the year. Overall, we provide support to enhance trust in banks in the perspective of promoting financial inclusion worldwide.</div></div>","PeriodicalId":51505,"journal":{"name":"Economic Systems","volume":"49 1","pages":"Article 101248"},"PeriodicalIF":2.8,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141844980","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 : 2025-02-27DOI: 10.1016/j.ecosys.2025.101302
Yuyang Chen , Jie Gao
Expropriation risk is detrimental to firm development and economic growth. Using the enactment of the 2007 Property Law in China as an exogenous shock that reduces the expropriation risk of private firms, we study the effect of property protection on private firms’ product market performance. We find that property protection increases product market performance, as evidenced by private firms facing greater expropriation risk before the Law exhibit better product market performance after the Law. We further find that this effect is stronger for firms that face greater expropriation risk before the Law, such as firms without political relation, firms in cities with higher fiscal pressure, and firms with higher geographic concentration. Channel analyses show that such effect may be a result of an increase in investment and a decrease in rent-extracting coercive spending. Additional analyses indicate such effect is restricted to firms in regions with higher enforcement efficiency and in more competitive industries.
{"title":"Product market effects of expropriation risk: Evidence from a quasi-natural experiment in China","authors":"Yuyang Chen , Jie Gao","doi":"10.1016/j.ecosys.2025.101302","DOIUrl":"10.1016/j.ecosys.2025.101302","url":null,"abstract":"<div><div>Expropriation risk is detrimental to firm development and economic growth. Using the enactment of the 2007 Property Law in China as an exogenous shock that reduces the expropriation risk of private firms, we study the effect of property protection on private firms’ product market performance. We find that property protection increases product market performance, as evidenced by private firms facing greater expropriation risk before the Law exhibit better product market performance after the Law. We further find that this effect is stronger for firms that face greater expropriation risk before the Law, such as firms without political relation, firms in cities with higher fiscal pressure, and firms with higher geographic concentration. Channel analyses show that such effect may be a result of an increase in investment and a decrease in rent-extracting coercive spending. Additional analyses indicate such effect is restricted to firms in regions with higher enforcement efficiency and in more competitive industries.</div></div>","PeriodicalId":51505,"journal":{"name":"Economic Systems","volume":"49 3","pages":"Article 101302"},"PeriodicalIF":3.3,"publicationDate":"2025-02-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144916391","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 : 2025-02-26DOI: 10.1016/j.ecosys.2025.101294
Camila C. Pereira , Saulo B. Bastos , Daniel O. Cajueiro
This paper examines the impact of economic uncertainty on stock returns. We introduce a new method that uses word vectors for word representation to estimate economic uncertainty from news stories. Our findings suggest that this measure of economic uncertainty influences the pricing of individual stocks. Furthermore, we show that firm characteristics, media coverage, public firm status, small-cap stocks, or illiquidity do not affect this relationship. We also compare our measure with two widely accepted uncertainty measures in the literature and find similar evidence.
{"title":"The words that lead to uncertainty: A measure based on word embeddings","authors":"Camila C. Pereira , Saulo B. Bastos , Daniel O. Cajueiro","doi":"10.1016/j.ecosys.2025.101294","DOIUrl":"10.1016/j.ecosys.2025.101294","url":null,"abstract":"<div><div>This paper examines the impact of economic uncertainty on stock returns<span>. We introduce a new method that uses word vectors for word representation to estimate economic uncertainty from news stories. Our findings suggest that this measure of economic uncertainty influences the pricing of individual stocks. Furthermore, we show that firm characteristics, media coverage, public firm status, small-cap stocks, or illiquidity do not affect this relationship. We also compare our measure with two widely accepted uncertainty measures in the literature and find similar evidence.</span></div></div>","PeriodicalId":51505,"journal":{"name":"Economic Systems","volume":"49 3","pages":"Article 101294"},"PeriodicalIF":3.3,"publicationDate":"2025-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144916388","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 : 2025-02-20DOI: 10.1016/j.ecosys.2025.101293
João Alcobia , Nuno Sobreira , Ricardo Cabral
This study investigates whether the Euro Area periphery member states would have been wealthier in 2010 had they not participated in the Economic and Monetary Union, as implied by the optimum currency area literature and the 1977 MacDougall report prepared for the European Commission. Using a synthetic control method, we found that by 2010, periphery member states' net international investment positions would show an improvement of, on weighted average, 41 % of GDP, which is equivalent to a combined 2.1 trillion of 2010 euros. The econometric results are robust to standard synthetic control method sensitivity tests. Finally, we discuss why the Economic and Monetary Union may have led to such a severe deterioration in the net external wealth position of the periphery member states.
{"title":"What could have been? A synthetic control evaluation of the effect of the Economic and Monetary Union on the net external wealth of periphery member states","authors":"João Alcobia , Nuno Sobreira , Ricardo Cabral","doi":"10.1016/j.ecosys.2025.101293","DOIUrl":"10.1016/j.ecosys.2025.101293","url":null,"abstract":"<div><div>This study investigates whether the Euro Area periphery member states would have been wealthier in 2010 had they not participated in the Economic and Monetary Union<span>, as implied by the optimum currency area<span> literature and the 1977 MacDougall report prepared for the European Commission. Using a synthetic control method<span>, we found that by 2010, periphery member states' net international investment positions would show an improvement of, on weighted average, 41 % of GDP, which is equivalent to a combined 2.1 trillion of 2010 euros. The econometric<span> results are robust to standard synthetic control method sensitivity tests. Finally, we discuss why the Economic and Monetary Union may have led to such a severe deterioration in the net external wealth position of the periphery member states.</span></span></span></span></div></div>","PeriodicalId":51505,"journal":{"name":"Economic Systems","volume":"49 3","pages":"Article 101293"},"PeriodicalIF":3.3,"publicationDate":"2025-02-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144916386","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.ecosys.2025.101292
Jie Zhang , Jiwei Chen , Guohui Chen , Manlin Zhi
An emerging literature estimates the productivity spillovers of foreign direct investment (FDI), but the temporal and spatial dynamics and the impact of the technology gap on FDI productivity spillover are insufficiently investigated. To provide a more comprehensive estimate for the international policy analysis, the study estimates the effects by utilizing the sample of 53 "Belt and Road" Initiative countries over the period 2003–2020 and captures the temporal and spatial dynamics of FDI productivity spillovers conditional on the technology gap. Moreover, the channels of FDI spillovers on productivity are investigated. The study reveals significant contributions of Chinese outward foreign direct investment (OFDI) -induced spillovers to the host countries' productivity growth by facilitating transformations in industrial and labour structures, alongside optimizing capital allocation. Nonetheless, spillover effects diminish with widening technology gaps, especially when exceeding a certain threshold. Temporal analysis indicates a strengthening trend in productivity spillovers over time. The spatial analysis demonstrates that Chinese OFDI exhibits negative spatial spillover effects, indicating the presence of competitive dynamics in attracting foreign capital.
{"title":"The temporal and spatial dynamics of FDI productivity spillovers: A technology gap perspective","authors":"Jie Zhang , Jiwei Chen , Guohui Chen , Manlin Zhi","doi":"10.1016/j.ecosys.2025.101292","DOIUrl":"10.1016/j.ecosys.2025.101292","url":null,"abstract":"<div><div>An emerging literature estimates the productivity spillovers<span><span><span> of foreign direct investment (FDI), but the temporal and spatial dynamics and the impact of the technology gap on </span>FDI productivity<span> spillover are insufficiently investigated. To provide a more comprehensive estimate for the international policy analysis, the study estimates the effects by utilizing the sample of 53 \"Belt and Road\" Initiative countries over the period 2003–2020 and captures the temporal and spatial dynamics of FDI productivity spillovers conditional on the technology gap. Moreover, the channels of FDI spillovers on productivity are investigated. The study reveals significant contributions of Chinese outward foreign direct investment (OFDI) -induced spillovers to the host countries' productivity growth by facilitating transformations in industrial and labour structures, alongside optimizing capital allocation. Nonetheless, </span></span>spillover effects<span> diminish with widening technology gaps, especially when exceeding a certain threshold. Temporal analysis indicates a strengthening trend in productivity spillovers over time. The spatial analysis demonstrates that Chinese OFDI exhibits negative spatial spillover effects, indicating the presence of competitive dynamics in attracting foreign capital.</span></span></div></div>","PeriodicalId":51505,"journal":{"name":"Economic Systems","volume":"49 3","pages":"Article 101292"},"PeriodicalIF":3.3,"publicationDate":"2025-02-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144917005","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 : 2025-02-07DOI: 10.1016/j.ecosys.2025.101291
Cao-Yuan Ma , Xiu-Feng Ni , Ting-Rui Li
This study examines how differing migration restrictions for labor with heterogeneous skills affect economic development and welfare inequality in China. Combining micro individual data with a general equilibrium model that includes skilled and unskilled workers, endogenous productivity, and housing supply, we quantify the differing migration costs for skilled and unskilled workers and its consequences. The findings reveal that unskilled workers’ interprovincial migration cost is much higher than that of skilled workers, resulting in a 1.286 % output loss and widening economic disparity by 3.996 %, causing the interprovincial income gap to expand by 5.929 % and expanding the income gap between skilled and unskilled workers by 0.059 %. Regarding skill heterogeneity, facilitating the smooth interprovincial migration of unskilled workers can produce more significant and positive output and welfare effects compared with skilled workers. Across China’s regions, rationalizing the proportion of skilled and unskilled workers and improving the complementarity between skilled and unskilled workers would help optimize the spatial allocation of workers and enhance the output and welfare effects of labor migration. Therefore, eliminating the exclusion of unskilled workers and guiding the rational and orderly migration of skilled and unskilled workers will promote output growth, narrow the economic gap, and improve workers’ welfare, narrowing the welfare gap and establishing a mutually beneficial outcome of efficiency and fairness.
{"title":"Labor migration, economic growth, and welfare inequality: A quantitative analysis of China","authors":"Cao-Yuan Ma , Xiu-Feng Ni , Ting-Rui Li","doi":"10.1016/j.ecosys.2025.101291","DOIUrl":"10.1016/j.ecosys.2025.101291","url":null,"abstract":"<div><div>This study examines how differing migration restrictions for labor with heterogeneous skills affect economic development and welfare inequality in China. Combining micro individual data with a general equilibrium<span> model that includes skilled and unskilled workers, endogenous productivity, and housing supply, we quantify the differing migration costs for skilled and unskilled workers and its consequences. The findings reveal that unskilled workers’ interprovincial migration cost is much higher than that of skilled workers, resulting in a 1.286 % output loss and widening economic disparity by 3.996 %, causing the interprovincial income gap to expand by 5.929 % and expanding the income gap between skilled and unskilled workers by 0.059 %. Regarding skill heterogeneity, facilitating the smooth interprovincial migration of unskilled workers can produce more significant and positive output and welfare effects compared with skilled workers. Across China’s regions, rationalizing the proportion of skilled and unskilled workers and improving the complementarity between skilled and unskilled workers would help optimize the spatial allocation of workers and enhance the output and welfare effects of labor migration. Therefore, eliminating the exclusion of unskilled workers and guiding the rational and orderly migration of skilled and unskilled workers will promote output growth, narrow the economic gap, and improve workers’ welfare, narrowing the welfare gap and establishing a mutually beneficial outcome of efficiency and fairness.</span></div></div>","PeriodicalId":51505,"journal":{"name":"Economic Systems","volume":"49 3","pages":"Article 101291"},"PeriodicalIF":3.3,"publicationDate":"2025-02-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144916394","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.ecosys.2025.101290
Oleg Gurshev
This paper uses unique data on majority-owned foreign manufacturing affiliates doing business in Russia to study the impact of 2014 economic sanctions across profit shifting and real multinational firms. We find that profitability of identified profit shifting affiliates operating in Russia between 2012 and 2019 has been largely unaffected by the introduction of external financial frictions. In fact, we report that, among profitable firms, the recorded profitability of such affiliates has seen a sharp increase up to 27.5 % in the following year after the introduction of sanctions relative to the other real foreign affiliates. For a specific sub-sample of Cyprus-owned firms, we find that the reported profitability has risen up to 29.7 %. Finally, our results indicate that real affiliates have permanently withdrawn a notable portion of fixed assets from the economy.
{"title":"From Russia with love: Empirical evidence on affiliate profitability under sanctions and capital flight across borders","authors":"Oleg Gurshev","doi":"10.1016/j.ecosys.2025.101290","DOIUrl":"10.1016/j.ecosys.2025.101290","url":null,"abstract":"<div><div>This paper uses unique data on majority-owned foreign manufacturing affiliates doing business in Russia to study the impact of 2014 economic sanctions<span> across profit shifting and real multinational firms. We find that profitability of identified profit shifting affiliates operating in Russia between 2012 and 2019 has been largely unaffected by the introduction of external financial frictions. In fact, we report that, among profitable firms, the recorded profitability of such affiliates has seen a sharp increase up to 27.5 % in the following year after the introduction of sanctions relative to the other real foreign affiliates. For a specific sub-sample of Cyprus-owned firms, we find that the reported profitability has risen up to 29.7 %. Finally, our results indicate that real affiliates have permanently withdrawn a notable portion of fixed assets from the economy.</span></div></div>","PeriodicalId":51505,"journal":{"name":"Economic Systems","volume":"49 3","pages":"Article 101290"},"PeriodicalIF":3.3,"publicationDate":"2025-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144916390","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 : 2025-01-14DOI: 10.1016/j.ecosys.2025.101289
Libin Liu, Xu Si
The decline in the labor income share and its determinants has been widely discussed in recent decades. Using a sample of Chinese A-share listed firms from 2010 to 2020, this paper provides evidence of the impact of firms' subjective perceptions of economic policy uncertainty (FEPU) on the labor income share. Empirical results show that there is a significant decrease in the labor income share when firms perceive an increase in economic policy uncertainty. Cash payments to employees and related employee benefits tend to decline when firms perceive a rise in economic policy uncertainty, which leads to a lower labor income share when total operating revenue remains unchanged. Additionally, workers' bargaining power moderates this negative effect. Heterogeneity analysis reveals that the negative effect of FEPU on the labor income share is weaker or insignificant for high-skill-intensive firms, high-technology-intensive firms, low-capital-intensive firms, and central state-owned firms. This paper sheds new light on the factors contributing to the decline in the labor income share and provides relevant policy implications for the stabilization of the labor income share.
{"title":"Firms' perception of economic policy uncertainty and the labor income share","authors":"Libin Liu, Xu Si","doi":"10.1016/j.ecosys.2025.101289","DOIUrl":"10.1016/j.ecosys.2025.101289","url":null,"abstract":"<div><div>The decline in the labor income share and its determinants has been widely discussed in recent decades. Using a sample of Chinese A-share listed firms from 2010 to 2020, this paper provides evidence of the impact of firms' subjective perceptions of economic policy uncertainty (FEPU) on the labor income share. Empirical results show that there is a significant decrease in the labor income share when firms perceive an increase in economic policy uncertainty. Cash payments to employees and related employee benefits tend to decline when firms perceive a rise in economic policy uncertainty, which leads to a lower labor income share when total operating revenue remains unchanged. Additionally, workers' bargaining power moderates this negative effect. Heterogeneity analysis reveals that the negative effect of FEPU on the labor income share is weaker or insignificant for high-skill-intensive firms, high-technology-intensive firms, low-capital-intensive firms, and central state-owned firms. This paper sheds new light on the factors contributing to the decline in the labor income share and provides relevant policy implications for the stabilization of the labor income share.</div></div>","PeriodicalId":51505,"journal":{"name":"Economic Systems","volume":"49 3","pages":"Article 101289"},"PeriodicalIF":3.3,"publicationDate":"2025-01-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144916393","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 : 2025-01-08DOI: 10.1016/j.ecosys.2024.101288
Ceyhun Elgin
This paper introduces an extensive database of governments’ economic policy measures adopted in response to the COVID-19 pandemic and examines the outcomes of these measures. Using this novel dataset, five key observations are documented: (1) Countries expected by the IMF at the onset of the pandemic to experience sharper GDP declines in 2020 adopted larger fiscal and macro-financial packages by year-end. (2) Wealthier nations implemented larger fiscal and macro-financial policy packages, even as a percentage of GDP. (3) High pre-pandemic inflation countries adopted less expansionary monetary policies. (4) Adoption of larger fiscal packages correlated with higher GDP growth rates in 2020 and 2021. (5) Countries with more expansionary policies during the pandemic did not necessarily experience higher inflation rates in 2021 or 2022.
{"title":"Countercyclical economic policy response during COVID-19","authors":"Ceyhun Elgin","doi":"10.1016/j.ecosys.2024.101288","DOIUrl":"10.1016/j.ecosys.2024.101288","url":null,"abstract":"<div><div>This paper introduces an extensive database of governments’ economic policy measures adopted in response to the COVID-19 pandemic and examines the outcomes of these measures. Using this novel dataset, five key observations are documented: (1) Countries expected by the IMF at the onset of the pandemic to experience sharper GDP declines in 2020 adopted larger fiscal and macro-financial packages by year-end. (2) Wealthier nations implemented larger fiscal and macro-financial policy packages, even as a percentage of GDP. (3) High pre-pandemic inflation<span> countries adopted less expansionary monetary policies. (4) Adoption of larger fiscal packages correlated with higher GDP growth rates in 2020 and 2021. (5) Countries with more expansionary policies during the pandemic did not necessarily experience higher inflation rates in 2021 or 2022.</span></div></div>","PeriodicalId":51505,"journal":{"name":"Economic Systems","volume":"49 3","pages":"Article 101288"},"PeriodicalIF":3.3,"publicationDate":"2025-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144916392","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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