Financial Reform Research Articles

Digital Financial Inclusion, Capital Mismatch and High-Quality Development of the Real Economy

Based on the analysis of the mechanism of digital inclusive finance affecting the high-quality development of the real economy, this study empirically examines the direct effect and spatial spillover effect of digital inclusive finance on the quality of real economic development using the spatial Durbin model with the provincial data from 2011-2022 and examines the mediating effect of capital mismatch. The study finds that: digital inclusive finance has a positive driving effect on the quality of real economic development, with positive total and direct effects, but negative spatial spillover effects; capital mismatch is an important mechanism for digital inclusive finance to promote the high-quality development of the real economy. Therefore, it is recommended that the government create a digital inclusive financial ecosystem, deepen financial market reform, and promote the high-quality development of the regional real economy.

What shapes populists’ economic policy impact? An analysis of financial market reform in Hungary and Poland

ABSTRACT The paper seeks to understand the factors that shape populist radical right parties’ economic policies. While there is a good understanding of how these parties’ core ideology of nativism and authoritarianism shapes social policies, we know less about economic policies. With few exceptions, the insights of this literature have also not travelled to East-Central Europe, despite the strength of the populist right in this region. Instead, authors writing on the region focus on the social coalitions forged by populist parties as an explanation for policies. These authors however do not focus on the role of populism in policymaking. Our paper therefore asks whether the ideological literature can travel to economic policies as well, and specifically to the cases of Hungary and Poland. Drawing on the evidence of financial market reforms under the Fidesz and PiS rule in Hungary and Poland, and a congruence analysis testing the predictive power of existing approaches, we show that a combination of ideological and material factors is needed to explain observed economic policies.

Study on the Development of Offshore RMB Market and Its Impact on the International Financial System

The internationalization of the Chinese yuan responds to challenges with the US dollar's dominance, spurred by events like the subprime crisis and unlimited quantitative easing. China's economic stature necessitates yuan's global role. Its journey involves five stages, from border trade usage to SDR inclusion and presence in global indices. Offshore markets are pivotal, facilitating capital flows and meeting investor needs. Financial regulatory reforms align with market dynamics, enhancing transparency and stability. This study explores the symbiotic relationship between yuan internationalization and financial regulatory reforms, offering theoretical insights and policy recommendations for China's financial evolution and yuan's global ascent.

Sustaining progress towards universal health coverage amidst a full-scale war: learning from Ukraine.

In the aftermath of Russia's military response to the 2014 Revolution of Dignity, the government of Ukraine implemented a package of health financing reforms underpinned by universal health coverage (UHC) principles. By the time of Russia's full-scale invasion of Ukraine in February 2022, the new systems and institutions envisaged in the reforms were largely established. In this Commentary article, we explain how these attributes strengthened the Ukrainian health system's response to the impacts of the war. Ukraine's experience highlights the role that health financing arrangements, designed in accordance with UHC principles, can play in strengthening health system resilience.

Exploratory analysis on payment mechanisms to Community Mental Health Centers in Chile using mixed grounded theory.

Research on psychiatric deinstitutionalization has neglected that reforms in this field are nested in a health system that has undergone financial reforms. This subordination could introduce incentives that are misaligned with new mental health policies. According to Chile's National Mental Health Plan, this would be the case in the Community Mental Health Centers (CMHC). The goal is to understand how the CMHCpayment mechanism is a potential incentive for community mental health. A mixed quantitative-qualitative convergent study using grounded theory. We collected administrative production data between 2010 and 2020. Following the payment mechanism theory, we interviewed 25 payers, providers, and user experts. We integrated the results through selective coding. This article presents the relevant results of mixed selective integration. Seven payment mechanisms implemented heterogeneously in the country's CMHC are recognized. They respond to three schemes subject to rate limits and prospective public budget. They differ in the payment unit. They are associated with implementing the community mental health model negatively affecting users, the services provided, the human resources available, and the governance adopted. Governance, management, and payment unit conditions favoring the community mental health model are identified. A disjointed set of heterogeneously implemented payment schemes negatively affects the community mental health model. Formulating an explicit financing policy for mental health that is complementary to existing policies is necessary and possible.

Application of Mobile Telephony to Improve Medication Adherence in Type 2 Diabetes Patients

Therapeutic failure, poor quality of life and high economic costs have been linked to poor adherence to medication in Type 2 diabetes (T2D) patients. This paper aims to assess patients’ glycemic control, knowledge of T2D and adherence to medications, and evaluate the impact of mobile telephone-based intervention on these indices. A one-year retrospective review of pharmacy refill records was followed by a 6-months’ randomized controlled intervention conducted among 121 T2D patients in a secondary health care facility in Nigeria. Participants were assigned to control (n = 60) and intervention (n = 61) groups. The intervention comprised twice-weekly short message service (SMS) follow-up messaging to the intervention group alongside usual healthcare services. Control group received no SMS. Primary (HbA1c) and secondary (knowledge and adherence) outcome indicators were measured and compared pre- and post-intervention. The same copy of questionnaire was administered at baseline and post-intervention to both groups. Chi-square test was used to examine association of variables while two-sample t-test was conducted to compare mean pre- and post- intervention scores in both groups at p<0.05. The study revealed that intervention significantly improved glycemic control (HbA1c reduction) (p = 0.01). For the control group, mean pre- and post- intervention knowledge scores were 2.798 and 3.118 respectively (t = 1.1368, p = 0.2705) while intervention group recorded 2.714 and 4.193 respectively (t = 5.6772, p<0.001) on a 5-point Likert scale. Pre- and post- intervention adherence scores for control group were 3.804 and 4.013 respectively, (t = 0.2343, p = 0.8182) while intervention group had 3.430 and 6.859 respectively (t = 6.3216, p>0.001) on the 8-point Morisky Medication Adherence Scale (MMAS-8). The study concluded that patients initially had poor glycemic control, fair knowledge of T2D and low adherence to medications. SMS intervention significantly improved all three indices. Policy reforms in healthcare financing is recommended for sustainable provision of mhealth follow-up in diabetes care.

COVID-19 pandemic, oil prices and Saudi stock market: empirical evidence from ARDL modeling and Bayer–Hanck cointegration approach

In 2020, the world experienced several significant events, including the coronavirus (COVID-19) pandemic and the collapse of international crude oil prices. The rapid spread of this pandemic has dramatic impacts on financial markets all over the world, thereby increasing market risk aversion in an unprecedented way since the subprime financial crisis. The decline in stock markets implied volatilities of equity and oil prices, thereby heightening turmoil in global financial markets despite comprehensive and substantial financial reforms. To this end, we investigated the likely effects of this pandemic on the Saudi stock market while controlling for oil prices based on daily data for a period from 1/1/2020 to 19/9/2022. To ascertain the existence of a long-run equilibrium relationship between the variables, we applied autoregressive distributed lag (ARDL) modeling and the error correction model, with this ultimately revealing the existence of strong cointegration in the long run. The ARDL bounds test was found to be robust by combined cointegration tests, thus providing further evidence of a strong relationship in the long run. Granger causality tests also yielded evidence of causality between the variables in both directions. The total COVID-19 confirmed cases and oil prices also caused movements in stock returns in the short run. Our findings have some prominent implications for asset managers and policymakers to improve stock market efficiency and boost global economic activity. Saudi authorities can consequently remove the regulatory and legal obstacles to develop their stock market and better improve the risk management, which will allow to make quick decisions in response to any oil price volatilities. Policymakers should also adopt proactive strategies that can comfort stock investors’ anxieties over the increasing oil price volatilities. Finally, the findings should be treated with some cautions because of the limited sample size and the tests’ statistical inference. Nevertheless, they do open opportunities for further studies to look in more detail at how the COVID-19 pandemic affected, over the short and long run, monetary and fiscal policy coordination, financial stability, and various other macroeconomic indicators in Saudi Arabia.

Improving access to primary health care through financial innovation in rural China: a quasi-experimental synthetic difference-in-differences approach

BackgroundInadequate financing constrains primary healthcare (PHC) capacity in many low- and middle-income countries, particularly in rural areas. This study evaluates an innovative PHC financing reform in rural China that aimed to improve access to healthcare services through supply-side integration and the establishment of a designated PHC fund.MethodsWe employed a quasi-experimental synthetic difference-in-differences (SDID) approach to analyze county-level panel data from Chongqing Province, China, spanning from 2009 to 2018. The study compared the impact of the reform on PHC access and per capita health expenditures in Pengshui County with 37 other control counties (districts). We assessed the reform’s impact on two key outcomes: the share of outpatient visits at PHC facilities and per capita total PHC expenditure.ResultsThe reform led to a significant increase in the share of outpatient visits at PHC facilities (14.92% points; 95% CI: 6.59–23.24) and an increase in per capita total PHC expenditure (87.30 CNY; 95% CI: 3.71-170.88) in Pengshui County compared to the synthetic control. These effects were robust across alternative model specifications and increased in magnitude over time, highlighting the effectiveness of the integrated financing model in enhancing PHC capacity and access in rural China.ConclusionsThis research presents compelling evidence demonstrating that horizontal integration in PHC financing significantly improved utilization and resource allocation in rural primary care settings in China. This reform serves as a pivotal model for resource-limited environments, demonstrating how supply-side financing integration can bolster PHC and facilitate progress toward universal health coverage. The findings underscore the importance of sustainable financing mechanisms and the need for policy commitment to achieve equitable healthcare access.

Learning in Lending: The World Bank’s Organisational Learning Journey in Albanian Health Financing Reform Projects, 1994–2022

Abstract Fostering a learning culture is crucial for aid and development organisations to address the complexities and uncertainties in their operating environments. This case study examines the World Bank’s learning processes in lending projects, focusing on the Albanian health financing reforms from 1994 to 2022. Using the Learning in Lending conceptual framework developed by the World Bank’s Independent Evaluation Group, the qualitative analysis of World Bank documents and reports offers valuable insights into the dynamics of learning processes in health projects. The findings illustrate a feedback loop process encompassing three distinct steps and reveal three types of learning: learning into lending, learning while lending, and learning from lending. By shedding light on the intricacies of the World Bank’s learning processes in health lending projects, this study not only deepens our understanding of how the organisation learns from its experience but also highlights the shortcomings and limitations of the process. Moreover, it emphasises the dual value of learning for multilateral and aid organisations, such as the World Bank, namely improving project results and addressing challenging developmental issues.

Can performance-based financing improve efficiency of health centers in Ethiopia? A Malmquist Productivity Index analysis

IntroductionThe Ethiopian government has introduced several healthcare financing reforms intending to improve efficiency. Piloting implementation of performance-based financing is one of these actions. The purpose of this research is to assess the efficiency of healthcare facilities that have implemented performance-based financing compared to those that have not.MethodsEfficiency was measured using a nonparametric data envelopment analysis and the Malmquist Productivity Index technique. Total factor productivity change, technical change, and technological change are compared across eight sampled healthcare facilities that are implementing performance-based financing and eight that are not in Ethiopia.ResultsHealth facilities implementing performance-based financing have a mean technical efficiency score of 64%, allowing for a potential 36% reduction in inputs without affecting outputs. Their scale efficiency is 88%, indicating a potential 12% increase in total outputs without expanding facilities. In contrast, facilities not implementing performance-based financing have a mean technical efficiency score of 62%, with a potential for 38% input reduction without affecting outputs. Their scale efficiency is 87%, suggesting a potential 13% increase in total outputs without scaling up facilities. Among the 16 healthcare facilities observed, seven experienced a decline in the mean total productivity, while one remained stagnant. The remaining eight facilities witnessed an increase in productivity. The healthcare facilities implementing performance-based financing showed a 1.3% decrease in mean total productivity during the observed period. Among them, five showed an increase and three showed a decrease in the total factor of productivity. The mean total factor of productivity of all healthcare facilities not implementing performance-based financing remained stagnant over the three-year period (2019–2021), with four showing an increase and four showing a decrease in total productivity.ConclusionsThe study concludes that implementing performance-based financing did not improve productivity levels among healthcare facilities over three years. In fact, productivity decreased among the facilities implementing performance-based financing, while those not implementing it remained stagnant. This shows health facilities that implement performance-based financing tend to utilize more resources for similar outputs, contradicting the anticipated efficiency improvement.

Opini Audit, Nilai Aset, Dan Kemandirian Daerah Sebagai Determinan Audit Delay: Studi Empiris Pada Pemerintah Provinsi Di Indonesia 2018-2021

Since 2003, Indonesia has gone through a financial reform. Based on Law No. 13/2004, the Audit Board of Indonesia (BPK) is required to submit the audit report (LHP) including the audit opinion to the Regional People’s Representative Council (DPRD) no later than 2 (two) months after the unaudited financial report is submitted by the local government. This becomes BPK's guideline in completing its audit to avoid delays. During 2017-2021, the audit opinion on local government financial reports (LKPD) has increased. This increase in opinion includes an increase in the unqualified opinion (WTP) to 92.4% of the 2021 financial statements from 76% in 2017. This study aims to answer research gaps related to the effect of audit opinion, local government size through asset value as a proxy, and local autonomy on audit delay. Furthermore, it is important to obtain empirical evidence about the effect of opinion, local government size, and local autonomy on audit delay.

The green finance pilot policy and investment efficiency of industrial enterprises

ABSTRACT How does the Green Finance Pilot Policy (GFPP) in China impact the investment efficiency (IE) of industrial enterprises? Utilizing the establishment of green finance reform and innovation pilot zones in eight regions across five provinces in 2017 as a quasi-natural experiment, this paper applies the difference-in-differences method to assess the impact of the GFPP on the IE in the industrial sector. Our findings reveal that the GFPP significantly boosts IE by addressing issues of overinvestment. Furthermore, the GFPP enhances IE by reducing debt financing and improving information transparency. We recommend that policymakers further promote the GFPP and strengthen information disclosure regulations to guide rational investment in industrial enterprises.

LITERATUR REVIEW: REFORMASI ANGGARAN DAERAH DAN AKUNTANSI KEUANGAN DAERAH

This literature study was carried out with the aim of knowing the implementation and analyzing budget and financial accounting reforms in regional government. This research uses a literature review or what is also known as a literature review. Based on the results of research conducted on the Google Scholar site, 15 articles were determined that met the criteria determined by researchers from a total review of 15,400 articles published on the Google Scholar site in the 2014-2024 period. The findings obtained from the results of the literature review are that in this post-reform era, regional budget management is required to be transparent and accountable. The financial accounting system during the reform period applies the accrual principle which is expected to produce specific, complete and informative descriptions of regional government financial reporting.

Influence and Mechanism of Green Finance on Environmental Violations in Heavy-Polluting Enterprises —A Quasi-Experimental Design Based on China’s Green Finance Reform and Innovation Pilot Zone Policy

Influence and Mechanism of Green Finance on Environmental Violations in Heavy-Polluting Enterprises —A Quasi-Experimental Design Based on China’s Green Finance Reform and Innovation Pilot Zone Policy

The impact of green finance on companies’ overcapacity: Evidence from green financial reform and innovation policy in China

The Green Financial Reform and Innovation (GFRI) policy not only serves as a crucial tool for facilitating a comprehensive transition towards sustainable practices in economic and social development but also has a significant influence on the operational activities of companies. However, there is limited research on whether the GFRI policy can affect companies’ overcapacity. To address this gap, we use data from the China Stock Market & Accounting Research Database and the Chinese Research Data Services Platform to evaluate the impact of green finance on companies’ overcapacity. The results show that the GFRI policy can effectively alleviate companies’ overcapacity. Moreover, the GFRI policy can alleviate companies’ overcapacity by strengthening market competition, enhancing financing constraints, and promoting innovation. Further, the GFRI policy exerts a more pronounced effect on alleviating overcapacity in non-labor-intensive companies, companies in heavily polluting industries, and companies in regions with weak environmental supervision. This paper not only supplements the relevant literature on alleviating overcapacity but also provides more theoretical support for promoting a national green financial system in practice.

Does bank competition improve borrower welfare? Evidence from China

Whether borrowers can directly benefit from bank loans is an important criterion for assessing the economic effect of bank competition. Based on the increasingly fierce competition in China's lending market, we establish a bargain model to investigate the internal mechanism through which bank loan competition benefits borrowers. We then construct a two-tier stochastic frontier model to measure borrower payoff in loans and apply the Lerner index to investigate bank loan competition. We employ the data of 82 Chinese commercial banks between 2014 and 2021 to study how bank loan competition impacts borrower welfare. The results show, first, that the higher the degree of lending market competition, the greater the loss banks suffer from lengthy loan agreement negotiation processes, and the better off borrowers are. Second, a bank's dominant position in loan negotiation leads to net welfare losses and higher financing costs for borrowers. Third, loan competition results in better financial service to the real economy by offering net welfare gains to borrowers. This study not only enriches the literature on the micro-economic effects of bank competition, but also provides policy implications to both deepen financial marketization reform and accelerate construction of efficient institutional mechanisms to infuse finance into the real economy.

The Fiscal Space for Health in Vietnam: Challenges from Population Aging

Vietnam's population is aging, leading to a higher proportion of elderly individuals. Despite significant health financing reforms, But changes in epidemiology, demographics, and growing demand for health care will continue to put pressure on health spending. This paper examines the fiscal space for health in Vietnam amidst population aging by analyzing data from 2009 to 2020. Findings reveal that healthcare resources have not kept pace with the escalating demands due to the aging of Vietnam's population faster than forecast. Total health expenditure as a percentage of GDP shows this clear increase. Private healthcare spending, particularly out-of-pocket expenses, is on the rise. Spending from the health insurance fund also increases every year,, placing future burdens on young workers. In addition, the State budget allocations for healthcare have also grown, but economic growth will compensate for this shortfall.

Harnessing the green frontier: The impact of green finance reform and digitalization on corporate green innovation

This paper empirically examines the impact of green finance reform and digitalization on corporate green innovation among non-financial and real estate listed companies in China's capital market using a generalized difference-in-differences method. The results indicate that green finance reform coupled with digital transformation significantly enhances the level of corporate green innovation. Further, heterogeneity tests reveal that the promoting effect of green finance reform and digitalization on corporate green innovation is more pronounced in non-state-owned and manufacturing enterprises.

Exploring the dynamics of urban energy efficiency in China: A double machine learning analysis of green finance influence

Analysing the impact of green finance policies on urban energy efficiency contributes to finding solutions to promote the development of China's low-carbon energy system and the global reduction of greenhouse gas emissions. Utilizing Chinese urban data from 2006 to 2021, the study employs an enhanced non-radial distance function (NDDF) model to evaluate the energy efficiency of 282 prefecture-level cities. It examines the 'Green Finance Reform and Innovation Pilot Zone' policy as a quasi-natural experiment. It uses a double machine learning model to analyze its effect on urban energy efficiency and its mechanisms. The research demonstrates that green finance policies significantly improve energy efficiency, mainly through strengthening environmental regulation, fostering green technology innovation, and optimizing industrial structure. Additionally, an in-depth analysis of regional heterogeneity reveals variations in the policy's effectiveness across eastern, central, and western regions and between resource-rich and resource-poor cities. The findings suggest that the efficacy of green finance policies, while generally positive, is influenced by regional economic development and resource endowment differences. The study suggests targeted strategies to improve the green finance system, customize policies according to regional specifics, incentivize corporate green innovation, and foster cross-sectoral collaboration. By offering novel insights into sustainable development and providing actionable policy recommendations, this research contributes to advancing Chinese urban centres' economic and environmental sustainability through the strategic application of green finance.

Did the nationwide implementation of electronic fund management in the Indian employment guarantee scheme result in reduced expenditures? A re‐examination of the evidence

AbstractDigital tools are increasingly being used in welfare programmes to reduce corruption and increase transparency. Banerjee et al. (2020, E‐governance, accountability, and leakage in public programmes: experimental evidence from a financial management reform in India. American Economic Journal: Applied Economics. https://doi.org/10.1257/app.20180302) evaluate the effectiveness of one such intervention. In a later section of their paper, they use a Two‐Way Fixed Effects (TWFE) specification to examine the consequences of the nationwide scale of an electronic funds management system in India's workfare programme, and report that it reduced expenditures by 19%. The present paper extends its analysis by (a) exploiting the recent literature that disaggregates the TWFE coefficient in the presence of staggered treatment timing to pinpoint sources of identifying variation and (b) attempting to uncover heterogeneity in treatment effects. We find that certain problematic comparisons have a large weight in the TWFE coefficient. Further, an event study analysis of the six constituent and valid comparisons shows that there is no support for parallel trends, so lag coefficients cannot be vested with causal interpretation. Our results imply that large‐scale evaluations, because of the very diversity they encompass, need to explicitly account for the factors that are responsible for programme effectiveness.