The impact of oil prices and the financial market on cost efficiency in the insurance and Takaful sectors: Evidence from a stochastic frontier analysis

The Gulf Cooperation Council’s (GCC) insurance industry, including conventional insurance and Takaful, has witnessed remarkable growth during the last decade. However, the economies of this region rely on oil as the primary stream of revenue and lack development in financial markets. This could affect the insurance industry. For this reason, this paper examines the impact of oil prices and the financial market on the cost efficiency of the insurance and Takaful sectors in GCC countries using a stochastic frontier cost function with data from 2009–2016. The results show that the relationship between oil prices and efficiency changes from positive to negative when the prices increase, whereas the relationship between the financial market and efficiency is negative. No clear evidence of the impact of oil prices on efficiency arises from the differences between conventional insurance and Takaful. However, there are differences regarding the financial market, with a negative impact on conventional insurance and a positive one on the Takaful business. The results of this study have implications for regulators and management. The Takaful industry is rapidly growing compared to conventional insurance in the GCC and, therefore, the financial market may have added benefits for the GCC region. However, caution is required in relation to the impact of the financial market on conventional insurance. Furthermore, management may require the development of strategies to deal with the nature of GCC economies to avoid shocks to oil prices.     

金融发展、FDI与经济增长

本文基于拉姆齐—卡斯—库普曼斯模型,利用中国29个省、市、自治区1978～2004年的面板数据,研究金融发展、外商直接投资(FDI)对经济增长的影响。研究显示FDI在一定水平下,对东道国资本积累和产出增长的影响是非线性的,随着外资数量的逐渐增加,其对资本积累和产出增长的促进效应逐渐下降,FDI进入初期的正影响最终转为负影响,研究还显示FDI在数量一定的情况下,金融发展对本国资本积累和产出增长有正影响。金融发展通过有利于吸引外商直接投资、为外资企业提供金融服务,将潜在的溢出效应转化为现实生产力,显著地促进了经济增长。     

Impact of Islamic banking development and major macroeconomic variables on economic growth for Islamic countries: Evidence from panel smooth transition models

This study examines the nonlinear relationship between Islamic banking development, major macroeconomic variables and economic growth in Islamic countries. Using the panel smooth transition model, the results show a positive nonlinear relationship between Islamic banking development and economic growth. Moreover, the relationship between the macroeconomic variables and economic growth is asymmetric and regime-dependent. Further, by using the dynamic panel quantile model, we show that for many cases the Islamic banking variables lead economic growth across the quantiles. More specifically, foreign direct investment, oil production and inflation have a positive impact on economic growth during the normal financial development state, while government consumption, one-lag economic growth, terms of trade and financial development have a negative impact on economic growth for this state. The human capital index, education and the rule of law have an insignificant impact, regardless of the prevailing regime. The results for the separated oil-importing and oil-exporting economies are generally consistent with the combined sample regarding the Islamic banking development variables. As for the macro variables, they have a positive and significant (insignificant) effect on EG for the oil-importing (oil-exporting) economies for almost all models.     

金融发展、FDI技术溢出与中国经济增长——基于省际面板数据的实证分析

基于1990年-2008年中国省际面板数据,就金融发展水平决定的FDI溢出效应对中国经济增长影响的实证研究表明,样本期内FDI通过其资本积累效应,对中国经济增长产生了显著的促进作用,且这一作用有随时间而强化的趋势;金融发展具有放大FDI技术溢出效应的作用,并由此对中国经济增长产生正面影响,但目前来看这一影响还比较小;"金融抑制"现象依然存在并对中国经济增长产生了不利影响,但在经历了多年的金融体制改革之后,"金融抑制"现象已有所减轻,其对经济增长的负面影响趋于减弱。     

广西北部湾经济区中心城市引进东盟FDI的战略思考

从东盟引进FDI一直是广西北部湾经济区中心城市利用外资的一支重要力量。广西北部湾经济区中心城市利用东盟FDI存在着行业结构、产业结构、地区结构的不均衡。因此,广西北部湾经济区中心城市应紧抓新的机遇,明确其总体发展的思路和重点发展领域,政府、企业、金融机构应采取多样化措施,共筑平台,实施区域中心城市带动发展战略,加大力度引进东盟FDI。     

区域金融规模、效率及其对FDI溢出效应的影响研究——来自长江三角洲经济圈的实证分析和检验

FDI促进经济增长的能力与一个国家或地区的金融发展水平(规模、效率)联系紧密。我国现有研究较多关注的是全国状况或者一个省区状况,本文则将研究视角定位于经济圈,选择我国FDI集中流入的长三角经济圈作为研究对象,将金融发展分解为量和质两个维度,对长三角经济圈的金融规模、效率对FDI溢出效应影响进行了系统研究。论文实证分析和检验的结果发现:长三角经济圈金融信贷规模的扩大反而抑制了FDI技术溢出的吸收,而金融市场效率的改进所产生的效果则刚好相反,即能够显著放大FDI对区域经济的正贡献率。     

Foreign direct investment and financial markets influences: Results from the United States

This paper investigates the linkages among Foreign Direct Investment (FDI-greenfield and mergers and acquisitions (M&A)) decisions and equity market returns and volatilities. The central premise is that FDI decisions by Multinational Enterprises (MNE) are influenced, among other factors, by risk and uncertainty indicated by equity market returns and volatilities in the destination (host) countries. This is because of the events on the stock markets in general, and their volatilities, in particular, signal the vitality of the investment climate of the target country. Including capital market variables among the determinants of FDI is important for assessing the cost of capital and for evaluating direct investment and asset allocation decisions.Secondary time-series data (quarterly) were used on incoming US FDI from 1994 to 2018 along with data on independent variables such as exchange rates, inflation, market size, equity market returns, and equity market volatilities. Thus, the paper endeavors to contribute to the International Business literature by highlighting the role played of equity returns and volatilities in FDI decisions and therewith attempts to integrate finance (capital markets) with International Business/Strategic Decision making. Several different regression specifications (OLS, Fixed, and random-effects and VAR) were utilized to analyze the data, and capital market variables (stock returns and volatilities) were found to influence the location of production facilities by a multinational enterprise (MNE). In other words, the share of production capacity optimally located abroad, as well as M&A decisions, are influenced by capital market returns and volatilities.     

多重目标下的跨国银行FDI动机和区位选择——基于跨国银行面板数据变截距固定效应模型的检验

依据1986年-2008年期间以外国金融直接投资的形式在我国设立商业存在的跨国银行数据、运用Panel Data变截距固定效应模型GLS估算方法,检验了跨国银行进入我国的动机和区位选择的影响因素.结果发现,跨国银行进入我国"追求利润"的动机比"客户追随"的动机更加强烈;而制度质量上接近的程度则是跨国银行进行区位选择的决定性因素.     

Forecasting commodity price indexes using macroeconomic and financial predictors

Using a long sample of commodity spot price indexes over the period 1947–2010, we examine the out-of-sample predictability of commodity prices by means of macroeconomic and financial variables. Commodity currencies are found to have some predictive power at short (monthly and quarterly) forecast horizons, while growth in industrial production and the investment–capital ratio have some predictive power at longer (yearly) horizons. Commodity price predictability is strongest when based on multivariate approaches that account for parameter estimation error. Commodity price predictability varies substantially across economic states, being strongest during economic recessions.     

Equity market and money supply spillovers and economic growth in BRICS economies: A global vector autoregressive approach

Previous studies report that private credit as a proxy of financial development contributes to economic growth in BRICS economies. This paper employs three additional measures of financial development, namely equity market, money supply and market capitalization, and further investigates cross-country evidence on the impact of equity market and money supply spillovers on economic growth in BRICS economies. Utilizing a Global Vector Autoregressive (GVAR) framework and quarterly data from 1989Q1 and to 2012Q4 from BRICS economies, we find that equity market and money supply variables do not predict the contributions of financial development in each BRICS member in boosting economic growth in the other member countries. However, market capitalization significantly influences economic growth. These results suggest that, besides private credit, market capitalization is another key channel of promoting growth in individual economies and the region. Policy implications of the findings are discussed.     

中国金融发展与全要素生产率——基于时间序列的经验证据

全要素生产率问题是研究中国经济可持续增长的核心问题。本文利用界限检验法、基于ARDL法的协整系数估计、向量误差修正模型及其Granger因果关系检验等计量技术,考察了全要素生产率与金融发展等变量的关系。实证结果表明,全要素生产率与金融发展、外商直接投资、经济自由度三个变量存在长期均衡关系,并且从长期来看,金融发展、外商直接投资、经济自由度皆是全要素生产率变动的原因;而从短期来看,只有经济自由度才是全要素生产率变动的Granger原因。     

The linkages among energy consumption,economic growth,relative price,foreign direct investment,and financial development in Malaysia

The aim of this study is to analyse the causal relationship among energy consumption, economic growth, relative price, financial development (FD) and foreign direct investment in Malaysia using a multivariate framework. This study covers a sample from 1972 to 2009. Both the Johansen–Juselius cointegration test and bounds testing approach to cointegration consistently suggest that the variables are cointegrated. We find that energy consumption and economic growth Granger causes each other in the short and long run. In addition, both FDI-led growth and finance-led growth hypotheses are also supported by the findings from this study. Ultimately, energy is a prominent resource for financial sector development in Malaysia because we find that energy consumption Granger causes FD. Policymakers should implement a dual strategy that, on one hand, increases investment in energy infrastructure to ensure that the supply of energy is sufficient for the financial sector and economic development, while, on the other, encourages R&D in green technology such as exercising proper soil conservation techniques and sustainable farming practices in order to reduce the consumption of fossil fuels. By doing so, environmental problems such as carbon dioxide emissions can be minimised without affecting economic growth and financial sector development in Malaysia.     

Causality Tests for Cross-Country Panels: a New Look at FDI and Economic Growth in Developing Countries

The remarkable increase in FDI flows to developing countries over the last decade has focused attention on whether this source of financing enhances overall economic growth. We use a mixed fixed and random (MFR) panel data estimation method to allow for cross country heterogeneity in the causal relationship between FDI and growth and contrast our findings with those from traditional approaches. We find that the relationship between investment, both foreign and domestic, and economic growth in developing countries is highly heterogeneous and that estimation methods which assume homogeneity across countries can yield misleading results. Our results suggest there is some evidence that the efficacy of FDI in raising future growth rates, although heterogeneous across countries, is higher in more open economies.     

FDI技术溢出效应的门限特征研究——来自中国省际面板数据的证据

已有的关于FDI(对外直接投资)技术溢出效应研究文献中,大多数学者认为FDI技术溢出会显著地促进东道主国家的经济增长,然而,利用中国1997年-2009年的省际面板数据,对FDI技术溢出效应进行研究却发现,FDI技术溢出效应在中国不同的地区存在显著差异;运用门限回归模型,从地区经济发展水平、地区开放程度、地区人力资本存量、地区金融发展程度等四个方面检验了FDI技术溢出效应的门限特征,并测算出了引发积极FDI技术外溢效应的门限水平。     

Leverage and firm growth: an empirical investigation of gazelles from emerging Europe

The aim of the paper is to assess the impact of leverage on gazelles’ performance while controlling for firm characteristics, macroeconomic environment, and characteristics of domestic banking sectors. Using a sample of 1105 gazelles from Central, Eastern, and South-Eastern European (CESEE) countries for the period 2006–2014, we find that leverage negatively affects firm growth. The results prove to be robust regarding the use of different estimation approaches, alternatives variables for firm growth, and different sub-samples. Our results suggest that improving access to various sources and types of financing represents a key issue for supporting gazelles’ growth. We also find that macroeconomic environment and banking sector characteristics are important determinants of gazelles’ growth. The economic growth positively influences sales and total assets growth, while the effect of financial and economic development varied with the firm growth measure used. Our findings provide empirical evidence for the need of policy initiatives at national and European Union level to facilitate the growth of small businesses.

     

The Determinants of Intra-European Foreign Direct Investment Flows: Market Integration and Policy Issues

SUMMARY

This paper reviews the literature on the determinants of foreign direct investment (FDI) and the European Community (EC), especially the few studies concerned with intra-European FDI. It applies international business theory to investigate the determinants of FDI flows within the EC over the period 1984–89. The key results are that the models found contrast with the standard US-EC literature, and also differ within the EC. Real variables assume the greatest importance, although financial variables do appear significant. The pattern of findings suggests that the growth of intra-EC FDI is linked to the adoption of a pan-European FDI strategy by EC firms, largely prompted by EC market integration.     

Corporate cash holdings and total factor productivity – A global analysis

Studies concerning total factor productivity (TFP) have investigated the effect of TFP on economic growth from a country-level perspective, which is a critical issue in the macroeconomics field. Few studies have examined how corporate financial decisions influence TFP from a firm-level perspective. Specifically, no extant studies have investigated how cash holdings affect firm productivity. This study utilizes data for firms in 65 countries during 1993–2017 to investigate the effect of cash holdings on TFP from a corporate perspective. The findings show that firms with higher cash holdings can enhance TFP. The results hold after considering endogenous problems, financial constraints, financial crises, corporate governance, institutional quality, and financial development as well as various robustness tests. Furthermore, we examine whether firms consistently invest their cash holdings into research and development (R&D) expenditures enhances firm productivity. The evidence indicates that higher cash holdings lead to steady increases in R&D expenditure, which improves firms’ TFP.     

外商直接投资行为分析及对策研究

中外学者的研究表明,外商直接投资对当地经济发展的促进作用是明显的,我国东部地区的经济发展就少不了外商直接投资的功劳。我国吸引外商直接投资已连续多年位居世界第二,而东部地区又是我国吸引外商直接投资最多的地区,占到了外商直接投资的85％以上。这表明外商在我国东、中、西部地区的直接投资很不平衡,外商直接投资的行为有着明显的特征。而且研究表明,他们的这些行为受到了诸如投资环境、地理位置、人力资源、经济外向度、聚集效应等因素的影响。因此各地特别是中西部地区,需要制定对策以提高外商在当地的直接投资。其中基本的对策是改善投资环境,丰富人力资源,产生聚集效应。     

The relationship between trade,FDI and economic growth in Tunisia: An application of the autoregressive distributed lag model

The relationship between foreign direct investment (FDI), trade openness and economic growth in host countries remains one of the most important issues in the economic literature and met with renewed interest in recent years mainly for countries suffering from unemployment problems and lack of technological progress. This paper examines this issue for Tunisia by applying the bounds testing (ARDL) approach to cointegration for the period from 1970 to 2008. The bounds tests suggest that the variables of interest are bound together in the long run when foreign direct investment is the dependent variable. The associated equilibrium correction is also significant, confirming the existence of a long-run relationship. The results also indicate that there is no significant Granger causality from FDI to economic growth, from economic growth to FDI, from trade to economic growth and from economic growth to trade in the short run. Even though there is a widespread belief that FDI can generate positive spillover externalities for the host country, our empirical results fail to confirm this belief for the case of Tunisia. They go against the generally accepted idea considering the positive impact of FDI on economic growth to be automatic. The results found for Tunisia can be generalized and compared to other developing countries which share a common experience in attracting FDI and trade liberalization.     

The patterns of cross-border portfolio investments in the GCC region: do institutional quality and the number of expatriates play a role?

In this paper, we document the determinants of portfolio investments to Gulf Cooperation Council (GCC) economies by bringing up the role played by market forces, cultural affinities, and institutional quality. We classify the GCC economies as host to 35 countries as per the Coordinated Portfolio Investment Surveys (CPIS) of the IMF for the period 2001–2006. Using the CPIS data and data from various other reliable sources and appropriate panel data analysis techniques, we find a number of interesting results: 1) the relatively higher quality of institutional set up in GCC in comparison to other countries; 2) the relative volume of expatriates across source countries in GCC soil; and 3) bilateral factors such as trade linkages between GCC and source countries, all statistically and significantly explain portfolio investments to the GCC region. Additionally, we uncover the existence of a portfolio “GCC bias”. That is, GCC investors exhibit a strong preference towards their own markets when allocating their cross border financial asset holdings.