Economic Risk Research Articles

Heterogeneous shell growth of the neustonic goose barnacle Lepas anserifera

Floating materials of both natural and anthropogenic origin affect marine ecosystems and human economic activities. Although the tracking of floating materials is important to manage the economic risks, it is difficult to trace them back to the events of origin, such as tsunamis and underwater volcanic eruptions. The gooseneck barnacle Lepas anserifera, a rapid colonizer in pelagic environments, is a potential “natural logger” of floating materials. In this study, we performed temperature-controlled culture experiments and growth line staining in the laboratory to quantify the growth increments of shells (scutum and tergum) consisting the capitulum of L. anserifera separately, and to examine the effects of the temperature on their growth. Following calcein staining, the growth lines of L. anserifera were visualized under a fluorescent microscope, and gross (capitular length and width) and individual (scutum and tergum) shell growth were compared. Shells grew in twice as much in the capitular length direction than in the capitular width direction owing to the larger growth increases in the scutum than in the tergum. Growth increments were unaffected by temperatures in the range from 20°C to 30°C, although the growth appeared to slow down in September and October compared with August. The stable oxygen isotope composition (δ18O) of the shells represented the water temperature as previously known, and the present results showed that 18O enriched in scutum than tergum in most cases. Further understanding for the biomineralization process of barnacles is required for the precise application of environmental proxies in barnacle shells.

An analysis of measures to combat the risk of economic crime associated with post-disaster funding in South Africa

Purpose The purpose of this paper is to analyse the measures that could be taken to combat the risk of economic crime in the aftermath of South African disasters. Design/methodology/approach This paper used secondary sources including, but not limited to, institutional reports, newspaper articles and peer-reviewed academic journal articles. Findings The COVID-19 pandemic was used as an example in this paper to discuss the susceptibility of post-disaster funding to the risk of economic crime and to assess how the South African government attempted to combat this risk during the pandemic. The Auditor-General of South Africa (AGSA) conducted a real-time audit of the government’s essential COVID-19 initiatives in collaboration with the newly established Fusion Centre. Through their collaborative efforts, they successfully identified mismanaged funds, facilitated the recovery thereof and prosecuted individuals and entities involved. This paper found that to proactively combat economic crime in future post-disaster events, the collaborative use of the AGSA and the Fusion Centre, in conjunction with existing bodies established under the Disaster Management Act, should be considered. Originality/value This paper contributes to the body of knowledge in disaster risk management and forensic accountancy. As the frequency of disasters is expected to increase in the future, so will the economic crime risk associated with post-disaster funding. This paper demonstrates that post-disaster funding is especially susceptible to the risk of economic crime and it is therefore important to research methods to combat this problem and prevent further losses.

A health economics perspective on behavioural responses to climate change across geographic, socio-economic and demographic strata

This perspective examines the relationship between climate change, health outcomes, and behavioural responses across the life course. It identifies three primary channels through which climate change impacts behaviours which in turn affect health: increased morbidity driving healthcare demand and accessibility, reduced productivity and income affecting health care investments, and combined health and economic risks shaping migration patterns, dietary choices and human capital investment across the life course and generations. Climate-induced changes in behaviours exacerbate existing health-related and socio-economic vulnerabilities. While climate-related shocks elevate demand for healthcare services, disruptions in infrastructure hinder access, especially for the poorest, widening health inequities. Loss of income and disrupted employment further compound health and economic risks, pushing vulnerable communities towards informal care options and impoverishment tied to health expenditures. Increased health and economic risks are associated with migration affecting healthcare access and health outcomes. They also influence dietary choices, with health consequences. Finally, deteriorating prospects of leading a long, prosperous and healthy life may induce individuals to reduce their time horizon and assign lower values to long-term survival, impacting human capital investments across the life course and generations. Again, these impacts are prone to exhibit a social gradient with vulnerable individuals being more likely to give up on striving for a healthier life. Effective policies must integrate climate, health, and socioeconomic factors, considering long-term behavioural responses and their health and socio-economic implications. Adapting health financing mechanisms to account for climate risks and incentivise resilience-building behaviours within health and social care systems is essential for protecting health across the life course, and avoiding widening inequities.

The level of medical care accessibility in Russia: Regional differentiation

The need to consider economic risks and respond to demographic challenges pushes the issues of creating and maintaining the quality of regions’ human potential, as well as saving population health to the research agenda. The aim of the study is to investigate the resourcing of regional health care systems in Russia in order to determine the level of medical care accessibility. Methodologically, the paper relies on the concepts of systems and regional economics, labour economics. The study applies time series and comparative analyses, as well as index, score-rating methods, composite coefficients calculation. The data is the socioeconomic and health care statistics by federal districts for 2005–2022 taken from the Federal State Statistics Service of the Russian Federation. The paper finds that regions differ in terms of the level of the medical care accessibility. Reportedly, the Ural Federal District ranked high for the efficiency of regional health care systems in 2021, which, according to the analysis, is due to the developed systems of preventive and emergency care. Conversely, the Siberian and Far Eastern Federal Districts were at the bottom of the ranking because of the deficit of physicians in emergency departments and scarce health care financing. The findings may underlie the development of measures on the improvement of health care resourcing, management, and efficiency both at national and regional levels.

Multi-hazard direct economic loss risk assessment on the Tibet Plateau

Natural disasters are becoming increasingly regional, frequent, and complex. Semi-quantitative risk assessments based on risk indices or relative risk levels lack quantitative parameters to characterize losses adequately. This study focuses on earthquakes and geological disasters, quantitatively assessing the risk of probable maximum loss (PML) from multi-hazard on the Tibet Plateau (TP) in terms of both absolute and relative values. The results indicate that total PML from multi-hazard on the TP is estimated at 465.5 billion CNY, with a relative value of 5.3%. The total loss value of towns with very high absolute PML is estimated at 254.8 billion CNY, while the relative loss value of towns with very high relative PML is 25.1%. Towns with high absolute value of PML for multi-hazard may have higher fixed asset values, while those with high relative value imply higher vulnerability. Adjusting building structures and reducing the vulnerability of buildings could effectively mitigate the risk of disaster losses caused by multiple hazards.

Behaviours of farmed saltwater crocodiles (Crocodylus porosus) housed individually or in groups.

Saltwater crocodiles (Crocodylus porosus) are farmed in Australia primarily for their skins and meat. Commercially, they are raised in group pens as hatchlings and grower crocodiles and then moved to unitised (individual) pens for the final finishing stage when they are several years old. They will exhibit aggressive behaviour towards each other in captivity. Unitised pens can prevent animal injury and teeth marks on the skins but may result in other social restrictions. Research into behavioural housing preferences could assist the industry and inform the process of guideline development for optimal crocodile management and welfare. This study assessed the impacts of two housing systems, unitised or group pens, in 20 commercial finishing crocodiles through measuring behavioural profiles of individuals from video recordings, including housing preference when given a choice. Both pens included water and an above-water shelf, but the crocodiles in unitised pens could also access underneath the shelf. A threat perception test was applied to assess anxiety when housed individually or in groups. However, it was difficult to apply a standardised stimulus to all animals that reliably elicited a behavioural response. Further work would be needed to validate this test for commercial reptiles as the outcomes were not robust. The behavioural observation results showed clear differences in where the crocodiles spent their time across the day and in their activity levels between the pen types. However, interpretation of this variation was confounded by the physical and social differences between the pen types given the inconsistency in shelf access. Behaviours exhibited also differed given there were social opportunities in the group pens where individuals were observed engaged in both aggressive and non-aggressive contact interactions. In the free choice environment, crocodiles spent similar amounts of time in both unitised and group pens, suggesting there were features of both pen types that were attractive to the animals. However, skins were damaged from teeth marks highlighting the physical and economical risks of group housing. Further work could validate behavioural tests to quantify affective state impacts in different housing environments and whether social interactions do provide benefits for improving crocodile welfare.

Assessment of Economic Policy Uncertainty spillovers: A cross-border analysis of global and BRIC economies

This study empirically assesses the dynamics of variation in economic policy uncertainty over the financial markets of BRIC countries, including Brazil, Russia, India, and China. Using monthly frequency data from January 2003 to June 2023 and employing Diebold and Yilmaz (2012) spillover estimation framework, we find a significant influence of global economic policy uncertainty on the BRIC economies that varies with the time horizons. The findings show a total spillover of 35.65% in the global and BRIC economic policy uncertainty. The highest gross directional spillover is reported globally and in China, while Brazil shows the lowest directional gross economic policy uncertainty spillover. However, the global economic policy uncertainty transmits the highest net directional spillover. The study provides practical policy implications in adopting a comprehensive, globally informed approach to economic policy decisions and risk mitigation strategies to navigate the evolving landscape of economic policy uncertainties effectively.

Sovereign Credit Risk in Saudi Arabia, Morocco and Egypt

The purpose of this paper is to assess and predict sovereign credit risk for Egypt, Morroco and Saudi Arabia using credit default swap (CDS) spreads obtained from the DataStream database for the period from 2009 to 2022. Our approach consists of generating the implied default probability and the corresponding credit rating in order to estimate the term structure of the implied default probability using the Nelson–Siegel model. In order to validate the prediction from the probability term structure, we calculate the transition matrices based on the implied rating using the homogeneous Markov model. The main results show that, overall, the probabilities of defaulting in the long term are higher than those in the short term, which implies that the future outlook is more pessimistic given the events that occurred during the study period. Egypt seems to be the country with the most fragile economy, especially after 2009, likely because of the political events that marked the country at that time. The economies of Morocco and Saudi Arabia are more resilient in terms of both default probability and credit rating. These findings can help policymakers develop targeted strategies to mitigate economic risks and enhance stability, and they provide investors with valuable insights for managing long-term investment risks in these countries.

Revisiting the nexus between financialization and natural Resource efficiency through the lens of financial development and green industrial optimization

Responsible natural resource management has become critical for ensuring the effective use of resources jeopardizing future generations' needs. Financialization based on artificial intelligence, green finance, and lower economic risks are important in this respect. The objective of this study is to explore the impact of financialization and economic uncertainty on the natural resource market. The analysis covers the period from 1980 to 2021 and is performed for selected South Asian Association for Regional Cooperation (SAARC) countries. In addition, among economic financialization processes, artificial intelligence (AI) based financial management (FM) is more significant than domestic financialization strategies. For that purpose, Artificial Neural Network (ANN) method and pooled regression analysis are employed for the empirical analysis. According to the findings, economic uncertainty has a stronger influence than economic financialization. Therefore, risk mitigation plays a larger role in creating shocks in all macroeconomic indicators and, as a result, on the natural resource market. The accuracy measures to support the finding's robustness like the value of R2 is highly acceptable and errors are minimum (% MAPE is 5.06 which falls under the criteria of high accuracy) in both testing and training datasets approximately by 50%. In addition, the findings of Garson method reveal that economic uncertainty and AI based FM are significantly important for the natural resource market as their important values (0.27, 0.26, and 0.20) touch the maximum importance statistics (0.30). The study, therefore, suggests that authorities in South Asian countries should focus on AI-based financial advancement and integrate AI into the traditional financialization methods to upgrade the regional economic financial system, which will help in regulating and improving the efficiency of the resource market. The results also provide the graphical and tabulation formation of financialization and economic uncertainty in SAARC countries. Additionally, analysis on the chosen variable by suing PCA has also been made to transform the dataset. Along with it, the regional corporation is crucial for dwindling economic uncertainty and promoting a steady growth and sustainable environment through the maintenance of the natural resource market.

The interconnectedness and spillover effects among economic uncertainty, energy-related risks and sovereign risk in BRICS economies

ABSTRACT Emerging economies experiencing energy-intensive growth face increased energy price volatility, which could fuel macroeconomic instability with possible implications on their debt repayment capacity. This study implements a quantile vector autoregressive model on a dataset collected between April 2011 and July 2024 to examine the interplay among economic uncertainty, energy-related risks and sovereign risk in BRICS economies. The empirical results show these risk factors exhibit strong interconnectedness under low- and high-risk profiles. Under a low-risk profile, energy risks are transmitters in all countries except Russia and India. Sovereign risk receives shocks in Brazil, India and South Africa but transmits shocks in Russia and China, whereas economic risk is a shock transmitter in South Africa and India and plays the receiver role in Brazil, Russia and China. In high-risk conditions, economic risk is a shock transmitter in Russia and India but receives shocks in Brazil, China, and South Africa; Sovereign risk receives shocks in all countries except China while energy risk is a transmitter across countries except Russia. Therefore, the dynamics of the studied risks are driven by individual country heterogeneities including risk profile, economic structure, market conditions and energy trade status. Policymakers should combine energy, economic and debt management policies to promote economic stability and build crisis resilience. In conclusion, debt management and investment in renewable energy are alternative policy instruments to promote creditworthiness in emerging countries.

Country risk and political risk under investigation – recent trends, prospects, and implications

For many years, economic growth has been one the main objectives of economies around the world. Recently, the central focus has diverted from the quantitative to the qualitative approach. Mainstream research acknowledged that institutional quality along with country risk is among the most significant factors that contribute to the achievement of high economic development rates. Country risk is associated with the probability that investors or companies from a certain country will face greater instability or losses and includes financial, economic, and political risks. Lower political risk ranks first in the category of main drives that enable countries to attract more foreign direct investments and allow markets to operate efficiently. This article examined the recent evolutions in terms of the concept and main antecedents of the political risks, considering the current negative disruptions that economies were forced to experience, covering aspects related to health, wars, and economic downturns. The analysis identified that a high political risk negatively impacts demographics, environment, and the health system. The ability of countries to bounce back and develop a strong resilient economy toward adverse shocks depends on the institutional quality and the effectiveness of policymakers, who are responsible for elaborating efficient economic policies.

Economic and Ecological Benefits of SHM Techniques in Chemical Process Industry

High-performance machine components are involved in a wide range of industrial production processes. They play an important role in the provision of chemical products, pharmaceuticals, and energy resources. They require monitoring because they can fail during production due to corrosion and/or wear, which often means an increased risk to people and the environment. Periodic inspections with on-site test personnel often require a shutdown of the chemical plant. Ideally, an ultrasonic structural health monitoring (SHM) system could be used to provide continuous data on the structural integrity of these components while reducing or eliminating plant downtime. A plant shutdown is not only a high economic or supply risk but can also be energy intensive. In our presentation, we would like to give an overview of the technical requirements for an SHM system to be used in the chemical industry. Finally, the presentation will highlight the economic benefits of SHM as well as its contribution to energy savings and reduction of CO2 emissions per ton of chemical product produced.

FOOTPRINTS OF CITIES IN CLIMATE CHANGE - A MINI REVIEW

Climate change is a long-lasting change in weather conditions over a certain period, from tropics to poles. Anthropogenic activities are inextricably linked to climate change. It is important for governments to understand this relationship in order to discuss economic, health and other associated risks with the public and to inform public policy. The aim of this review is to harmonize the current understanding on this topic, focus on current breakthroughs in our knowledge and examine research priorities. The article begins with the backdrop on sources and emission trends of global warming gases in Cities, especially carbon dioxide (CO2); and their footprints in climate change. Further section delves into the impacts of climate change and changing environmental conditions on residents of Cities especially urban citizens of low- and average-income nations who are most susceptible. Furthermore, discussion continues on how cities can help to control climate change and its impacts. The article concludes with the discussions on the topic areas covered and how residents of cities can contribute in combating climate action through individual actions.

Multi-Scenario Model Predictive Control for Greenhouse Crop Production Considering Market Price Uncertainty

This paper presents a stochastic model predictive control (SMPC) strategy to maximize the economic profit of a greenhouse crop production. The strategy consists of an optimization problem that is solved with a multi-scenario MPC formulation (MS-MPC). It considers the uncertainty of market price by using its historical evolution per year as multiple price scenarios in the cost function. MS-MPC calculates a single set of dates to harvest and sell the crop production that optimizes profits for all the considered scenarios. In addition, MS-MPC determines the optimal temperature references that should be achieved inside the greenhouse for the growth of the crop. A case study for a Mediterranean tomato crop is simulated to analyze the performance of the developed MS-MPC strategy using a hierarchical control architecture with two layers. In the upper layer, MS-MPC calculations are executed following a receding horizon implementation. In the lower layer, regulatory control techniques are applied to reach the optimal temperature references by using natural ventilation and a heating system. Results show that MS-MPC can improve economic profits compared to the use of an average price scenario for the MPC calculations. <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">Note to Practitioners</i> —This paper was motivated by the need of greenhouse farmers for strategies that maximize profit considering market prices and crop production dynamics. It is not easy for them to make decisions to achieve such long-term objectives while minimizing economic risks, because market prices are very difficult to predict. As a solution, this work presents a novel control strategy to maximize profits by means of automatic selection of the best possible dates to harvest and sell the crop production. This selection is made thanks to considering the uncertainty of market prices in the control strategy by evaluating different scenarios, which are recorded evolutions of the prices from previous years. Although the strategy was tested in simulation, results suggest that using multiple scenarios of historical prices is better for the optimization of profits than just considering an average yearly trend of prices. The more scenarios are considered, the more protection against possible evolution of market prices is obtained. In future research, this control strategy could be extended to include other uncertainties of factors affecting decision making, such as weather forecasts.

Global impacts of an extreme solar particle event under different geomagnetic field strengths

Solar particle events (SPEs) are short-lived bursts of high-energy particles from the solar atmosphere and are widely recognized as posing significant economic risks to modern society. Most SPEs are relatively weak and have minor impacts on the Earth's environment, but historic records contain much stronger SPEs which have the potential to alter atmospheric chemistry, impacting climate and biological life. The impacts of such strong SPEs would be far more severe when the Earth's protective geomagnetic field is weak, such as during past geomagnetic excursions or reversals. Here, we model the impacts of an extreme SPE under different geomagnetic field strengths, focusing on changes in atmospheric chemistry and surface radiation using the atmosphere-ocean-chemistry-climate model SOCOL3-MPIOM and the radiation transfer model LibRadtran. Under current geomagnetic conditions, an extreme SPE would increase NOx concentrations in the polar stratosphere and mesosphere, causing reductions in extratropical stratospheric ozone lasting for about a year. In contrast, with no geomagnetic field, there would be a substantial increase in NOx throughout the entire atmosphere, resulting in severe stratospheric ozone depletion for several years. The resulting ground-level ultraviolet (UV) radiation would remain elevated for up to 6 y, leading to increases in UV index up to 20 to 25% and solar-induced DNA damage rates by 40 to 50%. The potential evolutionary impacts of past extreme SPEs remain an important question, while the risks they pose to human health in modern conditions continue to be underestimated.

Preventing heat-related deaths: The urgent need for a global early warning system for heat

Heatwaves are the deadliest weather hazard and people and societies across the world continue to suffer from heat-related impacts. Future climate projections show a troubling increase in cross-sectoral impacts including health and economic risk presented by heatwaves. Many weather hazards such as floods and droughts already have a type of Early Warning System (EWS) or Global Alert System, but a global heat early warning system currently does not exist. An accurate heat EWS can save lives and can promote heat adaptation across society. Here, we (1) explore the history of Early Warning Systems as framed using the Disaster Risk Reduction paradigms and (2) identify potential barriers to an integrated Global Heat Early Warning system. Finally, we discuss what we have learned from history and the identified current barriers and outline a vision of a Global Heat Early Warning system around four key themes, incorporating systems for low-, middle-, and high-income countries and requiring cross-sectoral, cross-government, and interdisciplinary collaboration.

WITHDRAWN: Overseas Operations and Corporate Financial Asset Allocation

Using Chinese listed companies’ data from the 2008–2018 period, this study investigates the impact of overseas operations, proxied by overseas subsidiaries, on financial asset allocation. The results show that, first, in general, enterprises that participate in overseas operations have a higher level of financial asset allocation. Second, heterogeneity analysis at the micro level shows that overseas operations promote both hedged and non-hedged financial assets. The relationship between overseas operations and financial asset allocation mainly exists when the parent company faces more serious financing constraints, no overseas returned executives are present in the parent company, overseas subsidiaries have inconsistent business with the parent, and overseas subsidiaries experience losses. Third, heterogeneity analysis at the macro level shows that compared with overseas operations in Organization for Economic Co-operation and Development (OECD) countries, overseas operations in non-OECD countries have a higher level of financial asset allocation. Furthermore, compared with overseas operations in non-Belt and Road countries, overseas operations in Belt and Road countries have a higher level of financial asset allocation. Overseas operations mainly play a role in promoting financial asset allocation in cases of high economic risk, high political risk, and numerous investment opportunities in areas where overseas operations are located. Fourth, financial asset allocation is beneficial for reducing cash flow fluctuations and operational risk of multinational enterprises, and acts like a reservoir. This study advances research on the determinants of financial asset allocation from the unique perspective of the overseas investment channel, which provides some implications for the Chinese government on its “Go Global” and Belt and Road strategies and realizing financial development to serve the Chinese economy.

Risk Management in Implementation City Road Project in Padang City

Risks can have an impact on the productivity, performance, quality and cost limits of a project and risks can be said to be consequences that may occur unexpectedly. The success of a construction project really depends on the ability of project management to manage the risks that occur. The role of transportation in the city of Padang is to support the economic, education, tourism and defense and security sectors. Construction projects are a dynamic field and contain risks. The aim of this research is to identify risks and carry out risk analysis in the implementation of city road construction projects in the city of Padang as well as carry out risk responses for risk ownership in order to reduce the consequences caused by these risks. This research uses primary and secondary data which will later become a questionnaire and conduct interviews. Questionnaires were distributed to respondents, namely contractors, the results of the questionnaire calculation analysis using the Severity Index (SI) method from during the implementation of urban road construction in the city of Padang, 47 (forty seven) risks were identified based on activities at the project implementation stage. The risks identified are 2 (two) political risks, 7 (seven) environmental risks, 2 (two) planning risks, 2 (two) marketing risks, 3 (three) economic risks, 1 (one) financial risk, 6 ( six) natural risks, 7 (seven) project risks, 7 (seven) technical risks, 2 (two) human risks, 3 (three) criminal risks and 5 (five) safety risks. Of the identified risks, an analysis of the level of risk acceptance was carried out which showed that there were 23 (twenty-three) risks that were included in the highest risk category or unacceptable risk category (Unacceptable) and 24 (twenty-four) risks that were included in the risk category. not expected (Undesirable). Ownership of the greatest risks is the responsibility of the contractor because during the project, the contractor has a central role as controlling the overall course of the project.

Study on Overseas Expansion Strategies for Small and Medium-Sized Korean Construction Companies Using PEST Analysis

The purpose of this study is to research overseas expansion strategies for small and medium-sized construction companies(SMCCs) in South Korea. The research methodology employs PEST (Political, Economic, Social, and Technological) analysis within the construction industry. Findings suggest increased investment in research and development, adoption of eco-friendly technologies, and localization strategies. By enhancing competitiveness through advanced technology adoption and strengthening sustainable practices aligned with global standards, firms can mitigate political and economic risks. Policy implications include collaboration with government and relevant agencies to support Official Development Assistance (ODA) projects, provide financial assistance, manage risks, and establish integrated information platforms. Moreover, enhancing capabilities through education and consulting programs in technology, law, finance, and risk management prepares firms for international expansion. This study offers specific solutions to Korean small and medium-sized construction companies, emphasizing enhanced policy support to successfully pursue expansion and growth opportunities in the global market.

Analysis of the Political and Economic Purpose and Risk of China’s Lithium Resource Development in Africa

Analysis of the Political and Economic Purpose and Risk of China’s Lithium Resource Development in Africa