DO BANK RELATIONSHIPS MATTER IN PUBLIC DEBT OFFERINGS?

Finance theorists have argued that banks have a comparative advantage over public debtholders and other suppliers of debt both in gathering information about and in monitoring corporate borrowers. Although underwriters of public debt issues and private placements have access to inside information when executing specific transactions, commercial bankers have ongoing relationships with their corporate borrowers that have often been built up over years. Perhaps more important, banks are also often in a better position and have stronger incentives than a dispersed collection of bondholders to keep tabs on what the borrowers do after receiving the capital.
This theoretical argument received striking empirical support from a study by Chris James published in 1987 in the Journal of Financial Economics. Entitled "Some Evidence on the Uniqueness of Bank Loans," the study documented that announcements of new bank lending aggreements by public firms are received positively, on average (and in a large majority of cases) by the stock market. This finding offered a pointed contrast to the neutral to sharply negative stock-price responses that accompany announcements of almost all other kinds of securities offerings, including private placements of debt and public offerings of straight debt.
In this article, the authors discuss their own recently published study that provides another piece of evidence of the value added by banking relationships. Specifically, the authors report that the first public debt offerings of companies with bank relationships carry spreads that are 85 basis points less than the spreads of initial debt issues by comparable firms without bank relationships. As the authors interpret their findings, a banking relationship not only helps to "certify" the value of corporate borrowers to their stockholders, but also provides other lenders with valuable "cross-monitoring" benefits that are reflected in lower borrowing costs.     

越南税收行政改革

该文分析了越南税收行政改革取得的突破性进展,提出了新时期税收行政改革的基本方向和措施。     

Service value and switching barriers: a personal values perspective

This research aims to investigate how customers, the key actors in a service relationship, perceive service value and switching barriers. The study is framed along the means-end-chain theory of personal values and theory of customer resources in the service-dominant logic. Hypotheses about the impact of personal values on customer value, switching barriers and customer loyalty were tested using structural equation modeling of survey data obtained from the health care and retail banking sectors in Vietnam. The results show that in both sectors, personal values have a significant impact on perceived process and outcome value as well as on perceived economic and relational switching barriers. Economic barriers were found to affect loyalty in the banking sector, in the same way that relational barriers affect loyalty in the health-care sector only. Loyalty in both sectors is influenced by process but not by outcome value. The implications of these findings are discussed.     

Updating Poverty Maps without Panel Data: Evidence from Vietnam*

A household survey and a census can be combined to estimate a poverty map for small areas. Ideally, the survey and the census should be conducted in the same year. In several empirical applications, however, survey and census years can be different, which might make poverty estimates biased. Using data from the Vietnam Household Living Standard Survey 2002 and the 1999 Population and Housing Census, the present paper produces a 2002 poverty map for Vietnam and describes the biases when the survey and census years are not coincident. It is found that poverty estimates from the poverty mapping method taking into account the time difference between the survey and the census are quite close to survey‐based estimates, at least at the regional level.     

THE BEHAVIOR OF U.S. PUBLIC DEBT AND DEFICITS DURING THE GLOBAL FINANCIAL CRISIS

In this paper we test the sustainability of U.S. public debt for the period 1916–2012 by analyzing how the primary surplus to gross domestic product (GDP) responds to changes in the debt to GDP ratio in a time‐varying parameter model. Further, we determine the stationarity property of the debt/GDP ratio while accommodating possible breaks in the data caused by wars and economic crisis under both the null and alternative hypotheses of an endogenous unit root test. The results show that the U.S. public debt was sustainable until 2005 when the primary surplus to GDP reacted negatively to the debt/income ratio. This is further exacerbated during the global financial crisis when primary surpluses continued to fall with increased debt, thus jeopardizing the sustainability of fiscal policy. While the stationarity test shows that the U.S. fiscal debt/GDP ratio is sustainable, it fails to highlight the risk that its debt policy has been becoming unsustainable in recent years. (JEL H62, E62, C2)     

Vertical specialization in the EU and the causality of trade

We use a novel classification scheme to identify three stages of production in the manufacturing sector: parts, components and final goods. In particular, we offer evidence on the revealed comparative advantage of the EU-27 countries concerning the three vertically separated stages of production. Moreover, we investigate whether, and if so how, imports of parts, and components can work as a predictor for the exports of final goods. We find that countries specialize at different stages of production, and that components are Granger causal for the export of final goods in many countries with a lag of 3 months.     

BUSINESS CYCLES IN SMALL OPEN ECONOMIES: EVIDENCE FROM PANEL DATA BETWEEN 1900 AND 2013

Using a novel data set for 17 countries between 1900 and 2013, we characterize business cycles in both small developed and developing countries in a model with financial frictions and a common shock structure. We estimate the model jointly for these 17 countries using Bayesian methods. We find that financial frictions are an important feature for not only developing but also small developed countries. Furthermore, business cycles in both groups of countries are marked with trend productivity shocks. Common disturbances explain one third of the fluctuations in small open economies, especially during important worldwide phenomena.     

Monetary Policy Transmission in Vietnam: Evidence from a VAR Approach

A thorough understanding of the transmission mechanism is a key requirement for central banks for successful implementation of monetary policy. This paper investigates the existence of the interest rate channel, exchange rate channel and asset price channel in Vietnam by employing a vector autoregressive model analysis using monthly data ranging from 2003M1 to 2012M12. The results from the analysis present evidence for a cost channel. However, we find no evidence for the existence of an exchange rate channel or asset price channel of monetary transmission in Vietnam.     

The role of trade openness and investment in examining the energy-growth-pollution nexus: empirical evidence for China and India

Most of the existing literature dealing with the relationship between carbon emissions, energy consumption and economic growth either suffers from ignoring relevant variables such as trade openness or investment, or suffers from using econometric methods that are unable to distinguish between short- and long-term causality and are not robust to the degree of integration of time series used for the analysis. This article suggests using the autoregressive distributed lag approach along with additional explanatory variables such as measures of trade and investment to shed a new light on the link between emissions, energy consumption and income in the two largest and energy-intensive developing economies: China and India. Our results, over the 1971–2009 period, provide evidence that investment plays a major role in shaping the relationship between carbon emissions, energy consumption and income in China while this is not the case in India. Furthermore, trade openness is found to play a key function in the short term in China but does not contribute to the emissions-energy-growth scenario in India.