Nonlinearity in the effects of financial development and financial structure on unemployment

The positive role of the financial sector in promoting economic growth has been well established among academics and practitioners since the early 1990s. However, more recently, there has been increasing evidence pointing to a vanishing, and even negative, effect of financial sectors at high levels of financial depth, particularly since the global financial crisis of 2007?2009. Too much finance could hurt growth. The paper shifts the focus towards labor market outcomes by examining whether too much finance also hurts unemployment. Using a dynamic simultaneous model via system GMM estimation and a panel of 97 OECD and non-OECD countries for the period 1991–2015, we find that the answer depends on the type of finance and the extent of a country’s labor market flexibility. Specifically, (i) too much financial development hurts unemployment for countries with more rigid labor markets; (ii) too bank-centered or too little market-oriented financial systems worsen unemployment, particularly for countries with more flexible labor markets; and (iii) too much credit to private enterprises deteriorates unemployment in countries with more rigid labor markets, whereas too little credit to households worsens unemployment in countries with more flexible labor markets. Evidence also shows that these unemployment consequences possibly run through investment and entrepreneurship channels.     

International Finance: Pushing the Statistical Envelope to Meet the Challenges of Globalization

This paper treats three key areas where statisticians are pushing the envelope to meet the challenges of providing the basis for sound analysis and thus for sound policy in pursuit of assuring prosperity and preventing financial crises. In one area, the challenge is to provide comprehensive and timely data on foreign direct investment. In another area, the challenge is similar-to provide comprehensive and timely data on public debt. Moreover, a whole new area of statistics, dealing with the health of the financial sector, is being developed in recognition that one country's financial health or sickness affects its neighbors and many others in a world of complex global ties.     

公共资本和私人资本的生产效率及其区域差异——基于分位数回归模型的研究

本文基于中国各省区市1994～2005年的样本数据,利用分位数回归估计了各区域和各省区市的公共资本和私人资本在各分位点的产出弹性,主要结论是:私人资本的产出弹性远远大于公共资本,私人资本的产出弹性系数均为正,且基本上显著;而对于公共资本,除少数省区市外,东中部各省区市的产出弹性系数为正,而西部省区市的弹性系数则基本上为负,且大多数并不显著。各省区市的公共资本和私人资本不仅在产出弹性大小上存在较大差异,而且在条件分布的不同分位点,其弹性的变化规律也不尽相同。     

强化财务管理提高经济效益

企业的经济活动是以资金活动贯穿始终的,企业的经济效益主要是通过投入、产出、消费和所得四个方面比较全面反映出来的,这些内容都需要通过财务管理来体现,随着国际市场竞争更加激烈,强化财务管理,保证企业健康发展尤其重要.     

Did covenants distort risk signals from bank subordinated debt yields before the financial crisis?

Restrictive covenants on bank debt require a bank to take or refrain from specific actions that affect the riskiness of that debt. Although covenants all but disappeared in the 1990s, they re-emerged after 2004 with an increase in bank risk leading up to the financial crisis. Subordinated debt yields potentially enable better risk monitoring by supervisors, but covenants can shift risk from bondholders to stockholders without reducing overall bank risk. This can distort the risk signal used by market participants to discipline excessive risk taking. Because covenants are endogenous and increase during periods of bank stress, the yield signal is dampened the most precisely when regulators most need accurate risk monitoring.     

Introduction to financial frictions and debt constraints

This is an introduction to the special section on financial frictions and debt constraints.     

Sovereign debt composition and time-varying public finance sustainability

We compute time-varying responses of the sovereign debt ratio to primary budget balances for 13 advanced economies between 1980 and 2012, and assess how fiscal sustainability reacts to different characteristics of government debt. We find that the sustainability time-varying coefficient increases and countries become more fiscally sustainable if they contract a higher share of long-term public debt, if more debt is held by the central bank or if it is easily marketable in capital markets.     

Asset sale,debt restructuring,and liquidation

This paper considers a dynamic model in which shareholders of a firm in distress have a choice of whether the firm proceeds to debt restructuring or direct liquidation at an arbitrary time. In the model, we show the following results. Fewer asset sales, lower financing, debt renegotiation, and running costs, a lower premium to the debt holders, a lower cash flow volatility, and a higher initial coupon increase the shareholders׳ incentive to choose debt restructuring to avoid full liquidation. In the debt renegotiation process, the shareholders arrange the coupon reduction and use equity financing to retire a part of the debt value to the debt holders. The timing of debt restructuring always coincides with that of liquidation without debt renegotiation. Most notably, the shareholders do not prefer asset sale in debt restructuring even if they face high financing costs. The possibility of debt renegotiation in the future increases the initial leverage ratio in the optimal capital structure.     

Institutional perspective of financial sector development: A multidimensional assessment

Financial sector development is a multidimensional process that plays a vital role in the economic growth and development of a country. This study investigates the effect of institutional quality on multidimensional financial sector development, and its dimensions, such as, depth, access, and efficiency. We used a panel dataset of 85 emerging and developing economies from 1996 to 2018 for analysis. Our findings based on 2SLS estimation demonstrate that institutional quality has a significant positive effect on the progress of the financial sector, especially its depth, access, and efficiency. The breakdown analysis shows that most of the key components (control of corruption, government effectiveness, regulatory quality, rule of law, and voice and accountability) of institutional quality enhance the financial sector development. Our empirical results are robust across alternative measures of institutional quality, split-sample analysis, alternative instrument, and estimator. This paper also offers useful policy implications to the stakeholders in emerging and developing economies.     

Prediction difficulty, financial strength and debt maturity

In order to have the optimal capital structure, the company with higher volatility of return adjusts the capital structure more frequently and has shorter debt maturity. Investors also have shorter investment cycle on these companies. Investment cycle is also affected by information asymmetry. The less asymmetric the information is, the more information investors get and the longer the investment cycle is. The adjustment frequency is also restricted by financial strength. This paper measures the debt maturity structure of the firm as the weighted average of debt maturity, and it is more precise than the ratio of long term debt to total debt. In empirical tests on debt maturity, the results show that financial strength, volatility of return and asymmetric information all have negative impacts on debt maturity.     

浅谈民营企业管理系统的开发与应用

文章分析了民营企业开发管理系统的必要性,介绍了开发管理系统的步骤、方法和注意事项,阐述了开发民营企业管理系统的意义。     

Fiscal policy,debt constraint and expectations-driven volatility

Imposing some constraints on public debt is often justified regarding sustainability and stability issues. This is especially the case when the ratio of public debt over GDP is restricted to be constant. Using a Ramsey model, we show that such a constraint can however be a fundamental source of indeterminacy, and therefore, of expectations-driven fluctuations. Indeed, through the intertemporal budget constraint of the government, income taxation negatively depends on future debt, i.e. on the expected level of production. This mechanism ensures that expectations on the future tax rate may be self-fulfilling. We show that this is promoted by a larger ratio of debt over GDP.     

Drivers and barriers to environmental supply chain management practices: Lessons from the public and private sectors

This study explores the factors that drive or hinder organisations to implement green supply chain management initiatives. A literature review identifies the main categories of internal and external drivers of green supply chain management practices, including organisational factors, regulation, customers, competitors and society, but there is little indication of suppliers as drivers for green supply chain management. Internal barriers include cost and lack of legitimacy, whereas external barriers include regulation, poor supplier commitment and industry specific barriers. An explorative study is conducted based on interviews from seven different private and public sector organisations. Encouragingly, across the organisations, more drivers than barriers to environmental supply chain management are identified. Organisations seem to be more influenced by external rather than internal drivers. The barriers to environmental supply chain management experienced by organisations tend to be both internal and external.     

Managing the Public Debt: The Optimal Taxation Approach

This paper examines research on public debt management, focusing on debt structure by denomination, indexation features, and maturity. The optimal taxation approach is reviewed and its policy implications are related to the trade-off between minimization of the expected cost of debt servicing and minimization of budgetary risk. Strong arguments are provided for debt instruments which yield low returns when output and hence revenues are lower and public spending higher than expected. This debt design minimizes tax distortions and provides flexibility in conducting fiscal policy. The exact characterization of the debt composition which supports efficient taxation depends on the stochastic structure of the economy. Long-term nominal debt is a hedge against supply shocks affecting revenues and inflation and makes the government budget insensitive to interest-rate risk. However, at high levels of debt, the extent of insurance or flexibility that governments can obtain by issuing long-term nominal debt is limited by the need to maintain the credibility of the anti-inflation stance.     

Economic policy uncertainty and cost of debt financing: International evidence

Prior research shows that economic policy uncertainty affects a wide range of corporate financial decisions; however, there is little research on the relationship between economic policy uncertainty and cost of debt financing across countries. In this paper, we argue that economic policy uncertainty affects cost of debt financing through two mechanisms including information asymmetry and default risk. With a sample of 163,243 firm-years across 17 countries from 2003 to 2016, we find that economic policy uncertainty positively affects cost of debt financing and this effect is stronger during the global financial crisis from 2008 to 2009. Moreover, our research findings show that large firms’ debt financing cost is less affected by economic policy uncertainty.     

论金融信用缺失及其风险防范

金融信用失灵,必然会导致全社会经济秩序的混乱,因此,防范金融信用缺失就显得尤其重要。文中分析了金融信用缺失的表现、原因,最后给出了防范金融信用缺失切实可行的建议。当然,良好社会风尚需要全民良好信用的构建。     

Powerful CEOs,debt financing,and leasing in Chinese SMEs: Evidence from threshold model

This study investigates the impacts of CEO power on firm financing policies (i.e. debt financing and operating leasing) using the Caner and Hansen (2004) instrumental variable threshold regressions approach. The sample consists of a panel of 297 Chinese listed small and medium sized enterprises (SMEs) over the period 2009–2012. The empirical results indicate that there are threshold effects in the CEO power-debt relationship and CEO power-operating lease relationship. In particular, we find that firms tend to use more debt financing (and operating leasing) when CEO power index below a certain threshold level; beyond the threshold level, CEO tends to manipulate firm capital structure to pursue their own interests, thus using less debt financing and operating leasing. In addition, our estimation results suggest a positive relationship between debt and operating leases when CEO power is smaller than certain threshold, while it becomes negative if the power index exceeds the threshold level.     

Bank competition,financial development and macroeconomic stability: Empirical evidence from emerging economies

In this study, we investigate the potential contribution of bank competition to macroeconomic stability, and the interactive role of financial development. We classify macroeconomic stability into economic and financial stability. Economic stability is represented by the volatility of actual and unexpected output growth, whereas financial stability is assessed by the aggregate Z-score and volatility of the private credit-to-gross domestic product ratio. We employ two structural and two non-structural measures of bank competition in our analysis. Applying a two-step dynamic panel system (GMM) to macroeconomic data from 48 developing nations from 1999 to 2018, we find a bell-shaped relationship between bank competition and macroeconomic stability. The findings imply that a higher level of bank competition promotes macroeconomic stability by reducing output growth volatility, fluctuations in private credit, and the probability of bank default. There is an optimal level of bank competition beyond which it may foster economic and financial instability. Moreover, financial development enhances bank competition’s positive impact on macroeconomic stability.     

Introduction to international financial markets and banking systems crises

This note introduces to the literature streams explored in the special section on international financial markets and banking systems crises. All topics tackled are related to the Great Recession. A brief overview of the research questions and related literatures is provided.