|
on Financial Development and Growth |
| By: | António Afonso; M. Carmen Blanco-Arana |
| Abstract: | Financial inclusion is a key factor for economic growth in most developing countries. This paper examines the relationship between financial inclusion and Gross Domestic Product (GDP) per capita in the Least Developed Countries (LDCs) using panel data for the period 1990-2021. The empirical evidence suggests that financial inclusion is indeed related to economic growth in the LDCs. We consider different dimensions of financial inclusion: usability (% of bank credit to bank deposits), accessibility (commercial bank branches), concentration (% of concentration of banks) and availability (depositors with commercial banks) to determine which has a greater effect on economic growth in the countries analyzed. Therefore, we assess which dimensions of financial inclusion are a better tool to improve the economic situation in the poorest countries in the world. While we conclude that all dimensions of financial inclusion have a positive effect on economic growth, in the expected direction, we find that not all dimensions affect economic growth similarly. The dimensions ‘accessibility’ and ‘concentration’ are robustly associated with economic growth, while ‘usability’ and ‘availability’ produce a significant but relatively lesser effect in the LDCs. |
| Keywords: | Financial inclusion; GDP per capita; Panel data; LDCs |
| JEL: | O47 C33 F30 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp03162024&r=fdg |
| By: | Sunde, Tafirenyika |
| Abstract: | The current study investigates the impact of foreign direct investment on the growth of Namibia’s economy from 1990 to 2020 using the ARDL cointegration method. The results reveal that FDI, the interactive variable of FDI and trade openness, and other macroeconomic variables such as domestic investment, overnment consumption expenditure, human capital, a proxy for economic stability, and return on investment are responsible for Namibia’s economic growth. The article confirms the FDI-led growth and the Bhagwati hypotheses for Namibia as shown by the FDI and the interactive variable of FDI and trade openness, respectively. To reap the full benefits of FDI on economic growth in Namibia, the government must focus on improving physical infrastructure and the quality of human resources. It should also facilitate the development of an entrepreneurship culture, create a stable macroeconomic environment, and improve conditions for productive investments to accelerate economic growth and development. |
| Keywords: | Economic growth; foreign direct investment; trade openness; human capital; return on investment; government consumption expenditure cointegration; cointegration; inflation; ARDL |
| JEL: | E0 E01 F1 F14 |
| Date: | 2022–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117366&r=fdg |
| By: | Pablo Martinelli Lasheras (Universidad Carlos III de Madrid, and Figuerola Institute); Dario Pellegrino (Bank of Italy) |
| Abstract: | This paper explores the role of landownership distribution in shaping the Italian post-WWII long-run growth experience (1951-2001). By exploiting an extraordinarily high-quality sub-national dataset, we find a strong and robust negative relationship between private landownership inequality and different measures of economic development and structural change during the Economic Miracle. Our results show that a relatively egalitarian agrarian milieu was conducive to the most successful growth model in post-WWII Italy: the ‘industrial districts’, the flexible network of small and medium-sized enterprises whose origins can be traced back to the 1950s. Widespread access to property and family farming was key to accelerating structural transformation. We find the effect of land inequality to be driven by the compression of the resources available to the lower-middle rural class. The intensity of sharecropping and rent-paying tenancy among non-owning farmers is also associated with higher growth, mitigating the growth-depressing effects of land inequality. The growth-enhancing effects of access to property are limited by minimum asset value levels and fade above a certain threshold, consistent with the existence of credit constraints and poverty traps that shape structural transformation in the long run. |
| Keywords: | land inequality, wealth distribution, structural change, long-run economic growth |
| JEL: | O1 O4 N3 Q1 R1 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:workqs:qse_52&r=fdg |
| By: | Sergio Villalvazo |
| Abstract: | This paper studies the cross-sectional dimension of Fisher’s debt-deflation mechanism that triggers Sudden Stop crises. Analyzing microdata from Mexico, we show that this dimension has macroeconomic implications that operate via opposing effects. We propose a small open economy, asset-pricing model with heterogeneous-agents and aggregate risk to measure the effects of inequality during crises. In contrast to a representative-agent model, heterogeneity generates persistent current account reversals with smaller drops in asset prices and larger drops in consumption driven by the leveraged households. Moreover, in a lower inequality calibration, we find that crises are less severe, as observed in the data. |
| Keywords: | Inequality; Sudden Stops; Debt-deflation; Asset-pricing; Household leverage |
| JEL: | D31 E21 E44 F32 F41 G01 |
| Date: | 2024–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1388&r=fdg |
| By: | Kumar, Rishabh (University of Massachusetts Boston) |
| Abstract: | This paper analyzes the upper tails of wealth, income, and consumption in India over the period 2012-18 using rich- lists, wealth surveys, income tax returns and consumer expenditure surveys. We find the upper tail to obey a power- law in all three economic resources. Comparing our estimates in 2012 – where we possess data on wealth, income, and consumption simultaneously – we find that the upper tail of wealth is most concentrated, income slightly less, and consumption is much less concentrated. Unlike wealth and income, the Pareto coefficients for consumption are estimated to have a well-defined mean and variance. Our findings are suggestive of convex saving functions in the income distribution. |
| Date: | 2024–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:298js&r=fdg |
| By: | Issam Samiri |
| Abstract: | I propose a general equilibrium model with endogenous defaults and a banking sector operating under a Value-at-Risk constraint. Analytical examination reveals that (a) the Value-at-Risk rule introduces a risk premium on bank lending, (b) this risk premium fluctuates with the business cycle, amplifying the impact of real shocks, and (c) bank leverage also fluctuates with real shocks, but its cyclical behaviour depends on the shocks' effects on default expectations, credit demand, and the bank's balance sheet. Assuming TFP shocks as the sole exogenous source of fluctuation, the model quantitatively replicates realistic fluctuations in banks' leverage, equity, lending, and credit spreads. |
| Keywords: | RBC, Value-at-Risk, bank leverage, Credit Spreads, Financial Frictions |
| JEL: | E13 E32 E44 G21 G32 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:555&r=fdg |
| By: | Katalin Varga; Tibor Szendrei |
| Abstract: | Tracking the build-up of financial vulnerabilities is a key component of financial stability policy. Due to the complexity of the financial system, this task is daunting, and there have been several proposals on how to manage this goal. One way to do this is by the creation of indices that act as a signal for the policy maker. While factor modelling in finance and economics has a rich history, most of the applications tend to focus on stationary factors. Nevertheless, financial stress (and in particular tail events) can exhibit a high degree of inertia. This paper advocates moving away from the stationary paradigm and instead proposes non-stationary factor models as measures of financial stress. Key advantage of a non-stationary factor model is that while some popular measures of financial stress describe the variance-covariance structure of the financial stress indicators, the new index can capture the tails of the distribution. To showcase this, we use the obtained factors as variables in a growth-at-risk exercise. This paper offers an overview of how to construct non-stationary dynamic factors of financial stress using the UK financial market as an example. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2404.01451&r=fdg |
| By: | Kathryn Bankart; Xolani Sibande; Konstantin Makrelov |
| Abstract: | Corporate credit growth remains strong despite tighter monetary policy and deteriorating global and domestic conditions. Current drivers of corporate credit, particularly general loans and advances, are normalising to pre-COVID levels as the need for working capital has increased, investment has picked up in particular sectors of the economy such as agriculture and passthrough from monetary policy actions has been limited. A simple econometric model suggests that investment is a major driver of corporate credit growth in the long-run, while lending spreads and government borrowing rates are important determinants in the short-run. |
| Date: | 2023–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:rbz:oboens:11047&r=fdg |
| By: | Francesco Bianchi; Sydney C. Ludvigson; Sai Ma |
| Abstract: | We measure the nature and severity of a variety of belief distortions in market reactions to hundreds of economic news events using a new methodology that synthesizes estimation of a structural asset pricing model with algorithmic machine learning to quantify bias. We estimate that investors systematically overreact to perceptions about multiple fundamental shocks in a macro-dynamic system, generating asymmetric compositional effects when several counteracting shocks occur simultaneously in real-world events. We show that belief overreaction to all shocks can lead the market to over- or underreact to events, amplifying or dampening volatility. |
| JEL: | G1 G12 G4 G41 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32301&r=fdg |
| By: | Lambert, Claudia; Molestina Vivar, Luis; Wedow, Michael |
| Abstract: | Investment funds hold a disproportionately larger fraction of domestic relative to foreign stocks. Stock market development and familiarity (language and distance) are considered key determinants for home bias. The literature neglects however that investors often invest in foreign funds domiciled in financial centers. We use a “look-through approach” to account for this misclassification. First, we find substantially smaller home bias estimates compared to those in the literature. Second, the explanatory power of plausible home bias determinants is lower than previously documented. Third, familiarity only plays a meaningful role when investors are households, highlighting the role of investor sophistication. JEL Classification: G11, G15, G23 |
| Keywords: | cross-border portfolio, financial centers, home bias, investment funds |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20242924&r=fdg |
| By: | Madalen Castells Jauregui; Dmitry Kuvshinov; Björn Richter; Victoria Vanasco |
| Abstract: | What is the sectoral composition of the market for safety, and does it matter for economic stability? To address these questions, we construct a novel dataset of sectoral safe asset positions in 24 advanced economies since 1980. We document that the ratio of safe to total financial assets has remained stable in most countries, despite considerable growth in gross and net safe-asset positions relative to GDP. We find that fluctuations in safe-asset positions are mainly driven by the financial and the foreign sectors, with the real economy playing a muted role, indicating that financials in advanced economies have been increasingly intermediating safety within and across borders. We conclude by showing that increases in safe asset demand by foreigners -- or its counterpart, the supply by financials, -- are associated with expansions in domestic risky credit and lower subsequent output growth. |
| Keywords: | safe assets, Capital flows, financial accounts, Business cycles, financial stability |
| JEL: | E42 E44 E51 F33 F34 G15 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1438&r=fdg |
| By: | Henri-Louis Vedie |
| Abstract: | Depuis 2016, on assiste à une dynamique de création de fonds souverains africains. En 2023, on recense 21 pays et 24 fonds souverains. Sur la seule période 2016-23, celle de la deuxième vague, huit pays vont se doter d’un premier fonds souverain, et d’un deuxième, dans le cas du Maroc, en 2022. Cette étude rappelle tout d’abord l’historique d’une création qui commence, dès 1994, au Botswana, avec le Pula Fund, précisant pour chacun des 24 fonds leur date de création, leur répartition régionale, la population des pays concernés etc. Elle propose, par ailleurs, une analyse détaillée des fonds souverains de la deuxième vague, montrant que le plus grand nombre de ces fonds sont des plateformes stratégiques d’investissement, et non pas intergénérationnels, ne se finançant plus, comme la plupart des fonds souverains de la première vague, sur les rentes, pétrolière et gazière. Désormais, ces fonds stratégiques de développement ont une priorité : mobiliser les capitaux internationaux, à partir d’un effet levier de l’argent public, investi dans les projets stratégiques de leurs pays respectifs. Enfin, cette étude montre le rôle clé exercé par le Maroc durant cette deuxième vague, via son fonds souverain Ithmar Capital, en présidant, depuis novembre 2021, l’International Forum of Sovereign Wealth Funds (IFSWF), une première pour un pays africain, et en ayant été à l’initiative de la création de l’Africa Sovereign Investors Forum (ASIF). |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb04-24&r=fdg |
| By: | Ebele S. Nwokoye (Nnamdi Azikiwe University Awka, Nigeria); Stephen K. Dimnwobi (Nnamdi Azikiwe University Awka, Nigeria); Favour C. Onuoha (Evangel University Akaeze, Nigeria); Chekwube V. Madichie (University of York, United Kingdom) |
| Abstract: | An inquiry into the impact of external and domestic borrowings is considered timely for Nigeria, given the growing public debt profile amid deteriorating human capital development. Using data from 1990 to 2021, the study estimates the effects of domestic and external debts on Nigeria’s human capital development. The study employed the fully modified ordinary least squares (FMOLS) and canonical cointegration regression (CCR) as the main estimation technique and the robustness check respectively. The study discovered that domestic and external debt, economic growth and debt servicing exert positive and significant influence on human capital development in Nigeria while environmental pollution has an inverse and significant impact on human capital development in Nigeria. Premised on the outcomes, policy suggestions aimed at enhancing human capital development in Nigeria have been put forward. |
| Keywords: | Nigeria, Domestic debt, External debt, Human capital development |
| JEL: | H63 H68 I24 O15 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:24/006&r=fdg |
| By: | Cormier, Ben; Heinzel, Mirko; Reinsberg, Bernhard |
| Abstract: | Informal groupings like the G7 aim to address global development challenges but lack the administrative and budgetary capacity to drive change directly. Instead, the G7 seeks to catalyze international action that reflects its priorities. For example, the G7 attempts to set the international development agenda by publishing annual communiqués with actionable commitments designed to influence the behavior of G7 donor countries, non-G7 donor countries, and international organizations. But questions about the G7’s ultimate impact persist, as critics contend the informal G7 can do little more than pay lip service to development challenges. We provide empirical evidence that the G7 shapes international development in two ways. First, when the G7 emphasizes a policy area in its annual communiqués, donors allocate more aid to that policy area. Second, when the G7 highlights a policy area in its annual communiqués, donors establish more trust funds in that policy area. This suggests the G7 serves simultaneous coordination and orchestration roles in international development: it coordinates its member states’ aid and orchestrates non-G7 bilateral and multilateral aid. The study’s theory, approach, and findings can inform further research on whether and how informal organizations ultimately affect states, formal international organizations, international cooperation, and global governance. |
| JEL: | L81 |
| Date: | 2024–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122594&r=fdg |
| By: | Heinzel, Mirko; Reinsberg, Bernhard |
| Abstract: | Existing studies imply that multilateral development assistance is more effective than bilateral assistance. However, multilateral assistance is increasingly constrained through earmarked funding where donors restrict the use of their funds. Such funding shifts decision-making power away from multilateral donors and increases transaction costs through more stringent monitoring requirements. We argue that the consequences of these constraints are negative for aid effectiveness. We test this argument by studying the effectiveness of the World Bank in increasing economic growth. Our research design combines novel data on the funding composition of growth-focused development projects between 1995 and 2014 with georeferenced data on their sub-national locations within 50x50km grid cells. Using difference-in-differences estimation, we assess whether local economic development, measured through the Gross Cell Product, increases in areas where core- and trust-funded projects were located in the previous year. We find that while growth-focused projects are generally effective, core-funded projects have a substantially greater impact than trust-funded projects. These findings imply that donors should consider allocating a greater share of their multilateral development assistance as unearmarked contributions if they want to safeguard the development impact of this assistance. |
| Keywords: | aid effectiveness; earmarked funding; economic growth; sub-national analysis; trust funds; World Bank; MR/V022148/1 |
| JEL: | N0 F3 G3 |
| Date: | 2024–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122593&r=fdg |
| By: | Tersoo David Iorngurum (Charles University, Prague, Czech Republic) |
| Abstract: | The interest rate pass-through represents a vital transmission mechanism between the financial sector and the real economy. Nonetheless, the empirical literature offers no consensus regarding the direction and extent of asymmetry in this pass-through. In this paper, I systematically review the empirical literature using various contemporary meta-analytic techniques to test for publication bias and establish consensus for the conflicting study outcomes. I find evidence of publication bias. Beyond publication bias, the magnitude of the reported pass-through declines relative to the simple literature average, but substantial asymmetry remains. Precisely, bank lending rates appear to be a lot more responsive to increases than decreases in monetary policy interest rates. Furthermore, I identify the factors responsible for diverse study outcomes. These include study characteristics, asymmetry, and macrofinancial variables. Concerning study characteristics, results differ due to differences in data frequency, data source, the researched period, study quality, author affiliation, and estimation context. Concerning macrofinancial factors, results differ due to differences in openness to foreign direct investment inflows, openness to trade, the inflationary environment, and economic development status. The pass-through is particularly strong in countries more open to foreign direct investment inflows and developed economies but relatively weak for countries more open to import trade and countries with a high inflationary environment. Finally, I model the interest rate pass-through based on the best practices in the literature. On average, the short-run pass-through to bank lending rates is about 49.7% for a policy rate hike and about 29.7% for a policy rate cut. On the other hand, the long-run pass-throughs are about 69.6% and 46.6%, respectively. |
| Keywords: | Interest rate pass-through, asymmetry, meta-analysis |
| JEL: | E43 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2024_17&r=fdg |
| By: | Joshua Aizenman; Donghyun Park; Irfan A. Qureshi; Gazi Salah Uddin; Jamel Saadaoui |
| Abstract: | We investigate the determinants of emerging markets performance during five U.S. Federal Reserve monetary tightening and easing cycles during 2004–2023. We study how macroeconomic and institutional conditions of an Emerging Market (EM) at the beginning of a cycle explain EM resilience during each cycle. More specifically, our baseline cross-sectional regressions examine how those conditions affect three measures of resilience, namely bilateral exchange rate against the USD, exchange rate market pressure, and country-specific Morgan Stanley Capital International index (MSCI). We then stack the five cross-sections to build a panel database to investigate potential asymmetry between tightening versus easing cycles. Our evidence indicates that macroeconomic and institutional variables are associated with EM performance, determinants of resilience differ during tightening versus easing cycles, and institutions matter more during difficult times. Our specific findings are largely consistent with economic intuition. For instance, we find that current account balance, international reserves, and inflation are all important determinants of EM resilience. |
| JEL: | E58 F32 F36 F44 G12 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32303&r=fdg |
| By: | Sepp, Tim Florian; Israel, Karl-Friedrich; Treitz, Benjamin; Hartl, Tom |
| Abstract: | This paper examines the heterogeneous effects of the ECB's monetary policies on the resilience of the German banking system between 1999 to 2022. We distinguish between the main bank types in Germany: Large Banks, Regional Banks, Sparkassen, Landesbanken and Credit Unions. We proxy bank-type resilience by a zscore measure. We use structural monetary policy shocks relying on high-frequency identification methods. Unconventional monetary policy shocks are decomposed into three parts: timing shocks, forward guidance, and quantitative easing. We estimate the resilience of German bank types in response to expansionary monetary policy shocks by producing impulse response functions through local projections. Conventional monetary easing is associated with weakened resilience for all bank types. Unconventional monetary policies have heterogeneous effects on German bank types. Shocks to short-term interest rate expectations (i.e. timing shocks) are associated with increasing resilience of Large Banks, Regional Banks and Landesbanken, but with decreasing resilience of the others. Forward guidance only has a positive impact on the resilience of Sparkassen. Large-scale asset purchases through quantitative easing tend to the increase resilience of Large Banks and Sparkassen, but decrease the resilience of Regional Banks, Credit Unions and Landesbanken, in both, the short and long run. |
| Keywords: | Resilience, Financial Stability, Monetary Policy, Unconventional Monetary Policy, Banking System, Germany |
| JEL: | E42 E52 G21 M41 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:leiwps:289620&r=fdg |
| By: | Luca Fornaro; Christoph Grosse-Steffen |
| Abstract: | We provide a theory of financial fragmentation in monetary unions. Our key insight is that currency unions may experience of symmetry: that is episodes in which identical countries react differently when exposed to the same shock. During these events part of the union suffers a capital flight, while the rest acts as a safe haven and receives inflows. The central bank then faces a difficult trade-off between containing unemploymnet in capital-flight countries, and inflationary pressures in safe-haven ones. By counteracting private capital flows with public ones, unconventional monetary interventions mitigate the impact of financial fragmentation on employment and inflation, thus helping the central bank to fulfill its price stability mandate. |
| Keywords: | Monetary unions, euro area, fragmentation, optimal monetary policy in openeconomies, Capital flows, fiscal crises, unconventional monetary policies, inflation, endogenous breaking of symmetry, Optimum |
| JEL: | E31 E52 F32 F41 F42 F45 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1437&r=fdg |
| By: | Caccia, Enea; Tapking, Jens; Vlassopoulos, Thomas |
| Abstract: | This paper discusses the impact that a retail central bank digital currency (CBDC) could have on the implementation of monetary policy. Monetary policy implementation could be affected if the introduction of the retail CBDC changes the volume of commercial bank deposits held by customers, which would, in turn, affect central bank reserves. While it is often assumed that customer deposits would decrease if a CBDC was introduced, we provide arguments why this is by no means clear cut and deposits could even increase. If bank deposits do decrease, banks would need to draw on, and therefore reduce, their central bank reserve holdings. Moreover, uncertainty as to the timing and extent of any conversions of deposits into CBDC might prompt banks to scale up their demand for central bank reserves in order to hold larger precautionary buffers. Consequently, central banks might need to adjust their reserve supply and other features of their monetary policy implementation, depending, for example, on whether they use a floor or a corridor system for monetary policy implementation. In the specific case of the digital euro, the features already envisaged for its design would make it possible to minimise the risk of negative consequences for monetary policy implementation. JEL Classification: E41, E42, E43, E52, E58, G21 |
| Keywords: | central bank digital currency, central bank reserves, monetary policy implementation |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:2024345&r=fdg |
| By: | Nocciola, Luca; Zamora-Pérez, Alejandro |
| Abstract: | We shed light on the demand for a central bank digital currency (CBDC) as a means of payment, based on survey payment data. We provide a quantitative framework to assess transactional demand for CBDC at the point of sale, accommodating a wide range of design choices. We develop a structural model of payment means adoption and usage and estimate CBDC demand based on individuals’ preferences for payment method attributes. We disentangle the friction potentially associated to CBDC adoption, assessing two of its potential drivers: information frictions and gradual diffusion of digital payment methods. We find that modelling adoption is key to understanding CBDC demand. Finally, we show that optimal CBDC design, information campaigns, and network effects can substantially boost demand. JEL Classification: E41, E42, E47 |
| Keywords: | CBDC, money demand, payments, Random utility, structural model |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20242926&r=fdg |
| By: | Fumiko Hayashi; Aditi Routh |
| Abstract: | Cryptocurrency owners without sufficient financial literacy and risk tolerance may be financially vulnerable, as the cryptocurrency market is highly volatile and lacks consumer protections. Our study divides cryptocurrency owners into three groups based on their purpose for holding cryptocurrencies—for investment only (investors), for transactions only (transactors), and for a mix of investment and transactions (mix users)—and examines how each group correlates with financial literacy and risk tolerance compared to consumers who do not own cryptocurrencies (nonowners). Using the 2022 Survey of Household Economics and Decisionmaking, we find that investors and mix users are significantly or moderately more financially literate and risk tolerant than nonowners, but transactors are less financially literate and slightly more risk tolerant than nonowners. We also find that the three groups of cryptocurrency owners vary by demographic and financial characteristics. Our findings highlight that transactors could be particularly financially vulnerable in the absence of consumer protections in the cryptocurrency market. |
| Keywords: | cryptocurrency; financial literacy; risk |
| JEL: | D14 D91 E42 |
| Date: | 2024–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:98055&r=fdg |
| By: | Gschnaidtner, Christoph; Dehghan, Robert; Hottenrott, Hanna; Schwierzy, Julian |
| Abstract: | A widespread approach to measuring the innovative capacity of companies, sectors, and regions is the analysis of patents and trademarks or the use of surveys. In emerging digital technologies this approach may, however, not be sufficient for mapping technology diffusion. This applies to blockchain technology which is in essence, a decentralized and distributed database (management system) that is increasingly used well beyond its originally intended purpose as the underlying infrastructure for a peer-to-peer payment system. In this article, we use an alternative method based on web-analysis and deep learning techniques that allow us to identify companies that use blockchain technology to determine its diffusion. Our analysis shows that blockchain is still a niche technology with only 0.88% of the analyzed firms using it. At the same time, certain sectors, namely ICT, banking & finance, and (management) consulting, show higher adoption rates ranging from 3.50% to 4.50%. Most blockchain companies are located at or close to one of the financial centers. Young firms whose business model is (partly) based on blockchain technology also locate themselves close to these centers. Thus, despite blockchain technology often being explicitly characterized as decentralized and distributed in nature, these adoption and strategic location decisions lead to "blockchain clusters". |
| Keywords: | technology adoption, blockchain technology, geographical distribution of firms, natural language programming |
| JEL: | C45 O33 R30 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:289452&r=fdg |
| By: | Marc Gronwald; Sania Wadud |
| Abstract: | This paper investigates the informational efficiency of green bond markets using a recently introduced quantitative measure for market inefficiency. The methodology assesses the deviation of observed asset price behavior from the Random Walk benchmark, which represents an efficient market. The main findings of the analysis are as follows: the degree of informational inefficiency of the green bond market is generally found to be very similar to that of benchmark bond markets such as treasury bond markets. For extensive periods, what is more, it is even found to be less inefficient. Overall, the price developments in green bond markets are very similar to those in the benchmark bond markets. In other words, fundamental factors that drive bond prices in general also drive prices for green bonds. It is worth pointing out, however, that the degree of inefficiency of the green bond market during the Covid outbreak in 2020 and the inflation shock in 2022/2023 is lower than that of the treasury bond market. |
| Keywords: | green bonds, efficient market hypothesis, fractional integration |
| JEL: | C22 E30 G14 Q02 Q31 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11029&r=fdg |
| By: | Ubeda, Fernando; Mendez, Alvaro; Forcadell, Francisco Javier |
| Abstract: | Trust in banking plays a significant role in promoting financial inclusion. Multinational banks (MNBs) have the potential to enhance trust by adopting sustainable banking practices. We investigate the impact of MNBs' adoption of ESG (Environmental, Social and Governance) practices on trust in banking in 38 developing countries. Using an instrumental variable approach and control function estimation, our findings indicate that sustainable practices by commercial MNBs are positively and significantly associated with increased trust in banking. The results remain consistent across different samples, lending robustness to our findings. By demonstrating the importance of sustainable banking in fostering trust, this study contributes to the limited literature on trust in banking in the global South. |
| JEL: | F3 G3 |
| Date: | 2024–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122554&r=fdg |