Cultural distance and cross-border bank linkages

This study investigates the effect of cultural distance on global bank linkages using country-pair data for the period 1990–2013. We followed Schwartz (2006) to measure cultural distance, and employed the number of bank pairs involved in cross-border syndicated lending from the source to target countries as a measure of bank linkages. We found that cultural distance has a negative association with bank linkages. This effect is stronger in countries featuring higher informational asymmetries, as represented by weaker institutions, higher uncertainty, or revolution shocks. Our results hold even when employing alternative measures of bank linkages and cultural distance, and when considering the potential endogeneity of cultural distance.     

Medicaid and long‐term care: The effects of penalizing strategic asset transfers

Medicaid provides a critical source of insurance for long‐term care, and individuals may strategically offload assets (typically to children) to meet the means‐tested eligibility requirement. In this article, we quantify the extent of such behavior using variation in the penalty for improper parent‐to‐child transfers induced by the Deficit Reduction Act of 2005. We estimate difference‐in‐differences models based on the hypothesis that only individuals with high levels of nursing home risk (high risk) will alter transfers because of the Act. We find that over a 2‐year horizon, high‐risk individuals reduced transfers to children on the extensive margin by 11 percent and that the average total amount of transfers decreased by $4,860. The results hold only for coupled respondents. We also conduct a triple‐differences analysis to examine heterogeneity with financial literacy and find that even those with a low level of financial literacy responded to the penalty.     

Exploring the links among corporate social responsibility,reputation, and performance from a multi-dimensional perspective

This study examines the links among corporate social responsibility (CSR), reputation, and performance in hotel companies from a multidimensional perspective. Data were collected from 322 hotels in China and partial least squares equation modelling (PLS-SEM) was employed for a causal-predictive analysis. Study results reveal that CSR practices influence hotel reputation as seen from both international and local perspectives. CSR and reputation influence performance dimensions (accounting-based performance, market-based performance, and non-financial performance) differently. The research findings offer specific theoretical and practical implications for hotel managers.     

Market response to syndicated loan announcements from high-profile failed and acquiring banks during the global financial crisis

Previous studies that have examined the impact of the 2008 financial crisis on syndicated loans have ignored potential differences between lending banks by explicitly or implicitly aggregating all lenders together and focusing on borrower characteristics. One must jointly consider both borrower and lender to fully understand the complex role of the syndicate during this period. We consider the identity of the lender, with a focus on five major US banks that failed and their five corresponding acquirers. Our results highlight the distinct roles of investment and commercial banks and facilitate an understanding of relationship and transactional-based lending.     

Credit constraints and productivity of SMEs: Evidence from Canada

To what extent firms are constrained by external credit is usually unobserved in commonly used firm-level data. We use a survey of financing among Canadian small and medium-sized enterprises to measure the likelihood of a firm being constrained by credit. We find that firm size, current debt-to-asset ratio and cash flow are robust indicators of being financially constrained, while long-term debt to asset ratio is not a significant indicator of credit constraints. We then estimate the firm-level total factor productivity, taking into account the measured credit constraints. Omitting credit constraints leads to an upward bias of productivity estimates, by 4 percent. In addition, we find no strong evidence that suggests credit constraints lead to slower productivity growth. Finally, we confirm that both investment and employment growth are negatively affected by the measured credit constraints.     

Fifty years of The Financial Review: A bibliometric overview

The Financial Review (FR) is a highly regarded journal publishing original empirical, theoretical, and methodological research in all areas of financial economics. It celebrated its golden jubilee year in 2018. Using bibliometric techniques, we analyze the journal's impact, prominent topics, most prolific authors, and their affiliated institutions and countries. Our analysis also identifies the most often cited articles at different points in the journal's history. Using textual data analytics, we identify the most frequent themes discussed between 1969 and 2018 by decade.     

The income inequality,financial depth and economic growth nexus in China

Income inequality has increased in China despite rapid economic growth. Income inequality could impinge on future development, leading to social tension or political instability. Our study investigates the short-run and long-run relationship between three important macroeconomic indicators—income inequality, economic growth and financial depth. We utilise a two-step procedure of ARDL bounds and Granger causality for the analysis. The bounds test indicates the presence of a cointegrating relationship between income inequality, financial depth and economic growth in the long run. In the second step, we utilise the Granger causality approach. Results show a bidirectional causality between financial depth-growth and a unidirectional causality between inequality-growth in the short run. In the long run, results reveal that growth and financial depth determine Gini. Our findings provide support for the inequality-widening effect due to economic growth and higher credit provided to the private sector. We find no evidence of inequality-narrowing or income-equalising effect in the long run for the period of study. It is possible that the government's inclusive growth policies which started less than a decade ago have not taken effect for us to capture the inverted U-shape income equalising effect significantly.     

Delegation and the regulation of U.S. financial markets

We analyze the institutional determinants of U.S. financial market regulation with a general model of the policy-making process in which legislators delegate authority to regulate financial risk at both the firm and systemic levels. The model explains changes in U.S. financial regulation leading up to the financial crisis. We test the predictions of the general model with a novel, comprehensive data set of financial regulatory laws enacted specifically between 1950 and 2009. The theoretical and empirical analysis finds that economic and political factors impact Congress’ decision to delegate regulatory authority to executive agencies, which in turn impacts the stringency of financial market regulation, and our estimation results indicate that political factors may have been stronger and resulted in inefficiencies.