nep-fdg New Economics Papers
on Financial Development and Growth
Issue of 2021‒10‒25
24 papers chosen by
Georg Man

  1. The Impact of Foreign Capital Inflows on Poverty in Vietnam: An Empirical Investigation By Mercy Musakwa; Nicholas M Odhiambo
  2. Why do people stay poor? By Clare A. Balboni; Oriana Bandiera; Robin Burgess; Maitreesh Ghatak; Anton Heil
  3. Generalized Cumulative Offer Processes By Zaifu Yang; Rong Zhang
  4. The long-term effects of experienced macroeconomic shocks on wealth By Viola Angelini; Irene Ferrari
  5. International Financial Integration and Stock Market in Developing Countries By Fatma Zaarour
  6. 'Money markets and trade’ defining provincial financial agents in England and Japan By Ishizu, Mina
  7. FDI inflows in Europe: does investment promotion work? By Crescenzi, Riccardo; Di Cataldo, Marco; Giua, Mara
  8. Comparative study of Costa Rica, Argentina, Malaysia, Djibouti and their complex relationship with China: advantages, disadvantages and lessons learned By Alden, Christopher; Méndez, Álvaro
  9. 중국의 금융개방 환경 변화와 대응방향 (Changing Environment for Opening of Chinese Financial Sector and Response Measures) By Hyun, Sang Baek; Na, Suyeob; Kim, Youngsun; Cho, Ko Un; Seo, Bongkyo
  10. Business News and Business Cycles By Leland Bybee; Bryan T. Kelly; Asaf Manela; Dacheng Xiu
  11. Corporate debt and state-dependent effects of fiscal policy By Daichi SHIRAI
  12. An Analysis of Monetary and Macroprudential Policies in a DSGE Model with Reserve Requirements and Mortgage Lending By Ben-Gad, M.; Pearlman, J.; Sabuga, I.
  13. The Impact of Remittances on Monetary Transmission Mechanisms during the Pre and Post-Conflict Eras in Sri Lanka By Jahan Abdul Raheem; Gazi M. Hassan; Mark J. Holmes
  14. The persistent and generalised decline in the U. S. interest rates: an alternative interpretation By Capraro, Santiago; Panico, Carlo; Torres-Gonzalez, Luis Daniel
  15. How do central banks identify risks? A survey of indicators By Banco de España Strategic Plan 2024: Risk identification for the financial and macroeconomic stability
  16. Income Shocks, Borrowing Constraints and Household Child Schooling: Evidence from Rural Thailand By Sasiwooth Wongmonta
  17. The Cognitive Load of Financing Constraints: Evidence from Large-Scale Wage Surveys By Clémence Berson; Raphaël Lardeux; Claire Lelarge
  18. Value creation in UEMOA microfinance institutions: The impact of stakeholders By Mamadou Ndione
  19. Financial Inclusion Through Fintech in the Digital Economy By Seo, Eunsook; Yoo, Kyeongwon
  20. A Global but not Spontaneous Firm: Co-operatives and the Solidarity Funds in Italy By Andrea BERNARDI; Cécile BERRANGER; Anita MANNELLA; Salvatore MONNI; Alessio REALINI
  21. Neue Wagniskapitalformen in Deutschland By Scheuplein, Christoph
  22. Green financial development improving energy efficiency and economic growth: A study of CPEC area in COVID-19 era By Zhang, Linyun; Huang, Feiming; Lu, Lu; Ni, Xinwen
  23. Comment interpréter la finance verte ? By Pierre Jacquet
  24. What Do You Think about Climate Finance? By Johannes Stroebel; Jeffrey Wurgler

  1. By: Mercy Musakwa; Nicholas M Odhiambo (University of South Africa)
    Abstract: This study investigates the impact of foreign capital inflows on poverty in Vietnam, using annual time series data from 1990 to 2018. The study was motivated by the need to establish if burgeoning foreign capital inflows in Vietnam can support the poverty alleviation agenda. Foreign direct investment (FDI) and external debt were used as proxies for foreign capital inflows; and infant mortality rate, Human Development Index (HDI) and household consumption expenditure were used as poverty proxies. Using the autoregressive distributed lag (ARDL) approach, the study found foreign direct investment to reduce poverty in the short run and long run when household consumption expenditure was used as a poverty measure. However, the study found FDI to worsen poverty in the short run when infant mortality rate and HDI were used as poverty proxies. The study found external debt to have poverty mitigating effect in the short run regardless of the poverty measure used and in the long run only when household consumption expenditure was used as a poverty measure.
    Date: 2021–10–14
  2. By: Clare A. Balboni; Oriana Bandiera; Robin Burgess; Maitreesh Ghatak; Anton Heil
    Abstract: There are two broad views as to why people stay poor. One emphasizes differences in fundamentals, such as ability, talent or motivation. The other, the poverty traps view, differences in opportunities which stem from access to wealth. To test between these two views, we exploit a large-scale, randomized asset transfer and an 11-year panel on 6000 households who begin in extreme poverty. The setting is rural Bangladesh and the asset is cows. The data supports the poverty traps view - we identify a threshold level of initial assets above which households accumulate assets, take on better occupations (from casual labor in agriculture or domestic services to running small livestock businesses) and grow out of poverty. The reverse happens for those below the threshold. Structural estimation of an occupational choice model reveals that almost all beneficiaries are misallocated in the work they do at baseline and that the gains arising from eliminating misallocation would far exceed the program costs. Our findings imply that large transfers which create better jobs for the poor are an effective means of getting people out of poverty traps and reducing global poverty.
    JEL: I32 J22 J24 O12
    Date: 2021–10
  3. By: Zaifu Yang; Rong Zhang
    Abstract: In this paper we provide a quantitative analysis of how wealth may affect economic growth. In the economy, the utility of every individual depends on both consumption and wealth. Exploring a class of specific utility functions in which wealth has a weakening effect on the marginal utility of consumption, we find a closed-form solution of steady-state consumption, capital stock, savings rate, and convergence rate and obtain several novel results of wealth effects on economic growth. We also demonstrate that the new models can be calibrated to fit well with empirical observation.
    Keywords: Economic growth, wealth effects, savings rate, convergence rate.
    JEL: C61 O40 O41
    Date: 2021–10
  4. By: Viola Angelini (University of Groningen; NETSPAR); Irene Ferrari (Department of Economics, University Of Venice CÃ Foscari; NETSPAR)
    Abstract: This paper examines the long-term effects of experienced macro-economic shocks – defined as multi-year peak-to-trough GDP declines of at least 10 percent – on the wealth distribution, portfolio allocation, and risk attitudes of older individuals in Europe. We show that individuals who have experienced more economic depression episodes have lower wealth in absolute terms, a lower probability to invest in risky assets, and display higher risk aversion. When analysing early investment decisions, we find that individuals hit by a depression substitute risky investments with investment in housing, and that these early choices shape wealth in the long-term.
    Keywords: Wealth distribution, economic depressions, risk aversion, early investments
    JEL: D31 E21 G51
    Date: 2021
  5. By: Fatma Zaarour (University of Sousse, IHEC, LaREMFiQ, BP n° 40 - 4054 Sousse, Tunisia Author-2-Name: Adnene AJIMI Author-2-Workplace-Name: University of Sousse, IHEC, LaREMFiQ, BP n° 40 - 4054 Sousse, Tunisia Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: " Objective - This study examines the relation between stock market capitalization and international financial integration for 23 developing countries during 1996 - 2018. Methodology/Technique - By using recently developed econometric panel techniques. The present paper takes into consideration cross section and structural breaks. Findings - Our findings show several interesting results. First, the existence of a long run relationship between the stock market and financial integration, particularly when private capital flows are included. Second, with the presence of structural breaks the result shows that international financial integration has a negative impact on stock market, which means that financial integration loses its explanatory power over the crisis period. Novelty - There is no applied study on the verification of the volatility of international capital flows (foreign direct investments and remittances) in the analysis of the relationship between international financial integration and stock markets. Type of Paper - Empirical"
    Keywords: Cointegration, Cross-Section, International Financial Integration, Panel Unit Root, Structural Breaks, Stock Market.
    JEL: C23 C51 C58 F02 F21 F24 G01
    Date: 2021–09–30
  6. By: Ishizu, Mina
    Abstract: The paper aims to offer an introduction to provincial financial agents as the key components in provincial-metropolitan integration of money markets. It establishes that PFAs engaged in de facto banking and played an important role in local money markets. Both in England and in Tokugawa Japan, they were responsible for making decisions whether or not to establish a connection with financial agents in the commercial centres. The paper also considers some of the financial services facilitated by the existence of financial connections between metropolitan and provincial financial agents. In both countries, remittances and (particularly in England) investment were important financial activities facilitated by such connections, while bill-rediscounting appears to have been relevant only in the English case. On the other hand, in Japan domain-related business activity forged financial links with the commercial centres, links in which provincial financial agents played a major role. Also the expansion of inter-domainal private trade may have further stimulated the inter-regional financial linkages in the late Tokugawa period.
    Keywords: financial agents; provincial towns; inter-regional financial linkages;; early industrialisation
    JEL: N20 N23 N25
    Date: 2020–01
  7. By: Crescenzi, Riccardo; Di Cataldo, Marco; Giua, Mara
    Abstract: Can active investment promotion efforts attract FDI towards areas and sectors that would not otherwise be targeted? This paper leverages an ad hoc survey on national and sub-national Investment Promotion Agencies (IPAs) in Europe and applies state-of-the-art policy evaluation methods to estimate the impact of IPAs on FDI attraction. The results show that FDI responds to IPAs even in advanced economies. Sub-national IPAs, operating in closer proximity to investors’ operations, attract FDI in particular towards less developed areas where market and institutional failures are stronger. IPAs influence FDI over and above other policies targeting the general economic improvement of the host economies. Impacts are concentrated in knowledge-intensive sectors where collaborative systemic conditions are more relevant. IPAs work best for less experienced companies - ‘occasional’ investors - more likely to suffer from institutional failures. Finally, IPAs are equally effective in attracting companies from both outside and inside the EU Single Market even if the latter are less likely to suffer from regulatory or information asymmetries. Overall, this evidence sheds new light on the role of sub-national IPAs as local ‘institutional plumbers’ in support of foreign investors and their operations.
    Keywords: foreign direct investment; investment promotion; multinationals; institutions; European Union; 639633-MASSIVE-ERC-2014-STG; Internal OA fund
    JEL: F21 F23 O24 R58
    Date: 2021–09
  8. By: Alden, Christopher; Méndez, Álvaro
    Abstract: This study provides a cross-country comparative analysis of China’s development finance policies and foreign policy practices to identify patterns of conduct within the sector and across regions as well as of differences in this conduct. Using both primary and secondary sources, we analyze the cases of Costa Rica, Argentina, Malaysia, and Djibouti and their complex relationship with Beijing. We find that China’s modus operandi in these countries has some telling similarities that help us understand how Beijing operates in the global South.
    JEL: F3 G3
    Date: 2021
    Abstract: 본 보고서에서는 중국 금융개방의 환경 변화를 분석하였다. 대내적으로는 금융개방 관련 정책 및 제도의 변화를 살펴보았고, 대외적으로는 미·중 갈등 심화가 중국 금융개방에 미치는 영향을 분석하였다. 산업·기술 측면으로는 중국 디지털 금융 발전에 따른 미·중 금융 플랫폼 헤게모니 경쟁에 대해 살펴보았다. 마지막으로 중국 금융개방을 평가하고 한국의 대응방향과 한·중 금융협력에 대한 정책 시사점을 제안하였다. China's financial opening has progressed at a very slow pace, unlike the manufacturing and trade sectors that have pushed for an active opening to the outside world. The Chinese economy has been growing rapidly while serving as a global production base, but since 2012, it has become necessary to modify its approaches to achieve growth as it enters the so-called “New Normal (新常態)”, an era of medium-speed growth. Recently, new reform and opening measures have been taken in various fields to improve the quality of the Chinese economy, and the need for reform and opening in the financial sector has also increased. Internally, the financial system centered on China's state-owned commercial banks has focused on indirect financing, which has served as a major obstacle to upgrading China's economy and industry to the next level, further increasing the need for reform and opening of the financial sector. Moreover, externally, the U.S.-China conflict which began in earnest in 2018, is applying strongly pressure toward reform and opening in China’s financial sector. The Chinese government began to show a proactive attitude toward financial opening amid such internal needs and external pressure, and an important development was seen in China’s financial opening when President Xi Jinping declared further opening measures at the Boao Forum in April 2018. The Chinese financial authorities have prepared follow-up measures related to financial opening, and the Chinese government’s efforts toward financial opening in the three years from 2018 to 2020 yielded more results than the ten-year opening period since its accession to the WTO. (the rest omitted)
    Keywords: USA; China; Chinese; financial opening; ecomony; New Normal;
    Date: 2020–12–30
  10. By: Leland Bybee; Bryan T. Kelly; Asaf Manela; Dacheng Xiu
    Abstract: We propose an approach to measuring the state of the economy via textual analysis of business news. From the full text of 800,000 Wall Street Journal articles for 1984–2017, we estimate a topic model that summarizes business news into interpretable topical themes and quantifies the proportion of news attention allocated to each theme over time. News attention closely tracks a wide range of economic activities and explains 25% of aggregate stock market returns. A text-augmented VAR demonstrates the large incremental role of news text in modeling macroeconomic dynamics. We use this model to retrieve the narratives that underlie business cycle fluctuations.
    JEL: E32 G0
    Date: 2021–10
  11. By: Daichi SHIRAI
    Abstract: This study analyzes fiscal policies in a business cycle model with an endogenous borrowing constraint when firms are heavily in debt. The tightness of the borrowing constraint for working capital loans depends on the level of corporate debt. When the level of corporate debt is modest, an increase in corporate debt amplifies corporate tax cut multipliers. Because the difference in debt levels due to the temporary tax cut remains for a long time, the cumulative effect on welfare becomes large. If the debt level exceeds a certain threshold, it remains at this level and depresses an economy permanently. In this situation, a permanent spending expansion changes the firms capital structure and can eliminate this inefficiency in the long run.
    Date: 2021–10
  12. By: Ben-Gad, M.; Pearlman, J.; Sabuga, I.
    Abstract: We propose a general equilibrium framework that highlights the interaction of reserve requirements and a conventional monetary policy in a model that combines endogenous housing loan defaults and financial intermediation frictions due to the costs of enforcing contracts. We use the model to examine how the interaction of these policies affect (i) the credit and business cycle; (ii) the distribution of welfare between savers and borrowers; (iii) the overall welfare objectives when monetary and macroprudential policies are optimised together or separately. We find that models with an optimised reserve ratio rule are effective in reducing the sudden boom and bust of credit and the business cycle. We also find that there are a distributive implications of the introduction of reserve ratio where borrowers gain at the expense of savers. However, there is no difference in the overall welfare results whether monetary and macroprudential policies are optimised together or separately.
    Keywords: Reserve requirements; endogenous loan defaults; welfare
    Date: 2021
  13. By: Jahan Abdul Raheem (University of Waikato); Gazi M. Hassan (University of Waikato); Mark J. Holmes (University of Waikato)
    Abstract: This study analyses the impact of remittances on the monetary transmission mechanism (MTM) of the Sri Lankan economy during its conflict and post-conflict eras, using monthly data from 1996 to 2009. In addition, the study focuses on how the impact of remittances varied over different intermediate transmission channels, especially credit, asset prices, and exchange rate, in transmitting monetary policy shocks to the economy. The SVAR model is used to analyse the impact of remittances in the transmission of monetary policy shock to real economic variables. The empirical findings reveal that remittances affect the MTM of Sri Lanka in the post-conflict period significantly and their impact on bank credit and asset prices is relatively more intense than the exchange rate channel in the post-conflict period. The findings of this study also suggest that conflict-driven migration and the consequent increase in the inflow of remittances could impact monetary policy measures through wealth and liquidity effects more after the end of the conflict.
    Keywords: remittances;monetary policy;transmission channels;conflict
    JEL: E5 E52 F24 D74
    Date: 2021–10–21
  14. By: Capraro, Santiago; Panico, Carlo; Torres-Gonzalez, Luis Daniel
    Abstract: Interest rates in the USA and in other countries have experienced persistent and generalised declines since the 1980s. The main interpretations of this phenomenon ignore the role of monetary factors, such as financial and monetary policy. The essay proposes an alternative interpretation based on the choice of the Federal Reserve (FED) to conduct monetary policy by attributing high priority to financial-stability. The interaction between changes in financial regulation, the transformation of "specialized" banking into "universal", and the FED's concern with financial instability have led the central bank to add to the role of "lender of last resort" that of "lender of first resort" that systematically provides liquidity at a low cost to financial firms. This new conduct of monetary policy has produced the downward trend in interest rates.
    Keywords: interest rates, monetary policy, financial stability, change of financial regulation.
    JEL: E11 E12 E43 E44 E52 E58 G01 G21
    Date: 2021–10–13
  15. By: Banco de España Strategic Plan 2024: Risk identification for the financial and macroeconomic stability (Banco de España)
    Abstract: For central banks, it is crucial to develop and maintain risk identification frameworks that allow them to detect in good time and address potential threats to financial stability with the most appropriate policy tools. This paper reviews the main indicators developed for this purpose by the Banco de España and by other central banks and prudential authorities. In this way, this stocktaking exercise contributes to improving the transparency and effective communication of the financial stability-related tasks carried out at the Banco de España. Some of the indicators are used in regular Banco de España surveillance activities, whereas others pertain to specific research activities. We classify our set of measures into two broad categories depending on the risk monitored: standard or systemic risks. Given the multidimensional nature of systemic risk, its identification goes beyond the sum of the standard risks explored in this paper (namely credit, macroeconomic, market, and liquidity and bank risks). This survey also classifies indicators by the type of institutional segment that triggers risks; namely, sovereigns, households, non-financial corporations, banks, non-bank financial sector, residential real estate and the financial markets. This work shows how the measures developed and regularly used at the Banco de España allow potential vulnerabilities to be comprehensively monitored. Nevertheless, maintaining an adequate risk-identification framework requires continuous adaptation to new theoretical developments and econometric tools, and, more importantly, to emerging challenges. In this respect, there is a current drive to develop new indicators to assess potential risks arising from climate change and those linked to the risk of system-wide cyber incidents. It is expected that the monitoring needs related to these risks will increase in the future.
    Keywords: risk identification, systemic risk, systemic risk indicators, standard risk indicators, financial stability
    JEL: E58 C43 G10 G21 G32 G50
    Date: 2021–09
  16. By: Sasiwooth Wongmonta
    Abstract: Education is a crucial component of human capital and make a contribution to social welfare. In rural developing countries, shocks and financial constraints on households are generally recognized as obstacles to children’s schooling opportunities. This paper investigates the effects of income shocks and borrowing constraints on household demand for education in rural Thailand, using the Townsend Thai panel data spanning from 2013 to 2017. Information on annual rainfall at provincial level is used to estimate a transitory income component for Thai rural households. Estimation results indicate that income risks and borrowing constraints have a substantial negative impact on child schooling outcomes, including educational attainment and years delayed in school. However, it finds that the transitory income results in an increase in household education expenditures conditional on child’s attendance at school. Further evidence shows that the interaction between income risk and borrowing constraints has no effect on household schooling decision. These findings suggest that in addition to household socioeconomic status, children’s human capital is at risk mainly due to income uncertainty and the absence of well-developed financial and insurance markets.
    Keywords: Income Shocks; Borrowing Constraints; Education; Child Schooling; Thailand
    JEL: D10 I21 I25 O15
    Date: 2021–09
  17. By: Clémence Berson; Raphaël Lardeux; Claire Lelarge
    Abstract: In this paper, we take advantage of the implicit cognitive exercise available in standard Labor Force Surveys to propose a new indicator of financing constraints which is based on the cognitive load they generate (Mullainathan and Shafir, 2013). Survey respondents are requested to report their monthly wages, which we compare to their administrative, fiscal counterparts. We propose a well-defined index of worker-level uncertainty, which filters out their potential rounding behavior and reporting biases. We estimate it using unsupervised ML/EM techniques and find that workers tend to perceive their own wages with a degree of uncertainty of around 10%. Through the lens of a simple rational signal extraction model, this amounts to estimates of workers' attention ranging from 30% to 84% depending on their wage, education, tenure and gender. Most importantly, we show that the attention of the lowest paid 30% of workers is cyclical and increases steadily by 17 percentage points in the ten days preceding payday, before immediately dropping on that day, which, through the lens of a simple model, is indicative of end-of-month financing liquidity constraints. Furthermore, this pattern reveals that the cognitive cost induced by these financing constraints arises from the not too concave (or convex) costs of achieving high levels of attention, and the convex costs of maintaining it over time.
    Keywords: Behavioral Inattention, Cognitive Costs, Wage Volatility, Poverty and Financing Constraints
    JEL: C83 D14 I32 J31
    Date: 2021
  18. By: Mamadou Ndione (CREGO - Centre de Recherche en Gestion des Organisations [Dijon] - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE] - UB - Université de Bourgogne - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar)
    Abstract: The purpose of microfinance institutions (MFIs) is to lend money to populations that lack the means to access the formal banking system. The various actors involved with MFIs are liable to pursue different and sometimes conflicting goals and interests, which can cause inefficiencies. This article discusses the impact of MFI stakeholders on wealth creation among these institutions in the eight countries that make up the West African Economic and Monetary Union (UEMOA). While the volume of credit given to clients and the quality of each country's macro-governance index have a positive impact on MFI wealth creation, the results are less clear when it comes to the impact of owners' or shareholders' contributions, or public subsidies. In any case, savers, lenders, and female clientele have no significant impact on MFI wealth creation.
    Abstract: Las instituciones de microfinanzas (IMF) tienen por objetivo prestar dinero a las poblaciones que no disponen de recursos suficientes para acceder al sistema bancario formal. Estas IMF agrupan varios actores que pueden proseguir objetivos e intereses diferentes, e incluso conflictuales, lo que puede ser fuente de ineficiencia. El presente artículo se interesa al impacto de las partes interesadas de las IMF sobre la riqueza generada en su seno en los ocho países de la Unión económica y monetaria oeste-africana (UEMOA). El autor muestra que, si bien el volumen de los créditos acordados a los clientes y la cualidad del índice de macro-gobernanza de cada país tienen una influencia positiva en la riqueza creada por las IMF, los resultados son más desiguales respecto al impacto de las aportaciones de los propietarios o de los socios, así como de las subvenciones públicas. En cualquier caso, les ahorradores, los prestamistas y la clientela femenina no tienen influencia significativa en la creación de valor de estas IMF.
    Abstract: Les institutions de microfinance (IMF) ont pour objet de prêter de l'argent aux populations qui ne disposent pas de moyens suffisants pour accéder au système bancaire formel. Ces IMF regroupent plusieurs acteurs susceptibles de poursuivre des objectifs et des intérêts différents, voire conflictuels, ce qui peut être source d'inefficience. Cet article s'intéresse à l'impact des parties prenantes des IMF sur la richesse créée en leur sein dans les huit pays de l'Union économique et monétaire ouest-africaine (UEMOA). L'auteur montre que, si le volume des crédits accordés aux clients et la qualité de l'indice de macro-gouvernance de chaque pays ont une influence positive sur la richesse créée par les IMF, les résultats sont plus mitigés en ce qui concerne l'impact des apports des propriétaires ou des sociétaires, ainsi que des subventions publiques. Dans tous les cas, les épargnants, les prêteurs et la clientèle féminine n'ont aucune influence significative sur la création de valeur de ces IMF.
    Keywords: Institution de microfinance,UEMOA
    Date: 2021
    Abstract: Since the 2008 global financial crisis, including the recent COVID 19 pandemic, low interest rates and low economic growth have continued around the world. In spite of this low interest rate trend, as the economic downturn prolongs, there is a situation of concern called the “new normal” of low interest rates and low economic growth, and low prices. In this new normal economic structure, the rapid progress of aging is increasing the necessity and desire for asset accumulation. In addition, digital finance such as Fin-tech with the evolution of the underlying technologies and the emergence of new technologies has replaced or improved many functions of existing finance in the advent of the 4th industrial revolution era. These changes are expected to bring benefits to the individual and corporate finance sectors, which have been subject to financial inclusion. On the other hand, digital finance, which is changing at such a rapid pace, may further isolate some individuals who were in the blind spot of finance, such as the elderly, and a support system for this is an issue that should be included in the policy of financial inclusion in each country. In this paper we find that Asian countries like other regions have achieved tangible results in financial inclusion while achieving financial deepening. When looking through various financial inclusion indicators such as holding accounts and loans, ATMs, and bank branches, the Asian region has achieved similar or superior performance to other regions. Compared to the income level, the growth of financial inclusion in Asia was found to be attributable to better performance in middle-income countries than in other similar regions. High-income countries in Asia are performing somewhat lower than similar peer groups in other regions, but this seems to be due to stagnation of growth. More seriously, financial inclusion in low-income countries in Asia is not appearing faster than in other income groups. In Asian countries there appears to be a wide variation in regional financial inclusion. However, Asian countries are expanding around the younger generation in the use of ICT technology that is helpful in spreading financial inclusion so if digital inclusive finance centered on Fintech is properly applied, Asian countries will become a new model for digital financial inclusion. However, since the gap in the use of Fintech in the region is large, how to fill this gap is being raised as an important policy task for each country as well as the whole region. (the rest omitted)
    Keywords: Fintech; Digital Finance; Financial Inclusion; Comparative Studies of Countries
    JEL: O33
    Date: 2020–12–30
  20. By: Andrea BERNARDI (Oxford Brookes University (United Kingdom)); Cécile BERRANGER (Manchester Metropolitan University (United Kingdom)); Anita MANNELLA (Roma Tre University (Italy)); Salvatore MONNI (Roma Tre University (Italy)); Alessio REALINI (Roma Tre University (Italy))
    Abstract: Cooperatives are increasingly being recognized as important contributors to inclusive, sustainable and fair development. However, the cooperative movement faces a multitude of challenges, including lack of access to credit. The Italian cooperative sector features an important financing tool: the solidarity funds (Fondi Mutualistici in Italian). In 1992, Law 59 established these financial institutions that are owned by the cooperative associations. By law, all co-operatives have to transfer to the mutual funds (or to the Government if they do not belong to any co-operative association) 3% of their profits. In the past 25 years, the solidarity funds have been allocating large resources creating a financial virtuous cycle that could be inspiring for other nations. The solidarity funds promote innovative and inclusive cooperative practices as well as training and university education. Examples of similar initiatives can be found in other countries, mostly where the cooperation culture is more established. In this paper we look at Canada, France and the United Kingdom to further explore the nature and relevance of mutualistic finance.
    Keywords: Non-bank financial institutions; Venture capital; Co-operatives; Labour managed firms; Employee ownership; mutual funds
    JEL: G23 G34 J54 L24 L31 N24 O16 P13
    Date: 2021–01
  21. By: Scheuplein, Christoph
    Abstract: In Deutschland haben sich neue Formen der Wagniskapitalfinanzierung entwickelt, die Gründern kurzfristige Beratungsprogramme (Acceleratoren) oder längerfristige Infrastrukturen (Inkubatoren) anbieten. Zudem werden Gründungen unternehmensintern vorgenommen (Company Builder) oder im Auftrag anderer Unternehmen (Inkubation als Service) betrieben. Es konnten 238 "Inkubationsfinanzierer" dokumentiert werden, die somit rund 17 Prozent aller in Deutschland aktiven Wagniskapitalgeber stellten. Mit je 30 Neugründungen pro Jahr wurde das stärkste Wachstum in den Jahren 2015 bis 2017 erreicht. Nachdem zunächst Akteure der Finanzwirtschaft und dann strategische Unternehmen Inkubationsfinanzierer gründeten, hat in den letzten Jahren auch der Staat derartige Geschäftsmodelle auf den Weg gebracht. Die meisten der in Deutschland ansässigen Inkubationsfinanzierer waren in Berlin (31 %), München (15 %) sowie Hamburg (8 %) beheimatet. Das Ruhrgebiet lag auf dem sechsten Platz (5 %), wobei ein Drittel der Inkubationsfinanzierer öffentlich gefördert wurden. Die Inkubationsfinanzierung schafft neue Kooperationsmöglichkeiten zwischen finanzwirtschaftlichen Akteuren, strategischen Unternehmen und staatlichen Einrichtungen und bietet somit einen Impuls für die Erneuerung des korporatistischen Innovationssystems in Deutschland.
    Date: 2021
  22. By: Zhang, Linyun; Huang, Feiming; Lu, Lu; Ni, Xinwen
    Abstract: This study seeks to evaluate the effect of green financial development, improving energy efficiency and economic growth on Covid-19 tenure. For this, the CPEC area is recommended to look into. Present study revealed the energy economic negative repercussions of Covid-19 impacts. It is assumed that, in China and Pakistan, economic expansion, trade openness, financial development, and urbanization coexist. To verify the postulated impacts of economic activity on the environment, we do Johansen cointegration, error correction, and Granger causality tests. We discovered that economic growth, energy consumption, trade openness, financial development, and urbanization had a long-term relationship to CO2 emissions in Pakistan. Urbanization is the only macroeconomic factor with a detrimental effect on carbon emissions. As with China, no cointegration is found across variables, but unidirectional causality from energy consumption and economic growth to economic growth is established. Economic growth, energy consumption, and trade openness also each have bidirectional causal effect on financial development. According to statistical data, along with significant projected economic development in CPEC countries, policymakers and regulators are urged to strengthen environmental protection laws in China and Pakistan.
    Keywords: Green financial development,Energy Financing,Energy Efficiency,Economic growth,Covid-19 crises,Capital formation
    Date: 2021
  23. By: Pierre Jacquet (ENPC - École des Ponts ParisTech)
    Abstract: Beyond its indisputable success as a financial niche, the concept of "green finance" exhibits several inconsistencies that reflect tensions with the current rules of financial capitalism and question the potential of green finance to engineer and sustain societal change. However, the interaction between the development of green finance, the pressures from civil society (that underlie changes in societal values), and the validation through tax and regulatory policies, holds a real potential for green transformation. Green finance brings a threefold contribution through that interaction: measure and communication of impacts; standardization of approaches, criteria and instruments; progressive normalization of green investment principles. Yet, taxation and regulation play a crucial role in validating these evolutions and introducing supportive incentives.
    Abstract: En dépit d'incontestables succès de niche, le concept de finance verte présente plusieurs zones de flou et incohérences qui soulignent les tensions avec les règles de fonctionnement du capitalisme financier et amènent à relativiser son potentiel de transformation de l'économie et de la société. Cependant, l'interaction entre le développement de la finance verte, les pressions de la société civile (qui font évoluer les valeurs de la société et instaurent de nouvelles normes), ainsi que les politiques réglementaires et fiscales (qui valident ces évolutions), peut soutenir la dynamique de transformation verte. La finance verte y contribue dans trois domaines : la mesure et la communication des impacts ; la standardisation des approches, des critères et des instruments ; la normalisation progressive de nouveaux principes d'investissement. Mais la fiscalité et la réglementation jouent aussi un rôle déterminant pour ancrer ces changements et créer les incitations adéquates.
    Date: 2021–07–01
  24. By: Johannes Stroebel; Jeffrey Wurgler
    Abstract: We survey 861 finance academics, professionals, and public sector regulators and policy economists about climate finance topics. They identify regulatory risk as the top climate risk to businesses and investors over the next five years, but they view physical risks as the top risk over the next 30 years. By an overwhelming margin, respondents believe that asset prices underestimate climate risks rather than overestimate them. We also tabulate opinions about the correlation between growth and climate change; social discount rates appropriate for projects that mitigate the effects of climate change; most influential forces for reducing climate risks; and, most important research topics.
    Keywords: climate finance, environment, ESG, SRI, social discounting
    JEL: G12 G14 H43 Q54
    Date: 2021

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