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Banking sector openness may directly increase growth by improving the quality of financial services and increasing funds available, or indirectly by improving the efficiency of financial intermediaries, both of which may reduce the cost of financing, in turn, increase capital accumulation and economic growth. The objective of this paper is to empirically reinvestigate these direct and indirect links, using a more advanced econometric technique (generalised method-of-moments [GMM] dynamic panel estimators). An illustrative model is presented to link financial market development with investment. The empirical results support the presence of direct and indirect links, thus encouraging countries planning to open their financial markets.

Corporate environmental information disclosure systems are important for controlling pollution caused by corporate activities. However, different motives associated with environmental information disclosure have different influences on the financing of companies. This paper adopts renewable energy companies instead of high pollution industries as a research object. The study analyzes the resource-dependent disclosure motivation of renewable energy companies, and the impact of environmental information disclosure on the scale and cost of direct and indirect financing. The results show the following. First, renewable energy companies in China have a resource-dependent motivation to disclose environmental information, with a gap between the level of environmental information disclosure and their actual environmental performance. Second, renewable energy companies may obtain more direct financing amount and lower indirect financing costs, but cannot obtain lower direct financing costs and more indirect financing amount by improving the level of environmental information disclosure with the resource-dependent motivation. Third, there are differences in the specific incentives for environmental information disclosure among the Eastern, Middle, and Western regions of China. The government needs to standardize the detailed rules and standards of the corporate environmental information disclosure system, and improve the environmental protection awareness and the implementation of green credit in the Western region.

The research deals with the state of the tourism sector of Ukraine under current conditions. The main funding sources for tourism entities have been considered. The financial measures taken by Ukraine and neighboring countries for overcoming the consequences of the pandemic in the tourism sector have been summarized. The importance of effective financial initiative support in the above-mentioned area has been substantiated. Several financial tools that should be used for the development of the tourism sector in terms of the pandemic are presented. The financial instruments of tourist activity stimulation are singled out: direct financing (public funding instruments) and indirect financing (fiscal incentives, state property rent relief, rate of tourist tax, etc.). The main destructive factors of the tourism sector development have been determined, which include: the lack of systematic state support for the tourism entities development under current conditions; a significant level of the tourism sector shadowing; misuse of funds from the land tourist tax; unsatisfactory condition of tourist facilities; worn-out infrastructure in most regions, etc. The following measures are needed to be implemented to improve the effectiveness of financial instruments for tourism development: the creation of an attractive investment climate in tourism; development of tourist infrastructure; intensification of public funding for tourism and the efforts of local governments to identify internal reserves for funding; intended use of funds from the land tourist tax; use of the potential of the public-private partnership mechanism at the local level; intensification of cooperation with non-governmental institutions, including foreign ones, which are interested in the implementation of tourism development programs, etc. The introduction of anti-crisis key factors, systematization, and consistency in the implementation of the above-mentioned measures will help to stabilize the development of tourism entities in the shortest possible time and achieve a level of economic efficiency and balance between security, public health, and economic interests. Keywords: pandemic, tourist activity, financial instruments, tourist tax, incentives. JEL Classification L83, G19 Formulas: 0; fig.: 1; tabl.: 0; bibl.: 14.

The subject of the study is the indirect financing of sports development abroad through tax incentives. This paper aims to analyze and summarize foreign experience of tax approaches to the sports development and to substantiate the possibility of its application in the Russian Federation. The following methods were used: content analysis of scientific papers and the legal framework related; comparing the different sports funding models and the tax instruments used in the analyzed countries to promote sports; logical synthesis to gain insights and form recommendations. Sports currently play an important role in addressing both social and economic challenges, which reinforces governmental regulation. The financing models for sports development applications abroad are examined. Models have been found to differ by the use of direct and indirect methods of sports financing methods, including tax incentives. The experience of tax incentives application for sports promotion in the United States, Germany, the Netherlands, Hungary, and Belarus has been analyzed, similarities and differences of the ways goals are achieved have been identified. Possibilities for applying foreign experience in tax incentives for the sports development in the Russian Federation have been identified. Conclusions have been made on the need to further analysis of foreign experience in order to improve methods of indirect financing of sports development. The economic rationale for the proposed tax regulation in sports development should be ensured to prove feasibility thereof.

Tulisan ini mengulas implementasi akad mudhārabah pada perbankan syariah di Indonesia yang secara spesifik lebih ditekankan pada aspek syariah, fikih, dan fatwa DSN-MUI sebagai titik berangkatnya. Urgensitas tulisan ini berada pada posisinya yang bukan saja sebagai kritik-konstruktif terhadap lembaga keuangan yang mengemban misi relegius, akan tetapi juga sebagai sarana diskusi bagi para pelajar, akademisi, dan praktisi perbankan agar oprasional perbankan syariah tetap berada pada rel syariat Islam. Ini dikarenakan masih banyaknya temuan di lapangan tentang ketidaksesuaian operasional perbankan syariah dengan ketentuan fikih dan fatwa DSN-MUI tentang mudhārabah. Penelitian ini merupakan penelitian kualitatif dengan pendekatan yuridis-normatif. Hasil penelitian ini menyimpulkan sekurang-kurangnya dua hal. Pertama, rumusan mudhārabah sudah mengalami evolusi dari konsep direct financing menjadi indirect financing. Kedua, secara praksis ketentuan syariah, fikih, dan fatwa DSN-MUI tentang mudhārabah tidak sepenuhnya diterapkan sebagaimana mestinya di sebagian perbankan atau lembaga keuangan syariah di Indonesia. Ketentuan tentang jaminan dan pembebanan ganti rugi modal dalam akad mudhārabah merupakan dua hal yang paling rentan menimbulkan adanya gap antara das sein dengan das sollen di perbankan syariah.

More recently, investors’ preference for green bonds is of particular interest for researchers. The possible non-pecuniary motive in sustainable finance can be identified by the green bond premium. But no consensus has been achieved owing to differences in samples and market settings. This paper specifically focuses on the estimation of the green bond premium in China. We introduced three issuance motivation theories to explain the drivers of green premium and convinced them through a set of empirical tests. The propensity score matching method was employed to claim that compared with matched conventional bonds, green bonds are priced at an average negative premium of 7.8bps, implying that green projects may be issued at a lower cost. Considering that a financial group has a higher negative premium than a corporate group, green financing for sustainable development is still led by indirect finance. Furthermore, empirical results convince that a negative premium is pronounced for state-owned enterprises and varies across the financial and corporate groups. Central SOEs have more advantage in raising funds than local SOEs. In addition, the effect of ownership on the green premium will significantly change if bond issues with a third-party verification. The role of verification is important in reducing information asymmetry and avoiding greenwashing behavior. We suggest that financial resources need to be properly allocated to the real enterprises through third-party verification or government supportive measures.

In recent years, China's small and medium-sized enterprises have developed by leaps and bounds, playing an increasingly important role in the whole national economy and making great contributions to China's economic growth. However, the poor financing channel has become the most important factor restricting the better and faster development of SMEs, and it has also been the focus of the further development of SMEs in China. This paper briefly introduces the development of small and medium-sized enterprise clusters in China, and makes an in-depth analysis of the direct and indirect financing advantages of small and medium-sized enterprise clusters and the factors that restrict the exertion of the financing advantages of clusters. Then, according to the present situation, this paper puts forward a way to solve the financing difficulties of small and medium-sized enterprise clusters, that is, mutual guarantee alliance. According to the financing guarantee institutions, this paper discusses the development of mutual guarantee alliance in China, and analyzes the existing problems of mutual guarantee alliance. In addition, through in-depth analysis of financing guarantee institutions, it is demonstrated that a stable mutual guarantee alliance can be established in the cluster, and the guarantee magnification of the mutual guarantee alliance can be obtained. Finally, this paper compares the mutual guarantee alliance with the traditional enterprise financing method, and analyzes its practical effect. Experimental research shows that popularizing mutual financing guarantee and promoting the development of mutual financing guarantee institutions can effectively alleviate the financing difficulties of small and medium-sized enterprises, and the guarantee magnification is basically kept above 8, which has important practical significance for promoting local economic development.

In the aftermath of the 2008 global financial crisis, the implications of financial liberalisation for stability and economic growth has come under increased scrutiny. One strand of literature posits a positive relationship between financial liberalisation and economic growth and development. However, others emphasise the link between financial liberalisation is intrinsically associated with financial instability which may be harmful to economic growth and development. This study assesses linkages between financial instability, financial liberalisation, financial development and economic growth in 41 African countries for the period 1985-2010. The results suggest that financial development and financial liberalisation have positive effects on financial instability. The findings also reveal that economic growth reduces financial instability and the magnitude of reduction is higher in the pre-liberalisation period compared to post-liberalisation period.

The title of this textbook makes it necessary to define the term “financial services” for purposes of exposition and subsequent analysis. It is virtually impossible to describe the extant financial services system as it exists in every distinct region of the globe. The infrastructure holding together the individual pieces that allow cross-border delivery of services was developed by historical accident without a pre-conceived master plan. To resolve these impediments to providing a meaningful narrative of financial services, this chapter focuses upon the UK financial system. It is large in relation to the economy, is an important financial centre for global transactions in financial assets, and has already been mapped by the Bank of England. The UK financial system is a microcosm through which financial services generally may be defined and analysed. Brexit, and the purported loss of London as a global financial centre, are irrelevant for purposes of illustration, since the UK is rich in financial institutions. This chapter is descriptive leaving for later critical analysis of underlying and misleading assumptions.

Xu, X. and Cui, Y., 2020. Is financial structure good for marine economic growth? An evidence from China. In: Li, L. and Huang, X. (eds.), Sustainable Development in Coastal Regions: A Perspective of Environment, Economy, and Technology. Journal of Coastal Research, Special Issue No. 112, pp. 311-314. Coconut Creek (Florida), ISSN 0749-0208.This paper mainly studies the relationship between China's marine economic growth and financial structure. Based on the data analysis from 2001 to 2019, there is an inverted U-shaped nonlinear effect between China's loan, bond, stock financing and marine economic growth, so there will be an optimal scale of loan, bond and stock financing in China. In addition, from the perspective of financial asset structure, the results also show that the marketization of financial structure can promote the growth of marine economy. Therefore, China should control the scale of indirect financing mainly by loans and direct financing mainly by bonds and stocks within a reasonable range, so as to promote the rapid and healthy development of marine economy.

Anumber of developments in recent years have combined to put the issue of financial stability at the top of the agenda, not just of supervisory authorities, but of public policymakers more generally. These developments include: the explosive growth in the volume of financial transactions, the increased complexity of new instruments, costly crises in national financial systems, and several high pro

With the steady expansion of the world economy, China’s import and export trade is booming day by day, and foreign trade has become a major factor to promote our country’s economic growth. As one of the economic subjects of external trade, small and medium-sized enterprises in foreign trade play an irreplaceable role. However, many small and medium-sized foreign trade enterprises encounter financing difficulties in the process of the development. On the foundation of big data analysis, with the starting point of the financing of small and medium-sized enterprises in foreign trade, firstly, this paper describes the present financing condition of the small and medium-sized enterprises in foreign trade as a whole, and then the reasons are analyzed. The reasons are divided as enterprises themselves, indirect financing, direct financing, private financing, and the government one by one.

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)

The preservation and appreciation of the state-owned assets are very important to the national economic development. With the continuous progress of our society and the improvement of the financial system, the state-owned investment enterprises play a key role in the preservation and appreciation of the state-owned assets. Therefore, the capital operation and the financing in the state-owned investment enterprises are particularly important. The cloud security is an important branch of the cloud computing technology and has been widely used in the field of the anti-virus. The cloud security obtains the latest information of the Trojan horses and the malicious programs in the Internet by monitoring the abnormal behaviors of the software in the network through a large number of the netlike clients, pushes them to the server for the automatic analysis and processing, and distributes the solutions to the viruses and the Trojan horses to each client. At present, there are many financing methods available. For enterprises, they cannot use the same way to carry out the capital operation, but should cooperate to use the direct and the indirect financing methods according to the actual situations.

The issues of government support for infrastructure projects implemented on the principles of public-private partnership are studied. General classification of public support instruments is offered. Financial and non-financial instruments used in world practices and in the Russian Federation, including direct and indirect financing of projects, state guarantees and benefits, administrative and methodological support of market participants are classified and analyzed. Based on the study of relevant international experience and current situation in Russia, major existing problems are identified, and recommendations are made on possible ways to improve the effectiveness of the system of support for public-private partnership projects in Russia, including the creation of separate specialized financial institutions.

Whether the credit risk should be priced has been widely debated. We study this issue in the Chinese context, where the financial market has been long dominated by indirect financing. We employ the Merton’s (1974) model to measure the credit risk of firms listed on Chinese A-share market monthly. We document a positive relationship between credit risk and subsequent returns. Following a high-minus-low strategy, we construct a credit risk factor DMU, which is then incorporated into Fama-French models. By comparing the performance of 6 competing models, we find that the credit risk factor helps improve the description of portfolio returns while the investment factor makes little contribution. The conclusions are further confirmed by regression details including adjusted-R2, AIC tests and intercepts. Meanwhile, the slopes on DMU are significant for most tested portfolios and present monotonic patterns when the credit risk increases, implying that the credit risk factor can well explain the variation in the cross section of portfolio returns. Our findings show that in the Chinese context, the credit risk factor is relevant and the DMU-augmented Fama-French five-factor model is a preferred model.

The recent financial crisis has been associated with a significant rise in the unemployment rate in the U.S. To understand the impact of financial frictions and shocks on unemployment fluctuations, I develop a monetary DSGE model with explicit financial and labor market frictions. The model is estimated using U.S. data over the period of 1984Q1 to 2016Q4. I find that the model accounts well for the cyclical behavior of unemployment and vacancies observed in the data. The historical decomposition results show that financial wealth shocks contribute significantly to the rise in the unemployment rate following the recent financial crisis. Overall, I find that financial wealth shocks contribute more than 30 per cent of the fluctuations in unemployment and vacancies in the U.S. during the sample period.

The goal of this study is to explore the effect of financial openness in emerging markets on the domestic financial market liquidity and then to clarify the linkage between financial openness and market liquidity. The empirical results show that higher the degree of the financial market openness enhances the domestic financial market liquidity, and the effect of the financial market openness on the emerging markets is more significance than the developed markets. We expect the empirical results of this study can provide a new insight into the development of emerging financial markets.

Expanding access to financial services holds the promise to help reduce poverty and foster economic development. However, little is still known about the determinants of the outreach of financial systems across countries. Our study is the first attempt to employ a large panel of countries, several indicators of financial inclusion and a comprehensive set of bank competition measures to study the role of banking system structure as a determinant of cross-country variability in financial outreach for households. We use panel data from 83 countries over a 10-year period to estimate models with both country and time fixed effects. We find that greater banking industry concentration is associated with more access to deposit accounts and loans, provided that the market power of banks is limited. We find evidence that countries in which regulations allow banks to engage in a broader scope of activities are also characterized by greater financial inclusion. Our results are robust to changes in sample, data, and estimation strategy and suggest that the degree of competition is an important aspect of inclusive financial sectors. JEL classification: G21, L11, O16, Keywords: Financial inclusion, Bank concentration, Market power

We investigated the relationship between stock prices and exchange rates in eleven emerging markets over the period of 1988 to 2014 using cointegration methodology and multivariate granger causality tests. We find that in emerging markets, the inner-financial structure, which reflects the proportion of direct financing and indirect financing, plays an important role in the link between exchange rates and stock prices. For ten out of the eleven emerging markets studied, the financial structure had a significant impact, either through the flow channel or stock channel. The effects of financial-economic structure (FIR) were much smaller.

This article deals with the increasing computerization of the financial markets and the consequences of such process on our ability to collect information about financial prices. The concept of information is at the heart of financial economics simply because this notion is a precondition for all investments. Since financial prices characterize an agreement on a transaction between two counterparties, they understandably became a key informational indicator for decision. This article will analyse the increasing computerization of financial sphere by discussing the recent emergence of what is called a “flash crash” and its impact on the traditional ways of collecting information in finance (technical analysis, fundamental analysis and statistical approach). I argue that the growing computerization of financial markets generated a “hyper-reality” in which financial prices do not refer to “something” anymore implying a revision of our usual way of defining/using the notion of information.

We set out in this study to determine whether individuals with higher levels of financial literacy are more likely to be active participants in the derivatives markets. Our empirical results, based upon an official National Survey undertaken by the Financial Supervisory Commission of Taiwan, reveal that even after controlling for stock market participation rates, financial literacy represents a significant benefit to individuals since it helps them to lower the entry barriers to purchasing complex derivatives products. We also find that household wealth, gender, residential location and diverse sources of information have significant effects on participation rates in the derivatives markets. Furthermore, when taking into consideration issues of accessibility or measurement error, the positive effects of financial literacy on derivatives market participation are found to remain largely unchanged.

Developing economies are seeking to promote financial inclusion, i.e., greater access to financial services for low-income households and firms. This raises the question of whether greater financial inclusion tends to increase or decrease financial stability. A number of studies have suggested both positive and negative impacts on financial stability, but very few empirical studies have been made. This study focuses on the implications of greater financial inclusion for small and medium-sized enterprises (SMEs) for financial stability. It estimates the effects of measures of the share of bank lending to SMEs on two measures of financial stability — bank nonperforming loans and bank Z scores. We find some evidence that an increased share of lending to SMEs aids financial stability by reducing non-performing loans (NPLs) and the probability of default by financial institutions.

The relationship between financial liberalization policies and financial development is controversial. The impact of these policies differs greatly across countries. In the literature, the quality of formal institutions has been identified as an important source of this heterogeneity, as countries with a weak institutional environment generally fail to benefit from financial liberalization. Using panel data covering 82 countries for the period 1973–2008, we find evidence that social capital may substitute for formal institutions as a prerequisite for effective financial liberalization policies. In particular, we find that during the post Washington-consensus period countries with a high prevailing level of social capital can ensure that financial liberalization positively influences financial development, despite the poor quality of their formal institutions.

Instead of empirically finding that higher levels of financial development reduce the positive impact of financial liberalization on inequality, as others do, we come up with the opposite result: financial development strengthens the inequality-raising impact of financial liberalization. We suggest that by, e.g., allowing financial liberalization to lead to more volatility and uncertainty, the model of Bumann and Lensink (2016 “Capital Account Liberalization and Income Inequality.“ Journal of International Money and Finance 61: 143–162.) can be extended as such that also an amplifying instead of reducing effect of financial depth on the impact of financial liberalization on income inequality can be theoretically justified.

This paper investigates the interaction between financial innovation and securitization. To this end, it introduces the rate of financial innovation (RoFIN) as an endogenous variable in an Agent-Based Model (ABM) set up and studies its interaction with the non-fixed fraction of securitized mortgage loans. RoFIN is able to capture financial agents’ business decisions on using financial innovation tools, processes and services, such as the home mortgage securitization process. In the aftermath of the 2007–2009 financial and economic crisis it has been argued that financial innovation and securitization have increased macro/finance systemic instability via, for example, non-linear two-way spillovers between the financial system and the macroeconomy. The ABM model proposed enables the capture of these dynamics. High values of RoFIN (i.e. exceeding the threshold of 50%) make financial innovation become harmful for the economic system, leading to a switch from a virtuous to an unvirtuous business cycle. When RoFIN reaches 90%, the numerical simulations come close to the macro/finance dynamics observed before and during the financial crisis. Given its potential role in triggering financial and economic instability, RoFIN is of interest for financial regulation and supervision. How this endogenous variable may be influenced by means of operational variables under the control of policymakers remains a subject for future research.

To realize the high-quality development of China's marine economy, it is important to vigorously promote blue finance and increase the support of science and technology finance for the innovation development of the marine industry. Based on the existing literature research, this paper uses two-step empirical evidence to investigate the role of science and technology finance on the innovation efficiency of the marine industry by combining the development status of science and technology innovation, science and technology finance in the marine industry. The results of the study show that government financial investment in science and technology finance has a significant contribution to the innovation efficiency of the marine industry; The innovation efficiency of marine industry is positively but not significantly affected by the investment of enterprises' funds in science and technology, and the innovation efficiency is inhibited by the investment in entrepreneurial risk management. In addition, there are still large differences in the efficiency of innovation in the marine industry among different regions. Moreover, we propose the government support the marine industry science and technology innovation fully, optimize risk investment and improve the investment return guarantee mechanism, and unblocked the indirect financing channels of the financial market for the sea-related science and technology innovation enterprises, and give policy recommendations to develop the marine industry science and technology innovation activities.

In this study we investigate the role of information and communication technology (ICT) in conflicts of financial intermediation for financial access. The empirical evidence is based on contemporary (or current values) and non-contemporary (or lagged by a year) quantile regressions in 53 African countries for the period 2004-2011. The main findings are: First, the net effect of ICT in formalization for financial activity in the banking system is consistently beneficial with positive thresholds. The fact that corresponding, unconditional and conditional effects are persistently positive is evidence of synergy or complementary effects. Second, the net effect of ICT in financial informalization for financial activity in the financial system is negative with a consistent negative threshold. Hence, the positive (negative) complementarity of ICT and financial formalization (informalization) is an increasing (decreasing) function of financial activity. Policy measures on how to leverage the synergy or complementarity between ICT and financial formalization in order to enhance financial access are discussed.

The great financial crisis widened the role of financial intermediation in financial stability. This study develops a new financial intermediation variable, credit cash flow (CCF), which enables me...

PurposeThe purpose of this study is to examine the role of reducing information asymmetry (IA) on conditional financial sector development in 53 African countries for the period 2004-2011.Design/methodology/approachThe empirical evidence is based on contemporary and non-contemporary quantile regressions. Instruments for reducing IA include public credit registries (PCRs) and private credit bureaus (PCBs). Hitherto unexplored dimensions of financial sector development are used, namely, financial sector dynamics of formalization, informalization, semi-formalization and non-formalization.FindingsThe following findings are established. First, the positive (negative) effect of information sharing offices (ISO) on formal (informal) financial development is consistent with theory. Second, ISOs consistently increase formal financial development, with the incidence of PCRs higher in terms of magnitude, and financial sector formalization, with the impact of PCBs higher for the most part. Third, only PCBs significantly decrease informal financial development and both ISOs decrease financial sector informalization. Policy implications are discussed.Originality/valueThe study assesses the effect of reducing IA on financial development when existing levels of it matter because current studies based on mean values of financial development provide blanket policy implications which are unlikely to be effective unless they are contingent on prevailing levels of financial development and tailored differently across countries with high, intermediate and low initial levels of financial development.

The increase in the frequency and scope of financial crises has made the stability and robustness of the financial system a major concern in the field of finance worldwide. Due to the interconnectedness between institutions, the negative effects of financial crises spread through the financial system in a process referred to as financial contagion. In this study, we focus on a financial system in which large numbers of financial institutions are connected by direct balance sheet linkages through their lending-borrowing relationships. We mainly focus on modeling and analyzing financial contagion from a network analytics perspective. First, we model the financial system and the mechanism of contagion by introducing the concepts of exposure matrix, book value, market value and liquidation cost. Second, we propose a simple contagion algorithm based on this modeling process. Third, we study the effects of the financial system's heterogeneity on the magnitude of financial contagion by applying the proposed algorithm. The level of heterogeneity is measured by the diversification of exposure ratio and the extent of network connectivity. According to the results of our comprehensive numerical simulation, we conclude that an increase in heterogeneity has a significant influence on the stability of the financial system. Our study has significant implications for the practice of financial regulation and surveillance.

We provide a review of China's financial system and consider the challenges it faces and future reforms. The formal sectors of the financial system, which include a fast-growing stock market and are dominated by a banking sector with large state-owned banks, have played a critical role in financing the state sectors and the investment-driven economic growth model. However, the formal sectors have not served the needs of the private sectors or of households; these dynamic sectors have been financed by alternative finance sectors operating largely outside the markets and formal institutions. Going forward, financial markets need to be further developed to provide more support for the private sectors, including technology and services industries; the formal and alternative sectors should work together to improve the efficiency of resource allocation to better support the new model of consumption- and innovation-driven growth. Finally, the financial system needs to reduce the likelihood of damaging financial crises, which have included a real estate crisis, a banking crisis triggered by defaults on corporate and local government debt, and a twin crisis in the currency market and the banking sector.

This paper explores the problem of the global financial crisis of 2008–9, using a behavioral perspective to examine in some detail the issue of governance failures. These failures are evident in the inadequate oversight/regulation provided by US financial market regulators, as well as the inability of financial market participants to adequately judge and assign risk measures to key financial instruments. In total, five elements of behavioral finance are shown to characterize the crisis. The paper shows how specific adjustments in government policy (dealing with market structural imperfections) and company governance (dealing mainly with risk management) can respond to the key elements of the crisis. It also points out that future financial crises cannot be avoided, so that mitigation is the only remedy to deal with such phenomena.

This study examines the effect of financial structure on CO2 emissions in G20 countries from 1971 to 2014. The empirical results show significant heterogeneity among developed and developing countries in the effect of financial structure on per capita carbon emissions. The ratio of direct to indirect financing is negatively correlated with per capita carbon emissions in developed countries while it is positively correlated in developing economies. We also find out that the interaction between financial structure and total factor productivity is positively correlated with carbon emissions in developing countries; this finding requires attention in order to achieve green development.

This study examines whether the association between financial literacy and participation in risky asset markets is robust to variation on a more innate level: the propensity for financial planning. I find that individuals’ propensity for financial planning is strongly positively related to stock market participation as well as membership in a voluntary workplace retirement savings scheme. This result holds when controlling for financial literacy and a range of demographic and control variables in a multivariate regression setting. Importantly, the positive association between financial literacy and risky asset market participation also persists, suggesting that these two variables operate through separate channels.

Financial markets are considered developed if there is improvement in the size, activity, efficiency and stability of the financial system. The study looked at how financial development based on debt, stock, money and foreign markets affect investment. The Johansen cointegration and Vector Error Correction Model (VECM) were used to estimate the short and long run relationship and test for the speed of adjustment. Granger causality test informed about direction of causality, variance decompositions and impulse response indicated effects of shocks. The Johansen cointegration test showed that the variables have a long run relationship. VECM showed that the speed of adjustment is about 13%, which means that variables will converge to equilibrium relatively quickly. The impulse response function indicated that financial market development indicators have short-run effects on investment in the first quarters after the initial shocks. Variance decomposition also indicated that specifically government bonds had greater effect in predicting future investments. The policy implications of these findings are for government to place greater priority on government bonds as its effect on investment is greater than other financial development proxies. Policies should focus on allowing greater risk diversification and improving the independence of the financial sector from government interference.

This study investigates the influence of the financial system on firms' investment efficiency in China. For this purpose, we employ country level data of capital markets and financial institutions along with financial data from 2797 Chinese firms in the period from 1998 to 2015. The firms are priori classified into four groups, by high and low values of financial constraints and agency problems. Results show that financial development influences firms' investments positively either directly or by reducing cash flow sensitivity. The impact remains the same for all types of firms. Moreover, the financial structure has an impact on investment efficiency of firms; this result also remains the same even after controlling levels of financial development. Study contributes that capital market based financial structure impacts investment decisions by reducing financing constraints and agency issue due to its strong monitoring ability.

Purpose The purpose of this paper is to characterise the financial performance and to identify the operating strategies of property development companies in Malaysia during the 2008 global financial crisis (GFC). Design/methodology/approach The research approach includes a comprehensive analysis of the financial statements and annual reports of 35 property development companies listed on the Kuala Lumpur stock exchange. The financial statements were analysed to evaluate the financial performance of these companies and to assess the severity of the impact of the GFC on revenues and profits. The operating strategies were determined from a content analysis of the statement to shareholders. Findings An aggregated analysis of the financial performance indicates a 23 per cent decline in net profit in 2008. Classifying these companies into two separate sets of distressed and non-distressed companies showed that poor financial performance and a high debt-to-equity ratio pre-GFC led to continuing poor performance during the GFC period and beyond. Survival strategies adopted by distressed companies include the disposal of assets to improve cash flow, refinancing loans, delaying the launch of new projects and reducing their workforce. Non-distressed companies adopted growth strategies such as purchasing land for development, focusing their offerings towards high-end products, vertically integrating and diversification. Practical implications The increased understanding of the financial performance and operational strategies will allow managers of property development companies to improve financial management and adopt appropriate strategies in response to the impact of future financial distress. Originality/value The study presented in this paper is the first to analyse the financial performance of Malaysian public-listed property development companies during the period of the 2008 GFC and to link their financial performance to operational strategies.

We examine the relation between the quality of financial inputs (indirectly measured by the existence or otherwise of restatements of the condensed financial statements), and management forecast accuracy in Japan. The Japanese market provides a unique environment to identify firms with poor-quality financial inputs because the stock exchanges require firms simultaneously to disclose (1) condensed financial statements for the current year and (2) management forecasts for the following year in their financial highlights ( Kessan Tanshin ) after the settlement of financial accounts and board approval before the final financial statements are issued. The simultaneous disclosure of management forecasts and earnings announcements implies that the firms that have restated their financial highlights are relying on poor-quality financial inputs to generate the statements and, most likely, the earnings forecast, as well. Our results suggest that restatement firms are likely to use poor-quality financial inputs and consequently report less accurate management forecasts.

This paper investigates whether financial market development has an impact on the relationship between foreign direct investment (FDI) and business start-up, which is a salient feature of entrepreneurship. In a panel of 92 developing countries, the paper finds that the ability of FDI to crowd-in business start-ups significantly depends on financial market development in the host economy. Based on the results, there is a threshold level of financial market development above which FDI crowds-in new businesses. Improving financial conditions in developing countries where they are unfavorable is therefore an important precondition for facilitating the positive externalities from FDI inflows which stimulate entrepreneurship. The results also support the policy propositions that a good regulatory environment and higher growth in income per capita are important for enhancing entrepreneurship.

In this study, we examine the impact of the 2008 Global Crisis on “access to finance” in high-income OECD, high-income non-OECD, middle-income, and low-income countries. We use three measures of access to finance. These are “Number of bank branches per 100,000 adults”, “Value traded of top 10 traded companies to total value traded (%)”, and “Market capitalization outside of top 10 largest companies to total market capitalization (%)”. During the run-up to the crisis and immediately after the crisis, we do not find any significant change in any of the three “access to finance” measures. We find that, during the crisis, only middle-income countries were affected significantly. These countries were affected in only one of the measures which is “Value traded of top 10 traded companies to total value traded (%)”. This measure went up and this change is marginally significant. We conclude that the global crisis only affected “access to finance” in middle-income countries.

This article examines the relationship between supplier financing and small- and medium-sized firms’ value as well as the variation in the marginal value of supplier financing that arises from diff...

As a result of the financial crisis of 2008, the macroeconomic adjustment has affected Mexican homes through greater unemployment and a drop in purchasing power. Moreover, families had to keep financing education costs, sometimes going into debt in the formal or informal financial market. The hypothesis of this article proposes that the access and use of formal and informal financial products makes it possible to reduce financial problems associated to education expenses at the basic education levels. The probit model is estimated with a sample comprised of four hundred homes in the municipality of San Pedro Cholula (state of Puebla). The results indicate that a worsening in the work conditions and the loss of employment are associated to a greater probability of facing financial difficulties. Likewise, the access to the formal financial market allows reducing the probability of facing these difficulties, whereas for the informal market the results are a function of the characteristics of each financial intermediary.

China has built a very comprehensive financial system, but has not let the market mechanism work freely. This unique pattern, rooted in China's dual-track reform strategy between state and non-state sectors, did not prevent a strong economic performance in the past, but is now a main cause of economic inefficiency and financial risks. The rapid development of digital finance is a back-door way of financial liberalization, responding to both old repressive policies and new technologies. To accomplish the mission of building an efficient financial system, the government needs to take at least three further steps in financial reform: creating a level-playing field; freeing up the market mechanism; and improving regulation. The key test lies in the effective enforcement of market discipline for corporate and financial institutions.

Сформовано напрями коригування фінансової політики держави для забезпечення підвищення фінансового потенціалу публічно–приватного партнерства (ППП), що передбачають врахування: стану фінансового потенціалу секторів ППП, тенденцій і напрямів розвитку регіонів України для підвищення фінансового потенціалу ППП; цільових показників фінансової політики, що найбільше впливають на фінансовий потенціал ППП за секторами. Напрями коригування обґрунтовано за допомогою тривимірного позиціонування регіонів України відповідно до їх фінансового потенціалу ППП, що дає уявлення про можливості участі у реалізації ППП., The type of financial policy, based three–dimensional positioning as PPP`s financial potential by sectors, is selected. The directions adjusting financial policy to improve the public–private partnership`s financial potential are developed, the proceedings of which will contribute to achieving the set goals and objectives for the formation of public–private partnership`s financial potential. There are formed types of financial policy: stimulating, moderate, and aggressive supportive, that are based on three–dimensional model positioning Ukrainian regions in PPPs` sectors according to their financial capacity, which gives an idea of the regions in terms of the possibility and expediency of their use in the implementation of public–private partnerships. There were developed ways of increasing the public–private partnerships` financial potential in view of the reasonable targets for each type of financial policy. For stimulating type there are balancing options of growth limited financial resources with provision of sufficient financial security and efficient allocation and use of financial resources. For moderate type there is ensuring an acceptable level of financial stability and profitability using its own capital. For supporting type there is focus on the rapid growth of the financial capacity of the strong support of public funding to avoid worsening financial condition and the type of transition to aggressive financial policy. For aggressive type there is directing efforts at addressing the adverse factors affecting the search for potential sources of reserves and financial support, to improve the financial capacity of a PPP sectors and supporting the transition to the type of financial policy., Сформированы направления корректирования финансовой политики государства для обеспечения повышения финансового потенциала публично–частного партнерства (ПЧП), с учетом: состояния финансового потенциала секторов ПЧП, тенденций и направлений развития регионов Украины для повышения финансового потенциала ПЧП; целевых показателей финансовой политики, которые больше всего влияют на финансовый потенциал ПЧП по секторам. Направления корректирования обосновано с помощью трехмерного позиционирования регионов Украины в соответствии с их финансового потенциала ПЧП, что дает представление о возможности участия в реализации ППП.

The purpose of this study is to investigate how increasing information sharing bureaus affect financial access. For this reason, we have employed contemporary and non-contemporary interactive Quantile Regressions in 53 African countries for the period 2004-2011. Information sharing bureaus are proxied with public credit registries and private credit offices. Financial development dynamics involving depth (at overall economic and financial system levels), efficiency (at banking and financial system levels), activity (from banking and financial system perspectives) and size are used. Two key findings are established. First, the effect of increasing private credit bureaus is not clearly noticeable on financial access, probably because private credit agencies are still to be established in many countries. Second, increasing public credit registries improves financial allocation efficiency and activity (or credit) between the 25th and 75th quartiles for the most part. As a main policy implication, countries in the top (or highest levels of financial development) and bottom (or lowest levels of financial development) ends of the financial efficiency and activity distributions are unlikely to benefit from enhanced financial allocation efficiency owing to increasing public credit registries.