Direct Financing Research Articles

Study on the Tort of Misrepresentation in the Inter-bank Bond Market--Taking Case No. 1 of the Beijing Financial Court as an Example

Chinese interbank bond market dates back to June 1997, when the People's Bank of China decided to open an interbank bond trading business at the National Interbank Lending Center, which was formally established. In the following years, this market developed relatively fast, and in June 2002, the bond counter market of commercial banks began to operate, which to a certain extent made the interbank bond market, which institutional investors dominate, expand through the counter trading for all kinds of investors in the whole society.In recent years, applying direct financing tools such as corporate bond issuance has become increasingly widespread. This paper takes Beijing Financial Court Case No. 1 as an example to study in detail the important reasons for the emergence of this type of infringement, focusing on the obligations and responsibilities of each participant, including the issuer Dalian Machine Tool Group, the intermediary bank Industrial Bank, and the investor Bluestone Capital Management. This paper aims to sort out the obligations and responsibilities of each participant in the inter-bank bond market to find out the reasons for the emergence of the phenomenon of misrepresentation and to explore the issues that appear to be suitable for this paper to find out the causes of misrepresentation, explore the operation rules and risk prevention measures of the interbank bond market that are suitable for China's national conditions, to solve the problems of misrepresentation, standardize the obligations and responsibilities of all parties, and promote the development of China's interbank bond market.

Design of Blockchain and Strategic Financing Service under the Platform Economy

The capital constrains and uncertainties in supply disruptions faced by small and medium-sized suppliers pose critical challenges for the development of e-commerce platforms. In response, platforms have begun offering direct financing (PDF) to their suppliers alongside traditional bank credit financing (BCF). Within the private (consortium) blockchain, the platform and the supplier (and the bank) achieve consensus on financial smart contract, enabling the execution of flexible contracts tailored to suppliers’ risk profile. We develop a game-theoretic model to examine the terms of smart contracts in different blockchains and further investigate the platform's optimal blockchain design. We find that PDF serves to safeguard the platform's commission income from high-interest BCF. Our analysis reveals that PDF is more likely to be provided to a risky supplier within the consortium blockchain, contrasting with outcomes observed within the private blockchain. As a result, the platform and the supplier could reach win-win, or win-lose outcomes within the private blockchain; while within the consortium blockchain, they tend to result in win-win or lose-win outcomes. Such incentive conflict could potentially hinder blockchain adoption. Our findings further provide the managerial insights guiding the platform's blockchain design: adopting consortium blockchain under moderate market potential and low or high supplier's risk, and adopting private blockchain otherwise. Furthermore, we consider the supplier's endogenous effort on reducing risk, and numerically demonstrate that blockchain may encourage or discourage the supplier's effort. Our research complements previous studies by investigating the interaction between the PDF provision and blockchain structures under uncertain supply disruption risk.

A Study of Administrative Regulations on Real Estate Project Finance and Recent PF Market Issues

Real estate project financing is the process by which real estate developers secure funding. This study categorizes the types of real estate finance and analyzes investment types based on the degree of financial companies’ participation. Financial companies invest in real estate development projects either through direct financing, using PF loans, or through indirect financing via mechanisms such as collective investment schemes. However, if a financial company is not merely a financial investor but also acts directly as a developing entity, appropriate regulation is required. From an investor protection perspective, the Financial Act aims to alleviate information asymmetry and enhance the financial soundness of financial companies. An important issue is the regulation of financial companies directly implementing real estate development projects. In particular, if a real estate development project fails, the implementer bears primary responsibility. Therefore, granting enforcement authority to a financial company that controls the funding mechanism may pose a risk to financial companies. Real estate financing suggests that administrative regulations should be organized in a way that facilitates collaboration among multiple administrative agencies. The regulatory frameworks of both the Construction Act and the Financial Act should govern financial companies’ participation in real estate development projects, necessitating close cooperation among different administrative agencies. In the complex and specialized administrative legislative process, overlapping responsibilities among multiple administrative agencies, such as those under the Real Estate Investment Company Act, may occur; conversely, gaps in responsibilities may also arise. With this in mind, it is necessary to acknowledge the role of financial companies beyond their fundraising function in real estate finance and to investigate the complex and diverse legal relationships that may arise as a result. In particular, given the current situation—marked by the downturn in the real estate PF market that began last year, the subsequent workout of Taeyoung Construction, and concerns about the deterioration of savings banks’ soundness—, it is crucial to explore an effective regulatory system for real estate development finance by integrating the Construction Act and the Financial Act.

The Impact of Enterprise Digitization on Investor Protection: Evidence from China

This paper takes China listed companies from 2011 to 2021 as a sample to explore the impact of digital transformation on investor protection. The study finds that the digital transformation of enterprises improves the level of investor protection, and the intermediary mechanism test shows that digital transformation improves the level of investor protection by improving corporate transparency. Further analysis shows that the level of enterprise risk exposure has a negative moderating effect in the process of improving the level of investor protection in the process of enterprise digital transformation, while executive shareholding and corporate ESG disclosure have a substitute role. This paper provides important enlightenment for protecting investors' interests, enhancing investors' investment confidence, and increasing the proportion of direct financing.

How much financing China needs to achieve carbon peak and carbon neutrality goals?

China requires financial support to achieve its dual‑carbon goals, the carbon emission peak and neutrality. However, currently, there lack of systematic estimation of the amount and structure of finance needed to achieve these goals. This paper attempts to fill the research gap by constructing a simultaneous equations model that characterizes the five core channels that finance contributes to carbon emission. Cointegration estimation, suitable for long-term forecasting, was used to estimate the amount of finance required for carbon emission paths planned by the International Energy Agency (2021) for China to achieve dual‑carbon goals. Finally, the finance structure was estimated using the Bootstrap method. We found that first, estimations of the simultaneous equations model perform better than the existing single equation models. Second, finance influences carbon emissions through economic development, employment (industry) structure, foreign direct investment, energy structure, and energy technology. There are long-run equilibrium relations between these variables. Third, the financing required for the dual‑carbon goals will increase from 2021 and grow at a relatively stable rate higher than history. The earlier carbon neutrality, the more financing is needed. Financing expansion to achieve the emissions peak before 2030 is small, but achieving carbon neutrality before 2060 is challenging. Fourth, the finance structures ranked by their shares in the total amount are indirect financing, other financings, direct financing, and shadow banking. The future paths of these financings have different fluctuation patterns due to their varied embedded risks.

Transformation of Waqf Asset Development Financing in Malaysia Through Diversified Direct Financing Methods

Transformation of Waqf Asset Development Financing in Malaysia Through Diversified Direct Financing Methods

Technological Innovations and Financial Markets Development in Sub-Saharan Africa

The aim of this article is to assess the effect of technological innovations on the development of financial markets in Sub-Saharan Africa over the period 1996-2021. The study was conducted in 48 sub-Saharan African countries. The theory of financial intermediation (McKinnon, 1973 and Shaw, 1973) was used for the entire analysis process. This evaluation was carried out using the ARDL model with the Pooled Mean Group (PMG) estimator. In addition, we develop a composite index of financial development following the work of Čihák et al., (2012) and Svirydzenka (2016). The results from this analysis show that in the short term, all the variables of interest internet, landline and cell phone have no significant effect on the development of direct finance; although in the long term, internet and landline have positive and significant effects. These results argue in favor of investing in technological innovations that are capable of stimulating financial markets, and whose effects can have a positive impact ......

Impact of financial development on the position in global value chain: An analysis from the perspective of R&D intensity

In this study, we provide a new explanation for the position in global value chain (GVC)—the impact of financial development—and explore the mechanism from the perspective of research and development (R&D) intensity. Based on GVC and financial development theories, we construct a general equilibrium model and find that financial development promotes product quality by increasing a company’s R&D investment intensity, thus affecting the position in global value chain. The theoretical analysis is supported by empirical evidence based on a panel data from 32 countries between 1995 and 2018. Considering that many developing countries are still trapped in the position with low value added in GVC, our findings provide an important solution—launching financial reforms such as developing direct financing, improving financial market flexibility, and enhancing operational efficiency in the market.

Financial inclusion through Islamic financial instruments: A catalyst for small and medium enterprises (SMEs)

The term Islamic finance is used to refer to financial activities conforming to Islamic Law (Sharia). One of the main principles of the Islamic finance system is the prohibition of the payment and the receipt of riba (interest) in a financial transaction. The term riba covers all forms of interest and is not limited to usury or excessive interest only. The most critical and significant implication of banning interest is the indirect prohibition of a “pure” debt security. The key point to bear in mind is that Islamic law does not recognize money and money instruments as a commodity but merely as a medium of exchange. Hence any return must be tied to an asset, or participation and risk-taking in a joint enterprise (such as partnerships). A pure debt security is replaced with an “asset-linked” security, direct financing of a real asset, and different forms of partnerships of which equity financing is the most desirable. In addition to prohibition of riba, there are several other important provisions which may affect financial transactions. These include the prohibition of ‘gharar’ (uncertainty or asymmetrical information), ‘maysir’ (gambling, speculation), hoarding, as well as trading in prohibited commodities (for example, pork and alcohol).

ON THE ISSUE OF LEGAL REGULATION OF REALTOR ACTIVITIES IN THE REPUBLIC OF KAZAKHSTAN

The Department of Analysis of the effectiveness of legislation of the RSE with the REM “Institute of Legislation and Legal Information of the Republic of Kazakhstan” regularly considers issues related to the development of specific proposals in order to improve legislation, which should contribute to the implementation of the legal policy of the Republic of Kazakhstan as a whole. Currently, the Republic of Kazakhstan is working on the implementation of the addresses of the First President of the Republic of Kazakhstan - Elbasy N.A. Nazarbayev “Strategy 2050: new political course of an established state” [1] and “The third modernization of Kazakhstan: global competitiveness”, as well as addresses of the President of the Republic of Kazakhstan K-Zh. K. Tokayev “Kazakhstan in a new reality: time for action” dated September 1, 2020 [2]. As part of this work, the Government of the Republic of Kazakhstan is carrying out large-scale work on the development of legislation in various areas of legal regulation. In order to provide legal support for the work of the Government of the Republic of Kazakhstan, as well as ensure the practical implementation of the instructions of the Head of State, it is necessary to work out the issue of scientific support for legislative activities in the Republic of Kazakhstan. Moreover, the Head of State embedded his intention to involve science in legislation, instructing in his next Address to the people of Kazakhstan “Unity of the people and systemic reforms are a solid foundation for the nation's prosperity” [3] to introduce direct financing of research institutes engaged in fundamental science. This article is devoted to the analysis of the effectiveness of realtor activities in the Republic of Kazakhstan, as well as the question of the feasibility of introducing independent legal regulation. In particular, we examined the issues of the current legal regulation of real estate activities in the Republic of Kazakhstan. A brief comparative analysis of existing problems in the legal regulation of this activity in relation to regulatory legal acts of higher legal force has been carried out. Conclusions are drawn on the issue of compliance of the introduction of separate legal regulation for realtors with the strategic goals of the Republic of Kazakhstan. The opinions of individual Kazakhstani experts on this issue were used.

On the need to address emanating threats to economic security in the State investment policy

Subject. The article examines new threats to economic security in the State investment policy that are growing quantitatively and transforming qualitatively. Objectives. The aim is to show ways and methods of improving the Russian State investment policy from the point of view of eliminating the threats to economic security. Methods. I performed a content analysis of the current legislation, a systems analysis of budget investments in derivative investment projects, depending on the characteristics of the main investment projects. The paper presents the fundamental distinctive features of derivative investment projects. Results. The study underpins the importance of identifying and analyzing the new threats to economic security, which are growing quantitatively and transforming qualitatively, in the State investment policy; systematizes the main methods of implementing the Russian State investment policy; outlines the ways to bolster investment activity and direct financing. It presents an objective critical analysis of the strategic planning document, i.e. the Concept of Technological Development for the Period until 2030, in accordance with which the Russian government is implementing the investment policy in high-tech areas. Conclusions. When considering threats to economic security in investment plans and processes, it is necessary to take account of high probability of attempts to implement derivative investment projects that threaten economic security.

The Impact of Financial Liberalization Policies on Income Inequality

<p style="text-align:justify"><br /> <span style="font-size:10.5pt"><span style="font-family:等线"><span dir="ltr" lang="EN-US" style="font-family:"Cambria",serif">This paper examines impacts of China’s financial liberalization policy on income inequality, through three channels: financial scale, financial structure and financial efficiency, an empirical analysis based on panel data of 30 provinces in China from 1996 to 2013 is conducted. The results confirm the Kuznets effect between financial scale, financial structure and income inequality. As the size of the financial sector expands, the financial structure is tilted toward direct financing, and the income gap among residents will experience a "reverse U-shaped" trend that rises first and then falls. Most of China has not yet passed the turning point, and is still in the upper bound of the "inverted U-shaped" curve. Financial liberalization policies will continue to exacerbate income inequality. The impact of financial efficiency on income distribution is quite different in different regions of China. After dividing the whole China into three regions according to the degree of economic development, it is found that the financial efficiency of the eastern and western regions has a Kuznets effect on the income gap, but compared with the eastern region, more provinces and cities in the western region have entered the stage of reducing the income inequality, and the financial development has a great impact on the western region. The effects of financial development on central China are weak, and income inequality increases with financial efficiency.</span></span></span></p>

Does the issuance of green bonds nudge environmental responsibility engagements? Evidence from the Chinese green bond market

Policymakers and managers have increasingly adopted green bonds as a direct financing tool to address environmental degradation and climate change in emerging economies; however, the increasing green washing sentiments in the green bond market raise questions on whether green bonds can nudge polluting businesses to achieve green transformation. Therefore, this study joins the controversial debate by investigating the impact of green bond issuance on corporate environmental responsibilities and the potential impact mechanisms and economic consequences. Using the data of Chinese listed enterprises from 2011 to 2020 and the staggered issuance of green bonds as plausibly exogenous shocks, we determine that the enterprises in the experimental group that issued green bonds increased their environmental performance compared to their counterparts. Furthermore, this positive link is maintains after a series of robustness tests. Moreover, we identify that green bond issuance plausibly enhances environmental responsibility engagements through two governance channels, namely, internal management and external supervision. This beneficial effect appears more pronounced for subsamples of firms in low-polluting industries, without environmental subsidies and with higher managerial abilities. Furthermore, economic consequences indicate that the issuance of green bonds primarily motivates speculative shareholder benefits, as evidenced by short-term increases in stock yields but with limited impact on the short-run financial performance. Overall, these findings offer new evidence supporting that green financing tools could play a helpful hand toward environmental sustainability.

An analysis of Sidbi's Direct Financing Program for MSMEs in Lucknow District

This study provides a critical analysis of SIDBI's recent involvement in the establishment of Micro, small and medium enterprises . In micro,small and medium units in Lucknow city, the study report proposes the use of direct finance schemes. It's also talked about how SIDBI's direct financing programs have helped small businesses thrive. In order to support the micro,small and medium units in the Lucknow District, this would assist organizations and other stakeholders in taking action.

The impact of social financing structures on different industry sectors: A new perspective based on time-varying and high-dimensional methods

<abstract> <p>With the continuous innovation of financial instruments, the financing structure presents a diversified development trend, and the proportion of direct financing in Aggregate Financing to the Real Economy (AFRE) has been increasing. We utilized monthly data from January 2002 to March 2023 to establish a time-varying spillover index model and a large TVP-VAR model in order to investigate the dynamic impact of the social financing structure on various industry sectors. The empirical results suggested that the impact of financing structure on different industry sectors varies. Direct financing had the least impact on the industry compared to on-balance-sheet financing and off-balance-sheet financing. Lagging effects had the most significant influence on all industries. Furthermore, since 2015, the impact of different industries on the proportion of direct financing has significantly changed, indicating that the impact of direct financing on different industries became apparent during the 'stock crash'. Moreover, the impact of different financing methods on the economic development of various industry sectors was susceptible to external events, and the degree of impact varied. Our results are useful in helping policy makers better understand the changes in different industries affected by the financing structure, which can inform their policy formulation.</p> </abstract>

Global practices in financing environmental investment-construction projects

Research on global practices in "green" financing has revealed that the most common approach is a mixed financing model, incorporating "green" financing (funds, certificates, carbon units’ sales), financial market resources, as well as contributions from the private and public sectors. Direct financing of projects aimed at reducing greenhouse gas emissions is one of the state’s roles. This can be accomplished through the allocation of public funds or the establishment of special funds for financing such projects. The state can also participate in creating favorable investment climate for "green" projects. Additionally, the state may be involved in developing and implementing standards and methodologies for the projects’ assessment and certification, as well as establishing a system for the registration and accounting of carbon units.

THE MARKET FOR THE PRODUCTION OF WHITE CABBAGE AS AN ELEMENT OF FOOD SECURITY

The article presents and analyzes the indicators of white cabbage production in Russia (by districts, subjects of the federation and categories of farms). The purpose of this study is to analyze the state of white cabbage production in the Russian Federation and in the world in terms of food security. Materials and methods. The information base of the research is information and scientific material, statistical data of the Food and Agriculture Organization of the United Nations (FAO), official periodicals of modern analytical centers. The study used general scientific methods of systematization, comparison and analysis of data. Study results. To increase the level of food security in Russia, it is necessary to ensure sustainable development of domestic production, physical and economic accessibility of high-quality food for the population. According to the new Food Security Doctrine, the strategic goal is to increase the export potential. The study revealed that about 70,150,406 tons of cabbage are produced. China is the largest cabbage producer in the world. In the Russian Federation, 14.3% of all cultivated areas of open ground crops are occupied for cabbage. The area under crop for cabbage in farms of all categories has decreased over the past six years. Many farmers and agricultural organizations refuse to grow cabbage due to its low profitability. The main cabbage production in 2022 is concentrated in the North Caucasus Federal District. In 2022, the volume of gross cabbage harvest amounted to 23,200.2 thousand tons. The current situation in the country makes it possible to implement import substitution of varieties and hybrids of white cabbage. Currently, the main task is to abandon the import of seeds of foreign breeding, and therefore it is important to focus on creating new hybrids that will be of high quality, good yield and shelf life, as well as resistance to diseases and pests. Conclusions. Today, the Russian Federation is under severe sanctions from the United States and European countries, so the issue of food security is acute. An important role in solving the problem of forming sufficient amounts of food resources belongs to the agro-industrial complex, which plays an important role in the country's economy. An important role belongs to the vegetable growing industry, which provides the population with a variety of vegetable products all year round. The country remains dependent on imported seeds, and for accelerated import substitution it is advisable to develop such forms of support as direct financing of seed production costs, provision of benefits, loans and guarantees. It is also necessary to develop a targeted state program for the transition of the industry to domestic seed material. According to analysts, Russia will be able to fully provide itself with seeds by 2025–2030.

Impact of Energy Efficiency and Financial Support on Green Upgrading in China’s Industrial Sector

The report from the 20th National Congress of China emphasizes the importance of focusing on the clean, low-carbon, and efficient use of energy, increasing financial support, and promoting green upgrading within the industrial sector. This paper, based on annual data, employs the entropy weight method to construct a comprehensive index reflecting the impact of green upgrading in industrial sectors. To delve deeper, it utilizes the DEA model to measure energy efficiency and its subdivision BCC model to break down energy efficiency into technical and scale efficiency. The financial support landscape is examined from the vantage points of both direct and indirect financing. Using a multivariate time series model, this paper thoroughly investigates the influence of energy efficiency and financial support on the green upgrading of the industrial sector. The findings reveal a significant positive impact of both energy efficiency and financial support on green upgrading in industrial industries. Notably, scale efficiency emerges as the primary driver of energy efficiency. Moreover, indirect financing proves to be more effective in promoting financial support than direct financing. The empirical results retain their robustness even after substituting explanatory variables. The study concludes by contextualizing the research findings within the current real-world scenario, offering practical insights, and proposing specific recommendations.

Funding of the activities of religious organizations in Ukraine

This article is devoted to the legal regulations pertaining to funding the activities of religious organizations in Ukraine. First, the analyses concern the direct financing of religious organizations from public funds (funding from the state budget programs for the restoration of religious architectural monuments, as well as the educational subventions that can be directed to private institutions of secondary education founded by religious organizations). However, financing religious organizations is also possible from other public funds, particularly local self-government budgets. The so-called “indirect” funding of religious organizations takes the form of tax benefits, discounts on natural gas and electricity, as well as free transfer of property. The analyses concerning the self-funding of religious organizations are focused on voluntary donations made by faithful as well as the economic activity of enterprises founded by religious organizations. The considerations aim to facilitate the choice of possible directions and types of activity of religious organizations, taking the provisions of financial law into account.

Budgetary Tools of Public Management of the Reconstruction and Restoration Processes in Local Communities of Ukraine

The article clarifies the essence and systematizes the principles of reconstruction and recovery processes in communities, substantiates the role of budgetary instruments in the public administration of these processes at the local level in Ukraine in war conditions and considering the prospects of post-war recovery. The main principles of reconstruction and recovery in Ukraine are considered, including the immediate start and gradual escalation of the process, increasing well-being based on the principles of justice, integration into the European Union, orientation to the process of better reconstruction for the future, stimulation of private investments, focus on reforms, transparency, accountability and rule of law, democratic participation and multi-stakeholder engagement, gender equality and sustainable development, etc. The main spheres of reconstruction and restoration in Ukrainian communities include both economic and social spheres, including reconstruction of infrastructure, housing stock, security and demining, social support, support of local enterprises, creation of new jobs, stimulation of economic development, etc. The role of the budget in the processes of reconstruction and recovery in communities was studied not only as a source of financing, but also considering its administrative potential. Along with the instruments of direct financing of reconstruction projects from the state and local budgets (local budgets, reserve fund, subventions, recovery funds, assistance of international partners), the importance of the administrative and organizational potential of the budget has been proven. It has been proven that the program-target budget is an important tool for public administration of reconstruction and recovery processes, as it provides strategic planning, targeted financing, prioritization of measures, determination of results, cost effectiveness, monitoring and evaluation, transparency and openness, public involvement. Considering the significant potential of the budget as an administrative tool, the direction of further research is determined by the theoretical justification of the essence, structure, goals, and objectives of the complex financial and budgetary mechanism of public administration of reconstruction and restoration processes in communities.