Optimal investment with vintage capital: Equilibrium distributions

The paper concerns the study of equilibrium points, or steady states, of economic systems arising in modeling optimal investment with vintage capital, namely, systems where all key variables (capitals, investments, prices) are indexed not only by time but also by age. Capital accumulation is hence described as a partial differential equation (briefly, PDE), and equilibrium points are in fact equilibrium distributions in the variable of ages. A general method is developed to compute and study equilibrium points of a wide range of infinite dimensional, infinite horizon, optimal control problems. We apply the method to optimal investment with vintage capital, for a variety of data, deriving existence and uniqueness of equilibrium distribution, as well as analytic formulas for optimal controls and trajectories in the long run. The examples suggest that the same method can be applied to other economic problems displaying heterogeneity. This shows how effective the theoretical machinery of optimal control in infinite dimension is in computing explicitly equilibrium distributions. To this extent, the results of this work constitute a first crucial step towards a thorough understanding of the behavior of optimal paths in the long run.     

资本外逃的经济效应与应对政策选择研究

资本外逃是一个复杂的经济问题,是由多种原因造成的,并会给一国经济发展带来不可估量的风险和损失。基于此,论文梳理了资本外逃的研究现状,提出了资本外逃所产生的经济效应,在此基础上,提出了资本外逃的政策选择,为一国在治理资本外逃时提供了政策选择和借鉴。     

The effects of credit default swaps on corporate investment

ABSTRACT

This paper examines how credit default swaps (CDS) affect the corporate investment of the referenced entities. We document a significant reduction in corporate investment after CDS trading, a result that is robust to alternative model specifications and a set of endogeneity tests. Our findings of the increased firm risk and cost of capital support the costly external capital channel. The cross-sectional variations in CDS effects demonstrate that both reduced monitoring and the empty creditor problem might be the underlying forces driving the costly external capital channel. Our additional analysis implies that CDS trading is associated with an enhancement in investment efficiency for firms that are prone to overinvestment.     

Microfinance and social capital formation- a social network analysis approach

The microcredit program has emerged as an important poverty alleviation strategy over the last three decades, and several studies have examined its economic impacts on the community well-being. However, far too little attention has been paid to the effects of micro credits on community social connection and solidarity. This paper aims to examine the application of Social Network Analysis (SNA) to explore the impact of the rural microcredit fund on community social capitals. In doing so, the data on interactions of four rural development groups' members before and after the microcredit project implementation were collected using participatory workshops in Neyzar village of Qom province in Iran. The data were analyzed by Ucinet software, and the socio-graphs were produced by the NetDraw application. The results show that, more people have been involved in the social interactions after the project implementation and there was statistically significant increase in density and decrease in centralization of cooperation network. Furthermore, there were no important distinctions in centrality of people with various educational levels before and after the project implementation. Overall, it can be concluded that, the microfinance initiative considerably promotes the community social capital and participation in the rural development activities. Moreover, the SNA techniques are applicable as an impact assessment tool to investigate changes in community social capital.     

Tax competition,imperfect capital mobility and the gain from non-preferential agreements

The gain to competing governments from entering into binding non-preferential tax agreements (that prevents discriminatory taxation in favor of mobile capital) depends on the extent of capital mobility between jurisdictions. In particular the gain is increasing in the cost of relocation of capital and the fraction of the domestic tax base which is relatively immobile. We show this in a symmetric model of tax competition between two governments where all capital is imperfectly mobile and differ only in their cost of relocation.     

The role of innovation in venture capital: empirical evidence from European Union and EFTA countries

This article investigates the effects of innovation attempts on the venture capital and investment activity in the cases of the selected European Union plus European Free Trade Agreement countries using annual panel data and by controlling for real income growth and business sophistication. Our findings suggest that innovation has positively significant effects on venture capital in the cases without opt-out countries (United Kingdom and Denmark); however, these effects become negative in the cases with opt-out countries. Policy implications are provided in the conclusion section of this study.     

R&D based knowledge capital and future firm growth: Evidence from China’s Growth Enterprise Market firms

Building upon a dynamic stochastic general equilibrium (DSGE) model, this paper examines the role of knowledge-based capital (KC) in improving firms’ future growth in productivity. Based on the analysis of Chinese listed firms from 2006 to 2017 in the Growth Enterprise Market (GEM), we find KC often generates endogenous movements in productivity and earnings over the business cycles, suggesting that the nature of KC is pro-cyclical. Moreover, investment in KC is often classified as a corporate expense and is thus deducted from the current year’s profits. Therefore, firms with high R&D investments have significantly higher future productivity growth but lower current profitability than do those with lower R&D investments. Given these characteristics, KC’s benefits to productivity and future earnings are thus not immediate. For faster growth in the long term, firms should continue investing in KC even if they may face a short-term fall in corporate earnings as a result of internal knowledge investment, especially for fast-growing GEM firms.     

Capital buffer and credit‐risk adjustments in Islamic and conventional banks

The main purpose of this article is to empirically investigate the interactions between changes in capital buffer and changes in credit risk, using panel data of Islamic and conventional banks located in the Middle East and North Africa (MENA) region over the period 1999–2016. A negative two‐way relationship between the changes in capital buffer and the changes in credit risk is found for the two types of banks, that is, banks tend to decrease their capital buffers in response to an increase in risk exposure and limit their risky activities in response to an increase in their capital buffers. Dividing our period of study into three subperiods to assess the effect of the last financial crisis 2007–08 on the adjustment process, we point out the negative bidirectional relationship between the changes in capital buffer and the changes in credit risk of the two types of banks is present for the three subperiods except the case of conventional banks during the precrisis period. Moreover, we provide evidence that Islamic banks adjust their capital buffer in response to the changes in credit risk regardless of the existence or not of a deposit insurance scheme. In contrast, the negative two‐way relationship between the changes in capital buffer and the changes in credit risk in conventional banks is found only in countries without deposit insurance schemes.     

乡村振兴战略下农村产业融合、人力资本与农民增收*——以浙江省为例

［目的］乡村振兴战略是贯彻新发展理念，建设现代化经济强国的重大战略之一。农村产业兴旺，农民生活富裕是乡村振兴战略的重要目标。农村一、二、三产业融合发展是实现乡村产业振兴，农民增收的重要途径。农村人力资本状况关系到农村产业融合的人才建设，关系到农民增收的实现。文章力图探究乡村振兴战略下农村产业融合、人力资本与农民增收间的相互作用关系，以期为乡村振兴战略的实现提供政策建议。［方法］以浙江省为例进行实证分析，通过建立PVAR模型，采用格兰杰因果关系及面板数据模型进行检验。［结果］农村产业融合及人力资本构成农民增收的格兰杰因果关系，两者都对农民增收产生显著影响，且人力资本影响效应更大。农民增收及人力资本对农村产业融合没有起到相应的促进作用。［结论］在实证分析的基础上，从加大人力资本投入、培育农村产业融合复合型人才及加强宣传引导工作等方面提出相应的政策建议促进农村产业融合。     

The impact of foreign direct investment on productivity: New evidence for developing countries

We provide new empirical evidence on the relationship between inward foreign direct investment (FDI) and total factor productivity (TFP) growth using cross-country data for 51 developing countries over the period 1984–2010. Our results suggest a weak direct effect of FDI on TFP growth but, after accounting for the roles of human capital and institutions as contingencies in the FDI-TFP growth relationship, we find a robust FDI-induced productivity growth response dependent on these ‘absorptive capacities’. However, the relevance of the human capital contingency effect diminishes when the effect of institutions is also considered, which suggests that improving institutions is relatively more important than human capital development for developing countries to realise productivity gains from FDI.