nep-fdg New Economics Papers
on Financial Development and Growth
Issue of 2022‒08‒22
24 papers chosen by
Georg Man

  1. Growth and Firm Dynamics in a Banking System Favoring Big Firms By Nurlan Jahangirli
  2. Economic Convergence With Safe Assets By Ly Dai Hung
  3. Financial liberalization and its implications for private savings in sub-Saharan Africa By Elizabeth Asiedu; Fafanyo Asiseh; Theresa Mannah-Blankson; Jones Arkoh Paintsil
  4. Creative Destruction and Stock Price Informativeness in Emerging Economies By Dai, Shangze; Fan, Fei; Zhang, Keke
  5. Dynamic Tax Evasion and Capital Misallocation in General Equilibrium By Francesco Menoncin; Andrea Modena; Luca Regis
  6. A Macro Financial Model for the Chilean Economy By Mauricio Calani; Benjamín García; Tomás Gómez; Mario González; Sebastián Guarda; Manuel Paillacar
  7. Aggregate skewness and the business cycle By Martin Iseringhausen; Ivan Petrella; Konstantinos Theodoridis
  8. Investment booms, diverging competitiveness and wage growth within a monetary union: An AB-SFC model By Bernhard Schuetz
  10. Liquidity Risks in Lending Protocols (LPs): Evidence from Aave Protocol By Xiaotong Sun
  11. Macroprudential Regulation and Sector-Specific Default Risk By Sami Ben Naceur; Bertrand Candelon; Mohamed Belkhir; Jean-Charles Wijnandts
  12. The evolution of macroprudential policy use in Chile, Latin America and the OECD By Carlos Madeira
  13. Sovereign Credit Spreads, Banking Fragility, and Global Factors By Anusha Chari; Felipe Garcés; Juan Francisco Martínez; Patricio Valenzuela
  14. ¿QUÉ FINANCIAN LOS NUEVOS BANCOS DE DESARROLLO? Una aproximación a sus operaciones durante su primer quinquenio de actividad By Andrea Molinari; Leticia Patrucchi; Cecilia Flores
  15. "Evolving Sovereign Wealth Fund under Infrastructure Funding Scarcity: A Literature Study " By Aris Wahyu Raharjo
  16. How Do Natural Resource – Backed Loans Affect the Public Debt Sustainability in Developing Countries? Empirical Evidence By Yacouba COULIBALY; Alexandru MINEA; Patrick VILLIEU
  17. Toward Understanding Financial Diplomacy: The Case of Morocco By Fadoua Joudar; Brahim Dinar
  18. Systemic Sudden Stops in Emerging Economies: A Recent Perspective By Tunio, Mohsin Waheed
  19. E pluribus plures: shock dependency of the USD pass-through to real and financial variables By Minesso, Massimo Ferrari; Gräb, Johannes
  20. The effects of Monetary Policy on Capital Flows A Meta-Analysis By Mauricio Villamizar-Villegas; Lucía Arango-Lozano; Geraldine Castelblanco; Nicolás Fajardo-Baquero; Maria A. Ruiz-Sanchez
  21. The geography of acquisitions and greenfield investments: firm heterogeneity and regional institutional conditions By Amendolagine, Vito; Crescenzi, Riccardo; Rabellotti, Roberta
  22. Women in Fintech: As Leaders and Users By Ms. Sumiko Ogawa; Purva Khera; Mahima Vasishth; Ms. Ratna Sahay
  23. How Altruism Works during a Pandemic: Examining the Roles of Financial Support and Degrees of Individual Altruism on International Remittance By Nakamura, Nobuyuki; Suzuki, Aya
  24. Circular economy and central bank digital currency By Ozili, Peterson K

  1. By: Nurlan Jahangirli (Monash)
    Abstract: Banks favor big firms by offering small firms different menu choices, which leads to disproportionate borrowing costs. I study big firm favorism in credit markets as a source of cross-country divergence and lower business dynamism. First, I provide some new evidence on the nature of this relationship across low-, middle-, and high-income countries. The disproportionate cost of borrowing drastically declines as we move from low-income to high-income countries. Then, I integrate these stylized empirical facts into a Schumpeterian growth model with heterogeneous firm dynamics. Counterfactual policy interventions to alleviate disproportionate borrowing costs suggest a 10% to 21% increase in the economic growth rate in the US.
    Keywords: firm dynamics, cross-country convergence, borrowing costs, economic growth, pricing of corporate loans
    JEL: O16 O40
    Date: 2022–08
  2. By: Ly Dai Hung (Vietnam Institute of Economics, Hanoi, Vietnam)
    Abstract: The paper characterizes the convergence of economic growth across economies on accounting for the sovereign debts rating, a measure of the safety of government debts. The empirical analysis combines a cross-section with a panel data regression on a sample of 180 economies over 1990-2019. The evidence records that there exists the convergence of economic growth (-convergence): an economy with lower initial per capita GDP has a higher average growth rate of per capita GDP. Moreover, on cross-section data, the sovereign debts rating amplifies the convergence process, and also exerts a positive effect on the steady state level of per capita GDP relative to that level of world leading economy. And on panel data, the convergence only applies for an economy attains a high enough sovereign debts rating (higher than a threshold of 10.8 established by the data). This result also constitutes an inverted-U-shaped dependence pattern of economic growth on the per capita GDP. These analysis together uncover one mechanism for the convergence that a higher sovereing debts rating raises both the domestic investment and foreign capital inflows, then, stimulating the capital stock accumulation toward the steady state per capita GDP.
    Keywords: Fixed-Effect Panel Regression,Safe Assets,Convergence of Economic Growth,Cross-Section Regression
    Date: 2021–11
  3. By: Elizabeth Asiedu; Fafanyo Asiseh; Theresa Mannah-Blankson; Jones Arkoh Paintsil
    Abstract: This paper employs data from 103 developing countries between 1981 and 2012 to examine the determinants of private savings in sub-Saharan Africa (SSA), with a focus on the effect of financial liberalization on private savings. It also analyses why the savings rate for SSA countries is lower than for other developing countries, by examining whether the determinants of private savings in SSA differ significantly from non-SSA countries.
    Keywords: Developing countries, Financial liberalization, Saving, Sub-Saharan Africa
    Date: 2022
  4. By: Dai, Shangze; Fan, Fei; Zhang, Keke
    Abstract: It is generally accepted that creative destruction can increase stock price informativeness, for innovative companies tend to behave more surprisingly. However, we believe the rising of stock price informativeness by enterprise innovation in emerging or developing markets is, in some sense, the result of executive ownership and insider trading. To investigate our proposition, we build a rational expectation framework model and define stock price informativeness (SPI) as the Kolmogorov-Smirnov distance between expected distribution and actual distribution of stock prices. Then we use Chinese listed company data to perform benchmark and mediation effects regressions, along with instrumental variable regression in the empirical sector. After that, we use Thailand and Indonesia listed company data for robustness tests. Finally, we divide Chinese listed companies into developed-economy funded and others to do grouping regression. The main conclusion is: Creative destruction can raise stock price informativeness, while executive ownership plays a partial mediating effect in the path of such influence. However, that mechanism is not significant when we use developed-country-funded enterprises listed in China as the sample for regression. Thus, the effects of creative destruction on stock price informativeness are uneven across countries, and executive ownership plays a vital role in that impact in emerging economies.
    Keywords: Stock price synchronicity; Enterprise innovation; Inside information; Executive ownership; Rational expectation
    JEL: G2 G3 G32
    Date: 2022–07–05
  5. By: Francesco Menoncin; Andrea Modena; Luca Regis
    Abstract: We study tax evasion in a tractable macroeconomic model with productive public expenditure financed by a fixed-rate income tax. Taxpayers are heterogeneous in their productivity and subject to borrowing constraints. They can lower their fiscal burden by evading taxes at the risk of being audited (and fined) by the government. We solve the model for its competitive equilibrium and characterize entrepreneurs’ optimal policies contingent on their individual productivity and the endogenous price levels. The model predicts that enforcing tax compliance stimulates the productivity of public expenditure, thus making less productive enterprises viable. At the same time, however, fewer evasion opportunities alleviate borrowing constraints by offsetting the advantage of low-productivity (and highly-evasive) entrepreneurs, thereby re-allocating capital to more productive users. On the demand side, decreasing tax evasion reduces consumption levels by curbing private capital accumulation. However, it fosters consumption rates by mitigating entrepreneurs’ precautionary motif against auditing risk.
    Keywords: Dynamic Tax Evasion; Financial Frictions; General Equilibrium; Misallocation
    Date: 2022
  6. By: Mauricio Calani; Benjamín García; Tomás Gómez; Mario González; Sebastián Guarda; Manuel Paillacar
    Abstract: This paper presents a dynamic stochastic general equilibrium (DSGE) model built with a focus on frictional financial intermediation. The model, estimated for the Chilean economy, expands the quantitative analysis toolkit of the Central Bank of Chile, allowing for the study of how financial frictions shape the transmission mechanisms of several macroeconomic and financial shocks. The model builds on a simplified version of the Central Bank of Chile’s main DSGE model, described in Garcia et al. (2019), augmented to include a rich financial sector and financial frictions. The extensions include optimizing financial intermediaries, corporate and mortgage lending, long-term government bonds within a segmented bonds market, and the possibility for households, firms, and banks to default. The result is the Central Bank of Chile’s Macro Financial Model. The model captures many features of the Chilean economy and allows for a quantitative analysis of the financial system’s role in explaining the business cycle and of the interaction between the real and financial sides of the economy.
    Date: 2022–05
  7. By: Martin Iseringhausen (ESM); Ivan Petrella (University of Warwick, CEPR); Konstantinos Theodoridis (ESM)
    Abstract: We develop a data-rich measure of expected macroeconomic skewness in the US economy. Expected macroeconomic skewness is strongly procyclical, mainly reflects the cyclicality in the skewness of real variables, is highly correlated with the cross-sectional skewness of firm-level employment growth and is distinct from financial market skewness. Revisions in expected skewness deliver dynamics that are nearly indistinguishable from those produced by the main business cycle shock of Angeletos et al. (2020). This result is robust to controlling for macroeconomic volatility and uncertainty, and alternative macroeconomic shocks. Our findings highlight the importance of higher-order dynamics for business cycle theories.
    Keywords: Business cycles, downside risk, skewness
    JEL: C22 C38 E32
    Date: 2022–07–20
  8. By: Bernhard Schuetz (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria)
    Abstract: This paper proposes a 2-country stock-flow consistent agent-based model of a monetary union and exposes it to three supposed drivers of imbalances in the build-up to the Great Recession: unequal developments in investment, competitiveness and wages. The model has some innovative features: It does not rely on given propensities to import, with agents from different regions instead all being part of the same market and import shares emerging endogenously as a result of the geographical distance between agents. The model also features labor hoarding by firms and a banking sector that bears some Minskyan features. The model is able to replicate the low unemployment rates in the North that were paralleled with falling unemployment rates in the South together with trade imbalances in favor of the North.
    Keywords: stock-flow consistent agent-based modeling; monetary union; international imbalances; investment; productivity; wages
    Date: 2022–07
  9. By: Damián Pierri (Instituto Interdisciplinario de Economía Política de Buenos Aires - UBA - CONICET)
    Abstract: We present a new Generalized Markov Equilibrium (GME) approach to studying sudden stops and financial crises in emerging countries in the canonical small open economy model with equilib-rium price-dependent collateral constraints. Our approach to characterizing and computing stochastic equilibrium dynamics is global, encompasses recursive equilibrium as a special case, yet allows for a much more flexible approach to modeling memory in such models that are known to have multiple equilibrium. We prove the existence of ergodic GME selections from the set of sequential competitive equilibrium, and show that at the same time ergodic GME selectors can replicate all the observed phases of the macro crises associated with a sudden stop (boom, collapse, spiralized recession, recov-ery) while still being able to capture the long-run stylized behavior of the data. We also compute stochastic equilibrium dynamics associated with stationary and nonstationary GME selections, and we find that: a) the ergodic GME selectors generate stochastic dynamics that are less financially constrained with respect to stationary non-ergodic paths; and, b) non-stationary GME selections ex-hibit a great range of fluctuations in macroeconomic aggregates compared to the stationary selections. From a theoretical perspective, we prove the existence of both sequential competitive equilibrium and (minimal state space) recursive equilibrium, as well as provide a complete theory of robust recursive equilibrium comparative statics in deep parameters. Consistent with recent results in the literature, relative to the set of recursive equilibrium, we find 2 stationary equilibrium: one with high/over borrowing, the other with low/under borrowing. These equilibrium are extremal and “self-fulfilling” under rational expectations. The selection among these equilibria depend on observable variables and not on sunspots.
    Keywords: Financial Crises, Sudden Stops, Small Open Economies, Ergodicity, Recursive Equilibrium, Generalized Markov Equilibria
    JEL: C6 D52 F32
    Date: 2021–06
  10. By: Xiaotong Sun
    Abstract: Decentralized Finance (DeFi) can replicate most traditional financial activities. Among various DeFi, Lending Protocols (LPs) resemble banks, allowing users to borrow and lend cryptocurrencies. By analysing stablecoin loans in Aave protocol, we find a small group of users with dual roles, i.e., borrowers and depositors, and these users account for significant loans and deposits. Therefore, potential liquidity risks can occur if these users collectively withdraw deposits and initiate loans, and potential liquidity risks can affect both loan-specific factors and status of Aave protocol. Surprisingly, liquidity risks in Aave are related to other LPs, implying illiquidity is infectious in DeFi.
    Date: 2022–06
  11. By: Sami Ben Naceur; Bertrand Candelon; Mohamed Belkhir; Jean-Charles Wijnandts
    Abstract: This paper studies the transmission of macroprudential policies across both financial and non financial sectors of the economy. It first documents that tighter macroprudential regulations implemented in Europe over the period 2008–2017 lowered default risk not only in the financial, but also in non-financial sectors. Second, the paper analyzes the impact of two reforms in the macroprudential framework. Higher capital requirements improve the long-run resilience of the financial sector but at the cost of raising long-term default risk in non-financial sectors. Strengthening the resolution framework for failing banks has beneficial long-run effects on the default risks of the financial and non-financial sectors. Our results concur with the literature documenting how banks adjust their balance sheet composition and credit supply in reaction to changes in their regulatory environment.
    Keywords: Macroprudential regulation; Default risk; Capital requirements; Bank bail-in
    Date: 2022–07–15
  12. By: Carlos Madeira
    Abstract: This study compares the use of macroprudential policies and capital flow management in Chile versus other countries. I find that Chile made a lower net tightening of its macroprudential policies relative to 1990 than the other country groups, whether in terms of its overall index or any of its subcategories. This is explained in part because Chile had already adopted tight macroprudential policies after the Banking Law of 1986; therefore, it started the 1990s with a more conservative level of financial regulation than most countries. However, Chile still presents a restrictive Loan to Value regulation, close to the OECD average. In terms of Financial Openness and Capital Controls, Chile was very closed until the Asian crisis. Chile is more open with respect to capital inflows relative to all the country groups, although it is still more closed than the OECD and Advanced Economies for outflows.
    Date: 2022–07
  13. By: Anusha Chari; Felipe Garcés; Juan Francisco Martínez; Patricio Valenzuela
    Abstract: This study explores the relationship between sovereign credit risk, banking fragility, and global financial factors in a large panel database of emerging market economies. To measure banking fragility, we construct a novel model-based semi-parametric metric (JLoss) that computes the expected joint loss of the banking sector conditional on a systemic event. Our metric of banking fragility is positively associated with sovereign credit spreads, after controlling for the standard determinants of sovereign credit risk, a comprehensive set of measures of systemic risk, and country and time fixed effects. The results additionally indicate that countries with more fragile banking sectors are more exposed to global (exogenous) financial factors than those with more resilient banking sectors. These findings underscore that regulators must ensure the stability of the banking sector to improve governments’ borrowing costs in international debt markets.
    Date: 2022–05
  14. By: Andrea Molinari (Instituto Interdisciplinario de Economía Política de Buenos Aires - UBA - CONICET); Leticia Patrucchi (Universidad Nacional de Moreno); Cecilia Flores (Universidad Nacional de Moreno)
    Abstract: El dinamismo en el mapa de actores financieros multilaterales y regionales de los últimos años se manifiesta en diversas dimensiones. Una de ellas es la emergencia de nuevos actores. El Nuevo Banco de Desarrollo del BRICS (NDB) y el Banco Asiático de Inversión en Infraestructura (AIIB) vienen captando una creciente atención debido a su desafío de complementar las necesidades, especialmente de infraestructura, del mundo en desarrollo. A cinco años de su puesta en marcha, este trabajo indaga en sus políticas operativas y principales instrumentos de financiamiento, caracterizando luego su volumen de operaciones y la composición sectorial y geográfica de sus carteras. Además del exponencial crecimiento prestable, destacan diferenciales como el cofinanciamiento con BMDs tradicionales (AIIB) o el financiamiento de bancos nacionales y subregionales de desarrollo, o en moneda local (NDB).
    Keywords: Nuevos Bancos de desarrollo, Financiamiento, Políticas operativas, Proyectos
    JEL: F33 F53 O19 F63 N25
    Date: 2021–09
  15. By: Aris Wahyu Raharjo (School of Business Management Institut Teknologi Bandung, Bandung, Indonesia Author-2-Name: Sudarso Kaderi Wiryono Author-2-Workplace-Name: School of Business Management Institut Teknologi Bandung, Bandung, Indonesia Author-3-Name: Raden Aswin Rahadi Author-3-Workplace-Name: School of Business Management Institut Teknologi Bandung, Bandung, Indonesia 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 - There are three primary focuses of this study, namely: to understand past literature on sovereign wealth fund (SWF) pattern of development, the impact of SWF investment on target firm financial performance, and how SWF fosters infrastructure development in Indonesia Methodology/Technique - The methodologies of this study are descriptive and structured systematic reviews. Six dimensions were the focus of this literature review which are the basis for sorting and grouping the 1683 publication journals. Those six dimensions are SWF characteristics, SWF target firm characteristics, country characteristics, deal characteristics, research methods, and level of analysis Findings - The SWF objectives and pattern of development in a country depending on the country-specific conditions which could evolve over time. There have been many past types of research on SWF development in different countries. Past research provided differing outcomes in various aspects of SWF development from one country to the others. In the case of Indonesia, INA is expected to provide global capital access in filling in the funding gap for Indonesia's infrastructure development. For that reason, this research is seeing an urgency to observe how Indonesia SWF manages its investment portfolio in unique infrastructure development and its impact on the national economic growth. Furthermore, past research findings described that the impact of institutional investors such as SWF on firm performance is still unclear. Many questions concerning the financial aspects of SWF's activities still remain relatively unanswered. The outcomes of this literature review provide multiple bases for future research with a mixed case study method. Novelty - This research observes and compares various SWF patterns of development in different countries (multiple cases). Indonesia's SWF wealth fund was a newly established government agency and has not been widely explored in past research. How the government of Indonesia overcomes funding scarcity for infrastructure development provides a unique experience. Type of Paper - Empirical"
    Keywords: Indonesia Sovereign Wealth Fund; Firm Value; Infrastructure Development; Structured Literature Review
    JEL: F30 M20
    Date: 2022–07–30
  16. By: Yacouba COULIBALY; Alexandru MINEA; Patrick VILLIEU
    Keywords: , Resource-backed loans, Natural Resources, Natural resource rents, Public Debt, Economic Growth, Public & Private Investment, Propensity Score Matching
    Date: 2022
  17. By: Fadoua Joudar (Université Hassan 1er [Settat]); Brahim Dinar (Université Hassan 1er [Settat])
    Abstract: Due to an economic context characterized by globalization, marked by fierce competition and by the opening of markets at the international level, several opportunities and large-scale challenges arise because of this new international context. This set of circumstances has drawn increasing attention to the role of financial diplomacy in promoting savings. Generally confused with economic diplomacy, financial diplomacy represents a particular aspect of diplomacy, however it remains very little treated in research works. Aware of the importance of financial diplomacy in the insertion of its financial system at the level of international finance, Morocco has deployed remarkable efforts in this direction. Indeed, the interest given to financial diplomacy by Morocco is not new, it dates back to its independence. The structural adjustment program initiated in Morocco in 1983; was the beginning of strengthening the assistance and support relations of the IMF and the World Bank. These relations explain Morocco's interest in its financial diplomacy. Due to the lack of research work dealing with this issue, this article attempts to answer the following question: What are the illustrations and actors of financial diplomacy in Morocco to ensure its insertion in the international economy? To answer this question, this article examines the importance of Morocco's financial diplomacy in international financial relations, through an identification of diplomatic actors as well as its contribution to Morocco's debt situation.
    Keywords: Financial Diplomacy,International Monetary Fund,World Bank
    Date: 2022
  18. By: Tunio, Mohsin Waheed
    Abstract: This paper first looks for Sudden Stops in capital inflows to nineteen emerging economies of Asia, Europe, Latin America, and Africa as Calvo, Izquierdo and Mejia (2008) based on the country-specific data availability from January 1990 to May 2022. The paper then introduces the notion of Systemic Sudden Stop as the one triggered by exogenous factors and measured in terms of a rise in Emerging Market Bond Index (EMBI) spreads. The author finds out that four countries i.e. Indonesia, Thailand, Poland, and Egypt have already entered into the Systemic Sudden Stop phase while other emerging economies could also be at a greater risk of the similar situation. The major risks to emerging markets come from the commodity prices and rising inflation due to the Russia-Ukraine conflict; tightening financial conditions; mounting uncertainty; and recessionary fears. Nevertheless, on the positive note, net ratings of emerging market sovereign bonds have improved in comparison with the year 2020, and EMBI spreads have not increased much due to greater risk being already priced-in, especially in high yield.
    Keywords: sudden stops, capital inflows, capital outflows, emerging markets, exchange rate, current account, EMBI spreads
    JEL: F31 F32 F39 F41
    Date: 2022–07
  19. By: Minesso, Massimo Ferrari; Gräb, Johannes
    Abstract: This paper quantifies the pass-through of a US dollar appreciation on trade variables and domestic financial conditions in a panel of 34 countries. Pass-through coefficients are highly shock-dependent: if the appreciation is driven by a US expansionary shock, the positive effects of stronger global demand - the “real” channel dominate the negative effects of a stronger dollar - the “exchange rate” channel. As a result, a positive US demand (supply)-drive appreciation expands global trade and stock valuations up to 2.2 (2.5) and 8% (15%) respectively, while if the appreciation is driven by a monetary policy shock the sign is opposite, leading to a contraction in the order of 2.5% (3%) depending on the country. The coefficients also exhibit a large degree of cross-country heterogeneity, we find that financial and trade exposure to the US, trade openness and USD invoicing shares explain up to 60% of the USD pass-through after demand and supply shocks. Cross-country differences, instead, are not explained by dollar invoicing if monetary policy or risk shocks determine USD movements. We explain this finding with the endogenous policy reaction of monetary authorities in emerging markets that stabilizes the exchange rate against the dollar and weakens the invoicing channel of dollar shocks. JEL Classification: F31, F41, F44, E44, E32
    Keywords: Exchange rate, pass-through, USD, VAR
    Date: 2022–07
  20. By: Mauricio Villamizar-Villegas; Lucía Arango-Lozano; Geraldine Castelblanco; Nicolás Fajardo-Baquero; Maria A. Ruiz-Sanchez
    Abstract: We investigate whether central banks are able to attract or redirect capital flows, by bringing together the entire empirical literature into the first quantitative meta-analysis on the subject. We dissect policy effects by the type of flow and by the origin of the monetary shock. Further, we assess whether policy effects depend on factors that drive investors to either search for yields or fly to safety. Our findings indicate a mean effect size of inflows in the amount of 0.09% of quarterly GDP in response to either a 100 basis point (bp) increase in the domestic policy rate or a 100bp reduction in the external rate. However, the effect size under a random effect specification is much lower (0.01%). Factors that significantly attract inflows include foreign exchange reserves, output growth, and financial openness, while factors that deter flows include foreign debt, capital controls, and departures from the uncovered interest rate parity. Also, both local and global risks matter (global risks exerting a larger pressure). Finally, we shed light on differences across the different types of flows: banking flows being the most responsive to monetary policy, while foreign direct investment being the least responsive. **** RESUMEN: Este trabajo representa el primer metanálisis cuantitativo sobre si los bancos centrales son capaces de atraer o redirigir los flujos de capital. Se analizan los efectos por tipo de flujo y por el origen del choque monetario. Además, se evalúa si los efectos de las políticas dependen de factores que impulsan a que inversionistas extranjeros busquen rendimientos o, por el contrario, busquen refugio. Nuestros hallazgos indican que, en promedio, el tamaño de las entradas de capital es de 0,09% del PIB trimestral en respuesta a un choque de 100 puntos básicos, ya sea en aumentos de la tasa de política doméstica o en reducciones de la tasa de política externa. Sin embargo, bajo una especificación de efectos aleatorios el tamaño del efecto es mucho menor (0,01%). Los factores que atraen significativamente flujos de capital incluyen el nivel de reservas internacionales, el crecimiento de la producción y el grado de apertura financiera, mientras que los factores que disuaden los flujos incluyen la deuda fiscal, controles de capital y desviaciones de la paridad descubierta de la tasa de interés. También, tanto los riesgos locales como los globales importan (aunque los riesgos globales ejercen una mayor presión). Finalmente, brindamos luces sobre las diferencias entre los tipos de flujos: los flujos bancarios siendo los más reactivos a la política monetaria, y los de inversión extranjera directa los menos reactivos.
    Keywords: Meta-Analysis, Capital Flows, Monetary Policy, Meta-Análisis, Flujos de Capital, Política Monetaria
    JEL: C83 E58 F21 F31 F32
    Date: 2022–08
  21. By: Amendolagine, Vito; Crescenzi, Riccardo; Rabellotti, Roberta
    Abstract: This paper investigates how institutional conditions at national and regional levels shape the decisions of Multinational Enterprises (MNEs) to invest abroad by means of either acquisitions or greenfield investments. The empirical analysis covers all Foreign Direct Investment (FDI) projects in the European Union by the largest MNEs in the world to study alternative choices by the same firm and account for firm-level characteristics in investment decisions. The empirical results show that - other things being equal - MNEs prefer acquisitions to control activities in regions with stronger investment eco-systems, while they choose greenfield investments in regions with weaker systemic conditions. Moreover, the regional quality of government makes a fundamental difference to the nature of the investment projects attracted by regions: those with high quality of government can attract greenfield investments undertaken by the most productive MNEs. By improving their quality of government, local and regional policy makers can attract higher quality FDI to their constituencies, potentially breaking the vicious circle between low productivity areas and low productivity FDI.
    Keywords: greenfield FDI; cross-border acquisitions; firm terogeneity; regions; Europe; insitutions; European Union Horizon 2020 Programme H2020/2014-2020 (Grant Agreement n 639633-MASSIVE-ERC-2014-STG).
    JEL: R12 R58 F23
    Date: 2022–07
  22. By: Ms. Sumiko Ogawa; Purva Khera; Mahima Vasishth; Ms. Ratna Sahay
    Abstract: While digital financial services have made access to finance easier, faster, and less costly, helping to broaden digital financial inclusion, its impact on gender gaps varies across countries. Moreover, women leaders in the fintech industry, although growing, remain scarce. This paper explores the interaction between ‘women’ and ‘fintech’ by examining: (i) the role of women leaders on firm-level performance in the fintech industry; and (ii) the determinants of gender gaps in the usage of digital services to better understand the cross-country differences. Results indicate that greater gender diversity in the executive board is associated with better performance of fintech firms.With regard to determinants of the gender gaps in the usage of digital financial services, we find that higher financial and digital literacy of women is associated with lower gender gaps in digital financial inclusion, and that socio-cultural factors also play a key role.
    Keywords: Firm Performance;Women Leaders; Digital Financial Inclusion; Financial Literacy; Digital Literacy
    Date: 2022–07–15
  23. By: Nakamura, Nobuyuki; Suzuki, Aya
    Keywords: International Development, Consumer/Household Economics, Institutional and Behavioral Economics
    Date: 2022–08
  24. By: Ozili, Peterson K
    Abstract: The emergence of central bank digital currency (CBDC) provides an opportunity for central banks to make an important contribution to the transition to a circular economy. This paper examines the role of a central bank digital currency in the circular economy. Central banks can contribute to the transition to a circular economy in two ways: first, by making central bank digital currency accessible to circular businesses and other players in the circular economy sector; and second, by looking into how the design features of CBDC can support circular economy goals. On the role of CBDC in the circular economy, I argue that a central bank digital currency offers a better payment option for circular economy financial transactions; central bank digital currency can lead to greater financial inclusion for ‘unbanked’ informal workers in the circular economy; CBDC can create a gateway that allows a central bank to offer financial assistance to distressed circular businesses; using a central bank digital currency can reduce illicit activities in the circular economy; a central bank digital currency can be used to provide stimulus funding to support circular businesses during crises; and, a central bank digital currency can offer low transaction cost for circular economy financial transactions. The paper also shows the link between CBDC and the circular economy. It also offers a critical perspective on the link between CBDC and the circular economy.
    Keywords: circular economy, central bank digital currency, circular finance, linear economy, resources, sustainability, central bank, CBDC design, blockchain, sustainable development, payment system, innovation.
    JEL: E42 Q2 Q54 Q56
    Date: 2022

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