Financial Center Research Articles

Bank competition, government interest in green initiatives and carbon emissions reduction: An empirical analysis using city-level data from China

Finance plays a pivotal role in the transition to a sustainable economic development model. In China, the banking sector, a key component of its financial landscape, operates within an increasingly competitive environment, exerting profound effects on the efficient allocation of resources. This paper employs instrumental variables regression and text analysis techniques to meticulously examine the impact of bank competition on carbon emissions and elucidate the underlying mechanisms. We also investigate the synergistic influence of government engagement in green initiatives and bank competition on carbon emissions reduction, drawing insights from data encompassing Chinese cities during the years 2006 to 2019. Our empirical analysis unveils a significant carbon emissions reduction effect resulting from bank competition. This effect is primarily driven by the facilitation of green innovation and the promotion of manufacturing servitization. Notably, this impact is more pronounced in cities that are not dependent on resource extraction and those situated outside regional financial centers. Additionally, the level of government interest in green initiatives amplifies the carbon reduction effect of bank competition. This paper contributes to the enhancement of the banking market structure, aligning it with eco-friendly development goals.

Remembering the Recession: Marketplace and Status Quo Journalism

Ten years after the 2008 Great Recession, US media recalled the experiences and lessons learned from its aftermath. Among these was Marketplace's Divided Decade project, which spanned calendar year 2018 and included 66 discrete stories covering the impact on individuals and different sectors. The project cut across both Marketplace Morning and its evening broadcast Marketplace, both syndicated by American Public Media (APM). Marketplace appeals to a public radio audience of elite, educated listeners who are located away from financial power centers but still wield influence. This audience is larger than any other U.S. broadcast business program. Using theories of affect, this paper will demonstrate how Marketplace's recollection of a critical event continued to shape attitudes about the economy. By using critical discourse analysis (CDA), I unearth how power is reified through financial news reporting practices. Marketplace's focus on individual narratives decoupled the crisis from its structural context, while its reliance on economic policy leaders emphasized their affective memories and justified official responses. Divided Decade upheld the status quo by separating the impact of the crisis from the lives that were affected, while foreclosing alternative approaches to the problems the 2008 crisis laid bare.

What have we learned about political participation changing a financial centre’s competitiveness?

What have we learned about political participation changing a financial centre’s competitiveness?

Securing securities: political risk, sovereign debt, and the Anglo-American financial power transition

Abstract Under what conditions do countries lose their status as the leading global financial center? Some scholars argue that such shifts follow shortly after transitions in the distribution of other key capabilities (e.g. GDP), while others argue that path dependence or other more bespoke capabilities might be able to sustain financial leadership long after decline in other capabilities. This paper aims to understand the causes of the Anglo-American financial transition. I argue that the ability to manage political risk for investors is critical to the position of countries as financial entrepôts. In the case of British financial leadership, I argue that Britain’s position as an entrepôt hinged on its power projection capability, which enabled Britain to limit political risk for investors in ways that other states could not replicate. The gradual loss of those capabilities, in turn, saw Britain eventually become overshadowed by the United States. I support my claims with a TERGM analysis of the interwar sovereign debt network.

Pandemic, sanctions and anxiety in Russia’s regions: Business expectations nowcasting

The study develops a methodology of business expectations index nowcasting with testing on data for the Russian economy as a whole and its regions. This methodology differs from the existing solutions in that it introduces a Bayesian averaging approach to define a set of search patterns for nowcasting and solves the issue of aggregation of time series by individual queries. The developed indices have shown a high level of adequacy, serving as effective tools to reflect shock events in the country’s economic and political landscape and also as predictors of fluctuations in survey­based expectation indices. The application of the presented methodology has revealed the factors that affect the volatility of business expectations indices depending on the level of development and sectoral specialization of Russian regions. In particular, financial and economic centers of highly developed regions and developed regions with diversified economy show high volatility, while business expectations indices in less developed agrarian and commodity regions show low volatility. These results can be useful for economic policy decisions and are of interest to researchers concerned with economic stability and forecasting.

All That Is Solid Bursts into Flame: Capitalism and Fire in the Nineteenth-Century United States

Abstract Industrial capitalism arrived in Europe as great urban fires were already retreating. The United States, however, was generously timbered and far more reliant on wooden construction. As a result, its infernos continued, and even increased, well into its age of capital. They especially struck places of intense commodification: hastily built settler towns, slave cities, financial centres and sites of mineral extraction. Noting the connection between fire and capitalism, a class of upwardly mobile strivers came to appreciate fires for their ability to disrupt social hierarchies, reset property relations and nurture economic dynamism. Oddly, many who had suffered fires even interpreted them as ‘blessings in disguise’. This pyrophilia was not universal, however, and the richest men of the Gilded Age strenuously opposed it, seeking instead to fireproof the environment. The clash between pyrophobes and pyrophiles was between economic incumbents and economic insurgents, and it touched on many areas of late nineteenth-century culture. Familiar Gilded Age artefacts such as Chicago’s White City and L. Frank Baum’s The Wonderful Wizard of Oz can be productively understood in terms of this widespread fight over the value of fire, and thus the shape of capitalism.

Financial Relations between Hong Kong and the Mainland

The financial crisis caused by the subprime mortgage crisis in the United States in 2006 has deeply plunged many Western capitalist countries into multiple political, economic and social crises. This has forced many financial institutions in developed countries to redistribute their assets to strengthen the stability of financial institutions, forcing many Europeans and Americans to return funds to their own countries. As a result, the domestic currency depreciated, and the economic growth slowed down or even went into recession. As an emerging economy, China has been faced with both opportunities and challenges. The financial market has long been regarded as the "barometer" of the national economy, so the deepening relationship, such as the research and cooperation between the financial markets in Hong Kong and the Mainland, can certainly improve the international financial status of both sides. It also promotes the process of building a fair, orderly and inclusive new international order. This paper systematically introduces the political and financial relations between Hong Kong and the Mainland, focusing on the relationships between Shanghai-Hong Kong and Guangdong-Hong Kong financial centers and advocating some suggestions on how to balance the relationship between the three financial centers while speeding up the construction of the national financial center. Using a variety of financial theories and statistics of Hang Seng AH Share Premium Index and Centaline City Leading Index, etc., this paper reaches the conclusion that the financial relationships between the Mainland and Hong Kong have always been close, while the differences between the two markets are more pronounced, steps can definitely be taken to benefit both of them (Zhu, 2013).

Cognitive Biases Impact on Investor’s Investment Decision of Retail Mutual Fund Investor

The purpose of this research is to study the effect of Cognitive bias on Investor’s investment decision of Retail Mutual Fund Investor.
 Methodology Adopted:Structured questionnaire was distributed to 1012 Indian mutual fund investors of four states considered financial hubs of India (Delhi/NCR, Mumbai, Bangalore, and Kolkata). Multiple regressions were used to test the model. Validity of instrument was established through CFA.
 Findings: Cognitive Bias (Overconfidence, over-reaction, Herd Effect and Regret Aversion) significant with investor’s investment decision making.
 Research Implications:Results are significant on Indian investors but with different geographic results might different. 
 Originality/ Value: Academic research is still needed to understand the impact of mutual fund investors' cognitive biases on their investment decisions, Biases studied on Equity investors in south India, due to inconsistency in literature the work found to be original.

Urban resilience against environmental disasters: Comparing Lagos and New York

Urban resilience against environmental disasters is a critical aspect of sustainable urban development, particularly in megacities like Lagos and New York, which face diverse environmental challenges. This review examines the comparative analysis of urban resilience strategies in Lagos, Nigeria, and New York City, USA, focusing on their responses to environmental disasters. Both cities encounter distinct environmental hazards, including flooding, hurricanes, and heatwaves, albeit within different socio-economic contexts. Lagos, Africa's most populous city, grapples with rapid urbanization, inadequate infrastructure, and informal settlements, exacerbating its vulnerability to environmental disasters. In contrast, New York City, a global financial hub, confronts challenges posed by its dense urban fabric, aging infrastructure, and coastal exposure. Despite differing contextual factors, both cities strive to enhance their resilience through various strategies. Lagos employs a mix of top-down and bottom-up approaches, emphasizing community engagement, early warning systems, and infrastructure improvements to mitigate flood risks. Initiatives such as the Lagos State Resilience Strategy and the implementation of green infrastructure projects signify efforts to enhance adaptive capacity and reduce vulnerability. Conversely, New York City adopts a multifaceted approach, integrating policy frameworks, technological innovations, and community-based initiatives to bolster resilience. Post-Hurricane Sandy, the city launched the "OneNYC" plan, emphasizing infrastructure upgrades, coastal protection measures, and climate adaptation strategies to withstand future shocks. Comparative analysis reveals both convergences and divergences in urban resilience strategies. While Lagos prioritizes grassroots involvement and low-cost solutions, New York emphasizes institutional coordination and investment in resilient infrastructure. Challenges persist in both contexts, including funding constraints, governance issues, and socio-economic disparities, underscoring the need for holistic and inclusive resilience frameworks. Understanding the nuances of urban resilience in diverse contexts can inform policy interventions and best practices transferable across cities globally. By examining the experiences of Lagos and New York, this review contributes to the discourse on building resilient cities capable of navigating environmental uncertainties and safeguarding the well-being of urban populations.

Dual-Class Share Structure in the Indonesian Equity Market

A lot of major equity markets abroad have allowed the listing of the Dual-Class Share Structure (DCSS) corporations. DCSS is an agreement in which two types of shares are issued by the very same firm, with one type of share conferring greater power compared to the other. The Indonesian Stock Exchange only allows for limited access for DCSS technology-related corporations to list on its Mainboard. To remain attractive as Southeast Asia's top financial centre, Indonesia needs to alter its securities regulations while making its listing market adaptable to meet the needs of various enterprises. This research aims to analyse and elaborate on permitting DCSS corporations to go public and devise suitable governance safeguards to guarantee the highest possible standards of corporate governance are upheld. This research explores the legal certainty and applicability of DCSS in the Indonesian equity market and abroad, using a qualitative approach and thematic analysis of secondary data. The major finding of this research is the acceptance of DCSS adds to issues with abuse of power by the controlling shareholders, which was outweighed by their cash flow rights. While those in favour of DCSS argue that the existing shareholders' main reason for choosing a DCSS arrangement is to preserve company control. Most major exchanges in the world have taken action to accommodate DCSS going public, like those in the USA, Hong Kong, Singapore, and China. Considering the magnitude of the Asian market, Indonesia can emulate the accomplishments of other exchanges too. A series of recommendations are provided to guarantee the highest standards of corporate governance can be upheld, such as: permitting DCSS for new entrants and innovative businesses, regulating the ownership of enhanced voting shares, and setting out sunset provisions for DCSS arrangement.

Has globalization of the Japanese economy contributed to satisfying career‐building for women? The case of Japanese female migrants to East Asia

AbstractThis paper analyzes the shift in career strategies among Japanese women due to the globalization of Japan's economy since the 1980s. It highlights how economic changes led to a gender‐based division of labor, propelling women to seek opportunities abroad. The research draws on interviews with 81 women who moved to financial centers in East Asia, mainly in Hong Kong and Shanghai, examining their experiences in the workforce, the impact of human resource agencies in their migration, and the challenges and opportunities they encountered. The study reveals a complex landscape where Japanese women navigate gendered expectations and discrimination both in Japan and abroad in pursuit of career advancement. The conclusion emphasizes three points. First, women found opportunities abroad to do what they wanted, even if it was not what they initially expected before leaving Japan. Second, although supportive and subordinate to male managers, their work was indispensable to the management of Japanese companies abroad. Their contribution has long been underestimated but needs to be considered. Third, the experience abroad gave them direct interaction with various clients and colleagues and a view of rapid societal change in Hong Kong and China, contributing to choosing their diverse career trajectories and life plans.

The more things change in higher education, the more they stay the same

Richard Chaite, Executive Director of the National Center for Postsecondary Governance and Finance at the University of Maryland, wrote the following in September 1989:

The role of innovation-led profits in the development of an international financial centre

Qianhai—an innovation park in Shenzhen—has the possibility of boosting innovation in Hong Kong, Shenzhen and in the wider region. This paper reviews the existing evidence about which policies have promoted profitable innovation in the Qianhai region (Hong Kong and Shenzhen) in the past. We also point to the importance of profitable innovation—rather than just innovation for its own sake. Profits attract and keep firms in an international financial centre. Yet, until we know exactly how much profitability these innovative firms require and how to promote such profitability, the advice given in the literature to Qianhai’s and other policymakers will remain woefully inadequate.

Weighted Signed Networks Reveal Interactions between US Foreign Exchange Rates.

Correlations between exchange rates are valuable for illuminating the dynamics of international trade and the financial dynamics of countries. This paper explores the changing interactions of the US foreign exchange market based on detrended cross-correlation analysis. First, we propose an objective way to choose a time scale parameter appropriate for comparing different samples by maximizing the summed magnitude of all DCCA coefficients. We then build weighted signed networks under this optimized time scale, which can clearly display the complex relationships between different exchange rates. Our study shows negative cross-correlations have become pyramidally rare in the past three decades. Both the number and strength of positive cross-correlations have grown, paralleling the increase in global interconnectivity. The balanced strong triads are identified subsequently after the network centrality analysis. Generally, while the strong development links revealed by foreign exchange have begun to spread to Asia since 2010, Europe is still the center of world finance, with the euro and Danish krone consistently maintaining the closest balanced development relationship. Finally, we propose a fluctuation propagation algorithm to investigate the propagation pattern of fluctuations in the inferred exchange rate networks. The results show that, over time, fluctuation propagation patterns have become simpler and more predictable.

Influence of the financial shared service center on the quality of accounting information

PurposeThis research endeavors to assess the influence of financial shared service centers (FSSCs) on the quality of accounting information within China’s A-share listed companies. Using a multi-period difference-in-differences (DID) model, the study aims to empirically examine the correlation between the adoption of FSSCs and the quality of accounting information.Design/methodology/approachThe study uses a robust methodology to evaluate the relationship between FSSCs and accounting information quality (AIQ). Leveraging the established FSSCs within China’s A-share listed companies as the treatment group, this research adopts a multi-period DID model. This approach enables a rigorous empirical examination of the influence exerted by FSSCs on the overall quality of accounting information.FindingsThe present study delves into the impact of FSSCs on AIQ and conducts empirical analysis using data from Chinese A-share listed companies between 2004 and 2021. The findings substantiate that: FSSCs significantly bolster the quality of accounting information, a conclusion retained even after robustness tests. Specifically, FSSCs exhibit a positive correlation with the comparability, timeliness and disclosure quality of accounting information while demonstrating no significant influence on relevance, robustness and reliability factors.Research limitations/implicationsFirst, the analysis primarily rests upon data from Chinese A-share listed companies between 2004 and 2021, potentially constraining the generalizability of findings across diverse contexts. Second, despite controlling for various factors, unobserved variables or external factors not encompassed in the model might influence the relationship between FSSCs and AIQ. Additionally, the study’s reliance solely on quantitative data confines exploration into qualitative aspects that might offer a more comprehensive understanding of FSSCs’ impact on AIQ.Practical implicationsThis paper establishes a nuanced connection between FSSC operations and AIQ, furnishing direct empirical evidence for their economic implications and propounding a novel avenue for augmenting AIQ. And, it furnishes guidance for forthcoming FSSC development, accentuating the necessity of harnessing information technology to enhance the relevance, reliability and robustness of accounting information.Originality/valueMajority of prior empirical studies assessing AIQ have focused on singular indicators, lacking a comprehensive depiction of its overall level. To address this gap, this paper pioneers the construction of a comprehensive index for AIQ, providing a holistic representation of its level. Furthermore, this study stands as the inaugural investigation into the relationship between China’s A-share listed firms’ FSSCs and the quality of accounting information.

О субъектах правоотношений в сфере повышения финансовой грамотности и формирования финансовой культуры

The article presents the subjective characteristics of the Catalog of best practices for implementing the Strategy for Improving Financial Literacy in the Russian Federation for 2017–2023. Groups of participants in the relevant legal relations have been identified and a conclusion has been drawn about their relevance in activities to create a financial culture. In order to achieve the indicators of the Strategy for Improving Financial Literacy and Forming the Financial Culture of the Population until 2030, it was proposed to unify the names, forms of organization and status of regional financial literacy centers.

Turkiye as a regional hub

Purpose- This study examines Türkiye's strategic importance and potential to serve as a pivotal regional hub for businesses. The study also investigates the various fields of businesses for being a potential hub. A review of common concerns that needs further developments are analysed. Methodology- The study utilizes an analytical literature survey and investigates the various business fields for becoming a regional hub. Findings- Turkiye is the 7th largest economy by GDP in Europe by IMF among 22 countries for the year 2022. Turkiye is ranked as the 1st in ease of setting and welcoming categories at Expat Explorer Index, and 7th in the world in the year 2019. More, Turkish international airports serve for 342 direct flights for 128 countries with Turkish Airlines and proximity to these markets with a total GDP of 46 trillion USD within 4 hours flight. Conclusion- Turkiye's unique geographical position bridges Europe and Asia providing a natural gateway between the East and the West. Proximity to major markets enhances its appeal as a strategic center for trade and commerce. Ongoing investments in infrastructure, including transportation networks and logistics facilities, are positioning Türkiye as a key hub for the efficient movement of goods and services. Modern ports, airports, and road networks facilitate seamless connectivity within the region. Türkiye's growing economy attracts foreign investments, fostering the development of financial services and encouraging multinational companies to establish regional headquarters Keywords: Regional hub, Istanbul Finance Center, strategic location, logistics hub, service hub. JEL Codes: F10, F18, M20

The transaction cost implications from business angel ownership in the Caribbean

AbstractResearch question/issueThis is a study of the relationship between business angel retained ownership in investee firms across the Caribbean region and their informational asymmetry costs captured in bid‐ask spreads.Research findings/insightsWe find business angel ownership to be associated with a reduction in transaction costs or bid‐ask spreads. However, this is reversed leading to increasing transaction costs following moderation by whether the investee firm has a subsidiary located within an offshore jurisdiction and separately if the investee firm adopts higher levels of Anglo‐American shareholder value corporate governance.Theoretical/academic implicationsWe undertake a novel application of incomplete contracting theory in theorizing the influence of ownership of business angels on the transaction costs of their investee firms. We extend and contribute to theory development through consideration of the presence of investee firm's subsidiary located in offshore financial centers within the firm's corporate network and the degree to which it adopts Anglo‐American shareholder value corporate governance. In the former, we argue business angels are more prone to collaborate with firm insiders to the detriment of outside minority investors given the enhanced opacity and shift in incentives. In the latter, we argue the incongruity between business angels, insiders, and outside minority expectations regarding the adoption of shareholder value governance also leads to elevated transaction costs.Practitioner/policy implicationsBusiness angel finance is widely lauded as a potential source of development capital within regional and developing economies with the potential to rejuvenate otherwise moribund entrepreneurial ecosystems and business sectors. Our study yields important findings relevant for practitioners in formulating development policy nurturing the development of indigenous economies through enhanced business angel participation. It also considers the moderating influence of firm's adoption of Anglo‐American shareholder value corporate governance and whether the firm has a related party located in an offshore financial center, something of profound importance in regions comprising offshore financial centers.

Analisis Pengaruh Investasi Singapura terhadap Pertumbuhan Ekonomi Indonesia

Singapore's foreign investment has an important role in economics development in Indonesia's. In the era of increasing globalization and economic integration, the flow of foreign investment has become a key factor in improving the welfare of the Indonesian people. Singapore, as Indonesia's largest trading partner, has made significant investments in various sectors in Indonesia, with quite a large impact on the economy and society. This research uses a qualitative approach to analyze the impact of Singapore investment on Indonesia's economic growth. The research results show that foreign investment brings capital, technology and management that increase the productivity and competitiveness of Indonesian industry. This investment plays a role in developing infrastructure that supports long-term economic growth. This research has global relevance because Singapore is one of the largest financial and trade centers in the world, and Indonesian can be a role model for other countries. It is hoped that the results of this research will provide valuable insights for the development of economic policy in Indonesia and strengthen economic relations between Indonesia and Singapore.

The more things change in higher education, the more they stay the same

Richard Chaite, Executive Director of the National Center for Postsecondary Governance and Finance at the University of Maryland, wrote the following in September 1989: