Financing energy efficiency retrofits in Chilean households: The role of financial instruments,savings and uncertainty in energy transition

High firewood consumption for heating produces high levels of pollution in cities in central and southern Chile, with serious consequences for health and quality of life. Energy efficiency measures (EEMs) have been identified as the best strategy to reduce air pollution and maximize social benefits. However, their adoption has been slow. The objective of this article is to investigate household preferences for financial incentives needed to promote private investments in EEMs in Central-Southern Chilean households and study the role of energy savings and the uncertainty about potential savings in the investment decision, with the aim of finding solutions to increase the adoption of these technologies. We use a choice experiment to explore the trade-off between the investment costs, financial instruments, energy savings, and the uncertainty about achieving the theoretical savings provided by engineering and architectural models. The results show that financial instruments play the most important role in this decision, followed by the savings achieved by the retrofit. Householders prefer to finance their investments with a mix of their personal resources and medium-term credits, trying to avoid long-term commitments. Although uncertainty was found to be a significant variable, it seems to play a small role in the investment decision.     

Accounting practice,fiscal decentralization and corruption

In prior studies, accounting and decentralization corruption solutions have so far been analysed in isolation. In this article, we connect these two strands of literature on corruption. Understanding this connection is important because weak financial accounting and reporting systems can inhibit monitoring incentives and thus reduce decentralization benefits in countering corruption. We argue that the effectiveness of decentralization as an anti-corruption barrier is complemented by the quality of the accounting practice in a country. Using multiple sources of data, we find that decentralization has a positive and increasing effect on reducing corruption among countries with a high-quality accounting practice. In contrast, decentralization has a negative and decreasing effect on reducing corruption among countries with weak-quality accounting practices. These findings are robust to alternative measures of accounting, decentralization and corruption and to endogeneity tests. Our findings demonstrate the crucial information role of accounting in enhancing decentralization monitoring mechanisms and in thereby reducing corruption.     

Financial development and economic growth in a microfounded small open economy model

The global financial crisis since 2008 revived the debate on whether or not and to what extent financial development contributes to economic growth. This paper reviews different theoretical schools of thought and empirical findings on this nexus, building on which we aim to develop a unified, microfounded model in a small open economy setting to accommodate various theoretical possibilities and empirical observations. The model is then calibrated to match some well-documented stylized facts. Numerical simulations show that, in the long run, the welfare-maximizing level of financial develop is lower than the growth-maximizing level. In the short run, the price channel (through world interest rate) dominates the quantity-channel (through financial productivity), suggesting a vital role of international cooperation in tackling systemic risk of the global financial system.     

Risk spillover between Bitcoin and conventional financial markets: An expectile-based approach

In order to challenge the existing literature that points to the detachment of Bitcoin from the global financial system, we use daily data from August 17, 2011–February 14, 2020 and apply a risk spillover approach based on expectiles. Results show reasonable evidence to imply the existence of downside risk spillover between Bitcoin and four assets (equities, bonds, currencies, and commodities), which seems to be time dependent. Our main findings have implications for participants in both the Bitcoin and traditional financial markets for the sake of asset allocation, and risk management. For policy makers, the findings suggest that Bitcoin should be monitored carefully for the sake of financial stability.     

The Impact of Public Expenditure and International Trade on Agricultural Productivity in China

The “industry nurturing agriculture” reforms and World Trade Organization accession led to dramatic growth in public expenditure and international trade in China’s agricultural sector. This article aims to estimate the effects of public expenditure and trade on agricultural productivity in China for 2004–2015. A semi-parametric production function with shape constraints is introduced to derive more accurate productivity before the productivity determinants are analyzed with an emphasis on public expenditure and trade. The empirical result shows that public expenditure and exports can effectively improve agricultural productivity, while imports have no significant effects. Policy implications are discussed in the context of supply-side reforms.     

Early Experience and Later Outcomes of Education: Schooling Transition Evidence from Indonesia

This paper investigates the effect of early school experience on later educational attainment. Using the Indonesia Family Life Survey (IFLS), we find that students who repeat a grade at primary school are less likely to progress to junior high school. We also find that grade retention is associated with lower rates of transition from junior high school to senior high school. The relationship persists across years and samples. Meanwhile, the age of students when starting school and the hours they spend there have limited effects on whether they continue their schooling. We also observe that the effects of parental education and household income on the transition of students from primary school to junior high school are weakening. Given the long-term impact of grade retention, policymakers should be cautious when recommending it for underachieving children and should look for alternatives.     

Is it U.S. GAAP or IFRS? Understanding how R&D costs affect ratio analysis

While financial reporting standards under U.S. GAAP and IFRS are fundamentally similar, differences do exist that may affect our analysis of company financial statements. This is particularly true when comparing a U.S. company following U.S. GAAP to a firm that uses IFRS. To illustrate, we compare research and development (R&D) accounting methods under both sets of standards and illustrate how they affect the analysis of financial results of firms in a specific industry—automotive manufacturers. Our results provide insight into settings in which differences in R&D accounting may have the greatest impact on financial analysis.     

Does bank competition promote financial inclusion? A cross-country evidence

The idea of financial inclusion has recently been discussed as one of the key strategies to enhance economic development (World Bank 2014). We move this discussion forward by examining if bank competition is a crucial component enforcing financial inclusion, which is arguably a finance supply-side driven process. In this study, we compute the financial inclusion index built on Sarma (2008) approach to better reflect banks’ willingness and capability to provide financial services. Applying System Generalized Method of Moments to the panel of 93 countries, we find that bank competition promotes financial inclusion.     

A multivariate distance nonlinear causality test based on partial distance correlation: a machine learning application to energy futures

This paper proposes a multivariate distance nonlinear causality test (MDNC) using the partial distance correlation in a time series framework. Partial distance correlation as an extension of the Brownian distance correlation calculates the distance correlation between random vectors X and Y controlling for a random vector Z. Our test can detect nonlinear lagged relationships between time series, and when integrated with machine learning methods it can improve the forecasting power. We apply our method as a feature selection procedure and combine it with the support vector machine and random forests algorithms to study the forecast of the main energy financial time series (oil, coal, and natural gas futures). It shows substantial improvement in forecasting the fuel energy time series in comparison to the classical Granger causality method in time series.     

信贷管制、隐性契约与贷款利率变相市场化——现象与解释

本文将视角聚焦于利率市场化改革之前,重点研究金融抑制对银企信贷契约的异化。研究发现,在金融抑制背景下银企之间存在以留存贷款为表现的隐性契约,用以帮助银行在满足管制要求的同时追求利润最大化。本文对这一现象进行了理论分析与实证检验,发现隐性契约的发生与否会随着货币政策、企业特征等因素的改变而有所差异,这在一定程度上起到了利率变相市场化的作用。进一步研究则发现,这一隐性契约对企业价值产生了负向影响。