scholarly journals Dynamic modeling of macroeconomic factors influence on portfolio investment flows in countries with emerging markets

2021 ◽  
Vol 13 (3) ◽  
pp. 359-380
Author(s):  
Svetlana V. Doroshenko ◽  
◽  
Evgenya V. Lapteva ◽  
◽  
Keyword(s):  
Developing Countries ◽  
Emerging Markets ◽  
Capital Flows ◽  
Emerging Market ◽  
Generalized Method Of Moments ◽  
Political Stability ◽  
Portfolio Investment ◽  
Macroeconomic Factors ◽  
The Difference ◽  
The Impact

Introduction: the impact of pull or push factors on capital flows has become an especially relevant issue due to the increasing importance of emerging countries in the growth of world welfare. Objectives: to identify the impact of global and domestic economic factors on portfolio capital flows to emerging markets. Methods: the work is based on applied statistical and econometric methods of regression analysis. Panel regression estimation was carried out by two-step least squares methods (instrumental variables), generalized method of moments according to the methodology of Arellano–Bond and Arellano–Bover/Blundell– Bond. The study contains a total of 2,240 observations. Results: two hypotheses were put forward: (1) global indicators of USA monetary policy have a greater impact on the inflow of portfolio investments in developing countries in crisis years than domestic factors; (2) the difference between the receiving country’s interest rate and the US rate has the most significant effect on the inflow of portfolio investment to emerging market economies among the domestic factors. The impact of the factors on portfolio investment flows was assessed using macroeconomic data for 28 developing countries, based on quarterly observations for the period 2000–2019. Conclusions: there is empirical evidence that global factors are more important in times of crisis than specific country ones. The second hypothesis was not confirmed. It was revealed that the flows of portfolio capital are most influenced by the level of international reserves and domestic political stability in the country.

scholarly journals Liquidity regulations and bank behavior: An emerging markets perspective

2021 ◽  
Vol 10 (4, special issue) ◽  
pp. 194-211
Author(s):  
Tafirei Mashamba
Keyword(s):  
Emerging Markets ◽  
Global Financial Crisis ◽  
Emerging Market ◽  
Generalized Method Of Moments ◽  
Emerging Market Economies ◽  
Basel Iii ◽  
Market Economies ◽  
Coverage Ratio ◽  
The Impact

The 2007 to 2009 global financial crisis significantly affected the funding structures of banks, especially internationally active ones (Gambacorta, Schiaffi, & Van Rixtel, 2017). This paper examines the impact of liquidity regulations, in particular, the liquidity coverage ratio (LCR), on funding structures of commercial banks operating in emerging markets over the period 2011 to 2016. Similar to Behn, Daminato, and Salleo (2019) who developed a dynamic partial equilibrium model to examine capital and liquidity adjustments, this paper develops three dynamic error component adjustment models and estimates them using the two-step system generalized method of moments (GMM) estimator to analyze funding adjustments adopted by banks in emerging markets in response to the LCR requirement. The results revealed that banks in emerging markets responded to binding liquidity regulations by increasing deposit, equity as well as long-term funding. In terms of the magnitude of response, deposit funding was found to be more responsive to the LCR rule while the elasticity of equity and long-term funding to the LCR specification was found to be weak. The weak response of equity and long-term funding to liquidity standards was attributed to low levels of capital market development in emerging markets (Bonner, van Lelyveld, & Zymek, 2015). By and large, the results suggest that Basel III liquidity regulations have been effective in persuading banks in emerging market economies to fund their business activities with stable funding instruments. Based on this evidence, the study supports the adoption of Basel III liquidity regulations in emerging markets. Moreover, policymakers in emerging market economies should monitor competition for retail deposits to safeguard the benefits of the LCR rule and pay more attention to developing capital markets.

scholarly journals Capital Flows and Bank Risk-Taking Behavior: Evidence From Indonesia

2020 ◽  
Vol 9 (s1) ◽  
pp. 33-53
Author(s):  
Bayront Yudit Rumondor ◽  
Pakasa Bary
Keyword(s):  
Risk Taking ◽  
Capital Flows ◽  
Emerging Market ◽  
Capital Inflows ◽  
Bank Risk ◽  
Portfolio Investment ◽  
Industry Level ◽  
Country Level ◽  
Risk Taking Behavior ◽  
The Impact

AbstractThis paper investigates the impact of capital flows on bank risk-taking behavior. It undertakes two levels of empirical estimations, namely (i) single-country industry-level; and (ii) multi-country industry-level estimations, covering emerging market economies. The results suggest that capital inflows, in the form of portfolio investment, is significant in raising risk-taking behavior. Large banks are less aggressive in their risk-taking behavior vis-à-vis smaller banks. Such impact of portfolio investment on risk-taking behavior is also shown in the multi-country level estimates.

scholarly journals The Impact of Financial Development on Carbon Emissions: A Global Perspective

2019 ◽  
Vol 11 (19) ◽  
pp. 5241 ◽  
Author(s):  
Chun Jiang ◽  
Xiaoxin Ma
Keyword(s):  
Developing Countries ◽  
Financial Development ◽  
Carbon Emissions ◽  
Emerging Market ◽  
Generalized Method Of Moments ◽  
Specific Effect ◽  
Developed Countries ◽  
Global Perspective ◽  
Empirical Results ◽  
The Impact

Financial development has been deemed to be an important factor influencing carbon emissions; however, the specific effect generated by financial development is still disputed. In this study, we examined the relationship between financial development and carbon emissions based on a system generalized method of moments and the data of 155 countries, and we further analyzed the national differences by dividing the sample countries into two sub-groups: developed countries, and emerging market and developing countries. The empirical results indicated that from a global perspective, financial development could significantly increase carbon emissions, and the analysis of the emerging market and developing countries reached the same conclusion; however, the results indicated that for developed countries, the effect of financial development on carbon emissions is insignificant. A series of robustness checks were conducted and confirmed that our empirical results were reliable. We suggest that policymakers in emerging market and developing countries should carefully balance financial development and environmental protection, as financial development will promote carbon emissions before countries reach a relatively high development level.

scholarly journals The effects of Basel III liquidity regulations on banks’ profitability

2018 ◽  
Vol 7 (2) ◽  
pp. 34-48 ◽  
Author(s):  
Tafirei Mashamba
Keyword(s):  
Emerging Markets ◽  
Emerging Economies ◽  
Emerging Market ◽  
Generalized Method Of Moments ◽  
Basel Iii ◽  
Ratio Requirement ◽  
Coverage Ratio ◽  
Ratio Rule ◽  
Estimation System ◽  
The Impact

The new Basel III Liquidity Coverage Ratio standard which encourages banks to maintain a diversified pool of high-quality liquid assets against their short-term expected net cash outflows although it appears to be noble from a theoretic perspective it may weigh down banks’ performance because liquid assets earn low returns. It is against this background that this study sought to evaluate the impact of the new Basel III liquidity regulations on the profitability of banks in emerging market economies. A sample of 40 banks operating in 11 emerging markets over the period 2011 to 2016 was used in the study. For estimation, system Generalized Method of Moments (GMM) estimator was employed. Surprisingly, empirical results demonstrated that regulatory pressure stemming from Liquidity Coverage Ratio requirement increased instead of diminishing the profitability of banks in emerging markets. The plausible explanation given for this evidence was that banks in emerging markets managed their liquidity in a manner that is consistent with Liquidity Coverage Ratio rule hence the regulation had no detrimental effects on banks in emerging economies.

scholarly journals Institutional Reforms and Their Impact on Economic Growth and Investment in Developing Countries

2021 ◽  
Vol 13 (9) ◽  
pp. 4941
Author(s):  
Jin Zhao ◽  
Ghulam Rasool Madni ◽  
Muhammad Awais Anwar ◽  
Syeda Masooma Zahra
Keyword(s):  
Developing Countries ◽  
Economic Prosperity ◽  
Institutional Reforms ◽  
Difference In Differences ◽  
Human Interactions ◽  
Political Reforms ◽  
Vast Literature ◽  
Treatment Analysis ◽  
The Difference ◽  
The Impact

It is widely accepted that the economic and social system may be more efficient by reforming institutions. Institutional reforms are attempts to change the rules affecting human interactions and these reforms are fundamental for development and economic prosperity. The reforms can be divided into two categories; political and economic institutional reforms. It is need of the hour to determine the category of reform that is more suitable for developing countries. Moreover, a vast literature describes the impact of institutional reforms but little focused on exploring their impacts on macroeconomic activities. So, this study is an effort to determine the impact of institutional reforms on macroeconomic variables by considering the panel data of 122 developing countries covering the time span from 1996 to 2019. The study applied treatment analysis using the difference-in-differences technique to gauge the effects of reforms. Besides, it will be interesting to know the causes triggering the institutional reforms in developing countries. The findings of the study reveal that economic reforms are more important as compared with political reforms to grow the economies. The countries focusing on political reforms are not able to overcome the economic crisis. Moreover, both types of reforms do not cause each other in these countries.

scholarly journals Evaluating the impact of corporate logos towards corporate reputation

2017 ◽  
Vol 20 (2) ◽  
pp. 158-180 ◽  
Author(s):  
Pantea Foroudi ◽  
Khalid Hafeez ◽  
Mohammad M. Foroudi
Keyword(s):  
Emerging Markets ◽  
Cultural Values ◽  
Attribution Theory ◽  
Corporate Reputation ◽  
Emerging Market ◽  
Corporate Image ◽  
Customer Relationship ◽  
Corporate Communications ◽  
Content Type ◽  
The Impact

Purpose This paper aims to examine the impact of corporate logos on corporate image and reputation in creating competitive advantage in the context of Persia and Mexico as emerging markets. The paper provides an extensive links between corporate logo and its dimension and internal stakeholders’ attitudes towards advertisement, familiarity and recognisability as intermediaries to corporate image and reputation. Design/methodology/approach A qualitative exploratory approach was undertaken, comprising 12 face-to-face interviews and 14 skype in-depth interviews with graphic designers, design, communication and marketing consultant in Mexico and Persia based on attribution theory. Findings The study posits that the more favorable the name, colour, typeface and design of the company logo, the more favorable the attitude Mexican consumers have towards the corporate logo, corporate image and reputation. However, in comparison for Persia these factors have less effect on customers’ judgment and behaviour, towards the corporate logo, corporate image and reputation. The research findings suggest that the selection of colour in a corporate logo is related to its marketing objectives, cultural values, desired customer relationship levels with the organisation and organisation’s corporate communications. Originality/value Corporate logo has received little attention in marketing literature and rarely researched in the context of emerging market. This is the first research of its kind to find the effect of the compound logo in emerging markets of Persia and Mexico. Therefore, this research makes significant contribution towards the corporate visual identity literature by developing of the sphere of influence of the corporate logo and its antecedents and consequences (corporate image and corporate reputation).

CSR engagement and values in a pre-emerging and emerging country context

2018 ◽  
Vol 13 (5) ◽  
pp. 1251-1272 ◽  
Author(s):  
Virginia Munro ◽  
Denni Arli ◽  
Sharyn Rundle-Thiele
Keyword(s):  
Developing Countries ◽  
Social Identity ◽  
Emerging Markets ◽  
Social Identity Theory ◽  
Emerging Market ◽  
Content Type ◽  
Employee Values ◽  
Emerging Country ◽  
Csr Strategy ◽  
Employee Identification

Purpose Internationalization has witnessed rapid growth of multinational enterprises (MNEs) in emerging markets, requiring reflection on how to operate within these markets. The purpose of this paper is to assist MNEs to adapt to these markets, and adopt corporate social responsibility (CSR) strategy with social initiatives (SIs), relevant to stakeholders, including their employees and the communities they reside in. The current paper does this by examining the relationships between employee identification with the organization’s SIs (SI-I) and their engagement in them (SI-E), alongside their perspective on the general importance of CSR (ICSR) and employee values to help with CSR (VCSR). The findings will better prepare managers in pre-emerging and emerging markets to design CSR strategy and SIs relevant to these markets and their communities. Design/methodology/approach Guided by social identity theory, this paper examines local employee identification of SI (SI-I) and engagement in SI (SI-E), in two MNE subsidiaries across varying emerging market levels in developing countries, utilizing a quantitative survey design. Structural equation modeling is utilized to analyze responses of N=544 employees in two South East Asian countries, namely, Indonesia (as an emerging country) and Vietnam (as a pre-emerging country), to determine any differences that may exist between the two countries. Findings The findings reveal that SI identification (SI-I) has a strong effect on employee engagement in SIs (SI-E) and also the importance they attach to organizations conducting CSR (ICSR). However, employee values to help with CSR activities (VCSR) has an effect on Vietnamese employees but not Indonesian employees. Likewise, SI-I mediates the effect between ICSR and SI-E for Vietnamese employees but not for Indonesian, suggesting differences exist between these two developing countries where the less developed country, Vietnam, is defined as pre-emerging and Indonesia as an emerging market (MSCI, 2016). Practical implications An awareness of the differences that may exist across employees in emerging markets will assist managers to design CSR strategy relevant to the level of market emergence of the host country, allowing for better CSR SIs identification and engagement in these countries. Originality/value The research model for this analysis utilizes constructs based on past Identification literature, while including new constructs for this study adapted from past literature, and underpinned uniquely by social identity theory in an International Business setting. The findings indicate differences between emerging and pre-emerging markets for particular constructs, which suggests the importance of considering the market level when implementing MNE CSR strategy. Limited research has been conducted examining the differences between emerging and pre-emerging markets, so further research is required to replicate these findings and provide insight into the differences that may exist for CSR SIs in emerging markets.

scholarly journals A Crook is a Crook . . . But is He Still a Crook Abroad? On the Effect of Immigration on Destination-Country Corruption

2015 ◽  
Vol 16 (4) ◽  
pp. 464-489 ◽  
Author(s):  
Eugen Dimant ◽  
Margarete Redlin ◽  
Tim Krieger
Keyword(s):  
Method Of Moments ◽  
Fixed Effects ◽  
Generalized Method Of Moments ◽  
Destination Country ◽  
Estimation Methods ◽  
Econometric Methodology ◽  
Migration Flows ◽  
The Difference ◽  
Method Of Moments Estimator ◽  
The Impact

AbstractThis paper analyzes the impact of migration on destination-country corruption levels. Capitalizing on a comprehensive dataset consisting of annual immigration stocks of OECD countries from 207 countries of origin for the period 1984-2008, we explore different channels through which corruption might migrate. We employ different estimation methods using fixed effects and Tobit regressions in order to validate our findings. Moreover, we also address the issue of endogeneity by using the Difference- Generalized Method of Moments estimator. Independent of the econometric methodology, we consistently find that while general migration has an insignificant effect on the destination country’s corruption level, immigration from corruption-ridden origin countries boosts corruption in the destination country. Our findings provide a more profound understanding of the socioeconomic implications associated with migration flows.

scholarly journals Spillover Effect of Global Financial Cycle To Asset Markets in Asean-5 Countries: A Structural VAR Approach

2018 ◽  
Vol 2 (02) ◽  
pp. 1
Author(s):  
Sri Andaiyani ◽  
Telisa Aulia Falianty
Keyword(s):  
Risk Aversion ◽  
Capital Flows ◽  
Asset Prices ◽  
Emerging Market ◽  
Structural Var ◽  
Asset Markets ◽  
Equity Prices ◽  
Financial Cycle ◽  
Property Prices ◽  
The Impact

<p><em>An upsurge and volatility of capital flows to Emerging Asian Economies indicated that there is the potential effect of global financial cycle to emerging market. It provides an overview of investor risk aversion in short term investment after financial crisis 2008. Global financial cycle could have a significant impact to asset prices, including equity prices and property prices. Rey (2015) has triggered an interesting discussion about global financial cycle. She found that there was a global financial cycle in capital flows, asset prices and credit growth. This cycle was co</em><em>‐</em><em>moves with the VIX, a measure of uncertainty and risk aversion of the markets. Therefore, this study attempts to analyze empirically global financial cycle shocks, measured by the VIX, on equity prices and property prices in ASEAN-5, namely Indonesia, Malaysia, Singapore, Thailand and Philippines. We estimate quarterly frequency data from Q1 1990 to Q2 2016 with Structural Vector Autoregressive (SVAR) approach. The result of this study showed that global financial cycle has a negative significant impact on the ASEAN-5 asset markets, in spite of the response of shock differs by country and size. This result is consistent with ASEAN-5 as small open economies that remain vulnerable to the global factor. This study contributes to the literature in several ways. First, we identify not only cyclical expansions or contraction in asset markets but also the impact of global financial cycle to asset markets in ASEAN-5 countries. Second, we investigate whether there are heterogeneous responses of ASEAN-5 countries to global financial cycle shocks. Third, we also identify the pattern of cycle in ASEAN-5 countries</em>.</p><p><strong><em>J</em></strong><strong><em>EL Classification: </em></strong>F30, F37, F42</p><strong><em>Keywords: </em></strong><em>ASEAN, Asset Markets, Global Financial Cycle, SVAR</em>

scholarly journals The influence of firm, industry and concentrated ownership on dynamic capital structure decision in emerging market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Razali Haron ◽  
Naji Mansour Nomran ◽  
Anwar Hasan Abdullah Othman ◽  
Maizaitulaidawati Md Husin ◽  
Ashurov Sharofiddin
Keyword(s):  
Capital Structure ◽  
Emerging Market ◽  
Generalized Method Of Moments ◽  
Dynamic Environment ◽  
Order Theory ◽  
Ownership Concentration ◽  
Content Type ◽  
Dynamic Panel Model ◽  
The Impact ◽  
Dynamic Capital Structure

Purpose This study aims to evaluate the impact of firm, industry level determinants and ownership concentration on the dynamic capital structure decision in Indonesia and analyses the governing theories. Design/methodology/approach This study uses the dynamic panel model of generalized method of moments-System (one-step and two-step) by using a panel data from 2000 to 2014 to examine the relationship between the determinants and leverage. The results are robust to the various definitions of leverage, heterogeneity, autocorrelation, multicollinearity and endogeneity concern. Findings Growing firms and firms operating in a highly concentrated industry use high level of debt, taking advantage of the tax shield (trade-off theory). However, if the firms are operating in a highly dynamic environment, they take on less debt as to avoid bankruptcy risk. Firms in Indonesia opt for debt financing perhaps to act as a controlling mechanism to mitigate agency conflicts that may exist between the large controlling shareholders and the minority. Aged and highly profitable firms with high tangible and intangible assets and liquidity level operating in a high dynamic environment follow the pecking order theory. Research limitations/implications This study does not perform each industry regression individually. All the industries are pooled together, as the main focus of this study is to examine the factors affecting leverage of firms in general without giving particular attention to individual industry. Originality/value The insights on the impact of ownership concentration and industry characteristics are novel especially on Indonesia, thus fill the gap in the literature.

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