Journal of Financial Economic PolicyTable of Contents for Journal of Financial Economic Policy. List of articles from the current issue, including Just Accepted (EarlyCite)https://www.emerald.com/insight/publication/issn/1757-6385/vol/16/iss/2?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestJournal of Financial Economic PolicyEmerald Publishing LimitedJournal of Financial Economic PolicyJournal of Financial Economic Policyhttps://www.emerald.com/insight/proxy/containerImg?link=/resource/publication/journal/1ee88968d0cefb969101bc7aabbe577f/urn:emeraldgroup.com:asset:id:binary:jfep.cover.jpghttps://www.emerald.com/insight/publication/issn/1757-6385/vol/16/iss/2?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestDisclosure-based regulation and municipal security trade priceshttps://www.emerald.com/insight/content/doi/10.1108/JFEP-09-2019-0186/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to measure the trade price impact of a recent regulatory disclosure intervention in municipal securities secondary markets, which required broker-dealers to disclose securities trading information on a near-real-time and continuing basis. The author analyzes trade price outcomes in the preintervention and postintervention regimes using a suite of time series estimations that give heteroskedasticity-robust standard errors (Prais–Winsten and Cochrain–Orcutt), accommodate higher-order lag structure in the error term (autoregressive integrated moving average) and account for volatility clustering in the time series (generalized autoregressive conditional heteroskedasticity). Results show that regulatory disclosure intervention significantly improved trade price efficiency in municipal securities secondary markets as daily trade price differential and volatility both declined market-wide after the disclosure intervention. The sample consists of trades in State of California general obligation bonds; therefore, empirical findings may not be generalizable to other states, local governments and different types of bonds. The findings highlight voluntary information disclosure as a practical and effective mechanism in disclosure regulation of municipal securities secondary markets. Only a small body of work exists that examines information disclosure regulation in municipal securities secondary markets; therefore, this paper expands knowledge on the topic and should provide renewed impetus for regulatory efforts aimed at improving the efficiency of municipal capital markets.Disclosure-based regulation and municipal security trade prices
Komla D. Dzigbede
Journal of Financial Economic Policy, Vol. 16, No. 2, pp.137-161

This paper aims to measure the trade price impact of a recent regulatory disclosure intervention in municipal securities secondary markets, which required broker-dealers to disclose securities trading information on a near-real-time and continuing basis.

The author analyzes trade price outcomes in the preintervention and postintervention regimes using a suite of time series estimations that give heteroskedasticity-robust standard errors (Prais–Winsten and Cochrain–Orcutt), accommodate higher-order lag structure in the error term (autoregressive integrated moving average) and account for volatility clustering in the time series (generalized autoregressive conditional heteroskedasticity).

Results show that regulatory disclosure intervention significantly improved trade price efficiency in municipal securities secondary markets as daily trade price differential and volatility both declined market-wide after the disclosure intervention.

The sample consists of trades in State of California general obligation bonds; therefore, empirical findings may not be generalizable to other states, local governments and different types of bonds.

The findings highlight voluntary information disclosure as a practical and effective mechanism in disclosure regulation of municipal securities secondary markets.

Only a small body of work exists that examines information disclosure regulation in municipal securities secondary markets; therefore, this paper expands knowledge on the topic and should provide renewed impetus for regulatory efforts aimed at improving the efficiency of municipal capital markets.

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Disclosure-based regulation and municipal security trade prices10.1108/JFEP-09-2019-0186Journal of Financial Economic Policy2024-01-25© 2020 Emerald Publishing LimitedKomla D. DzigbedeJournal of Financial Economic Policy1622024-01-2510.1108/JFEP-09-2019-0186https://www.emerald.com/insight/content/doi/10.1108/JFEP-09-2019-0186/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2020 Emerald Publishing Limited
Examining small bank failures in the United States: an analysis using (coarsened exact matching) CEMhttps://www.emerald.com/insight/content/doi/10.1108/JFEP-09-2023-0280/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestBank failures are critical events that have far-reaching implications for the financial system and various stakeholders. This study aims to focus on analyzing the phenomenon of small bank failures in the USA. This study adopts the coarsened exact matching (CEM) technique to enhance the reliability of the analysis. By matching similar observed characteristics, the CEM approach helps to address potential selectivity bias and facilitates a more accurate estimation of the treatment effect. This study uses a data set covering the period from 2000 through 2019 and includes 523 failed bank observations and 43,605 nonfailed bank observations. The results reveal several key findings. Small banks, especially those with lower yields on earning assets, those with lower charge-offs on loans and leases, those with higher core capital ratios and those with higher Fed Funds rates are found to be more susceptible to failure. Some results align with initial predictions, whereas others present contrasting outcomes. This study underscores the significance of understanding the factors contributing to bank failure and emphasizes the importance of studying small bank failures in particular. This study uses the CEM method. CEM is a comprehensive approach that combines matching, sample trimming and reweighting techniques. When applying CEM, researchers carefully select a set of core variables to achieve balance between the treated and control groups. The CEM process involves discretizing each continuous variable into distinct bins or categories, a process known as “coarsening.” It then requires an exact match among these binned variables between the treated and control units, which constitutes the matching step in CEM.Examining small bank failures in the United States: an analysis using (coarsened exact matching) CEM
Richard J. Cebula, Maggie Foley, John Downs, Douglas Johansen
Journal of Financial Economic Policy, Vol. 16, No. 2, pp.162-175

Bank failures are critical events that have far-reaching implications for the financial system and various stakeholders. This study aims to focus on analyzing the phenomenon of small bank failures in the USA.

This study adopts the coarsened exact matching (CEM) technique to enhance the reliability of the analysis. By matching similar observed characteristics, the CEM approach helps to address potential selectivity bias and facilitates a more accurate estimation of the treatment effect. This study uses a data set covering the period from 2000 through 2019 and includes 523 failed bank observations and 43,605 nonfailed bank observations.

The results reveal several key findings. Small banks, especially those with lower yields on earning assets, those with lower charge-offs on loans and leases, those with higher core capital ratios and those with higher Fed Funds rates are found to be more susceptible to failure.

Some results align with initial predictions, whereas others present contrasting outcomes.

This study underscores the significance of understanding the factors contributing to bank failure and emphasizes the importance of studying small bank failures in particular.

This study uses the CEM method. CEM is a comprehensive approach that combines matching, sample trimming and reweighting techniques. When applying CEM, researchers carefully select a set of core variables to achieve balance between the treated and control groups. The CEM process involves discretizing each continuous variable into distinct bins or categories, a process known as “coarsening.” It then requires an exact match among these binned variables between the treated and control units, which constitutes the matching step in CEM.

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Examining small bank failures in the United States: an analysis using (coarsened exact matching) CEM10.1108/JFEP-09-2023-0280Journal of Financial Economic Policy2023-11-20© 2023 Emerald Publishing LimitedRichard J. CebulaMaggie FoleyJohn DownsDouglas JohansenJournal of Financial Economic Policy1622023-11-2010.1108/JFEP-09-2023-0280https://www.emerald.com/insight/content/doi/10.1108/JFEP-09-2023-0280/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Revisiting long-run dynamics between financial inclusion and economic growth in developing nations: evidence from CS-ARDL approachhttps://www.emerald.com/insight/content/doi/10.1108/JFEP-07-2023-0186/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to analyze the long-run dynamic relationship between financial inclusion and economic growth for developing nations. This study develops a comprehensive financial inclusion index based on the UNDP methodology for 53 developing nations. The authors use second-generation unit root tests, cointegration techniques and an advanced dynamic common correlated effects estimator model called cross-sectional augmented autoregressive distributed lags (CS-ARDL) to examine long-run dynamics among variables. The tests confirm the presence of slope-heterogeneity and cross-sectional dependency. The second-generation panel unit root tests show the chosen variables are stationary at first difference. The bootstrap Westerlund cointegration result shows the variables are cointegrated in the long run. The CS-ARDL estimates conclude that financial inclusion positively enhances gross domestic product per capita in selected developing countries. The robustness check through augmented mean group estimation validates the findings. The study makes three important contributions: first, it constructs a comprehensive financial inclusion index using 10 variables for a panel of 53 developing nations; second, the potential cross-section dependence and slope heterogeneity of panel data have been accounted for by applying the second-generation unit root tests; third, the study uses the dynamic common correlated effects estimator model (CS-ARDL) to examine long-run dynamics among variables.Revisiting long-run dynamics between financial inclusion and economic growth in developing nations: evidence from CS-ARDL approach
Tariq Ahmad Mir, R. Gopinathan, D.P. Priyadarshi Joshi
Journal of Financial Economic Policy, Vol. 16, No. 2, pp.176-193

This study aims to analyze the long-run dynamic relationship between financial inclusion and economic growth for developing nations.

This study develops a comprehensive financial inclusion index based on the UNDP methodology for 53 developing nations. The authors use second-generation unit root tests, cointegration techniques and an advanced dynamic common correlated effects estimator model called cross-sectional augmented autoregressive distributed lags (CS-ARDL) to examine long-run dynamics among variables.

The tests confirm the presence of slope-heterogeneity and cross-sectional dependency. The second-generation panel unit root tests show the chosen variables are stationary at first difference. The bootstrap Westerlund cointegration result shows the variables are cointegrated in the long run. The CS-ARDL estimates conclude that financial inclusion positively enhances gross domestic product per capita in selected developing countries. The robustness check through augmented mean group estimation validates the findings.

The study makes three important contributions: first, it constructs a comprehensive financial inclusion index using 10 variables for a panel of 53 developing nations; second, the potential cross-section dependence and slope heterogeneity of panel data have been accounted for by applying the second-generation unit root tests; third, the study uses the dynamic common correlated effects estimator model (CS-ARDL) to examine long-run dynamics among variables.

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Revisiting long-run dynamics between financial inclusion and economic growth in developing nations: evidence from CS-ARDL approach10.1108/JFEP-07-2023-0186Journal of Financial Economic Policy2023-11-22© 2023 Emerald Publishing LimitedTariq Ahmad MirR. GopinathanD.P. Priyadarshi JoshiJournal of Financial Economic Policy1622023-11-2210.1108/JFEP-07-2023-0186https://www.emerald.com/insight/content/doi/10.1108/JFEP-07-2023-0186/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The 2016 US presidential election, opinion polls and the stock markethttps://www.emerald.com/insight/content/doi/10.1108/JFEP-10-2023-0310/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this paper is to study the impact of the 2016 presidential election polls on the stock market. The empirical model includes daily stock returns as the dependent variable and past asset prices, 10-year treasury rates, opinion polls and VIX (market uncertainty) as explanatory variables with a one-year lag. The model was estimated using two sets of daily polling data: from July 1, 2015, to November 8, 2016, and from June 1, 2016, to November 8, 2016. Additional descriptive statistics, such as means and standard deviations, were also calculated. The estimated results did not reveal any statistically significant effects of opinion polls in favor of one candidate over another on stock returns. Simple statistical tests, however, show that the market performed better when Trump held a polling advantage over Clinton. To the best of the authors’ knowledge, this is the only study that has examined the effects of the 2016 presidential election polls on the US stock market. This study adds value to the understanding of the relationship between election polls and the stock market in the USA.The 2016 US presidential election, opinion polls and the stock market
Kamal Upadhyaya, Raja Nag, Demissew Ejara
Journal of Financial Economic Policy, Vol. 16, No. 2, pp.194-204

The purpose of this paper is to study the impact of the 2016 presidential election polls on the stock market.

The empirical model includes daily stock returns as the dependent variable and past asset prices, 10-year treasury rates, opinion polls and VIX (market uncertainty) as explanatory variables with a one-year lag. The model was estimated using two sets of daily polling data: from July 1, 2015, to November 8, 2016, and from June 1, 2016, to November 8, 2016. Additional descriptive statistics, such as means and standard deviations, were also calculated.

The estimated results did not reveal any statistically significant effects of opinion polls in favor of one candidate over another on stock returns. Simple statistical tests, however, show that the market performed better when Trump held a polling advantage over Clinton.

To the best of the authors’ knowledge, this is the only study that has examined the effects of the 2016 presidential election polls on the US stock market. This study adds value to the understanding of the relationship between election polls and the stock market in the USA.

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The 2016 US presidential election, opinion polls and the stock market10.1108/JFEP-10-2023-0310Journal of Financial Economic Policy2023-12-11© 2023 Emerald Publishing LimitedKamal UpadhyayaRaja NagDemissew EjaraJournal of Financial Economic Policy1622023-12-1110.1108/JFEP-10-2023-0310https://www.emerald.com/insight/content/doi/10.1108/JFEP-10-2023-0310/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Effect of financial stability on new business establishments in Africa: does ease of doing business matter?https://www.emerald.com/insight/content/doi/10.1108/JFEP-07-2023-0202/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestGiven the relevance of entrepreneurship in nation-building, studies geared towards the promotion of new businesses are crucial. This study aims to contribute to the finance and entrepreneurship literature by providing empirical evidence on the role ease of doing business plays in promoting new business establishments amidst financial stability. The study used the fixed and random effect estimation techniques as well as the impulse response function to analyse annual panel data covering 53 African countries. The results indicate that regulatory quality and access to electricity promote new business establishments. Also, to experience the direct effect of financial stability on new business establishments or entrepreneurship in Africa, the role of the ease of doing business cannot be isolated. The policy implication is that the creation of an enabling business environment is crucial for new business establishments. The sample only includes countries in Africa. Future or further studies may want to expand the sample size and also consider a comparative analysis where this analysis will be done plus another region so that the differences in findings can be known. To the best of the authors’ knowledge, this is the first study to investigate the role of ease of doing business on new business establishments in the presence of financial stability in Africa.Effect of financial stability on new business establishments in Africa: does ease of doing business matter?
Evans Kulu, Joshua Sebu, Bismark Osei
Journal of Financial Economic Policy, Vol. 16, No. 2, pp.205-225

Given the relevance of entrepreneurship in nation-building, studies geared towards the promotion of new businesses are crucial. This study aims to contribute to the finance and entrepreneurship literature by providing empirical evidence on the role ease of doing business plays in promoting new business establishments amidst financial stability.

The study used the fixed and random effect estimation techniques as well as the impulse response function to analyse annual panel data covering 53 African countries.

The results indicate that regulatory quality and access to electricity promote new business establishments. Also, to experience the direct effect of financial stability on new business establishments or entrepreneurship in Africa, the role of the ease of doing business cannot be isolated. The policy implication is that the creation of an enabling business environment is crucial for new business establishments.

The sample only includes countries in Africa. Future or further studies may want to expand the sample size and also consider a comparative analysis where this analysis will be done plus another region so that the differences in findings can be known.

To the best of the authors’ knowledge, this is the first study to investigate the role of ease of doing business on new business establishments in the presence of financial stability in Africa.

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Effect of financial stability on new business establishments in Africa: does ease of doing business matter?10.1108/JFEP-07-2023-0202Journal of Financial Economic Policy2023-11-29© 2023 Emerald Publishing LimitedEvans KuluJoshua SebuBismark OseiJournal of Financial Economic Policy1622023-11-2910.1108/JFEP-07-2023-0202https://www.emerald.com/insight/content/doi/10.1108/JFEP-07-2023-0202/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Identifying the nexus between financial stability and economic growth: the role of stability indicatorshttps://www.emerald.com/insight/content/doi/10.1108/JFEP-09-2023-0260/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the interrelationship between financial stability and economic growth with a comprehensive analysis. The panel Granger causality testing approach is carried out to the panels of the Fragile Five (F5) and the Group of Seven (G7) countries for the period 1998–2020. To capture the different aspects of financial stability the authors use eight different indicators. The findings reveal some important implications: the relationship between financial stability and economic growth is sensitive to the financial stability indicators for both the F5 and G7 countries. The stability indicators related to the credit market contain much more causality relationship with economic growth than the indicators related to the stock market. Z-score and provisions to nonperforming loans (NPLs) are among the two variables with the highest causality relationship with economic growth. The least number of causality link is found for the Regulatory Capital Ratio and Stock Price Volatility in F5 countries and Credit Ratio, NPLs and Stock Price Volatility in G7 countries. Economic growth affects financial stability through credit market stability indicators and mostly for the F5 countries. No causal relationship is found for any of the financial stability indicators of Canada, the UK and the USA from economic growth to financial stability. Since the linkages between financial stability and economic growth may vary due to country/group specific differences, apart from the previous studies, the authors select two different groups of countries in terms of financial stability and economic size.Identifying the nexus between financial stability and economic growth: the role of stability indicators
Betul Kurtoglu, Dilek Durusu-Ciftci
Journal of Financial Economic Policy, Vol. 16, No. 2, pp.226-246

This study aims to examine the interrelationship between financial stability and economic growth with a comprehensive analysis.

The panel Granger causality testing approach is carried out to the panels of the Fragile Five (F5) and the Group of Seven (G7) countries for the period 1998–2020. To capture the different aspects of financial stability the authors use eight different indicators.

The findings reveal some important implications: the relationship between financial stability and economic growth is sensitive to the financial stability indicators for both the F5 and G7 countries. The stability indicators related to the credit market contain much more causality relationship with economic growth than the indicators related to the stock market. Z-score and provisions to nonperforming loans (NPLs) are among the two variables with the highest causality relationship with economic growth. The least number of causality link is found for the Regulatory Capital Ratio and Stock Price Volatility in F5 countries and Credit Ratio, NPLs and Stock Price Volatility in G7 countries. Economic growth affects financial stability through credit market stability indicators and mostly for the F5 countries. No causal relationship is found for any of the financial stability indicators of Canada, the UK and the USA from economic growth to financial stability.

Since the linkages between financial stability and economic growth may vary due to country/group specific differences, apart from the previous studies, the authors select two different groups of countries in terms of financial stability and economic size.

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Identifying the nexus between financial stability and economic growth: the role of stability indicators10.1108/JFEP-09-2023-0260Journal of Financial Economic Policy2024-01-10© 2023 Emerald Publishing LimitedBetul KurtogluDilek Durusu-CiftciJournal of Financial Economic Policy1622024-01-1010.1108/JFEP-09-2023-0260https://www.emerald.com/insight/content/doi/10.1108/JFEP-09-2023-0260/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Socioeconomic determinants of ownership of payment cards, mobile money account, and government remittances of digital financial services: evidence from Indiahttps://www.emerald.com/insight/content/doi/10.1108/JFEP-07-2023-0176/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to measure the extent of digital financial inclusion (DFI) and examine the effect of socioeconomic characteristics on using government remittances and the adoption of digital financial services (DFS) during the COVID-19 pandemic. The World Bank Global Financial Inclusion (Global Findex) database 2021 is used in this study, with a sample size of 3,000 Indian individuals. The study measured the demand-side analysis of DFI, namely, accessibility and usage of DFS with selected socioeconomic characteristics such as gender, age, income, education, being in the workforce and residential status of respondents. The dependent variable is binary in nature; therefore, the logistic regression model is used for the data analysis. The results of the study reveal that individuals’ socioeconomic factors, such as female, all the age groups, tertiary education, third- and fourth-income quintile and workforce, are found to have a significant association with “accessibility,” an exogenous variable of DFS. Besides, respondents’ socioeconomic attributes, namely, female, tertiary education, income for all quintiles and workforce, are more likely to use DFSs in the COVID-19 pandemic. The study also finds the residential status of individuals is influencing the accessibility and usage of DFS. The findings of the study provide valuable insights to the service providers and policymakers regarding the rapid expansion of DFS by digital infrastructure, simplifying the banking procedures and highlighting the importance of digital financial literacy to accomplish government goals through serving the unbanked population and also design strategies for achieving the objectives of Digital India: “Faceless, Paperless, and Cashless” of DFI across the country. Notable studies used World Bank Findex survey data to explore the determinants of financial inclusion in general. This research is one among the few studies to explore the determinants of India’s DFI. Moreover, this study measured the effect of individual socioeconomic attributes on the adoption of DFSs during the COVID-19 pandemic, which has not been included in prior studies. Therefore, this study has added value to the existing literature on financial technology innovation and DFS for the sustainable development of emerging nations.Socioeconomic determinants of ownership of payment cards, mobile money account, and government remittances of digital financial services: evidence from India
Prabhakar Nandru, Madhavaiah Chendragiri, Velayutham Arulmurugan
Journal of Financial Economic Policy, Vol. 16, No. 2, pp.247-271

This paper aims to measure the extent of digital financial inclusion (DFI) and examine the effect of socioeconomic characteristics on using government remittances and the adoption of digital financial services (DFS) during the COVID-19 pandemic.

The World Bank Global Financial Inclusion (Global Findex) database 2021 is used in this study, with a sample size of 3,000 Indian individuals. The study measured the demand-side analysis of DFI, namely, accessibility and usage of DFS with selected socioeconomic characteristics such as gender, age, income, education, being in the workforce and residential status of respondents. The dependent variable is binary in nature; therefore, the logistic regression model is used for the data analysis.

The results of the study reveal that individuals’ socioeconomic factors, such as female, all the age groups, tertiary education, third- and fourth-income quintile and workforce, are found to have a significant association with “accessibility,” an exogenous variable of DFS. Besides, respondents’ socioeconomic attributes, namely, female, tertiary education, income for all quintiles and workforce, are more likely to use DFSs in the COVID-19 pandemic. The study also finds the residential status of individuals is influencing the accessibility and usage of DFS.

The findings of the study provide valuable insights to the service providers and policymakers regarding the rapid expansion of DFS by digital infrastructure, simplifying the banking procedures and highlighting the importance of digital financial literacy to accomplish government goals through serving the unbanked population and also design strategies for achieving the objectives of Digital India: “Faceless, Paperless, and Cashless” of DFI across the country.

Notable studies used World Bank Findex survey data to explore the determinants of financial inclusion in general. This research is one among the few studies to explore the determinants of India’s DFI. Moreover, this study measured the effect of individual socioeconomic attributes on the adoption of DFSs during the COVID-19 pandemic, which has not been included in prior studies. Therefore, this study has added value to the existing literature on financial technology innovation and DFS for the sustainable development of emerging nations.

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Socioeconomic determinants of ownership of payment cards, mobile money account, and government remittances of digital financial services: evidence from India10.1108/JFEP-07-2023-0176Journal of Financial Economic Policy2023-12-26© 2023 Emerald Publishing LimitedPrabhakar NandruMadhavaiah ChendragiriVelayutham ArulmuruganJournal of Financial Economic Policy1622023-12-2610.1108/JFEP-07-2023-0176https://www.emerald.com/insight/content/doi/10.1108/JFEP-07-2023-0176/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Does internal cash flow-external financing sensitivity react to economic policy uncertainty and geopolitical risk? Evidence from Saudi Arabiahttps://www.emerald.com/insight/content/doi/10.1108/JFEP-06-2023-0142/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the influence of economic policy uncertainty (EPU) and geopolitical risk (GPR) on the relationship between internal cash flow and external financing in an emerging market, Saudi Arabia. It also examines the role of asset tangibility and financial crisis in establishing this relationship. The sample was taken from non-financial sector companies listed on the Saudi Stock Exchange between 2002 and 2019. The data were analyzed using panel data regression analysis, including ordinary least squares and fixed effects model. The author addresses potential endogeneity through the generalized method of moments. This study found that both EPU and GPR reduce the sensitivity of external financing to internal cash flow. This implies that firms depend more on internally generated funds during periods of increased EPU and GPR. Besides, this study found that the influence of EPU and GPR on the sensitivity of external financing to internal cash flow is more (less) negative for more tangible firms (during the financial crisis period). This result implies that Saudi firms boasting a higher level of tangibility are more flexible when it comes to seeking external financing. However, the presence of uncertainty during the crisis period makes the external financing costly, and therefore, firms will be less likely to raise funds from external sources. This study has important implications for managers, policymakers and regulators. First, the paper findings provide insights for corporate decision-makers in helping them to focus on internal funds to finance their investment during uncertain times. Second, the findings help managers to understand the role of asset tangibility in raising external funding when firms face financial constraints due to uncertainty. Third, this study also helps corporates to focus on internal funds to finance their investment during the crisis period because EPU and GPR increase the cost of external finance. Finally, the results provide guidelines for policymakers and regulators to make appropriate policy measures to increase the easy availability of external finance during periods of increased EPU and GPR. This paper is the first to shed light on the impact of internal funds on external financing while paying close attention to the role of EPU and GPR.Does internal cash flow-external financing sensitivity react to economic policy uncertainty and geopolitical risk? Evidence from Saudi Arabia
Moncef Guizani
Journal of Financial Economic Policy, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the influence of economic policy uncertainty (EPU) and geopolitical risk (GPR) on the relationship between internal cash flow and external financing in an emerging market, Saudi Arabia. It also examines the role of asset tangibility and financial crisis in establishing this relationship.

The sample was taken from non-financial sector companies listed on the Saudi Stock Exchange between 2002 and 2019. The data were analyzed using panel data regression analysis, including ordinary least squares and fixed effects model. The author addresses potential endogeneity through the generalized method of moments.

This study found that both EPU and GPR reduce the sensitivity of external financing to internal cash flow. This implies that firms depend more on internally generated funds during periods of increased EPU and GPR. Besides, this study found that the influence of EPU and GPR on the sensitivity of external financing to internal cash flow is more (less) negative for more tangible firms (during the financial crisis period). This result implies that Saudi firms boasting a higher level of tangibility are more flexible when it comes to seeking external financing. However, the presence of uncertainty during the crisis period makes the external financing costly, and therefore, firms will be less likely to raise funds from external sources.

This study has important implications for managers, policymakers and regulators. First, the paper findings provide insights for corporate decision-makers in helping them to focus on internal funds to finance their investment during uncertain times. Second, the findings help managers to understand the role of asset tangibility in raising external funding when firms face financial constraints due to uncertainty. Third, this study also helps corporates to focus on internal funds to finance their investment during the crisis period because EPU and GPR increase the cost of external finance. Finally, the results provide guidelines for policymakers and regulators to make appropriate policy measures to increase the easy availability of external finance during periods of increased EPU and GPR.

This paper is the first to shed light on the impact of internal funds on external financing while paying close attention to the role of EPU and GPR.

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Does internal cash flow-external financing sensitivity react to economic policy uncertainty and geopolitical risk? Evidence from Saudi Arabia10.1108/JFEP-06-2023-0142Journal of Financial Economic Policy2024-01-19© 2024 Emerald Publishing LimitedMoncef GuizaniJournal of Financial Economic Policyahead-of-printahead-of-print2024-01-1910.1108/JFEP-06-2023-0142https://www.emerald.com/insight/content/doi/10.1108/JFEP-06-2023-0142/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Economic and governance drivers of global remittances: a comparative study of the UK, US, and UAE to Indiahttps://www.emerald.com/insight/content/doi/10.1108/JFEP-08-2023-0230/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe paper aims to analyse the impact of economic and governance factors on remittance inflows to India from the UK, USA and UAE. India is globally recognised as the largest recipient of remittances. Using a comprehensive time series data set spanning 1996 to 2022, the authors use an innovative non-linear autoregressive distributed lag model approach to examine the influence of economic growth, corruption control and employer availability in the three source countries on remittance inflows to India. The results indicate that in the UAE, changes in economic growth and corruption control directly affect remittance outflows. However, the presence of employers in the UAE has minimal impact on remittance outflows to India. Regarding the UK, fluctuations in economic growth primarily drive remittance outflows to India. The effect of corruption control and employment opportunities on remittance outflows is marginal. In the USA, economic growth does not notably impact remittance outflows, whereas corruption control and employment opportunities significantly influence the outflows to India. These findings have important implications for policymakers. Analysing macroeconomic factors from key remittance-sending nations offers valuable insights for Indian policymakers and their international counterparts to enhance remittance inflows. The study focuses on three countries that collectively contribute to about 50% of India's remittances, providing a unique contribution compared to the usual country-specific or regional focus in existing literature. Finally, leveraging these findings, NITI Aayog, an organisation dedicated to achieving India's sustainable development goals, can effectively monitor macroeconomic indicators related to significant remittance-sending countries.Economic and governance drivers of global remittances: a comparative study of the UK, US, and UAE to India
Imran Khan
Journal of Financial Economic Policy, Vol. ahead-of-print, No. ahead-of-print, pp.-

The paper aims to analyse the impact of economic and governance factors on remittance inflows to India from the UK, USA and UAE. India is globally recognised as the largest recipient of remittances.

Using a comprehensive time series data set spanning 1996 to 2022, the authors use an innovative non-linear autoregressive distributed lag model approach to examine the influence of economic growth, corruption control and employer availability in the three source countries on remittance inflows to India.

The results indicate that in the UAE, changes in economic growth and corruption control directly affect remittance outflows. However, the presence of employers in the UAE has minimal impact on remittance outflows to India. Regarding the UK, fluctuations in economic growth primarily drive remittance outflows to India. The effect of corruption control and employment opportunities on remittance outflows is marginal. In the USA, economic growth does not notably impact remittance outflows, whereas corruption control and employment opportunities significantly influence the outflows to India.

These findings have important implications for policymakers. Analysing macroeconomic factors from key remittance-sending nations offers valuable insights for Indian policymakers and their international counterparts to enhance remittance inflows. The study focuses on three countries that collectively contribute to about 50% of India's remittances, providing a unique contribution compared to the usual country-specific or regional focus in existing literature. Finally, leveraging these findings, NITI Aayog, an organisation dedicated to achieving India's sustainable development goals, can effectively monitor macroeconomic indicators related to significant remittance-sending countries.

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Economic and governance drivers of global remittances: a comparative study of the UK, US, and UAE to India10.1108/JFEP-08-2023-0230Journal of Financial Economic Policy2024-01-05© 2023 Emerald Publishing LimitedImran KhanJournal of Financial Economic Policyahead-of-printahead-of-print2024-01-0510.1108/JFEP-08-2023-0230https://www.emerald.com/insight/content/doi/10.1108/JFEP-08-2023-0230/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
On the long-run properties of income and stock prices: the stability of the “golden ratios”https://www.emerald.com/insight/content/doi/10.1108/JFEP-12-2023-0388/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe challenge of predicting changes in aggregate income and stock prices is one that has occupied the research agendas of economists. This paper aims to use the consumption–income ratio and the dividend–price ratio to predict future income and stock prices. To examine the stability of the consumption–income ratio and the dividend–price ratio, the authors run a two-variable, two-lag reduced-form VAR in the vein of Cochrane (1994), using a lag of each respective ratio as exogenous to the VAR. Additionally, the authors estimate an AR(4) model for income and prices. The consumption–income ratio and the dividend–price ratio remain key to understanding future movements in income and stock prices. The consumption–income ratio significantly predicts future income in the USA, and aggregate income is easier to predict than consumption in the VAR model. The dividend–price ratio does not significantly predict future price growth. Consumption and dividend shocks have lasting impacts on income and prices. The consumption–income ratio and the dividend–price ratio are still key to understanding future movements in income and stock prices. The consumption–income ratio significantly predicts future income in the USA, and aggregate income is easier to predict than consumption in the VAR model. However, the dividend–price ratio does not significantly predict future price growth, a change from previous research from the 1990s, despite the increasing complexity of stock markets. Consumption and dividend shocks have lasting impacts on income and prices and appear to be significant drivers in both the short- and long-run variance in income and prices.On the long-run properties of income and stock prices: the stability of the “golden ratios”
James Dean, Joshua C. Hall
Journal of Financial Economic Policy, Vol. ahead-of-print, No. ahead-of-print, pp.-

The challenge of predicting changes in aggregate income and stock prices is one that has occupied the research agendas of economists. This paper aims to use the consumption–income ratio and the dividend–price ratio to predict future income and stock prices.

To examine the stability of the consumption–income ratio and the dividend–price ratio, the authors run a two-variable, two-lag reduced-form VAR in the vein of Cochrane (1994), using a lag of each respective ratio as exogenous to the VAR. Additionally, the authors estimate an AR(4) model for income and prices.

The consumption–income ratio and the dividend–price ratio remain key to understanding future movements in income and stock prices. The consumption–income ratio significantly predicts future income in the USA, and aggregate income is easier to predict than consumption in the VAR model. The dividend–price ratio does not significantly predict future price growth. Consumption and dividend shocks have lasting impacts on income and prices.

The consumption–income ratio and the dividend–price ratio are still key to understanding future movements in income and stock prices. The consumption–income ratio significantly predicts future income in the USA, and aggregate income is easier to predict than consumption in the VAR model. However, the dividend–price ratio does not significantly predict future price growth, a change from previous research from the 1990s, despite the increasing complexity of stock markets. Consumption and dividend shocks have lasting impacts on income and prices and appear to be significant drivers in both the short- and long-run variance in income and prices.

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On the long-run properties of income and stock prices: the stability of the “golden ratios”10.1108/JFEP-12-2023-0388Journal of Financial Economic Policy2024-02-13© 2024 Emerald Publishing LimitedJames DeanJoshua C. HallJournal of Financial Economic Policyahead-of-printahead-of-print2024-02-1310.1108/JFEP-12-2023-0388https://www.emerald.com/insight/content/doi/10.1108/JFEP-12-2023-0388/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited