Financial Development,Market Deregulation and Growth: Evidence from China

In this paper, the relationship between finance and growth is analysed in the context of an endogenous growth model with government regulation and intervention. Our theoretical model suggests that financial intermediaries can affect the process of economic growth in several ways. Using the recent Generalized Method of Moments (GMM) techniques, we test our model in a panel data set covering 29 Chinese provinces over the period of 1990–2001. Empirical results show that financial development and government deregulation in the financial sector significantly promote China's economic growth.     

Assessing Vulnerability to Financial Crisis: Evidence from Indonesia

This paper examines the view that the recent Indonesian crisis was largely unforeseen. The broadest macroeconomic indicators were of virtually no help in presaging the crisis; neither were high-frequency financial indicators. But warnings were there, just below the surface, in some of the macro indicators and in certain structural weaknesses that were long recognised as threats to financial stability. That said, none of these warnings suggested crisis of the magnitude that eventually occurred. The Indonesian experience indicates that macroeconomic stability should never be taken for granted. Signs of vulnerability to financial instability include: the degree of reliance on gross private capital inflows (taking into account maturities and the implications for rollovers); the extent of unhedged foreign exchange positions; and certain indirect indicators, such as policy slippages and key personnel changes. Finally, in a world of volatile capital flows, crisis will tend to occur before standard economic data suggest that crisis is imminent.     

Financial Deregulation and the Bank Lending Channel in Developing Countries: The Case of Indonesia

The dominant role of commercial banks as a source of finance and the considerable asymmetry of information in financial markets in developing countries have raised an argument that the bank lending channel of monetary transmission mechanism would be very important in such countries. This study addresses the issue by investigating empirically whether there are differential effects of monetary policy on banks' balance sheets, and its implications to the existence of the bank lending channel of monetary policy in Indonesia, especially since the early 1980s when the government adopted a policy of financial deveculation. We find significant differences of balance sheet behaviour across bank classes in response to a change in monetary policy, consistent with the predictions of the bank lending view. We also found that because of access to foreign funds and the existence of bank loan commitment, the monetary policy was unable to constrain loan supply by the large (state) banks, indicating that the bank lending channel operates through smaller (non-state) banks.     

Financial Derivatives and Private International Law: Some Remarks

Financial derivatives are a product of financial innovation that is not possible to define by means of Italian legal definitions; the primary source of regulation for financial derivatives is the international trade law. Private autonomy plays a central role in derivatives transaction, and such party autonomy must be recognized by the sovereign state to be legally effective and enforceable. Standard derivatives contracts, although sophisticated, cannot eliminate totally the legal risk. This lacking, together with the problem of unclear identification of the jurisdiction applicable, makes the juridical aspects of derivatives more complex.     

International Financial Relations Under the Current Float: Evidence from Panel Data

This paper uses multi-country data for the period 1973–1994 to investigate five key equilibrium conditions in international finance—purchasing power parity, the Fisher equation, uncovered interest parity, and the equity-return analogues of the latter two. The results are largely consistent with theoretical expectations. Over the long run, purchasing power parity, uncovered interest parity and the Fisher effect prove to be rather good first approximations. The equity-return relations, though somewhat less so are nevertheless much better behaved than past studies would lead one to expect. Average rates of equity returns keep pace with inflation within countries in almost all instances; across countries, they are positively correlated with average rates of inflation. This is particularly the case when the data period is extended to include earlier decades.     

Financial Liberalization and Corporate Investments: Evidence from Korean Firm Data*

This paper examines whether financial liberalization procedures introduced in Korea in the early 1990s succeeded in relaxing financing constraints on firms. Because external funds are more costly than internal funds in an imperfect capital market, corporate investments depend on the availability of internal funds. As financial liberalization mitigates constraints on firms, the sensitivity of investments to cash flow can be reduced. Using panel data on Korean firms, we found that cash‐flow effects on investment spending decreased drastically during the liberalization period. In particular, small, non‐chaebol and established firms that were severely constrained gained most from liberalization. Chaebol firms appeared to lose preferential access to credit after liberalization.     

Imperfect Competition in German Food Retailing: Evidence from State Level Data

An increase in the level of retail concentration in food markets across Europe has raised concerns about the implications of retail dominance in the food supply. This paper measures oligopoly and oligopsony market power in the German food retail industry and incorporate specific details about the German meat market and the European BSE crisis. In this paper, simultaneous estimates of the degree of oligopoly and oligopsony market power in the German food retail industry are derived by applying a set of monthly state level retail beef and pork marketing data in the federal state of Hessen, Germany, from 1995–2000. Results strongly suggest evidence of retail oligopoly and oligopsony power. Lerner index estimates indicate retail market power accounts for 0.5% to 11% of the retail unit margins of beef and pork.

Ownership Structure and Risk‐taking Behavior: Evidence from Banks in Korea and Japan

This study analyzes the effects of managerial ownership on the risk‐taking behavior of Korean and Japanese banks during the relatively regulated period of the late 1990s to the early 2000s. It finds that managerial ownership alone does not affect either the risk or the profit levels of Korean banks. In contrast, an increase in managerial ownership adds to the total risk of Japanese banks. However, increased risk‐taking behavior does not produce higher levels of profit for Japanese banks. The coefficients of the interaction term between franchise value and managerial ownership are negative and statistically significant for both the Korean and the Japanese banking industries. This means that an increase in managerial ownership in banks with high franchise values discourages risk‐taking behavior. The results confirm the disciplinary role of franchise value on the risk‐taking behavior of banks. These results also fall in line with previous literature supporting the moral hazard hypothesis based on research into the economies of the USA and other countries.     

金融地理结构与企业进口：来自中国制造业的微观证据

中国政府在全面对外开放阶段将扩大进口规模、促进贸易平衡作为新的贸易战略。文章利用2003～2013年中国制造业微观企业数据和城市数据,从地方金融集聚和金融中心溢出的双重视角深入研究了金融地理结构对企业进口的影响及其作用机制。研究发现,地方金融集聚和金融中心溢出均显著促进了企业进口。从传导机制看,融资成本降低和生产规模扩张是地方金融集聚和金融中心溢出促进企业进口的重要途径。异质性检验表明,地方金融集聚和金融中心溢出对非国有企业、沿海企业进口的促进作用更大;此外,地方金融集聚对不同规模和年龄企业以及加工贸易企业进口具有促进作用,而金融中心溢出仅对中上规模企业、年龄较大企业和一般贸易企业的进口产生显著的促进作用。进一步研究发现,地方金融集聚和金融中心溢出有利于提高企业的进口概率,增加企业的进口种类,另外它们还促进了企业对中间品与消费品的进口。文章的研究不仅为近年来中国进口的快速发展提供了新颖的解释,而且对当下金融供给侧改革也具有重要的政策启示。     

Price variability and price convergence: Evidence from Indonesia

This paper evaluates price variability and price convergence in Indonesia. Using price indices of 35 products in 45 cities from January 2002 to April 2008, this study shows that, during the observed period, prices in Indonesia converged to the ‘relative’ law of one price. The price variability of one product across cities is found to be smaller than the price variability of all products within a city. Transportation costs and the level of development matter to price variability. This study also reveals that the average speed of convergence, which is measured by the half-life, for perishable goods is about 9 months, non-perishable goods 32–36 months, and services 18–19 months, while the median of the half-life of all products is about 16–17 months. The speed of convergence depends on the initial price difference, but not the distance between cities.     

融资选择权约束、银行机构效率与金融制度结构演进

金融制度结构理论近年来成为学术热点,部分的理论也日趋成熟,但是对于我国金融制度结构演进问题的解释却是乏力的.本文首先梳理了金融制度结构演进的相关理论,然后结合分析我国金融制度结构演进的现实,特别注重了融资选择权约束、银行效率、企业成长周期,以及金融制度设计参与主体间的博弈行为等因素对我国金融制度结构演进的重要影响及其作用机理,进而对我国金融制度结构演进的动因提出新的认识.     

Bank capital and lending: Evidence of nonlinearity from Indonesia

This paper studies the transmission of bank capital shocks to loan supply in Indonesia. Using bank data for the period 2001:Q1 to 2018:Q4, we estimate dynamic panel data models of bank lending. We find nonlinear effects of capital on loan growth. Specifically, the response of weakly capitalized banks to changes in their capital positions is larger than that of strongly capitalized banks. This non-linearity implies that not only the level of capital but also its distribution across banks in the system affects the transmission of shocks to aggregate lending. Likewise, the effects of bank recapitalization on loan growth depend on banks’ starting capital positions and the size and distribution of capital injections.     

Cost Effectiveness of Water Supply Technologies in Rural Indonesia: Evidence From Nusa Tenggara Barat

The supply of adequate safe water to households in rural Indonesia remains a problem despite considerable government effort. Causes include lack of funds, the administrative shortcomings of water supply authorities, and inadequate consultation with the communities involved. The choice of water supply technology is crucial, because the alternatives vary widely in cost and in the demands they place on the organisational and technical capacity of water supply authorities and village communities. This paper compares the average incremental costs, in both financial and economic prices, of various technologies used in rural Indonesia, and discusses how to estimate their economic benefits. It shows that installing improved traditional wells and simple piped systems and rehabilitating large scale piped systems in Nusa Tenggara Barat province is likely to increase economic welfare, while installing new large scale piped systems may not. Finally, a distributional analysis of the different technologies is used to trace their beneficiaries.     

Financial Development,Financial Structure,and the Growth Effect of Monetary Policy: International Evidence

This paper investigates how financial development and financial structure affect the growth effect of monetary policy using panel data from 49 countries over the period 1980–2014. We find robust evidence that financial development has a significantly negative impact on the growth effect of monetary policy. We also find that the growth effect of monetary policy tends to be more pronounced as the financial structure of a country becomes more market-based. These results not only add interesting new evidence to the recent literature on the growth effects of monetary policy, but also provide some important insights into the financial determinants of monetary policy effects on economic growth, which have largely been ignored in the previous literature.     

银行业结构与经济增长——来自中国省级面板数据的证据

内容本文利用样本期为1987-2004年的省级面板数据对中国各省区银行业结构与经济增长的关系进行了计量分析。结果表明,中国各省区银行业结构对经济增长存在着显著为负的影响,这与一般均衡模型的理论预测相一致;中国各省区银行业结构与经济增长的关系表现出了明显的区域差异,即与东部区域相比,中西部区域银行集中度降低的益处更大,更能促进经济增长;在非国有化进程较快和市场化程度较高的省区,银行集中度的降低对经济增长的积极影响更为明显。在此基础上,本文提出了一些政策建议。     

Union and Debt: Evidence from Chinese Private Firms

Do unions really matter in China? Using a dataset containing more than 110 thousand Chinese private manufacturing firms, this paper is the first attempt to examine how unions' bargaining power affects firms' capital structures. We find that: (1) the firms' debt levels are often positively associated with their unions' bargaining powers; (2) when a firm is in financial distress, the management is more likely to issue more debt to strengthen its bargaining power against the union and increase its residual income; (3) compared with long-term debt, short-term debt is a better option for the management to increase its bargaining power and residual income. Our research indicates that the unions of private Chinese firms are an important policy instrument for the management rather than useless decorations, which provides valuable insights for us to understand the employee–employer relations and firms' capital structures in emerging economies.