Financial Agents Research Articles

Regional Health Accounts for Pakistan—Provincial and District Health Expenditures and the Degree of Districts Fiscal Autonomy on Health.

Since May 2009 the first National Health Accounts (NHA) for Pakistan have been finalised and published by Federal Bureau of Statistics (FBS) in cooperation with German Technical Cooperation (GTZ). This paper goes one step ahead the report and analyses in more detail the regional differences in health expenditure structures in Pakistan. The further analyses can be divided into four parts: health expenditures in provinces (Provincial Health Accounts, PHA),2 Punjab provincial and district governments health expenditures and its comparison with ADB figures, all districts of Pakistan and comparison between total district government and provincial government expenditure for each province; the latter calculation is applied as indication for the degree of fiscal autonomy of the districts in each province. Consequently we first analyse the provincial health expenditures by Financial Agents and compare them between the provinces which leads to very heterogeneous results (Section 2); the per capita health expenditures differ from 16 to 23 USD. Secondly, we compare NHA results on Punjab district government with available ADB results and present differences in methods as possible reasons for different results (Section 3). Third, we analyse district data of all district governments in all four Pakistani provinces on the level of detailed function codes in Section 4; the aim is to discover regional differences between districts of the same as well as of different provinces. Fourth, we analyse in Section 5 the degree of fiscal autonomy on health of the districts in each province; therefore we review the ordinance description and compare total district government with total provincial government expenditures per province. Finally we give recommendations for future rounds of NHA in Pakistan regarding formats and necessities of detailed health expenditure data collection to ensure evidence based decision-making not only on federal, but also on provincial and district level. JEL classification: H51, I1, O18, R1 Keywords: National Health Accounts, Health Expenditures, Regional Comparison, Regional Accounts, Fiscal Autonomy, Pakistan

Identifying farmers' preferences for types of credit and its market structure in rural Benin using the conjoint analysis approach

PurposeThis study analyzes farmers' preferences for agricultural credit and its market structure in rural Benin using the conjoint analysis approach.Design/methodology/approachThe data used come from primary sources collected from 228 randomly selected farmers. The conjoint analysis approach was used to produce the results. The bias associated with the heteroscedasticity of the error terms was fixed using the weighted least squares estimation method. Agricultural credit markets were segmented using the Calinski algorithm.FindingsThe study results reveal that farmers prefer a long-term agricultural credit with a low interest rate received via mobile banking. The interaction between a type of credit with collateral and a low interest rate is positively correlated with farmers' credit demand. The authors also found that agricultural credit markets are heterogeneous because of the heterogeneity in farmers' credit demand. This result has led to three different rural credit market segments identified in the selected study's sites. The market share simulation reveals a significant market share for the type of credit preferred by farmers in two segments.Research limitations/implicationsThe proven evidence from this study can guide the development of appropriate agricultural financial products that promote financial inclusion among farmers in rural Benin. More specifically, agricultural financial policies that promote digital long-term credit with low interest rate and appropriate guarantee mechanisms can promote financial inclusion among farmers and reduce the problem of asymmetric information in agricultural credit market. The study also calls for the promotion of differentiated policies across the three identified segments in order to positively impact the welfare of all farmers.Practical implicationsThe use of agricultural financial products that include digital long-term credit with low interest rate and appropriate guarantee mechanisms promote financial inclusion and reduce asymmetric information problems in agricultural credit markets in rural Benin.Social implicationsThe promotion of long-term digital and cheap credit improves farmers household's wellbeing in rural Benin.Originality/valueThis study contributes to a better understanding of the structure of rural credit markets. It also reveals the most preferred characteristics of rural credit profiles by farmers. Besides, it validates the importance of the use of guarantee as an appropriate mechanism which minimizes the problem of asymmetric information between financial agents and farmers.

Linear and non-linear patterns of internationalisation and funding in academic spin-offs

ABSTRACT Academic spin-offs (ASOs) are typically technologically driven, and their expansion into foreign markets has become a priority for the generation of revenue, thereby recuperating the initial R&D and patent costs over a shorter time frame. However, the literature of how these firms internationalise and what sources they can rely on to obtain the financial resources remains very limited. Two main objectives are proposed in this paper: first, the analysis of whether those relationships that ASOs maintain with various agents to provide financial resources for internationalisation differ between ASOs that have internationalised and those that have not; and second, the study into whether those ASOs that internationalise by following different internationalisation patterns present differences in their agents that provide them with financial resources. From a sample of 173 Spanish ASOs, results of cluster analysis and post-hoc tests indicate that internationalised ASOs rely on financial agents different to those of domestic ASOs. We firstly conclude, that the most representative internationalisation pattern in ASOs is Born Global (BG), through the True Born Global (TBG) and Sporadic Born Global (SBG) sub-patterns. Second, the internationalisation patterns are supported by different financial agents, although governmental institutions and Venture Capital (VC) firms constitute the most relevant agents.

DAVID K. THOMPSON, Bonds of War: How Civil War Financial Agents Sold the World on the Union

DAVID K. THOMPSON, Bonds of War: How Civil War Financial Agents Sold the World on the Union

Biotechnology firms, signals, and venture capital investment

Purpose: Biotechnology has gained such prominence that approximately 50% of the new drugs developed in the world are of biotechnological origin. Some of the Covid-19 vaccines are a good example of this. The biotechnology R&D projects are characterized by high costs, prolonged development times, and a high degree of uncertainty and failure. Few types of financial agents undertake such a risky investment: venture capital firms invest in high-tech, high-risk companies. In this paper, we analyze the signals that influence venture capital investment decisions.Design/methodology/approach: Hypotheses about the effectiveness of these signals are validated by means of a probit regression with panel data on a sample of 210 biotechnology companies established in Spain over a ten-year period.Findings: Positive and negative signalling effect has been found for some of the phenomena analysed, which validate the proposed model.Research limitations/implications: A convenience sample has been used for methodological reasons, and some phenomena that could have some effect on the venture capital investment decisions have not been possible to observe, due to the lack of available data.Practical implications: It can be crucial for biotechnology firms that their managers know which characteristics make these firms attractive to venture capital firms. Additionally, it is important to know those signals that, instead of favouring this investment, deter it.Originality/value: The focus on the first venture capital investment -instead of the most usual focus on the amount invested- as an event that mitigates the information asymmetry level, the use of a probit regression with panel data, and such a quantitative analysis on the Spanish biotech industry, never done before, highlight the originality of this work.

Risk-return performance of optimized ESG equity portfolios in the NYSE

The literature on the risk-return performance of equity portfolios depending on their ESG score is mixed. While most studies use some variant of Fama-French, we optimize equity portfolios of the NYSE between 2018-2019 according to the Markovitz mean-variance framework depending on their ESG scores to better reflect the behavior of financial agents. We then systematically analyze the optimal and efficient portfolio performance and find that high ESG portfolios have lower volatility and even lower returns, resulting in lower Sharpe ratios. The lower performance of high ESG portfolios is homogeneous across the three ESG components and robust across specifications.

A Community Marine Tourism as a Business Sector: Challenges Faced by Local Community

Marine tourism is one of several economic drivers which contribute to local community livelihood and regional income. Many potential coastal areas are gradually developing and transformed by its’ local communities into local-scale tourisms which accommodate local or domestic or surrounding tourists’ recreational needs. However, to be sustainable, there are many issues need to be addressed. The study intends to explore Dalegan community perceived tourism issue in developing their WPP destination or white sand tourism. The study adopts qualitative method in gathering and analyzing the data. The data are gathered through Dalegan community dialog or interactive session during Dalegan community service program. The collected data are interpreted by implementing thematic analysis. The study reveals that there are three main issues faced by Dalegan local communities: financial, creativity and lack of legal procedures. The collaboration of financial service agents, educational institutions, (local) government bodies and local community inclusion is needed. The study demonstrates that to build Dalegan marine tourism, local/community leadership, local human quality improvement, local resources identification and local culture need to be used as the development grounds. The study also shows that the local community is still not aware of the environmental issues and diversification of recreational activities. Thus, local community still needs advocacy to understand the relationship between tourism and environment. The study also finds that local women are valuable human resource for marine tourism business. They are potential women entrepreneurs who develop small business around WPP marine tourism.

The financing of innovation policies in Brazil between 1999 and 2016: political economy, institutions and financial cycles

ABSTRACT The main objective of the present paper is to provide the reasons behind the rise and fall of resources for innovation policies in Brazil between 1999 and 2016. The paper also intends to provide a broad map of the financial relations between funding sources and financial agents in the Brazilian National System of Innovation (NSI). In order to do that, the paper uses mixed methods: a historical approach to cover the motivations of the political economy; principles of network analyses to map the institutional relations between funding sources and financial agents; and economic theory to understand the determinants of the cash flows that finance science, technology and innovation (STI) policies. The institutional arrangement of the Brazilian NSI led the financial cycle to rely, on a general level, on GDP dynamism; the strategy of selected public bodies; on the federal budget decision process; and on the external economic cycle. Between 2003 and 2014, political struggles led to economic policies that favoured GDP growth and public spending, while the opposite occurred from 2015 onwards. In general, institutions were not equipped to protect the financial resources from the political changes of the mid-2010s.

Bonds of War: How Civil War Financial Agents Sold the World on the Union by David K. Thomson (review)

Bonds of War: How Civil War Financial Agents Sold the World on the Union by David K. Thomson (review)

The political consequences of dependent financialization: Capital flows, crisis and the authoritarian turn in Turkey

Recent debates on financialization in emerging market economies highlight the terms of unequal exchange that they are embedded in, where international capital flows steered by powerful financial actors and transnationalized banks have a major impact on economic growth performance. As a result, many of the small open economies in the Global South have become increasingly sensitive to international market volatilities, as the post-2008 Global Financial Crisis (GFC) episode has shown. Yet, we know much less about the political implications of these interactions. How do unequal financial relations influence political trajectories in emerging market economies? Using process tracing and based on original evidence from Turkey, we find that when GDP growth is dependent on financial inflows under a credit-led growth model, the constraints on the domestic policy space following an economic crisis allowed the ruling party to instrumentalize monetary and regulatory institutions as financial agents of political repression.

Investment preferences and risk perception: Financial agents versus clients

We study four fundamental components of financial agency settings: The perception of commonly used investment profile terminology, agents’ customization of portfolios to clients’ preferences, the effect of agents’ and clients’ preferences on investment levels, and the role of compensation schemes. We observe large heterogeneity in the perception of investment profiles, resulting in substantial miscommunication between clients and agents. Financial agents show a high willingness to implement their clients’ preferred investment profiles, yet appear to fail because of deviating perceptions. Agents’ own investment preferences matter, but take a back seat to clients’ preferences in determining investment shares. Different monetary incentive schemes hardly affect behavior. Our results suggest that moral constraints can limit agents’ discretion in the agency situation.

FORMATION AND MANAGEMENT OF THE BANK'S INVESTMENT PORTFOLIO

For effective investment activity of banks, it is necessary to optimize and manage the bank's securities portfolio.The modern portfolio management system has a sufficient arsenal of effective tools, including a number of principles and approaches.The volatility of the Kazakhstan stock market requires the accounting service to pay increased attention to the main function of professional financial agents (including commercial banks) - resource management. The multi-dimensionality of the modern investment portfolio of a commercial bank goes beyond the traditional "accounting" model, that is, the description of the results of portfolio management activities by drawing up the balance sheet. Accordingly, within the framework of the organization of the subject of financial activity, the problem of managing the investment portfolio, building a model and technological implementation arises.Given the huge potential of theoretical developments in the field of portfolio management, Kazakhstan's commercial banks are lagging behind in the practical implementation of management models. Decision-making within the standard organizational structure of commercial banks does not reflect the current capabilities and requirements for resource management. With the development of the Internet and information technologies in Kazakhstan, the time allocated to top managers for making managerial decisions has sharply decreased. Thus, it is necessary not only to develop a model of resource management in the financial markets, its practical implementation has also become a factor in the competitiveness of a commercial bank. The relevance of the study lies in the lack of a comprehensive approach to the practical implementation of the investment portfolio management process, starting with the creation of the organizational structure of a commercial bank and ending with the introduction of management models based on improved information.

The influence of knowledge level on the proportion of wealth in the stock market

The kinetic theory is applied to investigate the impact of knowledge level on the proportion of wealth in the stock market. Assume that each agent’s wealth is non-negative in the financial market and agents are allowed to choose their own portfolios in the stock and bond. The nonlinear Boltzmann models describing the investment proportion of wealth between the two assets and knowledge formation are discussed. In the models, the agent’s knowledge level and psychological factors affect their investment strategies and risk prediction. A value function containing the current price and intrinsic value of the stock is used to depict the agent’s psychological factors. The asymptotic procedure is employed to obtain the Fokker–Planck equation relating to the Boltzmann model. The numerical simulation experiments illustrate that knowledge has the potential to increase the proportion of wealth invested in the stock and improve the wealth status of agents.

РАСПРОСТРАНЕНИЕ ИННОВАЦИОННЫХ СЕРВИСОВ И ТЕХНОЛОГИЙ КАК ФАКТОР РОСТА КОНКУРЕНЦИИ НА ФИНАНСОВОМ РЫНКЕ

The article examines the content aspects of digitalization as a new paradigm of socio-economic relations, which led to the emergence of new factors of production - data in digital format. It is revealed that the spread of new technological solutions leads to the need for rapid response of financial market agents to changing conditions and formats of work. Modern banks have been developing remote customer service technologies, and the COVID-19 coronavirus pandemic has served as a catalyst for accelerating these processes. Financial organizations are actively improving mobile application services, expanding their range and creating marketplaces and full-fledged ecosystems.

Issues of integrating central bank digital currency into the fiat money system

Since 2020, a digital equivalent of legal tender became one of the most discussed topics among the international community of central banks. Moreover, the Bahamas’ “Sand Dollar” – the world's first actually operating platform has been launched. With the onset of the pandemic, the acceleration of events is influenced by a non-economic factor – the demand for all methods of remote socio-economic interaction. In 2021, based on previous public consultations, the Bank of Russia published the Digital Ruble Concept. The article discusses the background, goals and side effects of creating central bank digital money. The idea of digital transformation of banknotes meets the public demand for a payment instrument that is practical in modern realities, but its implementation is associated with uncertain consequences for the banking sector and the future development of technologies and security standards for settlements using digital solutions. In this context, the rationale for placing on a reimbursable basis the services of private financial agents on the digital money platform is given.

Finance in a global CGE model: the effects of financial decoupling between the U.S. and China

We add to the GTAP model a financial module built around an 18-region asset-liability matrix. A financial agent in each region takes account of expected rates of return in allocating the regions financial budget between domestic capital and financial assets in each other region. Using GTAP with the financial module in place, we simulate financial decoupling between the U.S. and China. The results show that the U.S. would gain by limiting its financial flows to China, leading to a redirection of finance to the domestic economy. This would stimulate investment in the U.S. with favorable effects on employment, capital stocks, real GDP, wealth, and real wage rates. At the same time investment in China would decline with negative effects on the Chinese economy. Similarly, China would gain by limiting its financial flows to the U.S. and the U.S. would lose. In a tit-for-tat situation in which each country reduces its financial asset holding in the other country by x per cent, the winner would be China. We conduct additional simulations to compare the effects of trade decoupling with those of financial decoupling.

From making visible to hiding. Visual representations of financial markets as tools of manipulation and active and living agents

This article shows that visual representations of financial markets not only make them visible, i.e. present and reveal certain important financial information such as the size and distribution of demand and supply, the quantity, type and intentions of sellers and buyers, trends and patterns in price movements, or the depth, liquidity and sentiment of the market, but also hide what they are supposed to reveal and make visible. What is important, they do this not only because of the ways of their production; not only because of pitfalls and errors inherent in them; not only because of framing processes they are subjected to, but also because of their interactive nature that allows financial agents to manipulate them. This fact, and above all its possibility, carries with itself important consequences for the role that the visual representations play in the functioning of capital markets. Namely, it causes that these representations, regardless of other factors, themselves become a source of uncertainty in these markets. As such, they are therefore not so much neutral and passive representations of financial exchange as rather tools for manipulation on the one hand and active and living agents on the other.

EDUCATIONAL COMPONENT OF HUMAN POTENTIAL: FINANCIAL-STATISTICAL AND LABOR PERSPECTIVES

L. Halkiv L. Halaz M. Bihus 1Lviv Politechnic National University 2Lviv Polytechnic National University 3Ivan Franko National University of Lviv, Department of International economic and Investment Activity Purpose. The purpose of this article is to improve theoretical, methodological, and applied foundations of the study of the educational component of human potential. Design/methodology/approach. Scientific works of domestic and foreign scientists studying issues related to human potential, labor market, and education financing, as well as official statistical data that characterize these issues, formed the information, theoretical, and methodological basis of the study. To achieve this purpose, the article uses a set of scientific methods that have ensured conceptual integrity of the study, in particular: the method of theoretical generalization and the abstract method were used to systematize scientific results and formulate conclusions; the method of structural analysis was used to study education costs in terms of individual components; concentration and differentiation analysis was used to study distribution of costs of financial agents; dynamic modeling was used to build trends in the number of educational institutions, the number of students, and the total cost of education; the tabular method was used for a compact representation of quantitative indicators; the graphical method was used to visualize the results of the study, etc. Findings. The functioning of the country's education system has a decisive influence on the quality of human potential. Graduates who complete a higher education program are more likely to work in knowledgeintensive jobs and earn higher salaries. Workers with higher education are usually more likely to be formally employed and less likely to lose their jobs. Effectiveness of the education system depends on its financing. The results of the analysis of data on expenditures on education in Ukraine indicate the following patterns: most funds are allocated for educational services provided by higher education institutions, for the first stage of secondary education and primary education; private firms and corporations most often allocate their funds for post-secondary education; the share of state institutions among financial agents carrying out activities in the field of education reaches about 90 %; the maximum costs of the public sector are observed at the ISCED 0-3 educational levels; the network of institutions and the contingent of students receiving vocational, technical, and higher education are decreasing; there is a declining trend in the level of education expenditures in the Consolidated Budget expenditures. The rise in the price of educational services against the background of an unbalanced labor market leads to a loss of knowledge; additional retraining expenses; increase in social benefits. Practical implications. The materials presented in the article can be useful to representatives of institutions and scientists whose activities are related to the financing of education and the labor market. Originality/value. In the article, the author. The level of education of an employee is considered as one of the components of their potential. This component allows an employee to compete successfully in the labor market. In Ukraine, financial resources of the population cover more than 30 % of doctoral studies and their equivalents, as well as about 25 % of expenditures cover higher education. Given the spread of poverty and the weakening of state support for higher education, Ukrainians will face the problem of the provision of financial support for universities.

Аристократическая семья Лайл: экономное «старое дворянство» или расточительные джентри?

The article discusses the sources of income, expenses and methods of doing business in the aristocratic Lisle`s family. Based on the correspondence of the Lisle`s spouses with their managers and financial agents, it is revealed that the greatest income for the family came from the lease of land, extraction of tin, timber and the fish trade. The position of governor of Calais, held by Lord Lisle, also brought income. However, the expenses of the family associated with caring for the manors, the need to endorse the status of an aristocratic family, the costs of maintaining and educating the children, as well as endless litigation over land ownership, significantly worsened the financial situation of the family. The author concludes that, despite the various sources of income and the very impressive amounts obtained from them, the Lisle family permanently needed money, for this reason Lady Lisle was forced to look for new ways to replenish the family budget.

The response of Brent crude oil to the European central bank monetary policy

This paper examines the impact of European Central Bank (ECB) monetary policy decisions on oil prices and liquidity using an event study with intraday data. We analyse the period from January 1999 to December 2020, which includes the financial crisis that started in August 2007. Our results show a significant response for oil returns only during the financial crisis. Specifically, we find that Brent crude oil futures’ returns responded negatively to unexpected variations in the Italian risk premium as a measure of unconventional monetary policy actions – and positively to unexpected variations in short-term interest rates. That is, an unexpected increase in short-term interest rates and reductions in the Italian risk premium are taken as positive signals anticipating the end of the financial crisis. Moreover, as Brent is priced in US dollars, we have tested if the Brent response is due to the exchange rate response. We find that the null hypothesis of equal response from Brent and the exchange rate to ECB monetary policy announcements cannot be rejected. These are important results for monetary policy makers and financial agents.