Trade Liberalization and the Profitability of Mergers: a Global Analysis*

We analyze the effects of bilateral tariff reductions on the profitability of cost‐reducing horizontal mergers. Given Cournot competition in a two‐country world, for any positive tariff below a certain threshold, marginal trade liberalization is shown to encourage only those domestic mergers with sufficiently large cost‐savings and to discourage the rest. For tariffs close to, but smaller than, the prohibitive tariff, however, marginal trade liberalization necessarily encourages all domestic mergers. Moreover, we show that for a given level of cost‐savings, the impact of marginal trade liberalization may not reliably predict that of nonmarginal liberalization. Although at high tariffs, domestic mergers are shown to be unambiguously more profitable than cross‐border mergers, near free trade, mergers which yield the most cost‐savings become the most profitable. Thus, when comparing domestic and cross‐border mergers, trade liberalization encourages the type which yields the most cost‐savings.     

A re-examination of the savings displacement hypothesis

This paper re-examines the savings displacement hypothesis. It uses a new dataset that disaggregates aid into project aid, financial programme aid, technical assistance grants and programme food aid. When considering the whole sample of 97 countries, results obtained from estimating a savings function using the GMM-System approach to dynamic panel suggest that project aid flows are the only type of aid exerting a negative effect on domestic savings. The results also show that the effects of the different categories of aid on domestic savings vary across regions, thus highlighting the importance of regional disaggregation in cross-country studies. The author would like to thank Jean-Louis Grolleau at the OECD Credit Reporting System for his helpful advice and his encouragements during the construction of the disaggregated aid database used in this paper.     

COMPARATIVE EFFICIENCY BETWEEN COOPERATIVE,SAVINGS AND COMMERCIAL BANKS IN EUROPE USING THE FRONTIER APPROACH

We test competing hypotheses concerning the comparative behavior of shareholder‐owned commercial banks and stakeholder‐orientated cooperative and savings banks in European banking. One hypothesis is that the risk culture and business models of stakeholder and shareholder‐owned banks have become more alike and so cost efficiency has converged between bank ownership structures. The alternative hypothesis suggests that institutional differences do matter and lead, amongst other things, to variation in network effects and monitoring mechanisms producing differing behaviors and efficiency outcomes. By using a novel panel data set of 521 European banks during 1994–2010, we find: (i) mean inefficiency scores vary by ownership type and are lower for cooperative banks than for commercial and savings banks; (ii) there is a large variation in inefficiency scores among banks within each ownership type but the lower variance for cooperative banks indicates that they are the most homogeneous group; (iii) the inefficiency distribution of savings and commercial banks appear to arise from the same distribution, but this does not hold for cooperative banks. As such our findings are more consistent with the alternative hypothesis. Our first two findings buttress those studies that found significant differences between European banks with differing ownership structures, while our third finding on the significance of the cycle to the distribution of inefficiency is novel.     

Why are Latin America's savings rates so low? An international comparative analysis

This paper presents a theoretical and empirical assessment of the determinants of savings rates, with special emphasis on Latin American savings rates. The study is based on international comparisons, using data from 36 countries for 1970–1992. A distinction is made between private and public savings. The later are endogenously determined by economic and political variables. Per capita income growth is the most important determinant of private and public savings; public savings are lower in countries with higher political instability; public savings crowd out private savings, but less than proportionately. Low Latin American savings are due to the magnitudes of their determinants, rather than structural differences.     

Bank ownership type and temporal evolution of long‐term bank funding in the period 2005–2017

This study uses a large panel dataset of Western European banks to examine the determinants of bank funding stability. Banks are divided into three categories by bank ownership type; the ownership types in this study are commercial banks, cooperative banks and savings banks. Three sources of stable bank funding are investigated: customer deposits, equity, and long‐term liabilities. Furthermore, the sum of these funding components is used as a proxy variable for a bank's total available stable funding (ASF). A special focus is on the temporal evolution of these funding types. The regression results show that commercial banks’ funding became much more stable in the period 2005–2017. However, that funding remains, on average, less stable than does cooperative and savings banks’ funding. In addition, funding stability has remained at the pre‐crisis level in cooperative and savings banks, despite a steep dip in cooperative banks’ ASF during the sovereign debt crisis. Furthermore, banks substantially decreased financing from long‐term liabilities after the financial crisis, replacing it with customer deposits and equity.     

Measuring Saving Intentions

Abstract
A need has long been expressed for up-to-date information on householder plans for saving, both quantity and type. This article surveys the international work done on ascertaining householder intentions and then proposes a group of nine specific questions to be put to Australian households with the aim of developing a useful Index of Saving Intentions along with information on household asset allocation. Full development can only be accomplished ex post when results can be correlated over time with various savings measures. It is intended that the Index assist in forecasting household behaviour, the allocation of savings across assets and that it will permit more rapid evaluation of the effects of government policy changes in areas such as taxation and superannuation. Results from initial surveys are presented.     

为结婚而储蓄?——来自中国家庭追踪调查①(CFPS)的经验证据

已有研究主要基于性别比失衡的竞争性储蓄动机解释了中国家庭的高储蓄之谜.文章把子女结婚这一自然事件作为处理变量,通过婚前和婚后的家庭储蓄变化识别出"婚姻效应",为竞争性储蓄动机理论和中国家庭的高储蓄之谜提供了微观证据.研究结果发现,在控制个人以及家庭特征后,相对于已婚家庭,未婚家庭储蓄显著更高.在排除地区性差异、教育储蓄动机、预防性储蓄动机和样本匹配等问题之后,未婚比已婚家庭具有更高储蓄水平的结论依然稳健.文章进一步分析识别出了城市和农村异质"婚姻效应"和婚后消费结构的变化,发现"婚姻效应"对不同收入水平的家庭都产生了影响,但"婚姻效应"对低收入家庭的消费抑制更为明显.文章的研究结果丰富了婚姻市场的竞争性储蓄动机理论.     

我国居民储蓄利率敏感性的实证研究

首先对利率变动与居民储蓄的关系进行理论分析,然后选取2000年1月到2010年12月的数据,利用VAR模型,就我国居民储蓄利率敏感性问题进行了实证研究,实证结果表明我国的居民储蓄和存贷利率之间的变化存在长期稳定的关系,但是居民储蓄对存贷利率变化并不敏感。居民储蓄利率敏感性差的根本原因是政府行为、企业行为、银行行为和居民行为还不符合市场经济的要求。最后对提高储蓄利率敏感性提出政策建议。     

Do Consumers Learn from Their Own Experiences?

It is natural to think that a household may learn from its own experiences and subsequently increase savings. This paper tests empirically the hypothesis that Japanese households learn from their experiences of large expenditure and increase their targets for precautionary savings after such experiences. The results imply that households raise their targets for precautionary savings by 4–5 percent of annual income in response to such experiences. Moreover, data are consistent with the argument that targets for savings affect actual savings. Assuming this holds, the results in this paper suggest that consumers may increase their actual savings following large expenditure.     

A time‐series approach to the determination of savings rates

Time series analysis is used to study the savings rate and its determinants. The real effective exchange rate is introduced as a new independent variable in the savings function. Borrowing constraints, the current account balance, real rate of interest, macroeconomic stability, and age dependency are shown to be significant determinants of the savings rate. In addition, the real effective exchange rate is found to be significant across countries. Violations of Purchasing Power Parity are shown to explain some of the differences in savings rates between Canada, Japan, the United Kingdom and the United States.     

Financial sector development and domestic savings in South Asia

Given the limited capital flows to developing countries in South Asia, domestic savings is the primary source of investment and growth. Financial sector development and access to financial institutions are important determinants of savings ratios in developing countries. In this context, we empirically examine the role of financial development on savings ratios of five South Asian countries after controlling for other relevant variables for the period 1975–2010 and also for two sub-periods—the pre-reforms period (1975–1991) and the post-reforms period (1992–2010). We find that financial sector development positively affects total and private savings in South Asia along with per capita income, share of agriculture and foreign savings. Results also support the humped-shaped relationship between financial development and savings. The causality results support that financial development leads to higher savings mobilisation in South Asia.     

Time Consistent Optimal Redistribution Policy in an Overlapping Generations Model

This paper analyzes optimal redistribution policy in a two‐period version of the overlapping generations model with heterogeneous individuals and asymmetric information between the government and the private sector. The government of the first period determines redistribution transfers for the first period but is not able to set the policy variables for the second period. With respect to savings the paper considers two scenarios: In the first scenario savings are observable and the government can set individual savings levels in addition to redistributive transfers. In the second scenario savings and capital incomes are not observable. In both cases the redistribution equilibrium is not second‐best efficient.     

中国的政策性金融和邮政储蓄的关系研究

本文的主要目的是分析政策性金融的资金和邮政储蓄的关系。通过分析 ,提出了以下几点看法 :( 1 )自 1 994年以后 ,中央银行仍然维持邮政储蓄资金转存关系的主要原因是为了确保向政策性银行提供资金。 ( 2 )在我国目前的政策性金融制度下 ,邮政储蓄是政策性金融的重要资金来源之一 ,而中央银行实际上起到了部分的“中间机构”的作用。所谓邮政储蓄抽走农村资金这一说法并不准确。 ( 3 )通过对政策性金融的利率结构的详细分析 ,提出了中央银行对财政实施间接补贴的两种解释。最后 ,作者指出了制度上存在的一些问题 ,并提出了相应的改革建议。     

The interest elasticity of household savings: a structural approach with German micro data

This paper empirically investigates the effects of changes in the interest rate as well as in the current and expected future consumer price levels on households’ consumption–savings decision. In a structural demand model applied to German consumption data, we use cross-sectional and longitudinal variation in prices and tax rates to construct individual after-tax interest rates and cluster-specific consumer prices. We find that the compensated own-price elasticities for savings as well as consumption are significantly negative, while the theoretical model implications of homogeneity and symmetry must be rejected. Importantly, we estimate the uncompensated interest rate elasticity of savings, in line with the literature, at around zero. Some heterogeneity in this elasticity is found along the savings and wealth distribution. We conclude that short-term policy-induced variation of net returns to savings is expected to have no significant effects on the level of compound savings.     

Why Women Have Lower Retirement Savings: The Australian Case

This study provides empirical evidence of the gender gap in retirement savings trajectories using a large longitudinal Australian database. The persistent trend of retirement income policy over recent decades has been to place responsibility for retirement savings accumulation with the individual employee. These plans are fundamentally linked to employment conditions and individual choices, which shape retirement savings trajectories and outcomes. Australia has a mature compulsory system and thus provides insight for countries embarking on similar paths. This study shows that the gender gap in retirement savings is observable from early on in an individual’s paid working life and persists over time, providing evidence that women are disadvantaged early in their careers, with few signs of improvement. Men, in contrast, are overrepresented in the upper quartile of growth in retirement savings. This study provides important empirical evidence for policymakers concerned with gender differences in retirement outcomes.     

Longevity and Life‐cycle Savings*

We add health and longevity to a standard model of life‐cycle saving and show that, under plausible assumptions, increases in life expectancy lead to higher savings rates at every age, even when retirement is endogenous. In a stationary population these higher savings rates are offset by increased old age dependency, but during the disequilibrium phase, when longevity is rising, the effect on aggregate savings rates can be substantial. We find empirical support for this effect using a cross‐country panel of national savings rates.     

流动性约束和不确定性状态下的预防性储蓄研究-中国城乡居民的消费特征分析

该文利用我国城乡时间序列数据,对城乡居民的消费特征做了新的探索.我们对引入预期收入增长的对数线性欧拉方程和二阶泰勒近似的欧拉方程进行了估计,结果说明,当期收入仍是决定我国居民消费的主要因素,消费的随机游走假说不成立;城镇居民比农村居民有更强的预防性储蓄动机.1990年代中期以来持续走低的收入增长率直接抑制了消费需求的增长,而仍然偏紧的流动性约束和日益增强的不确定性增大了预防性储蓄动机.     

TOP INCOMES AND NATIONAL SAVINGS

The relationship between income inequality and national savings is theoretically ambiguous, and past empirical studies have delivered mixed results. We revisit the question using a newly available source of data on inequality: the income share of the richest 10 percent and the richest 1 percent. Combining this with historical data on national savings rates, we are able to investigate the relationship for 11 developed countries over the period 1921–2002. We find no consistent relationship between lagged top income shares and current savings rates, and our standard errors are small enough that we are able to reject more than modest effects in either direction. We view this as suggesting that inequality at the top end of the distribution is not a major driver of national savings rates.     

Understanding domestic savings: an empirical approach

ABSTRACT

There are two unusual and important features in the evolution of the savings rate in Chile. First, the economy increased the average savings rate by 11 percentage points in the period 1985–2013 compared to 1960–1984, mainly due to a large change in private savings rate (10 percentage points), and an additional 1 percentage point from the public sector. The second feature is related to the change in the composition of private savings. After several years of nearly no corporate savings, this component became an important part of total savings reaching an average of almost 10% of Gross National Disposable Income (GNDI) during the period 1986–2012. Our results show that the 1984 tax reform, the boost in the marginal productivity of capital and the deepening of the financial market were the main drivers that explain the dramatic increase in corporate savings. We also found that the reduction in personal income tax after the tax reform and the higher income per capita growth helped to explain the increase in household savings, while the structural balance rule helped to explain the increase in public savings.     

REGULATORY FORBEARANCE AND DEPOSITOR MARKET DISCIPLINE: EVIDENCE FROM SAVINGS BANKS IN KOREA

This paper investigates whether regulatory forbearance for savings banks in Korea affects the market discipline of depositors using data from 2000 to 2010, which are characterized by a series of exits of savings banks. We find that depositors' sensitivity to the savings banks' asset quality decreases when there is regulatory forbearance for failing savings banks. This forbearance effect is also observed in the behavior of the depositors of the neighboring savings banks in the same business area. These results suggest that regulatory forbearance may cause depositors to misjudge bank risks, increasing the expected costs of bank failure. (JEL G21, G28)