Economic Systems最新文献

To better understand the relationship between formal institutions, culture, and the size of the shadow economy, this paper considers the impact of pro-market institutions and cultures of individualism, and their interplay, on the size of the shadow economy. Using panel data for 64 countries from 1995 to 2017, the results show that economically free countries that value individualism over collectivism are, on average, associated with smaller shadow economies. Furthermore, the findings reveal that individualistic cultures amplify the effect of formal market-supporting institutions in reducing the size of the shadow economy, and vice versa. In terms of policy guidance, the results of this study suggest that policies would benefit from accounting for culture in promoting pro-market institutions to combat the shadow economy or in transitioning shadow participants to the formal sector.

We argue that technological progress and technology diffusion is improving innovation the banking industry, leading to a potential steady-state equilibrium in operational efficiency and innovation across banks with similar characteristics. Using the latest meta-frontier method, this study examined BRIC banks during the period from 2000 to 2020. We found that Indian and Brazilian banks are more innovative in reducing costs, whereas Indian and Chinese banks are more cost efficient. Chinese, Russian, Indian, and Brazilian banks rank first to fourth in profit efficiency and profit-making innovation, respectively. Risk-taking boosts group cost and profit efficiencies and profit-making innovation but reduces cost-reducing innovation in each country. BRIC banks diverged in innovation during the analysis period but slowly converged after the 2008 crisis. Reform policies, adoption of production technology, formulating regulations and investing in human capital and technologies are crucial for less efficient and innovative banks to catch-up with frontier banks.

Identifying the determinants of intergenerational mobility is an important aim in the development literature. In this article, we examine intergenerational transmission for 6 neglected Latin American Economies (Brazil, Costa Rica, Ecuador, Mexico, Panama and Puerto Rico). We use a multinomial logit model of the determinants of choosing a white-collar job for the child of a father working in farming as compared to a child whose father had a blue- or white-collar job. We find that, in the studied countries, intergenerational occupation transmission is mainly linked to low skilled jobs. Our analysis confirms the low degree of social mobility typical of Latin America, in turn contributing to explaining the low growth rate. Our findings help identify specific target groups – talented young women coming from the agricultural sector – for developing soft skills while at primary or low secondary school and work-related skills while at high secondary school or university.

Using survey data on consumer inflation expectations in the European Union countries, we investigate the price, macroeconomic, attention, and geopolitical determinants of European consumers’ inflation expectations. We employ panel data regression with both fixed and random effects. We conclude that when consumers in the EU form their expectations regarding future inflation, they are determined not only by past inflation and the general macroeconomic situation, but also by selected attention variables expressing their search queries on the Internet (SVI based on Google Trends), and uncertainty concerning economic policy (EPU) steps and measures. Moreover, our baseline specification also suggests that inflation expectations of consumers in the Central and Eastern European countries are higher than those in Euro Area countries. These findings are robust to multiple specifications using individual survey indicators of expected inflation.

The transfer payment policy for National Key Ecological Function Zones is a typical vertical ecological compensation (VEC) policy that has been in place in China since 2008. This study treats this VEC policy as a quasi-natural experiment and utilises a slack-based measure model to calculate each county’s green economic efficiency based on China’s county-level data for the period 2003–2020. Then, the difference-in-differences method is used to evaluate the impact of the VEC policy on green economic efficiency and to verify its possible mechanisms. The results indicate that the VEC policy significantly improves the green economic efficiency of compensated areas, demonstrating that this policy promotes regional green economic development. Moreover, we find that the VEC policy may improve green economic efficiency by reducing the pollution caused by industrial development, promoting eco-industrial development and accelerating technological innovation. From the perspective of realising its three policy goals, the VEC policy not only improves the compensated areas’ ecological environment quality, but also promotes economic growth and optimises public services in the compensated areas. Furthermore, an inverted U-shaped curve relationship between the scale of VEC and green economic efficiency is identified.

Motivated by Rajan’s work, we propose that income inequality and systemic banking crises have a nonlinear nexus. In addition to examining the linear “Rajan effect,” we propose a “Kuznets effect” based on an assumption that income inequality has a nonlinear impact on growth, conditional on the stage of economic development, and thus plays a nonlinear role in modeling crises. We test the existence of this nexus using a sample covering 172 economies for a period of fifty years. We confirm that the relationship is U-shaped and identify the threshold level of income inequality that is beneficial for financial stability. Additionally, the U-test and area under the receiver operating characteristic (AUROC) statistics confirm that nonlinearity, and our model has good predictive performance of forecasting. Furthermore, the results of our panel regressions are consistent and are robust to several tests. We then identify the Rajan and Kuznets effects using a two-step test. We conclude that the impact of income inequality on the occurrence of systemic banking crises is U-shaped.

Information asymmetry can affect the propensity of firms to pay dividends directly and indirectly by reducing the agency costs of free cash flow (FCF). However, designing a research framework to identify whether information asymmetry or agency cost directly explains the propensity to pay dividends is challenging, as both are partially endogenous. To overcome this challenge, this study investigates the role of two independent external shocks in explaining the propensity of firms to pay dividends. We use the mandatory adoption of International Financial Reporting Standards (IFRS) as an information asymmetry–reducing event and the global financial crisis (GFC) as an agency cost–reducing event to disentangle the effects of information asymmetry and agency costs. Using a large international sample of more than 100,000 firm-year observations and a matched sample of more than 35,000 observations, we find that the propensity to pay dividends declined after the mandatory adoption of IFRS and then declined further due to the economic shock of the GFC. We also provide evidence that firms facing high information asymmetry and high agency costs have a lower propensity to pay dividends because of the combined effects of IFRS adoption and the GFC. These findings suggest that the agency costs of FCF are more directly relevant in explaining dividend payout policy.

Language, as a prominent cultural characteristic of a region, has a lasting and extensive impact on economic performance. In this paper, we study the impact of dialect diversity on the labor income share in China. We find that regional dialect diversity depresses the labor income share in manufacturing firms in China. This effect holds up to robustness and endogeneity checks. We explore the transmission channels underlying this negative relationship and find that dialect diversity depresses the labor income share by decreasing worker bargaining power, and this channel can be further explained by the depressing effect of dialect diversity on the participation of firms in export trade and regional human capital accumulation. Heterogeneity analysis shows that the negative effect of dialect diversity on the labor share is weak or insignificant in sectors with strong worker bargaining power such as state-owned enterprises, labor-intensive enterprises, and high-skill-intensive enterprises.