International capital mobility: regional versus global perspective

This paper examines the role of regional versus global savings in financing domestic investment to shed light on the role of financial globalization and regionalism in capital markets. Regression results based on six regions with 141 countries reveal that although the role of foreign (global or regional) saving has increased over time, there are regional differences: domestic saving is the major source of investment financing in North America with an increasing role of regional and global savings over time, while regional saving is the main source in Europe. Global saving has been the main source of investment financing in other regions where domestic and regional financial markets are not well developed. However, the role of regional saving has significantly increased in recent years in the Asia-Pacific and in Latin America. Regionalism such as financial and monetary cooperation is likely to have increased the role of regional saving.     

国际金融整合下资金流动与经济增长关系研究——基于新兴经济体面板数据的分析

在引入特定的宏观经济、金融和政策变量等控制变量后,本文尝试检验东欧、东亚和拉丁美洲三大主要新兴经济体的资金流动方向及其对经济增长的影响。实证结果显示:东欧地区收入水平与金融深化程度仍然偏低,但随着发展程度提高,未来将由资金流入转为流出。东亚地区的超额外汇储备、贸易顺差与资金流出,被指控为造成美国巨额经常账户赤字与全球经常账户失衡的主要原因之一。但该地区若能够持续进行金融深化,资金可能回流并使全球经常账户失衡现象得以缓解。至于拉丁美洲地区的宏观经济、金融和政策变量,对资金流动方向并无决定性影响,财政与货币政策仍是决定资金流入能否有助于经济增长的关键因素。最后,本文对解决我国国际收支不平衡问题提出了政策建议。     

Development of financial intermediation and economic growth: The Chinese experience

Using Chinese provincial data from 1985 to 1999 and applying recent GMM techniques developed for dynamic panels, this paper examines how the development of financial intermediation influences China's economic growth during the post-1978 reform period. Our econometric results show that China's financial intermediation development contributes to its rapid economic growth through two channels: first, the substitution of loans for state budget appropriation and second, the mobilization of household savings. Loan expansion, however, does not contribute to growth since loan distribution by financial intermediaries is inefficient. Deep financial sector reform aimed at correcting this inefficiency is desirable, and is expected to sustain China's economic development in the future.     

Microfinance in the Asia Pacific

The use of financial services as a development tool has taken a variety of forms over the past 25 years—rural credit schemes offering heavily subsidised loans to poor farmers, microfinance organisations providing working capital loans to predominately female micro-entrepreneurs, and a variety of organisations offering a range of financial services (credit, savings and insurance) to help poor households increase incomes and reduce their vulnerability to income fluctuations. Microfinance providers in Asia and Latin America have been world leaders, and the demonstration effect of their successes has helped to build substantial microfinance industries in countries such as Indonesia, Bangladesh and Bolivia. Africa has fewer well-known programs but some notable performers and growing microfinance sectors nonetheless; while regions such as the South Pacific have few if any microfinance successes. This paper highlights some key themes in the development of microfinance, with particular reference to the Asia Pacific region.     

The Financial Deepening-Productivity Nexus in China: 1987–2001

The financial intermediation-growth nexus is a widely studied topic in the literature of development economics. Deepening financial intermediation may promote economic growth by mobilizing more investments, and lifting returns to financial resources, which raises productivity. Relying on provincial panel data from China, this paper attempts to examine if regional productivity growth is accounted for by the deepening process of financial development. Towards this end, an appropriate measurement of financial depth is constructed and then included as a determinant of productivity growth. It finds that a significant and positive nexus exists between financial deepening and productivity growth. Given the divergent pattern of financial deepening between coastal and inland provinces, this finding also helps explain the rising regional disparity in China.     

Latin American manufacturing and the First World War: An exploratory essay

In the 1960s many writers on Latin America accepted the idea that the conditions for industrial growth were most propitious when international commercial and financial flows were disrupted, as in the First World War. Recent work has raised doubts, however, about the extent of manufacturing expansion between 1914 and 1918, while drawing attention to the growth of industry in the 20 years preceding 1914. This paper, through a discussion of the secondary literature and a sampling of primary sources on five countries, seeks to explain why increases in production and profits during the war were not accompanied by significant new investment or a diversification of Latin America's industrial structure.     

Building Complementarities in Africa between Different Development Cooperation Modalities of Traditional Development Partners and China

Abstract: China's relationship with Africa has grown exponentially over the last decade with US$95 billion in bilateral trade in 2008 and US$5.4 billion of Chinese investment in Africa for the same year. The growth of Sino‐African relations also has an impact on the role of traditional development partners in Africa in particular in the aftermath of the 2008 financial crisis, which has already led some traditional development partners to reduce their aid budgets and subsequently their Official Development Assistance (ODA) flows to Africa. The objective of this paper is to analyse different development cooperation modalities in Africa of traditional development partners and China. This requires identifying trends in aid, debt relief, general budget support, trade, preferential trade access, and investment flows of both traditional development partners and China. The paper advocates that complementarities can be built between these development modalities on a national, regional and global level. This would enhance development effectiveness, increase efficiency and create win‐win situations which would be beneficial to African countries, China and traditional development partners.     

Analysing disequilibrium interest-rate systems in developing countries

Under equilibrium conditions, monetary policy measures to raise institutional interest rates are contractionary. When interest rates are held below their free-market equilibrium levels, however, an increase can be expansionary. Higher institutional interest rates may deter savings in the form of unproductive inflation hedges and encourage savings in the form of financial claims issued to finance productive investment. In most developing countries, money is the predominant financial repository of savings and bank loans are a major source of investible funds. Hence, attention is focused here on models which analyse the effects of binding interest-rate ceilings on financial intermediation. Empirical evidence reported in this paper is consistent with the view that binding institutional interest-rate ceilings can have a substantial growth-reducing impact.     

Future sustainable Latin American growth: A need for savings

This article, starting from the Lewis emphasis upon increasing productivity, analyzes the external and internal sources of disequilibrium in Latin America over the last two decades. It indicates the impressive progress, and continuing requirements, that have been made in both dimensions over the last fifteen years. The real requirement for continued growth at high rates, emphasized by Lewis more than 45 years ago, is, however, increased rates of internal saving. Until the Latin American countries are able successfully to increase their domestic savings, hopes for sustained expansion will be continuingly frustrated.     

The Finance–Growth Link in Latin America

This paper analyzes the relationship between financial development and economic growth in Latin America with a Granger causality test and impulse response functions in a panel vector autoregression (VAR) model. With annual observations from a sample of 18 countries from 1962 to 2005, it is shown that while economic growth causes financial development, financial development does not cause economic growth. This finding is robust to different model specifications and different financial indicators. Interestingly, when the sample is divided according to different income levels and institutional quality, there is two‐way causality between financial development and economic growth only for the middle income group and for countries with stronger rule of law and creditor rights. The impulse response functions show that a shock to financial development has a positive impact on economic growth only for these subsamples, but the net effect of financial development on growth is relatively small.     

The savings trap and economic take-off

We develop a model of economic development in which cultureand technology interact to devermine savings, investment, andgrowth. Investment is assumed to involve intermediation or othercosts that may, in any period, result in either of two equilibriafor the savings rate. At the good equilibrium, aggregate savings,the savings rate, and growth are all higher than at the badequilibrium. Whether the country falls into this savings trapdepends on each individual's belief about the savings behaviorof others in the economy. Goverment policies that coordinatesavings and facilitate investment can influence whether thecountry escapes the trap.     

Financial Intermediation Development and Economic Growth： Does the Chinese Counterexample Exist？

In terms of the degree-of-freedom of bank loan decision-making, the ratio of loans of private enterprises and individuals to total loans is used to measure the development of China ＇s financial intermediation. Applying generalized method of moments estimation developed for dynamic panel data models, the present paper finds that the effect of financial intermediation development on economic growth is positive and statistieally significant when controlling for other variables, such as human capital foreign direct investment, securitization and foreign trade. The empirical results indicate that the concept of the so-called Chinese counterexample in financial development is questionable. Financial system reforms, including encouraging banks to operate independently, reducing or eliminating mandatory loans, and maldngfinancial decision-making more market-oriented, are important for China＇s economic growth.     

The German bank–growth nexus revisited: savings banks and economic growth in Prussia†

This article provides evidence that smaller, regional public financial intermediaries contributed to Germany's industrial development, using a new dataset of the foundation year and location of Prussian savings banks. This extends the bank–growth nexus beyond its traditional focus on large universal banks. Since savings banks were public financial intermediaries, our results further suggest that state intervention can be successful in the financial sector, particularly at the early stages of industrial development when capital requirements are manageable, and access to international capital markets is limited.     

Entry,information, and financial development: A century of competition between French banks and notaries

Poorly developed financial markets are widely believed to block economic growth, because only modern financial intermediaries such as banks can mobilize large amounts of financial capital at low cost. This claim is supported by cross country regressions, but the regressions assume that credit intermediation is measured accurately before modern financial intermediaries arrive. If traditional intermediaries were mobilizing large amounts of financial capital before banks or other modern intermediaries appear, then the strength of the relationship between financial development and economic growth would be cast into doubt. Using an original panel dataset from nineteenth-century France, we provide the first estimates of how much financial capital key traditional intermediaries (notaries) were mobilizing for an entire economy during its first century of economic growth, and we analyze the lending that the notaries made possible in French mortgage market. The amount of capital they mobilized turns out to be large. We then analyze the effect that financial deepening had on the notaries as banks spread and find that the banks' and notaries' services were in all likelihood complements. The implication is that the link between financial development and economic growth may therefore be weaker than is assumed.     

A comparison of Latin American and African economic development with an East Asian twist

There are many parallels between the development of Latin America and Sub‐Saharan Africa. Recent literature on this is reviewed. It is argued in the paper that the key to long‐term development is the shift from inward (import substitution) to outward (export‐oriented) growth. This shift involves both tariff reduction and significant investment in infrastructure and human capital accumulation. Given that much of Latin America (historically) and Sub‐Saharan Africa (currently) has depended or depends on trade taxes for revenue, an outward orientation poses a significant fiscal problem, which makes it extremely difficult to switch to an export‐oriented growth path. East Asian experience points to the importance of broad‐based agricultural growth in making the fiscal transition.     

金融危机对苏州出口增长趋势的影响

欧美日是苏州最大的出口市场,拉丁美洲是苏州出口增速最快的市场。金融危机已经影响了欧美日和拉丁美洲的经济增长,造成它们进口需求的下滑,会对苏州出口增速产生较大的负面影响。面对新的挑战,苏州应采取新的思路和对策。由于苏州外向型经济在全国的代表性,其现状和对策的研究将对全国具有较强的借鉴意义。     

农村金融发展与农民收入的关系:山东例证

利用山东省1978～2006年的时间序列数据,对农村金融发展与农民收入的关系进行了实证研究。结果表明,山东省农村金融发展与农民收入之间存在着稳定的协整关系,农村金融信贷促进了农民收入的增长,而农村储蓄对于农民收入的增加具有负效应。应采取增加农业贷款的支农力度,强化财政支农的力度,以及避免农村资金倒流等措施,促进农民收入的增加。     

区域金融发展与经济增长的实证关系研究——基于东部沿海地区和西部地区

通过建立面板数据模型，对东南沿海地区和西部地区1990—2015年的数据进行实证检验。检验结果表明，地区金融发展对经济增长的作用具有一定的差异性，金融深化率的发展、保险市场完善、固定资产投资、物价水平对经济增长具有积极作用；而金融中介率、地区开放程度尚未完全发挥对经济增长的促进作用。     

Determinants of bond market development in Asia

One of the major reasons behind the Asian financial crisis in 1997 was the excessive dependence of the Asian economies on commercial banks for domestic financing. The region failed to diversify its sources of corporate financing as it relied mainly on banks since its other types of financing, namely bond markets, were still underdeveloped and their sizes were quite small. On the other hand, the 2008 global financial crisis and the ongoing European debt crisis have led to constraints in acquiring local currency and foreign currency liquidity in the corporate sector in Asia as foreign banks withdrew investments from Asia. Furthermore, Asia needs large long term capital (US$ 750 billion per year for 2010–2020) for developing infrastructure connectivity within and across its economies. Local and regional capital can be channeled for long-term infrastructure projects and other productive investment through bond markets. Having a well-developed local currency bond markets can enhance the resilience of domestic financial sector to external shocks and it can facilitate better intermediation of savings into productive investments in Asia. To enhance corporate bond financing, it is important to examine factors that affect the effective development of bond markets in Asia. The study attempts to identify the determinants of bond market development in Asian economies through examining the relationship of bond issuance with selected key financial and economic factors. It also intends to provide policy recommendations for the further development of the Asian bond market. Major determinants for bond market development in Asia include the size of an economy, the stage of economic development, the openness of an economy, the exchange rate variability, the size of the banking system, and interest rate variability.     

Does Financial Intermediation Development Increase Per Capita Income in Rural China？

This paper investigates the impacts of financial intermediary （or banking） development on village-level per capita income using a Chinese dataset for selected years between 1993 and 2006. The empirical results from a random effect regression model indicate that mean per capita income in rural villages follows an inverted U-shaped path as financial intermediation develops. However, using a pooled quantile regression approach, we find that median per capita income in rural villages follows a positive linear path, rather than an inverted U-shaped path, as financial intermediation develops. The positive linear effect of financial intermediary development is observed at the lower and higher ends of the conditional per capita income distribution. This suggests that development of financial intermediation in China might not have statistically significant differential effects in low-income or high-income rural villages.