The determinants of foreign direct investment into European transition economies

Using a panel dataset of bilateral flows of foreign direct investment (FDI), we study the determinants of FDI from Western countries, mainly in the European Union (EU), to Central and Eastern European ones. We find the most important influences to be unit labor costs, gravity factors, market size, and proximity. Interestingly, host country risk proves not to be a significant determinant. Our empirical work also indicates that announcements about EU Accession proposals have an impact on FDI for the future member countries. Journal of Comparative Economics 32 (4) (2004) 775–787.     

Environmental Policy in Open Economies and Monopolistic Competition

This paper analyses the implications of international trade for non-cooperative environmental policy in the case of local production externalities. A particular focus is on the potential effects of regulations on the variety of goods and the resulting international spillover caused by trade. A tougher domestic standard negatively affects the utility of the households abroad, since such a policy reduces their variety of imports (due to fewer domestic product inventions) or their consumption of each imported brand (due to higher import prices). Ignoring the negative spillover, non-cooperative governments implement inefficiently strict standards in equilibrium. In contrast to this clear-cut inefficiency result, the impact of international trade on the state of the environment is ambiguous.     

The role of banks in CESEE countries: exploring non-standard determinants of economic growth

This paper explores the finance–growth nexus in 14 countries from Central, Eastern and South-eastern Europe (CESEE) over the 1995–2015 period. It investigates whether including two ‘non-standard’ variables, i.e. a credit cycle dummy and foreign bank relevance, deepens our understanding of the role of a typical financial determinant of economic growth, i.e. bank credit. We find evidence of a negative impact of bank credit on economic growth and the significance of cyclical fluctuations of bank credit. In contrast, a higher market share of loans granted by foreign-owned banks in a cyclical upswing and stock market capitalisation are found to have a proactive effect on growth.     

Policy instruments for curbing CO2 emissions: The case of the Netherlands

Taxes may seem to be the most attractive instrument for curbing the emissions of carbon dioxide. This paper, however, argues that environmental taxes involve a number of serious complications — especially in an open economy riddled with market imperfections like the Netherlands. Therefore, a wide-ranging policy mix is called for. As far as households and sheltered sectors are concerned, regulation can continue to play a major role. Within the context of unilateral policies aimed at exposed sectors, the combination of subsidies and voluntary agreements may be more cost effective than the tax instrument.This paper was prepared for a conference on Energy Taxation in Europe organized by the Stichting voor Economisch Onderzoek (SEO) and held on December 13, 1991 in Amsterdam, the Netherlands. The author would like to thank Sijbren Cnossen, Jarig van Sinderen and one anonymous referee for helpful comments on an earlier draft.     

四大国有商业银行的收缩战略研究——从规模经济的角度探讨银行实施收缩战略的必要性

在不断出现的全球银行业并购案例中 ,人们往往只重视对商业银行的扩张战略进行研究 ,但是收缩战略在当今的银行业中同样发挥着重要的作用。本文首先通过对银行业的背景和银行适度规模的分析 ,探讨商业银行实施收缩战略的原因 ,然后从实证的角度对我国国有商业银行的规模及其效益进行分析 ,证明实施收缩战略的必要性。文章最后针对我国的现实情况 ,提出实施收缩战略的两点具体措施。     

Valuing Mortgage Insurance Contracts in Emerging Market Economies

We develop a new option-based method for the valuation of mortgage insurance contracts in closed form in an economy where agents are risk neutral. While the proposed valuation method is general and can be used in any market, it may be particularly useful in emerging market economies where other existing methods may be either inappropriate or are too difficult to implement because of the lack of relevant data. As an application, we price a typical Serbian government-backed mortgage insurance contract.     

Inter‐temporal economies of scope,organizational modularity,and the dynamics of diversification

The question of whether corporations add value beyond that created by individual businesses has engendered much debate in recent years. Some of this debate has focused on the pros and cons of related vs. unrelated diversification. A standard explanation of the benefits of related diversification has to do with the ability to obtain intra‐temporal economies of scope from contemporaneous sharing of resources by related businesses within the firm. In contrast, this paper deals with inter‐temporal economies of scope that firms achieve by redeploying resources and capabilities between related businesses over time, as firms exit some markets while entering others. The transfer of resources due to market exit distinguishes our treatment of inter‐temporal economies of scope from standard intra‐temporal economies of scope. In addition, these inter‐temporal economies can benefit from a decentralized and modular organizational structure. This ability to obtain inter‐temporal economies of scope via organizational modularity and recombination suggests that corporations do not necessarily need a high degree of coordination between business units in order to benefit from a strategy of related diversification. Copyright © 2004 John Wiley & Sons, Ltd.     

Out‐of‐sample stock return predictability in emerging markets

This article builds on the widely debated issue of stock return predictability by applying a broad range of predictor variables and comprehensively considering the in‐sample and out‐of‐sample stock return predictability of ten advanced emerging markets. It compares forecasts from models with a single predictor variable, multiple predictor variables and a combination forecast approach. The results confirm the findings of Welch and Goyal (2008) for US data that only a limited number of individual predictor variables are able to deliver significant out‐of‐sample forecasts. However, a combination forecast approach provides statistically and economically significant out‐of‐sample forecast results.     

Hot money in disaggregated capital flows

We explore the possible existence and behavior of hot money in six categories of disaggregated bilateral capital flows (equity inflows, equity outflows, bond inflows, bond outflows, banking credit inflows, and banking credit outflows) for 12 emerging markets vis-à-vis the US from 1995 to 2012 and provides several new findings. First, we identify the existence of hot money in all six categories above and conclude that both gross inflows and gross outflows can be the sources of hot money. Second, hot money in equity inflows (outflows) engages in positive (negative) feedback trading regarding local stock market returns. Third, some categories of hot money have a temporary influence on local stock market returns while the others have a permanent influence, supporting the explanations of both price pressures and information advantage. Finally, local stock market returns in half of our sample countries, which have tightened capital controls during the late 2000s global financial crisis (GFC), are more affected by hot money than in the other half. Our findings confirm several popular conjectures of hot money, and endorse the use of capital controls to limit financial vulnerability in the run-up to and during the GFC.     

Can Foreigners Improve the Profitability of Emerging Market Banks? Evidence from the Vietnamese Strategic Partner Program

Foreign ownership and foreign management are often assumed to improve the efficiency of emerging market banks. Our article examines this relationship for the Vietnamese strategic partner program, where foreign banks have been allowed to take minority stakes in local banks. We add to the existing literature by distinguishing between ownership by foreign strategic and non-strategic investors, and between foreign management sent by the strategic partner and independent foreign executives. We show that only the presence of independent foreign executives has a positive impact on banks. We interpret these results as the consequence of conflicts of interest and power struggles between local shareholders and the strategic partner, which prevent efficiency in enhancing technology transfer.