nep-fdg New Economics Papers
on Financial Development and Growth
Issue of 2020‒11‒30
24 papers chosen by
Georg Man

  1. Bank credit and short-run economic growth: a dynamic threshold panel model for ASEAN countries. By Sy-Hoa Hoa; Jamel Saadaoui
  2. Credit, banking fragility and economic performance By Jérôme Creel; Paul Hubert; Fabien Labondance
  3. Financial Inclusion, Information and Communication Technology Diffusion and Economic Growth: A Panel Data Analysis By Amrita Chatterjee; Nitigya Anand
  4. Financial Variables as Predictors of Real Growth Vulnerability By Lucrezia Reichlin; Giovanni Ricco; Thomas Hasenzagl
  5. Growth-at-Risk: Bayesian Approach By Milan Szabo
  6. Credit Constraints, Labor Productivity and the Role of Regional Institutions: Evidence from Manufacturing Firms in Europe By Andres Rodriguez-Pose; Roberto Ganau; Kristina Maslauskaite; Monica Brezzi;
  7. Inflation and Economic Activity in Suriname By Ooft, Gavin
  8. The impacts of the global financial crisis on the real economy, economic policies and academic debates. By Alfazema, Antonio
  9. Bank capital: excess credit and crisis incidence By Ray Barrell; Karim Dilruba
  10. Leaning against the wind and crisis risk By Moritz Schularick; Lucas ter Steege; Felix Ward
  11. Bank reserves and broad money in the global financial crisis: a quantitative evaluation By Jagjit S. Chadha; Luisa Corrado; Jack Meaning; Tobias Schuler
  12. Inequality and imbalances: a monetary union agent-based model By Alberto Cardaci; Francesco Saraceno
  13. Inequality, Finance and Renewable Energy Consumption in Sub-Saharan Africa By Simplice A. Asongu; Nicholas M. Odhiambo
  14. Public Debt-Investment Nexus: the Significance of Investment-Generation Policy in West Africa By Fisayo Fagbemi; Opeoluwa A. Adeosun
  15. Public Aid for Born Globals: A Diagnostic for the French Economy By Flora Bellone; Catherine Laffineur; Sophie Pommet
  16. Screening and Loan Origination Time: Lending Standards, Loan Defaults and Bank Failures By Mikel Bedayo; Gabriel Jiménez; José-Luis Peydró; Raquel Vegas
  18. Sustainability and Efficiency of Microfinance Institutions in South Asia By Brijesh C. Purohit; S. Saravanan
  19. Household Choice of Financial Borrowing and Its Source: Multinomial Probit Model with Selection By Kanika Rana; Brinda Viswanathan
  20. Microfinance and Women EmpowermentEmpirical Evidence from the Indian States By S.Saravanan; Devi Prasad DASH
  21. The Regulation of Prosocial Lending: Are Loan Ceilings Effective? By Anastasia Cozarenco; Ariane Szafarz
  22. Economic Assessment of the Igbo Entrepreneurship Model for Entrepreneurial Development in Nigeria: Evidence from Clusters in Anambra State By Chukwunonso Ekesiobi; Stephen K. Dimnwobi
  23. Fintech, Bigtech, and Financial Inclusion By Loretta J. Mester
  24. Can Fintechs Stabilize the Financial Sector? By Windl, Martin

  1. By: Sy-Hoa Hoa; Jamel Saadaoui
    Abstract: We investigate short-run nonlinear impacts of bank credit on economic growth in ASEAN countries. We find an inverted L-shaped relationship and a statistically significant threshold of 96.5%. Positive effects of bank credit expansion on short-run economic growth fade away after this threshold.
    Keywords: Bank credit, Economic growth, Dynamic threshold estimation, ASEAN.
    JEL: C23 E51 G21 O41
    Date: 2020
  2. By: Jérôme Creel (Observatoire français des conjonctures économiques); Paul Hubert (Observatoire français des conjonctures économiques); Fabien Labondance (Observatoire français des conjonctures économiques)
    Abstract: Drawing on European Union data, this paper investigates the hypothesis that private credit and banking sector fragility may affect economic growth. We capture banking sector fragility both with the ratio of bank capital to assets and non-performing loans. We assess the effect of these three variables on the growth rate of GDP per capita, using the Solow growth model as a guiding framework. We observe that credit has no effect on economic performance in the EU when banking fragilities are high. However, the potential fragility of the banking sector measured by the non-performing loans decreases GDP per capita.
    Keywords: Private credit; Capital to assets ratio; Non-performing loans
    JEL: G10 G21 O40
    Date: 2020
  3. By: Amrita Chatterjee (Assistant Professor, Madras School of Economics); Nitigya Anand (Associate Solution Advisor, Deloitte & Touche Assurance and Enterprise Risk Services India Pvt. Ltd.)
    Abstract: There have been enough evidences to accept that Financial Inclusion (FI) and Information and Communication Technology (ICT) play positive role in economic growth, even though there are some exceptions. Moreover, we cannot deny the fact that ICT like mobile phone and internet penetration can strengthen the inclusiveness of formal banking sector. The present study has first examined whether ICT development can be an important determinant of Financial Inclusion by using a fixed effect panel data model. The results show that ICT is indeed an important determinant of FI. The same panel data of 41 countries was then used to test whether the growth process of the countries are influenced by Financial Inclusion and ICT diffusion in a dynamic Panel Data Model. Further the paper has investigated the role of FI powered by a better ICT penetration in fostering the growth of the nations using system GMM method by incorporating interactions between FI and ICT indicators. The results suggest that both FI and ICT individually and together through their close interaction can improve current year’s growth. However, we need education, awareness and technical assistance to get sustained growth.
    Keywords: Financial Inclusion, Growth, Information and Communication Technology, Dynamic Panel data model, System GMM estimator
    JEL: L86 L96 C23 O0 G2
  4. By: Lucrezia Reichlin (London Business School); Giovanni Ricco (Observatoire français des conjonctures économiques); Thomas Hasenzagl
    Abstract: We evaluate the role of financial conditions as predictors of macroeconomic risk first in the quantile regression framework of Adrian et al. (2019b), which allows for non-linearities, and then in a novel linear semi-structural model as proposed by Hasenzagl et al. (2018). We distinguish between price variables such as credit spreads and stock variables such as leverage. We find that (i) although the spreads correlate with the left tail of the conditional distribution of GDP growth, they provide limited advanced information on growth vulnerability; (ii) nonfinancial leverage provides a leading signal for the left quantile of the GDP growth distribution in the 2008 recession; (iii) measures of excess leverage conceptually similar to the Basel gap, but cleaned from business cycle dynamics via the lenses of the semi-structural model, point to two peaks of accumulation of risks – the eighties and the first eight years of the new millennium, with an unstable relationship with business cycle chronology.
    Keywords: Financial cycle; Business cycle; Credit; Financial crises; Downside risk; Entropy; Quantile regressions
    JEL: E32 E44 C32 C53
    Date: 2020
  5. By: Milan Szabo
    Abstract: The paper proposes a novel application of Bayesian quantile regression to forecast a full distribution of macroeconomic variables that can be linked to, for example, an official projection of the variable published by a central bank, or a forecast from a survey of professional forecasters. The approach is employed to estimate the popular Growth-at-Risk, which maps current financial and economic conditions to the distribution of future GDP growth, focusing mainly on downside risks. The results show that the linkage improves distribution forecasting and, thanks to the additional information obtained from the linkage, reduces overfitting and makes Growth-at-Risk models more operational for countries with short time series. Additional improvements in consistency around the official projection enhance the credibility of the results when communicated by the central bank. The method can also be used to derive asymmetric fan charts around the official projection not only for real GDP growth as examined in the paper, but also for unemployment or inflation.
    Keywords: Downside risk, fan charts, growth-at-risk, quantile regression
    JEL: C53 E27 E32 E44
    Date: 2020–11
  6. By: Andres Rodriguez-Pose; Roberto Ganau; Kristina Maslauskaite; Monica Brezzi;
    Abstract: This paper examines the relationship between credit constraints − proxied by the investment-to-cash flow sensitivity – and firm-level economic performance − defined in terms of labor productivity – during the period 2009-2016, using a sample of 22,380 manufacturing firms from 11 European countries. It also assesses how regional institutional quality affects productivity at the level of the firm both directly and indirectly. The empirical results highlight that credit rationing is rife and represents a serious barrier for improvements in firm-level productivity and that this effect is far greater for micro and small than for larger firms. Moreover, high-quality regional institutions foster productivity and help mitigate the negative credit constraints-labor productivity relationship that limits the economic performance of European firms. Dealing with the European productivity conundrum thus requires greater attention to existing credit constraints for micro and small firms, although in many areas of Europe access to credit will become more effective if institutional quality is improved.
    Keywords: Credit Constraints; Labor Productivity; Manufacturing Firms; Regional Institutions; Cross-Country Analysis; Europe
    JEL: C23 D24 G32 H41 R12
    Date: 2020–11
  7. By: Ooft, Gavin (The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise)
    Abstract: Maintaining a low rate of inflation and sustainable economic growth are at the core of monetary policymaking. Price stability is considered a condition for a healthy macroeconomic environment which promotes sustainable growth and a low rate of inflation is necessary to maintain stability in the financial sector as well as to boost investment activities. Motivated by the largely-discussed relationship between inflation and output, this paper examines this relationship for the economy of Suriname over the period 1975 to 2015, utilizing a vector autoregressive model and impulse response functions. The findings of the study reveal how the various sources of inflation impact on the economy of Suriname. Domestic price shocks and money-supply shocks, in particular, seem to substantially impact on economic activity. Exchange-rate shocks are detrimental to domestic prices. Based on the findings of this study, it is highly recommended for the Central Bank of Suriname to continue its prudent monetary policies in order to maintain a stable exchange rate and price stability. The study advocates for maintaining a healthy macroeconomic climate with price stability, which is a crucial condition for Suriname to follow a sustained path for economic growth and development.
    Keywords: Economic Growth; Inflation; Time-Series Models
    JEL: C32 E31 E47
    Date: 2019–01
  8. By: Alfazema, Antonio
    Abstract: The years preceding the crisis were characterized by strong global growth and relatively stable and low inflation in most countries. Growth was driven by significant increases in productivity in many countries, which, combined with the further integration of developing countries into the global economy and a strong expansion of trade, allowed prices to remain relatively stable for several years. The Article presents a summary of the facts that guided the global financial crisis, affecting the growth of the economy as a whole. Academics are unanimous in stating that the contours of the crisis stem from several combined factors, in the failure to comply with some basic rules, as the crisis can be relatively manageable if assets and liabilities are denominated in the country's currency.
    Keywords: Finance, Economy, Financial Crisis and Financial Globalization.
    JEL: G10 G15
    Date: 2020–11–20
  9. By: Ray Barrell (Research Centre of the National Institute of Economic and Social Research); Karim Dilruba
    Abstract: There are large and long-lasting negative effects on output from recurrent financial crises in market economies. Policy makers need to know if these financial crises are endogenous and subject to policy interventions or are exogenous events like earthquakes. We survey the literature about the links between credit growth and crises over the last 130 years. We then go on to look at the determinants of financial crises both narrowly and broadly defined in market economies, stressing the roles of bank capital, available on book liquidity, property price bubbles and current account deficits. We look at the role of credit growth, which is often seen as the main link between the macroeconomy and crises, and stress that it is largely absent. We look at the role of the core factors discussed above in market economies from 1980 to 2017. We suggest that crises are largely unrelated to credit developments but are influenced by banking sector behaviour. We conclude that policy makers need to contain banking excesses, not constrain the macroeconomy by directly reducing bank lending.
    Keywords: Financial stability; Banking crises; Macroprudential policy
    Date: 2020–09
  10. By: Moritz Schularick (Federal Reserve Bank of New York and Department of Economics, University of Bonn; and CEPR); Lucas ter Steege (Department of Economics, University of Bonn); Felix Ward (Erasmus School of Economics, Erasmus University Rotterdam; and Tinbergen Institute)
    Abstract: Can central banks defuse rising stability risks in financial booms by leaning against the wind with higher interest rates? This paper studies the state-dependent effects of monetary policy on financial crisis risk. Based on the near-universe of advanced economy gonancial cycles since the 19th century, we show that discretionary leaning against the wind policies during credit and asset price booms are more likely to trigger crises than prevent them.
    Keywords: financial stability, monetary policy, local projections
    JEL: E44 E50 G01 G15 N10
    Date: 2020–11
  11. By: Jagjit S. Chadha; Luisa Corrado; Jack Meaning; Tobias Schuler
    Abstract: The Federal Reserve responded to the global financial crisis by initiating an unprecedented expansion of central bank money (bank reserves) once the policy rate had reached the lower bound. To capture the salient features of the crisis, we develop a model where the central bank can provide reserves on demand and also use reserves to buy government bonds. We show that the provision of reserves through either channel reduces the cost of providing loans as they act as a substitute for private sector collateral and costly monitoring activity. We illustrate this mechanism by examining the role of reserves in projecting stable growth in broad money after the financial crisis. We also run a counterfactual which suggests that, if the Federal Reserve had not provided bank reserves on such a large scale, broad money would have fallen, the economy might have experienced a deeper contraction, and the recovery would have been more protracted, taking perhaps twice as long to return to equilibrium.
    Keywords: non-conventional monetary policy, quantitative easing, liquidity provision
    JEL: E31 E40 E51
    Date: 2020–11
  12. By: Alberto Cardaci (Lombardy Advanced School of Economics Milan); Francesco Saraceno (Observatoire français des conjonctures économiques)
    Abstract: Our paper investigates the impact of rising inequality in a two-country macroeconomic model with an agent-based household sector characterized by peer effects in consumption. In particular, the model highlights the role of inequality in determining diverging balance of payments dynamics within a currency union. Inequality may drive the two countries into different growth patterns: where peer effects in consumption interact with higher credit availability, rising income inequality leads to the emergence of a debt-led growth. Where social norms determine weaker emulation and credit availability is lower, an export-led regime arises. Eventually, a crisis emerges endogenously due to the sudden-stop of capital flows from the net lending country, triggered by the excessive risk associated with the dramatic amount of private debt accumulated by households in the borrowing country. Monte Carlo simulations for a wide range of calibrations confirm the robustness of our results.
    Keywords: Inequality; Current account; Currency union; Agent-based model
    JEL: C63 D31 E21 F32 F43
    Date: 2019–07
  13. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: The study investigates linkages between financial development, income inequality and renewable energy consumption from 39 countries in Sub-Saharan Africa. The empirical evidence is based on data for the period 2004-2014, Generalized Method of Moments (GMM) and Quantile Regressions (QR). The GMM results show that financial development unconditionally promotes renewable energy consumption while income inequality counteracts the underlying positive effect. The QR results reveal that the GMM findings only withstand empirical validity in bottom quantiles of the renewable energy consumption distribution. In order to increase room for policy implications for the promotion of renewable energy consumption, critical masses of income inequality that should not be exceeded are computed for bottom quantiles of the renewable energy consumption distribution while income inequality thresholds that should be exceeded are computed for top quantiles of the renewable energy consumption distribution. The study reconciles two strands of the literature. Theoretical, practical and policy implications are discussed.
    Keywords: Renewable energy; Inequality; Finance; Sub-Saharan Africa; Sustainable development
    JEL: H10 Q20 Q30 O11 O55
    Date: 2020–01
  14. By: Fisayo Fagbemi (Obafemi Awolowo University, Ile-Ife, Nigeria); Opeoluwa A. Adeosun (Obafemi Awolowo University, Ile-Ife, Nigeria)
    Abstract: The study examines the long run relationship and interconnections between public debt and domestic investment in 13 West African countries from 1986-2018. Using panel Panel Dynamic Least Squares (DOLS) and Panel Fully Modified Least Squares (FMOLS), debt (% of GDP) and external debt have an insignificant effect on investment in the long run, suggesting the negligible effect of public debt on the level of investments. But domestic investment Granger causes public debt indicators, implying that there is unidirectional causality. This suggests that any investment-generation policy could engender a rise in public borrowing, although such public loans might not be effective when there is pervasive mismanagement of public funds, as public debts need to be well managed for ensuring improved investment. Thus, the study suggests that maintaining a strong and effective debt-investment nexus requires fiscal consolidation efforts across countries, as such could lead to enhanced institutional capacity and sustainable investment-generation policy.
    Keywords: H63, E22, H30
    Date: 2020–01
  15. By: Flora Bellone (Université Côte d'Azur; GREDEG CNRS); Catherine Laffineur (Université Côte d'Azur; GREDEG CNRS); Sophie Pommet (Université Côte d'Azur; GREDEG CNRS)
    Abstract: Public investment banks aim to promote the growth of newly established firms, especially those that are the most innovative. An important policy challenge for such banks is to determine the extent to which and by what means they should support the rapid and early internationalization of these recently founded companies. To guide practitioners’ resource allocation decisions, this paper employs a unique dataset that combines comprehensive information on both the production and export activities of newly established French manufacturing firms over the period 1998-2015 and on a variety of public support instruments allocated to those firms by Bpifrance, i.e., the French public investment bank.
    Keywords: Born global, Firm-level data, Public investment bank, Export premia, Subsidies, Loans
    JEL: F14 G24 L25 M13
    Date: 2020–11
  16. By: Mikel Bedayo; Gabriel Jiménez; José-Luis Peydró; Raquel Vegas
    Abstract: We quantify the role of global production linkages in explaining spillovers of U.S. monetary policy shocks to stock returns of 54 sectors in 26 countries. We first present a conceptual framework based on a standard open-economy production network model that delivers a spillover pattern consistent with a spatial autoregression (SAR) process. We then use the SAR model to decompose the overall impact of U.S. monetary policy on stock returns into a direct and a network effect. We find that up to 80% of the total impact of U.S. monetary policy shocks on average country-sector stock returns are due to the network effect of global production linkages. We further show that U.S. monetary policy shocks have a direct impact predominantly on U.S. sectors and then propagate to the rest of the world through the global production network. Our results are robust to controlling for correlates of the global financial cycle, foreign monetary policy shocks, and to changes in variable definitions and empirical specifications.
    Keywords: loan origination time, lending standards, credit cycles, defaults, bank failures, Screening
    JEL: G01 G21 G28 E44 E51
    Date: 2020–11
  17. By: Majida Jrad; Yamina Tadjeddine
    Abstract: This paper examines the factors that affect the collateralizing of a loan specifically for SMEs in Lebanon that is a country with a small open emerging-market economy. Collateral should guarantee the bank loan but in practice it is adjusted according to other socio-economic criteria of companies. This is particularly true for SME's and even more so for emerging countries. We propose in this article to illustrate the signals mobilized by banks when providing collateralized loans. Data on these variables have been derived from the Lebanese Central Band and the World Bank. It contains observations for two samples – 532 firms for 2020 and 561 firms for 2014. Three sets of factors influence the level of collateral required: those related to firm characteristics (relevant variables: age, size, auditing financial statements, developing the qualification of workforce, export orientation, the sector of manufacturing, located in capital city, female manager, export orientation), to loan characteristics (no relevant variable), and to credit market specifics (interest rate). Regression estimates suggest the age and size of a firm contributed to more collateral required in 2019. Smaller collateral is required by firms with bigger size, auditing financial statements, developing the qualification of workforce, export orientation, belonging to the sector of manufacturing, located in capital city in 2013. Female manager, export orientation, and location in capital city contribute to smaller collateral required in 2019. Loan value does not seem to tighten collateral requirements. In opposite perspective, the increases in the interest rate entail stricter collateralizing the loans.
    Keywords: Financing, SMEs, collateral, credit risk, regression analysis, Lebanon.
    JEL: G32 O16 O53
    Date: 2020
  18. By: Brijesh C. Purohit (Professor, Madras School of Economics); S. Saravanan (Post Doctoral fellow, Madras School of Economics)
    Abstract: In this paper we focus on microfinance institutions in South Asia. These microfinance institutions (MFIs) provide credit to the poor who have no access to commercial banks. This is done to reduce poverty and to help the poor with setting up their own income generating businesses. There appears to be in general a conflict between the outreach activities of such MFIs and their sustainability. It may also influence the efficient functioning of such organizations. Therefore, the focus in literature has shifted from subsidizing MFIs to their financial sustainability and efficiency. It is now presumed that such institutions should be able to cover the cost of lending money out of the income generated from the outstanding loan portfolio and to reduce these costs as much as possible. Besides it there is an element of increasing competition among MFIs which is coupled with factors like commercialization, technological change and financial liberalization and regulation policies of the government. In view of such developments we analyze the behavior of microfinance institutions in South Asia comprising MFIs in India, Nepal, Bangladesh and Sri Lanka. We look into major aspects of access to poor by MFIs, sustainability in activities and finances as well as the efficiency of such organizations from different parameters. Using data for 5 years for 142 MFIs across these nations, our results indicate that the goals of sustainability and efficiency are not always mutually supportive. In the long run thus these organizations should choose their focus to those outreach activities in which they exhibit efficiency from different angles such that sustainability along with reduced dependence on lenders as well survival in competitive environment is feasible
    Keywords: Micro finance institutions, South Asia, sustainability, efficiency, competition
    JEL: G21 G32 G33 C33 I31
  19. By: Kanika Rana (ICSSR Research Fellow, Madras School of Economics, Chennai); Brinda Viswanathan (Professor, Madras School of Economics)
    Abstract: In developing countries, the economically disempowered, borrow from multiple sources and also have multiple borrowings notwithstanding that some may be unable to access any form of credit. To ensure a greater amount of financial inclusion, it becomes necessary to understand what determines the choice between alternative loan source combinations while taking into account that borrowers may have distinct characteristics from non-borrowers. Access to formal credit sources, are elusive for the disadvantaged due to different demand and supply side perceptions. Microfinance institutions (MFI) play an intermediate role having some attributes of the informal network and some similar to formal institutions. This study uses an observational data set for 2011-12 to analyse the role of socio-economic-demographic characteristics in the household‟s choice for different types of loan sources. In particular, the extensive nature of data allows us to study the mediating role played by MFI through its linkages with formal and informal sources. The results of Multinomial Probit with Heckman selection, to account for onborrowing households, reveal that where institutional sources are still a preferred option for the relatively advantaged section of the population, presence of microfinance loans in combination with other loan sources has contributed in ensuring greater equity in credit access to all. However, women headed households or dalit households with lesser opportunities of networking are less likely to take credit from formal sources
    Keywords: Household credit and sources, formal and informal institution, microfinance institutions, multinomial probit, Heckman selection
    JEL: C35 E51 G21
  20. By: S.Saravanan (UGC Post Doctoral Fellow, Madras School of Economics); Devi Prasad DASH (Department of Humanities and Social Sciences, Indian Institute of Technology, Ropar, Punjab-140001)
    Abstract: Microcredit is essentially utilised as the source of empowerment among the poor women in both rural and urban areas of the Indian states. Based on a panel of the Indian states for the period 2007 to 2014, our study examines the impact of women empowerment via the number of women Self Help Groups and women employment opportunities. Our empirical evidence finds that both are complementary to each other. Furthermore, we notice that changes in percapita income and poverty rate influence the scope for women employment and outreach of women SHGs across the Indian states. Factors like increasing access to bank loans and female literacy also help improve the women empowerment drive. The implications of the findings are discussed in the paper.
    Keywords: Microfinance, Self-Help Group, Women Empowerment, India
    JEL: G21 C23 J16
  21. By: Anastasia Cozarenco; Ariane Szafarz
    Keywords: Microcredit; microfinance; regulation; loan ceiling; mission drift; altruism
    JEL: G21 L51 G28 O52 L31 I38 C25 M13
    Date: 2020–11–10
  22. By: Chukwunonso Ekesiobi (Anambra state, Nigeria); Stephen K. Dimnwobi (Anambra state, Nigeria)
    Abstract: Purpose – This study presents an economic investigation of the entrepreneurship practise of the Igbos of South-Eastern Nigeria. It is intended to deepen entrepreneurial development and employment generation in the country. This study also provides empirical support to situate the Igbo entrepreneurship model (IEM) among existing entrepreneurship literature, particularly for research in developing countries. Design/methodology/approach – The study adopts a quantitative approach to examine 1187 responses carefully drawn from the Onitsha and Nnewi business clusters in Anambra state. In addition to descriptive demonstrations, the Propensity Score Matching (PSM) technique is employed to estimate the effects of treatment on the treated by pairing treatment and control units with similar attributes on the propensity score and other likely covariates. Specifically, the PSM is used to perform a counterfactual analysis of the effect of the entrepreneurship model on business outcomes by examining participants and non-participants in the IEM. Findings – The key findings of the study indicate that entrepreneurs who participated in the IEM have higher business survival rate, business growth rate and access to trade and informal credit, while non-IEM entrepreneurs have better access to formal credit source than the IEM graduates. Research Limitations/Implications – Generalisation of results can be limited since the study is based on responses of samples drawn from two clusters (Onitsha and Nnewi) in Anambra State, South-East Nigeria. The clusters, though situated in Igbo land, are not the only Igbo business locations in the South-East region and the rest of the country. However, with the larger number of the respondents and synchronisation with existing literature in this subject area guarantee the robustness and applicability of the study findings. Originality/value – The novelty of this study rests on its pioneering attempt to empirically examine how the IEM can drive entrepreneurial development in Nigeria. We also distil lessons for evidenced-based replication of the model to provide a sustainable employment channel for the country. The study posits, among other things, that the IEM can be a veritable approach for enterprise development and youth employment in Nigeria.
    Keywords: Igbo Entrepreneurship Model, Business outcomes, Clusters, Nigeria
    Date: 2020–01
  23. By: Loretta J. Mester
    Abstract: Since the beginning of this conference series, the discussions have consistently been very topical, and the agenda for the next two days does not disappoint on that score. The conference will cover many of the hot issues confronting practitioners, academics, and policymakers as financial system innovation proceeds at a rapid pace. Today I will discuss the implications of digitalization for financial inclusion and some steps that need to be taken to ensure that digitalization helps to foster inclusion rather than promote exclusion. The views I will present today are my own and not necessarily those of the Federal Reserve System or my colleagues on the Federal Open Market Committee.
    Date: 2020–11–09
  24. By: Windl, Martin
    Abstract: The growing popularity of fintechs has led the Financial Stability Board (FSB) to publish considerations about the effects of this emerging industry on stability and efficiency in the financial sector. Against this background, this paper compares the effects of competition and collaboration between banks and fintechs on stability and efficiency. Using a partial equilibrium model and a general equilibrium model with moral hazard between investors and the financial sector based on Martinez-Miera and Repullo (2017), this paper shows that cooperation between banks and fintechs increases stability and efficiency compared to the case of a competitive equilibrium. The findings are robust to changes in bargaining power within the financial sector but depend critically on contestable loan markets.
    Keywords: fintech,bigtech,financial stability,general equilibrium
    JEL: G21 G23 G28
    Date: 2020

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