Financial development,portfolio investments and the real economy in Africa

According to the conservative view, capital flows enhance economic growth. Focussing on Africa’s real economy, this study investigates the linkage between portfolio investments and real sector growth, and whether financial sector development strengthens this association. The study covers 30 countries over the period 1990–2017. We adopt the Lewbel instrumental variable general method of moments (IV-GMM) two-step robust estimator, which relies on heteroscedasticity for identification, while dealing with instrument insufficiency, unavailability, endogeneity and omitted variable bias. We found that portfolio equity has no growth impact on Africa’s real sector. Debt flows deter the growth of the overall real sector as well as the manufacturing and industrial sectors, but have no impact on agriculture and service growth. We found that financial development does strengthen the positive association between capital flows and economic growth, but this is dependent on the type of sector and portfolio investment, as well as on the degree of financial development. We control for known determinants of economic growth.     

The impact of real exchange rate shocks on manufacturing workers: An autopsy from the MORG

We study the impact of large real exchange rate shocks on workers in sectors initially more exposed to international trade using the Current Population Survey’s (CPS) Merged Outgoing Rotation Group (MORG) from 1979 to 2010 combined with new annual measures of imported inputs, a proxy for offshoring. We find that in periods when US relative prices are high, and imports surge relative to exports, workers in sectors with greater initial exposure to international trade were more likely to be unemployed or exit the labor force a year later, but did not experience significant declines in wages conditional on being employed. Contrary to the usual narrative, we find negative wage effects for higher-wage, but not lower-wage workers, particularly for those who are less-educated.     

Contagion between real estate and financial markets: A Bayesian quantile-on-quantile approach

We study contagion between Real Estate Investment Trusts (REITs) and the equity market in the U.S. over four sub-samples covering January, 2003 to December, 2017, by using Bayesian nonparametric quantile-on-quantile (QQ) regressions with heteroskedasticity. We find that the spillovers from the REITs on to the equity market has varied over time and quantiles defining the states of these two markets across the four sub-samples, thus providing evidence of shift-contagion. Further, contagion from REITs upon the stock market went up during the global financial crisis particularly, and also over the period corresponding to the European sovereign debt crisis, relative to the pre-crisis period. Our main findings are robust to alternative model specifications of the benchmark Bayesian QQ model, especially when we control for omitted variable bias using the heteroskedastic error structure. Our results have important implications for various agents in the economy namely, academics, investors and policymakers.     

International Real Estate Investment and Urban Development: An Analysis of Korean Activities in Hanoi,Vietnam

Foreign Direct Investment (FDI) has been recognised as a major influence upon urban development within emerging economies. As the focus of production shifted toward higher skills and advanced technologies, expatriate high-skilled employees of the Multinational Enterprises (MNEs) began to play a significant role in FDI projects and recipient cities begin to experience urban development associated with residential development and community services for the settlement of these expatriate staff. This research reports on the experience of Korean investment in real estate following earlier projects in manufacturing activity in the Hanoi Capital Region. Korean investors are currently the largest FDI source in Vietnam and Hanoi has been favoured by them. The purpose of this research is to examine that the urban impact of manufacturing FDI on a recipient city is magnified by its connections with Real estate FDI (RFDI) in a way that it spurs (1) intensified real estate development, (2) the creation of new urban cores, and (3) new commuting patterns. The clustering of Korea-specific residential development and service functions is a contribution to change in Hanoi. The Korean-built housing complexes have transplanted Korean-style housing design into gated communities and the residents continue their Korean life-styles with easy access to language-specific community facilities. This research sheds light on the coalescent nature of RFDI with overall FDI via flows of MNEs and expatriate staff that can generate direct and indirect spatial impacts at project, city and regional scales.     

Structural current accounts in the European Union countries: cross-sectional exploration

This paper investigates structural determinants of the current account balance and assesses whether the current accounts in the European Union countries were consistent with the calculated structural current accounts between 1995 and 2017. We estimate current account regressions using cross-sectional data for 94 countries in 2008–2016 and confirm the main findings with panel data estimates. We document that the current account depends on the real exchange rate in a nonlinear way. The real exchange rate affects the current account at low income levels, but it ceases to be important at high income levels. Based on structural current account estimates for the European Union countries, we document that after the 2008 crisis current accounts adjusted towards structural current accounts in deficit countries, but persisted above structural current accounts in surplus countries.     

Real earnings management around CEO turnovers

Following CEO turnovers, US firms adjust real business activities to manage earnings downwards (REM bath). This effect is most pronounced in firms with low levels of institutional ownership. REM baths early in CEOs’ tenure can be confounded with legitimate adjustments to business activities. However, we show that they are not accompanied by increases in R&D or capital expenses, nor are they explained by restructuring expenses. CEOs with short tenure record more negative REM measures in their first year of tenure, when compared with CEOs with long tenure.     

Insurance activity,real output,and geopolitical risk: Fresh evidence from BRICS

This paper fills some empirical gaps by evaluating the causal associations among insurance premiums, real output, and geopolitical risk in BRICS (Brazil, Russia, India, China, South Africa) from 1985 to 2017. We utilize a newly-developed Granger-causality quantile analysis to assess the causal relationships among the series under consideration in each distribution quantile. Our empirical results reveal unidirectional causality that runs from real output and geopolitical risk to insurance activities in Brazil and South Africa. We also observe bi-directional lower-tail causality among real output, insurance premiums, and geopolitical risk in Russia. Findings also present bi-directional causality among real output, insurance premiums, and geopolitical risk at different quantiles. Knowledge of these causal relationships can prevent governments from conducting a ‘one-size-fits-all’ policy.     

实体企业金融投资收益对中国宏观经济波动的影响分析

实体企业热衷于从金融市场获取投资收益，个别企业甚至出现了过度金融化的倾向，成为经济新常态大背景下的一种独特的经济现象。对2009~2018年我国宏观经济的发展动向及实体企业金融化的具体数据展开研究，并以同期沪深两市3567个有效面板数据为研究对象，建立一种多元回归统计分析模型，研究实体企业金融投资收益对宏观经济波动所产生的影响。实证分析结果表明，实体企业投资金融收益与宏观经济波动显著相关，这种过度金融投资行为增加了金融市场的不稳定性，给宏观经济的平稳发展带来了新的阻力。     

Is the Euro-zone on the Mend? Latin American examples to analyze the Euro question

Several European countries face challenges reminiscent of those faced by the emerging economies of Latin America. The economic booms in some peripheral Euro-zone countries financed by large capital inflows; the credit and asset price booms and then the busts including Sudden Stops in capital flows; the strong interaction between sovereign debt and domestic banking systems; the role of foreign banks and contagion; and all in the context of a fixed exchange rate, are familiar plotlines for Latin American audiences. For those Euro-zone countries that built up large Euro-denominated external liabilities, Latin America’s experience is particularly relevant and worrisome. Still, Europe may be in a better position to navigate a path out of the crisis given cooperative mechanisms that were absent in Latin America, particularly the availability of massive liquidity support. Nonetheless, while such support buys time, it does not guarantee success. This paper argues that reflecting on Latin America’s experience provides useful lessons for Europe to improve the chances for a successful resolution.     

南宁市房地产泡沫预防与政府规制研究

目前,中国房地产业受到政府的高度重视,随着相关条例相继出台,各地政府应该根据各自地区房地产行业发展的特点采取相应对策。文章对南宁市房地产业的发展现状进行研究,根据目前存在的房价虚涨等问题加以分析,以此提出政府对治理南宁房地产的政策措施。