Credit Ratings and Earnings Management around IPOs

This study examines the impact of having a credit rating on earnings management (EM) through accruals and real activities manipulation by initial public offering (IPO) firms. We find that firms going public with a credit rating are less likely to engage in income‐enhancing accrual‐based and real EM in the offering year. The monitoring by a credit rating agency (CRA) and the reduced information asymmetry due to the provision of a credit rating disincentivise rated issuers from managing earnings. We also suggest that the participation of a reputable auditing firm is crucial for CRAs to effectively restrain EM. Moreover, we document that for unrated issuers, at‐issue income‐increasing EM is not linked to future earnings and is negatively related to post‐issue long‐run stock performance. However, for rated issuers, at‐issue income‐increasing EM is positively associated with subsequent accounting performance and is unrelated to long‐run stock performance following the offering. The evidence indicates that managers in unrated firms generally manipulate earnings to mislead investors, while managers in rated firms tend to exercise their accounting and operating discretion for informative purposes.     

On the conduct of monetary policy in Vietnam

Vietnam has the highest inflation rate in Southeast Asia (over 20 per cent year‐on‐year in 2011). This paper examines the extent to which inflation in Vietnam is due to its conduct of monetary policy. It is argued that, had the central bank implemented policy on a more timely basis, inflation would not have been as high as it was, but the more fundamental problem is that the central bank does not have the tools it needs to conduct monetary policy effectively. Monetary policy is further complicated by Vietnam's exchange rate policy. By choosing to peg the currency and maintain fairly free capital mobility, the country has all but given up the ability to pursue an independent monetary policy. As a consequence, the central bank is forced to attempt to sterilise its foreign exchange interventions, which it is ill‐equipped to do. The paper argues that financial sector liberalisation is needed not only to promote growth but also to maintain macroeconomic stability.     

Stunting and academic achievement among Vietnamese children: new evidence from the young lives survey

Most of the empirical literature on the relationship between the health condition and skill development of school children are based on a static relationship between health and skill development. This article contributes to the literature by examining the dynamic relationship between stunting and school achievement using data from the first three waves of the Young Lives Survey in Vietnam. Using both structural equation and hybrid estimators, empirical results show that past school performance is the most significant predictor of the academic performance. Stunting has a significant negative effect on school performance, and its effect in the long run is as twice as much its effect in the short run. The empirical evidence also shows that the age of the child, mothers’ literacy, access to electricity and household consumption significantly affect school performance.     

Finance,growth and (macro)prudential policy: European evidence

Empirica - This paper examines the interactions between financial development, economic growth and (macro)prudential policy on a sample of 12 euro area countries. Our main takeaway is that active...     

The role of endowments,technology and size in international trade: new evidence from product-level data

Using product-level trade data, we empirically investigate the export patterns of more than 150 countries in their exports to the USA, Brazil, India, and Japan. We document strong evidence that exporters specialize according to their relative factor endowments, technology, and economic size. More developed, capital abundant countries are found to export products of higher unit values and a wider range of products to developed, emerging and developing markets. More developed, economically larger, and technologically advanced countries are also the major exporters of new products, spanning a wide range of product categories with high unit values. Our findings provide important insights into the macro phenomenon that a large proportion of the global trade takes place among developed economies, and that the latter are also major exporters to developing markets.     

Hollowing out of middle-pay jobs in Ohio: An exploratory analysis

Hollowing out is a term that refers to the decline in the share of middle-pay and middle-skilled jobs relative to low-pay and high-pay jobs. This study employs county-level occupational data at the place of employment to document hollowing out of middle-pay jobs across regions in Ohio. The county-level data with occupational information allow us to study how regions' economic heterogeneity contributes to the decline of middle-paying jobs in Ohio over the 2001–2019 period. Of 88 counties in Ohio, 77 counties experienced declines in the shares of middle-paying jobs. On average, Appalachian Ohio counties experienced higher hollowing out rates than other counties. We found that the hollowing out of middle-paying jobs in Ohio is associated with the declines in the shares of manufacturing and mining jobs.     

Green financing for sustainable development: Insights from multiple cases of Vietnamese commercial banks

Although the public sector is seen as the main party responsible for taking action on climate change and sustainable development, private commercial banks are in a unique position to support or shift the funding focus on green investment. By employing a qualitative research approach based on six commercial banks, this paper aims to investigate the current practices of how commercial banks are contributing to advance green business initiatives. Accordingly, this research examines and identifies the facilitators and challenges in domestic and foreign commercial banks in Vietnam which support green business initiatives. In addition to addressing the recent calls for the investigation of the role of commercial banks in facilitating green finance, our study expands the emerging literature by demonstrating the current efforts of Vietnam's commercial banks in fostering green finance during the Covid-19 pandemic.     

Capital regulation and bank balance sheet adjustments: a simultaneous approach

This study examines the balance sheets of banks in 15 Asian countries from 2004 to 2016 to explore how they respond to stricter capital regulation. We consider the simultaneity of balance sheet adjustments. Employing a normalisation method, the study found that Asian banks increased regulatory capital, primarily through retained earnings, and expanded assets over the study period. However, the two-step system Generalised Method of Moments results do not support the positive effect of capital regulation on regulatory capital components adjustments. In addition, stricter capital regulation even induces banks to reduce lending.     

The dynamics of textile firm responses to the restriction of endocrine disrupting surfactants: a Vietnam case study

Abstract

Since textile industry has been claimed to endanger the environment and human health, the insight of textile firm behavior regarding chemical use and discharge is vital for designing environmental risk management strategies. This study aimed to explore the dynamics of responses to the restriction of nonylphenol (NP) and its ethoxylates (NPEOs) among the Vietnamese textile manufacturers from the perspectives of attitude and the perceptions of adaptabilities, risks, benefits, and barriers. The chemicals are used as surfactants and are known to be responsible for endocrine disrupting effects. In-depth interviews were conducted with technical specialists from four textile firms and one chemical supplier. Regulatory and market situations with regards to the chemicals were also assessed. The findings revealed varied responses to chemical elimination where perceived technical risk, financial risk, benefits, and barriers played different roles in driving a certain action. The attitude towards chemical restriction was shaped by the trade-off between perceptions of financial risk and benefits and was moderated by market strategy. Efforts, such as enhanced washing or reductions in the dose of NP/NPEOs, imply the potency of continuous discharge of these chemicals into the environment, suggesting critical investigations on NP/NPEOs removal to prioritize actions for balancing between economic growth and environmental protection. Poor access to new policies and technological and chemical innovations was the most important barrier among private firms, highlighting the roles of non-governmental textile and garment industrial/trade associations in enhancing their members’ informative capacity. The study reflects the significance of incorporation of firm behavior research into environmental risk management practice.     

Invoice currency choice,nonlinearities and exchange rate pass-through

ABSTRACT

Estimating time-varying thresholds as a proxy for exporter’s predicted exchange rates, this study proposes a new approach to analyse possible asymmetric behaviour of exchange rate pass-through (ERPT) or pricing-to-market (PTM) in Japanese exports between yen appreciation and depreciation periods. Constructing the industry-specific nominal effective exchange rate on a contract (invoice) currency basis, we perform the multivariate threshold near-vector autoregressive (near-MTVAR) estimation and reveal a strong tendency of symmetric ERPT in the short-run, between yen appreciation and depreciation periods. From the 2000s, however, Japanese machinery exporters increased the degree of PTM even in the long-run, while other industries raised the degree of long-run ERPT, reflecting the difference of product differentiation across industries. This evidence has significant implications for the recent unresponsiveness of the Japanese trade balance to the large depreciation of the yen.