Investment opportunities and cash holdings of firms: an empirical study on Korean firms

We find that the cash flow sensitivity of cash holdings of firms whose investment opportunities are lower is significantly higher by examining a panel data of 898 Korean firms for 1999–2014. The cash flow sensitivity of investment is also found to be lower in case of low investment opportunity. Both findings suggest that firms decide to hold cash in response to an increase in cash flow when they do not have a good investment opportunity. Precautionary motive because of financial constraints and uncertainty, and agency problems, however, are not associated with the cash flow sensitivity of cash holdings. These findings imply that it is necessary to develop new investment opportunities to encourage firms to spend more cash in Korea.     

The optimal portfolio for the two-pillar mandatory pension system: the case of Poland

In the recent decade, there has been observed across the Central and Eastern European states the regulatory trend towards the increase of the non-financial (first) pension pillar size at the expense of the financial (second) pillar. It tends to question the consequences of this shift for the future retirement benefits. Applying the portfolio approach we address this issue by running a series of simulations to find out how to allocate pension contributions between both pillars in an optimal way. Our study contributes to the existing literature as follows. First, we do not perform the assessment of the predetermined regulatory solutions, but we look for an optimal one. Moreover, we allow our optimal rule to be time-varying, if necessary, which would be a true novelty in this research area. Second, we do not base our estimates on historical trends; rather, we apply the long-term economy’s projection to account for the society’s ageing impact, which is a crucially important factor for the solvency of the pension system. Adapting some of the simulation assumptions to fit the Polish case, our results confirm that current regulations underestimate the role of the capital pillar and the optimal allocation between both pillars should be time-varying.     

Stabilizing Endogenous Instability: Proposals for An Institutionalist Reform of Financial Regulation

A major and persistent question behind economic theories and related policies is whether the market can self-regulate without any restrictive exogenous intervention or whether regular and binding public regulation is necessary for ensuring the reproduction of the economic system in a sustainable way over time. This article considers this question with regard to the working of financial markets in a liberalized environment. Drawing upon an institutionalist stance, the article shows why the operation of a financialized capitalist economy usually leads to systemic imbalances and crises. The article then suggests an alternative framework for a consistent financial regulation that could prevent market actors from developing short-sighted strategies and gambling on macro stability.     

Paradox of plenty: Norway’s macroeconomic policy dilemmas during the oil price crash, 2014-15

Norway, a country at the top of global rankings in terms of gross domestic product (GDP) per capita and human development was also in an enviable position with large current account and fiscal surpluses, as well as a massive stock of public assets. Then came a shock; between June 2014 and early 2016 oil prices tumbled by more than 70 percent. As a major oil exporter, Norway’s current account was severely impacted but could this actually draw Norway into a macroeconomic crisis? Couldn’t it just fund its way out of the contractionary pressures building up in the economy using its stock of foreign currency reserves being held in a sovereign wealth fund? This article explores the fiscal and monetary policy challenges that Norway faced in preempting falling GDP growth and rising unemployment while at the same time, warding off a housing bubble going bust.     

Product innovation and sustainable marketing: effects on consumer innovativeness

Based on the theory of sustainable marketing and time cognition, this study constructed a theoretical model among product innovation, sustainable marketing, time perspectives, and customer innovativeness. Using a sample of 290 consumers in China respond to a new energy vehicle, this paper examines the influence of firm's product innovation on customer innovativeness through the paths of sustainable marketing and time perspectives. The results showed that product innovation positively affected three dimensions of sustainable marketing, which then had different effects on present and future time perspectives. Time perspectives positively affected consumer innovativeness. According to the findings, this study discussed implications for theory, practice, and future work.     

Consumption and communication perspectives of IT in a developing economy

Technological innovations are important sources of competitive advantage when there is a balanced rate of adoption that helps organisations maintain or improve performance levels. This paper synthesises and builds on efforts to conceptualise the adoption and implementation of technologically induced customer services in developing countries. Its point of departure is recent advances in computer-mediated marketing environments (CMMEs). It assesses relationships between customer services and evolving technologies in the provision of services in the banking sector. Using phenomenological hermeneutics and a case study approach, we iteratively engaged with data that emerged to identify core values and community-based values. These facets were further developed into seven main issues (core values: quality, education and reach, and community-based values: efficiency, usability, control and security). The paper offers practical steps by which companies and institutions may counter these issues and the theoretical implications for wider considerations are discussed.     

Asymmetric stabilizing impact of international reserves

This article studies international reserves’ nominal exchange rate stabilizing impact in emerging markets and developing countries, with a particular focus on its nonlinearity and asymmetry across different states of the economy. Using the fixed-effects and dynamic panel threshold models, we find the reserves to short-term debt threshold ratio after which the marginal stabilizing effect of reserves begins to fall during tranquil times. Such diminishing returns, however, do not appear to exist even at the excessive level of reserves during the global financial crisis, partly justifying precautionary demand for international reserves. These results call for extending reserve pooling or swap arrangements to enhance efficiency of reserve management by holding adequate, rather than excess, international reserves with an access to emergency lending during the crisis.     

The brighter side of being socially responsible: CSR ratings and financial distress among Chinese state and non-state owned firms

We examine the effect of corporate social responsibility (CSR) quality ratings on the financial distress levels of Chinese enterprises by using the previously unexplored new China-specific Altman ‘Z_China Score’ in the context of CSR and data from 749 firms over the 2009–2014 period. First, we find that CSR quality ratings significantly reduce Chinese firms’ distress levels. Second, we find that the ability of CSR to reduce distress levels in non-state-owned Chinese firms is higher than state-owned ones. Finally, we find similar results when we divide the data into high-low CSR ratings and levels of distress. Our results are robust to potential endogeneities.     

货币政策、金融周期及其宏观经济效应

本文综合金融市场的多维信息,利用主成分分析法合成我国的金融周期指数。在此基础上,构建TVP SV VAR模型研究2003—2017年间我国货币政策、金融周期及宏观经济变量间的时变互动关系。研究发现：（1）我国货币政策、金融周期和宏观经济变量之间存在显著的时变互动关系。（2）金融传导渠道可能扭曲货币政策效力,通过金融传导渠道,货币政策不仅会抑制经济增长,还可能加剧通货膨胀。（3）金融周期对货币政策产出效应的影响滞后于对价格效应的影响。短期来看,货币政策产出效应的时变特征与金融传导渠道无太大关联,但随时间推移,金融繁荣对产出的负面影响可能最终使货币政策产出效应发生反转。货币当局应警惕金融繁荣对货币政策效力的扭曲,审慎操作,且不宜承担过多刺激产出的任务。     

金融能力、金融决策与贫困

本文利用2013年中国家庭金融调查（CHFS）数据,通过因子分析法构建居民金融能力指数,运用Probit模型、工具变量法和中介效应模型实证分析了金融能力对贫困的影响以及金融能力、金融决策与贫困之间的作用机理。研究发现：（1）无论是绝对贫困还是相对贫困,金融能力能够显著抑制贫困的发生,且城镇地区相较农村地区更明显。（2）金融能力对贫困的影响既存在“抑制效应”,也存在“偏离效应”,两者之间呈现正“U”型关系。（3）经中介效应模型计算可知,在“抑制效应”下,金融能力可以通过改善金融决策来缓解居民贫困状况。具体而言,在三种不同的贫困状况衡量方式下,金融决策的中介效应占比分别为2542%,2296%和2160%。