ECONOMIC POLICY UNCERTAINTY EFFECTS ON CREDIT AND STABILITY OF FINANCIAL INSTITUTIONS

We examine policy‐related economic uncertainty effects on the availability of credit, non‐performing loans and loan loss provisions using a panel of 18 countries. We provide significant evidence that uncertainty reduces the availability of credit while leading to increases in banks' non‐performing loans and loan loss provisions, distorting sectoral stability. Our findings are economically meaningful.     

Factor allocation,economic growth and unbalanced regional development in China

On the basis of development accounting techniques and a factor misallocation framework, we use panel data of 30 Chinese provinces from 2000 to 2013 to assess how factor allocation affects economic growth and unbalanced regional development in China. In particular, we decompose economic growth into three parts, namely sector productivity (SP ), factor market efficiency (FME ) and factor endowment (FE ). We then conduct counterfactual analyses to investigate the short and long‐run roles of factor allocation in the income distribution across provinces. The results show that SP , FME and FE can explain 23%, 8.5% and 68.5% of economic growth, while labour, capital and energy reallocation account for aggregate productivity growth of about 47%, −4.8% and −0.1%. Furthermore, when the factors are efficiently allocated, transferring labour (capital, energy) from agriculture (service, industry) to the other sectors will increase the income per capita by 29.5% and 42.5% in the short and long term. Meanwhile, efficient factor allocation accounts for 32% and 29.7% of aggregate productivity and reduces the income variation across provinces by 25.5% and 23% in the short and long run, respectively.     

State‐Led Financial Regulation and Representations of Spatial Fixity: The Example of the Spanish Real Estate Sector

This article offers a bottom‐up contribution to the fixity–motion literature. It aims to unravel the apparent contradiction of real estate spatial fixity in Spain, which is portrayed both as a barrier to accumulation and as a unique source of investment by different capitalist actors. Empirically, it describes the shifts in real estate ownership and changes in profit‐making strategies that have taken place across the real estate sector during the crisis years, and the role of the state in these shifts. The article asserts that the idea of spatial fixity representing a spatial barrier for accumulation does not necessarily apply in the Spanish case. It further claims that the tensions in capital circulation through real estate are not only to be found in the action of time, but in different state strategies pursued by various actors. The opposing representations of fixity are the result of state regulation of interest rates, taxation and risk weighting. The state also increasingly promotes land rents as a source of liquidity creation.     

The Impact of Students’ Cultural Intelligence on Their Psychological Safety in Global Virtual Project Teams

This study addresses a call for the design and implementation of course curricula that prepare students to develop their CQ and gain experience working with peers on global virtual project teams. We explored how US-based and Peru-based students’ cultural intelligence (CQ) impacted their sense of psychological safety (PS) during a month-long global, virtual team project. We also examined the students’ people-focused (PF) and task-focused (TF) behaviors as mediators of the CQ-PS relationship. The results of mediation analyses provide support for our hypothesis that the relationship between cultural intelligence and psychological safety will be mediated by people-focused behaviors. Finally, we provide a model and suggestions for virtually bringing together students from different countries to collaborate on a global virtual project, and avenues for future research. Here we encourage a focus on a curriculum that educates students about their cultural intelligence and ways to develop psychologically safe learning environments. We also highlight the potential learning for faculty teaching such courses, and note how our experience collaborating with our counterpart in Peru constituted a fractal of what our students were experiencing on their global projects.     

One size doesn’t fit all: A project designing small-scale economic development projects

The authors describe an innovative active learning strategy for a course on the economics of developing countries—a project designing a small-scale economic development project. Student teams research issues faced by developing countries and identify a specific problem in a specific locale. Students then create a detailed, feasible plan to alleviate the problem. Student plans include five key components: justification, implementation, budget, funding and evaluation. After having implemented this project for six years, the authors believe it has the potential to enhance learning and improve analytical, creative problem-solving and research skills. Results from a spring 2017 survey, where students respond favorably to the project, are discussed.     

Excessive Financial Support,Real Estate Development and Macroeconomic Growth: Evidence from China

ABSTRACT

Using monthly panel data for China’s 30 provinces from 2007 to 2017, this article analyzes how level of financial support affects the interplay between real estate development and macroeconomic growth. Based on a threshold model, the results suggest that housing price increases substantially impede economic growth, but there is no significant threshold effect for the sample as a whole. On investigating regional cross-sectional variations, we found that local economic situation clearly impacts on this effect, with significant threshold effects detected in subsamples. While housing price may have positive influences on economic growth in the mid-west subgroup with appropriate financial support, more developed regions returned contrary results.     

Yen or Yuan? The law of one price and economic integration in Asia

Using highly comparable local retail prices of 146 goods and services across 18 Asian countries over 1990–2014, we analyse price dispersion and test convergence to the law of one price (LOP ) for these prices around three price benchmarks—Asia‐average, Japan and China prices—to gain insight about market integration in overall Asia as well relative integration of Asian economies to Japan and China. Cross‐Asia price dispersion around China‐price benchmark, for both tradables and non‐tradables, diminishes significantly over the sample period whereas that around Japan‐price benchmark increases considerably, particularly after the 2008 crisis. There is convergence to the LOP for about half of goods and services in China‐ and Asia‐average price benchmarks. The percentage of convergent prices is significantly smaller in Japan‐price benchmark. Direct estimates of the convergence speed parameter also confirm these observations. Overall, our results show evidence of increasing economic integration in Asia in the last two decades. The process of price convergence appears to be driven by the emergence of China as the centre of economic gravity in the region. There is much room for improvement as economic integration in Asia is still far below that in Europe in the 1990s or USA in the 1980s.     

Economic development,food demand and the consequences for agricultural resource requirements: an application to Indonesia

We analyse food demand patterns of Indonesian households from a resource intensity perspective and quantify the impact of changed demand patterns on the use of three major resource inputs: fossil fuel; land; and water in agricultural production. Using Indonesian Family Life Survey data, 13 major food items (which constitute 70 per cent of food expenditure) are categorised into low, moderate and high resource intensity, and income elasticity and Engel curves are estimated for the period from 1997 to 2007. Our results show that income growth in Indonesia is associated with demand patterns that are more resource intensive. By 2007, per capita requirements of fossil fuel, land and water increased by 42.7 per cent (3.13 MJ), 44.9 per cent (1.24 m²) and 50.4 per cent (2.1 kL), respectively, relative to 1997. The results imply that, at least for Indonesia, changed food demand patterns resulting from economic development will increase the demand for natural resources substantially.     

Asymmetric effects of housing wealth on college enrolment

We investigate the impact of housing wealth, credit availability and financial distress on college enrolment decisions. We find that housing wealth is negatively related to enrolment in public schools and positively related to enrolment in private schools. This evidence suggests that, on average, students substituted away from private schools towards public institutions during the recent financial crisis.     

Are you really doing good things in your boss's eyes? Interactive effects of employee innovative work behavior and leader–member exchange on supervisory performance ratings

Organizations increasingly depend on employee efforts to innovate. However, the quality of relationships between leaders and employees may affect the recognition that employees receive for their innovative work behaviors. Drawing from a social cognition perspective, we tested a model in which leader–member exchange (LMX) moderates the impact of employee innovative work behavior on supervisory ratings of employee performance. Results from two multisource studies combining self, colleague, and supervisor ratings consistently showed that employees receive more favorable performance ratings by engaging in innovative work behavior when they have high‐quality LMX relationships. Moreover, we found that this interactive relationship was mediated by leader perceptions of innovative employee efforts, providing support for a moderated mediation model. Implications for the literatures on performance appraisal, LMX, and innovation are discussed.