Financial Policy Research Articles

The effects of takeover laws on corporate financing policies: global evidence

Using a cutting-edge estimation method to address heterogenous treatment effects arising from differential treatment timing, we examine the effect of international takeover laws on corporate financing. We find that firms reduce their equity financing in response to takeover laws. Further analyses indicate that takeover laws’ negative effect on equity financing is more pronounced for firms with higher financial constraints and for firms in countries with strong investor protections.

Tax Evasion in Iraq and its Impact on Social Responsibility Accounting “An Applied Study in the Babylon Tax Department”

Taxes are considered financial revenues because they are one of the sources that can provide revenues that the state relies on to determine its financial policy, in addition to including its economic, political and social goals in order to distribute wealth and stimulate investment and savings. The purpose of the study is to improve corporate social responsibility by raising knowledge and awareness of the significance of tax compliance and its effects on society and the environment, as well as to encourage them to adopt ethical and sustainable tax practices , and enhancing corporate social responsibility and motivating them to adopt sustainable and ethical tax practices, which is an important tool for improving companies' tax performance and enhancing their role in supporting sustainable development and achieving a balance between financial, social and environmental concerns. It is of great importance in enhancing transparency and integrity, which contributes to increasing the level of transparency and integrity in corporate tax operations, which enhances trust between companies and the communities in which they operate. The study relied on the use of a questionnaire based on direct examination to understand the impact of tax evasion on social responsibility accounting for a sample of employees in the Tax Department of Babylon Governorate. 75 questionnaires were distributed to conduct the statistical analysis of the study. By analyzing the questionnaire, conclusions can be drawn about the extent of the impact of tax evasion on social responsibility accounting, and identifying aspects that can be improved or enhanced. Based on the results, the study will provide practical recommendations on the most important treatments that limit tax evasion through the tax law, spreading tax awareness, and explaining the impact of evasion on society and the environment.

The effects of fınancıal pressure polıcıes on economıc growth: The case of OECD countries

In this study, the effects on economic growth of financial pressure policies applied in OECD countries are examined. For this purpose, the “financial pressure index (FPI)” was calculated by using 10- year data for 2010–2020 from 37 OECD countries and “growth rates” were obtained. The FPI was calculated using (i) loans extended to the pri¬vate sector, (ii) loans extended to the central government, (iii) interest payments and (iv) inflation rate data. In calculating FPI, first of all, the data was standardized. Following the standardization process, the data was weighted using Principal Component Analysis (PCA) to calculate the FPI. After weighting the data, each standardized value was aggregated by multiplying it by its own weighted value, and the final FPI was ultimately calculated. Economic growth rates were calculated as a percentage of GDP. Finally, the analysis was carried out by comparing the calculated FPI with the economic growth rates. According to the results of the analysis, the coefficient of FPI was statistically significant (p < 0.05). In this context, every 1-point increase in FPI reduced GDP by 0.178 points.

Legal Regulation, Financial Incentives and Professional Autonomy in the Prioritisation of Norwegian Specialist Health Services.

To study hospital physicians' awareness and perceptions of the legal and financial regulations, and their impact on professional discretion regarding equity in access to treatment and quality of care. A sample of 637 physicians in the Norwegian specialist healthcare services selected from a survey conducted by the Institute for Studies of the Medical Profession. The paper investigates how legal and financial policy instruments affect the application of professional discretion regarding the prioritisation of specialist health services. Descriptive statistics and regressions were conducted for the analyses. Compared with financial incentives, legal regulations (laws, priority rules and guidelines) were assessed to be less negative external interventions in the exercise of medical and professional judgement. The empirical analyses revealed a positive tendency in physicians' assessments of the impact of legal regulations on treatment equity and healthcare quality, but negative attitudes towards financial instruments. The variations revealed are attributable to various structural and epistemic features of the legal-bureaucratic and economic models of administration in this area of the welfare state. Legal and financial regulations are imposed to achieve certain social goals and values. The findings of this study can provide further insight for the health authorities in other countries concerning implementation of such regulations in the specialist healthcare services.

The Impact of Financial Development on Unemployment: The Case of the People’s Republic of China (PRC)

Research Originality: As a populous country with a population of 1.4 billion, China faces the imperative issue of employment. This paper focuses on the impact of financial credit and financial deposits on different levels of unemployment in an attempt to analyse the unemployment problem in China.Research Objectives: The paper explores the impact of financial development on unemployment in China.Research Methods: Using panel data from 31 provinces and cities in China (spanning from 2007 to 2021), categorizing unemployment situations, employing quantile regression models to assess the impact of financial development on different levels of unemployment in China.Empirical Results: The findings indicate a negative correlation between financial development and unemployment levels in China. The study reveals that financial credit significantly impacts unemployment in provinces where the economy is higher than average GDP. However, in regions where the economy is lower than average GDP, the impact of financial deposits on unemployment is significant.Implications: This study establishes that the adoption of financial expansionary policies by the government can reduce unemployment and help guide the formulation of more precise and effective economic policies.JEL Classification: G21, E24, C33, O53How to Cite:Yixin, L., Radzi, N.A.M., Ma, M., & Saidi, N.A., (2024). The Impact of Financial Development on Unemployment: The Case of the People’s Republic of China (PRC). Etikonomi, 23(2), 353 – 368. https://doi.org/10.15408/etk.v23i2.37997.

Transition finance facilitates lower-cost achievement of climate targets: A case study of China

Low-carbon transition in carbon-intensive industries is crucial for achieving climate targets. However, it's challenging for enterprises and projects in these industries to access the necessary funding for their transition within the existing financial system. In this context, transition finance supports the low-carbon transition of carbon-intensive industries, injecting momentum into achieving carbon neutrality goals. However, the precise impact of transition finance on the macroeconomy remains uncertain, and the effective strategies for its implementation to effectively advance national climate objectives are still unclear. This study integrates the stock-flow consistent method into a computable general equilibrium model to evaluate the macroeconomic impact of transition finance supporting China's climate goals. Results indicate that promoting investment in energy systems capital within carbon-intensive industries through transition finance can reduce the economic cost of achieving carbon reduction targets in China, with a reduction ranging from 0.02 % to 0.26 %. Additionally, transition finance optimizes the energy structure in the short term, mitigates the exit of high-carbon industries, and lessens the impact of climate targets on these enterprises. However, implementing transitional financing requires enhanced information disclosure and strict regulation of fund flows to mitigate potential credit risks. The research findings provide valuable insights into China's transition finance policy formulation and serve as a reference for other regions seeking financial support to achieve climate targets.

Mediating effect of Education Level on the Relationship Between Financial Literacy and Financial Behaviour of Employees in Higher Education Institutions

This study explored the interplay between financial literacy, education level, and financial behaviour among employees in Higher Education Institutions. Drawing on a sample of employees from various departments within these institutions, the research investigates whether education level mediates the relationship between financial literacy and financial behaviour. Data were collected through a survey and analysed using SMARTPLS for mediation. The findings suggest that financial literacy has a statistically significant positive association with financial behaviour, financial literacy has a statistically significant positive association with Education level but the relationship between education level and financial behaviour is not statistically significant. Additionally, the mediating effect of education level between financial literacy and financial behaviour was not statistically significant. These results have implications for financial literacy programs and policies targeting employees in higher education institutions with the major focus pointing towards building of financial literacy levels regardless of the employees’ education level if the financial behaviour is to be positively influenced

Does Green Finance Development Enhance the Sustainability Performance of China’s Energy Companies?

The achievement of China’s “dual-carbon” standard has been devoted to the green transformation and the sustainable growth of energy firms, both of which can be financed by the growth of green financing. This study aims to investigate how the development level of green finance influences the sustainable development performance of listed energy companies in China. It seeks to delve into the underlying mechanisms connecting green finance with financing constraints and, subsequently, with sustainability performance, as well as exploring the relationship between green finance and green total factor productivity in relation to sustainability performance. Additionally, this study will provide strategies and recommendations to enhance the sustainable development capabilities of energy enterprises. This study empirically evaluates the four aspects of sustainable development performance: economic, social, environmental, and innovative performance—as well as its mechanism of action using the fixed-effects pattern with two ways and the mediated-effects pattern using unbalanced panel data from Chinese-listed energy firms spanning from 2011 to 2020. The study discovered that (1) energy firms’ performance in sustainable development is greatly enhanced by the progression of green finance; (2) the advancement of green finance effectively boosts the sustainable development performance of energy companies by reducing financing constraints and enhancing green total factor productivity; (3) a more distinct relationship is evident between the extent of green financing development and the performance of sustainable development within state-owned enterprises. While green finance development has a stronger role in innovative performance for larger energy firms, it has a noticeable proactive impact on the economic, social, and environmental performance of smaller energy enterprises. Based on the study’s findings, this paper presents recommendations for the enhancement of green financing policies and the sustainable enhancement of energy enterprises in China.

Asymmetric fiscal policies and digital economy development: An empirical analysis based on the global digital value chain perspective

The indicator system for evaluating the development level of the digital economy is multidimensional and dynamic. Accurate and scientific evaluation of the digital economy's development level is crucial. This study, based on the characteristics of the digital economy's development stages, evaluates the value creation dimension of the digital economy from the perspective of the global digital value chain. Additionally, it considers the access and usage dimensions to construct a comprehensive indicator system for evaluating the global digital economy development level. The results reveal significant disparities in digital economy development between countries, but also show that some developing countries have experienced rapid improvements in their digital economy development levels. In theoretical and empirical research, this paper utilizes the Barro Rule and the Cobb-Douglas production function, employing mathematical derivations combined with empirical regression analysis to explore the relationship and mechanisms between asymmetric fiscal policies and digital economy development during economic downturns. It finds that in the new era of the digital economy, governments often implement proactive asymmetric fiscal expenditure policies during downturns. Continuously promoting the development levels of national digital economies is an important mechanism for forming these characteristics of fiscal expenditures. Finally, this study proposes relevant policy recommendations, enriching academic research and policy discussions in the fields of financial fiscal policy and digital economy development.

Interest rate liberalization and household investment in China

In this study, we investigate the impact of interest rate liberalization on household investment behavior in China using data from the China Household Finance Survey from 2011 to 2019. We find that financial liberalization significantly increases the likelihood of households participating in financial markets and raises their holdings of riskier assets, driven by the wealth effect. This effect is more pronounced among higher-income, higher-asset, and better-educated households, without housing mortgages, as well as urban households. Our results highlight the importance of financial liberalization policies and provide new perspectives on the “limited participation puzzle” documented in emerging economies, where relatively few households actively invest in financial assets despite high expected returns. This study underscores how interest rate deregulation incentivizes household portfolio reallocation and promotes financial inclusion across socioeconomic groups.

Dynamics of personal financial management: a bibliometric and systematic review on financial literacy, financial capability and financial behavior

PurposeFinancial literacy, capability and behavior are crucial factors in personal financial management, which in turn plays a significant role in individual and societal financial well-being. The objective of this investigation is to explain critical factors and dimensions of personal financial management systems by employing a hybrid approach that encompasses a bibliometric analysis and a systematic review of the literature.Design/methodology/approachThe research team carefully evaluated a selection of 606 scholarly articles from the Scopus database and studied the evolution of personal financial management behavior over 38 years (1986–2023). This research adopted several graphical representations and network structures to comprehend publishing tendencies, high-impact papers, theoretical frameworks, intellectual constructs as well as the current state of research collaboration.FindingsFour major clusters were identified in the field of personal financial management behavior: the relationship between financial literacy and financial capability, factors influencing financial behavior, the impact of financial behavior on financial well-being and the financial behavior of different demographic groups. In addition, by performing content analysis on papers published within the last five years, new themes in personal financial management behavior were identified.Practical implicationsThis investigation serves to equip financial advisors, policy architects and scholarly investigators with a deeper insight into the intricacies of personal financial management behavior and aids in pinpointing prospective domains for forthcoming research.Originality/valueThis study seeks to address a significant vacuum in the current body of research by providing a thorough bibliometric analysis that specifically examines financial literacy, ability and conduct. To the best of our knowledge, no previous research has conducted such a comprehensive investigation in this field. This research aims to identify important researchers and influential works in the subject by using a mixed-methods approach that combines qualitative and quantitative methodologies, including content analysis. The purpose of doing this is to provide exclusive insights and expertise that can be highly valuable to scholars, practitioners, policymakers and other stakeholders who are interested in furthering the comprehension and encouragement of financial literacy and responsible financial behavior.

The State of the Art of Academic Research on Non-performing Loans: A Structured Literature Review

This study aims to conduct a Structured Literature Review (SLR) on Non-Performing Loans (NPLs), defined as distressed credits or deteriorated loans, to explore their historical developments and prospects. NPLs played a prominent role in the global financial landscape post the 2007 economic crisis and, nowadays, their volume is managed thanks to regulatory intervention. However, academic research on this topic is limited and sparse, particularly in relation to market volume and prices trend, as well as emerging management strategies and sustainability’s perspective. Therefore, our objective is to fill this gap and observe how the academic literature has responded to the development of this instrument. The SLR, and its associated bibliometric analysis, conducted using the Biblioshny package available on R-Studio, were performed on a sample of 1.236 academic documents (Articles, Book Chapters and Conference Papers) available on Scopus and published from 2010 to 2023. The sample, selected through a rigorous and validated screening procedure, was then studied across variables defined in the Analytical Framework: Topics, Research Methods, Research Area and Geographical Area. Based on this analysis, as explicitly stated in the findings section, we observe specific trending topics and geographical areas of study related to NPLs. This study not only helps fill a significant gap in academic literature concerning NPLs, but also provides important implications for financial practice and economic policy conducted by professionals, aiding in a better understanding of how to address and manage NPLs in various economic and geographical contexts. The originality of this research lies in its structured approach and use of bibliometric analysis, to examine a wide range of academic publications over an extended period, serving as a potential base for further insights and future studies.

Model of resilience strategies of small and medium-sized tourism enterprises post pandemic crises in marine-based destination

This study investigates the resilience strategies employed by small and medium-sized tourism enterprises (SMTEs) in Tanjung Bira, a marine-based destination in South Sulawesi, Indonesia, to cope with the impact of the COVID-19 pandemic. Duchek's Model of resilience, which conceptualizes resilience as a meta-capability composed of three stages (anticipation, coping, and adaptation), is used as a key framework. An exploratory qualitative approach was employed, involving in-depth semi-structured interviews with seven informants representing various tourism stakeholders. Thematic analysis revealed several main strategies for SMTE resilience: collaboration with stakeholders, government intervention, implementation of digital marketing, strengthening SMTEs legality, and strengthening/diversification of SMTE products. Mapping these strategies onto Duchek's Model, the anticipation stage included strategic planning, risk assessment, and building dynamic capabilities; the coping stage consisted of immediate financial measures and policy support; and the adaptation stage involved diversification, technology and innovation adoption, and collaboration and networking. A key implication is that destination management organizations should create innovative products and leverage online platforms for marketing to increase visitor arrivals and boost SMTE product sales. The findings contribute to understanding SMTE resilience in the context of a marine-based destination in Eastern Indonesia and provide insights for policymakers and practitioners to support SMTE recovery and long-term sustainability post-pandemic.

THE IMPACT OF TAXATION ON INTERNATIONAL COMMERCE AND EXCHANGE RATE ON IMPORTS

The globalization of capital markets has accelerated capital movements, turning the world into one large marketplace. International trade has become an important tool in shaping the financial structure of countries. However, elements such as customs duties and import quotas play a decisive role in trade between countries. Taxes, which are a financial policy tool of countries, are used to influence foreign trade, particularly imports. One of the determining factors in foreign trade activities is the exchange rate. The purpose of this study is to examine the effect of taxes on imports and the change in the nominal exchange rate on the import volume of goods and services. In this study, which examined 20 Organization for Economic Co-Operation and Development (OECD) countries with data for the period 1999-2021 taken from the World Bank official website, the model was analyzed with the help of AR (1) Residual Random Effects Generalized Least Squares Regression Model Estimator. The analysis revealed that increases in international trade taxes and exchange rate increases reduce the import volume. This result empirically supports the conclusion that taxes on international trade and reductions in exchange rates increase import volume.

Digital finance policy and the challenge of air pollution in China

This study investigates the influence of digital finance tools on air quality in China from 1990 to 2020 using the cross-sectional augmented autoregressive distributed lag approach. The findings underscore the critical role of digital finance, especially internet banking, in reducing air pollution levels. The increased adoption of internet banking is linked to lower vehicular emissions and more efficient financial operations, aiding environmental preservation. Similarly, ATM banking is found to negatively correlate with air pollution, though to a lesser extent. In contrast, coal consumption, urban population growth, and inflation are positively associated with air pollution, highlighting the necessity for sustainable urban planning and energy transition policies. To combat air pollution, it is essential to utilize digital finance tools, broaden digitalization across various sectors, and employ AI and big data for precise interventions. Supporting green financial tools can help fund renewable energy projects, speeding up China’s shift to a low-carbon economy and mitigating the harmful effects of air pollution.

Sustainable finance, water governance, and water policy objectives in Ontario municipalities

ABSTRACT Sustainable finance is an important part of the water governance landscape that has not received sufficient attention in the water governance and policy literature. In this paper, we approach sustainable finance as a ‘non-water’ factor that influences water governance situations. Two key water policy objectives in Ontario municipalities provide the focus: water system financial sustainability, and industrial water use reduction. We find that sustainable finance as a sector has significant potential to drive future decision-making around water in municipalities in the context of chronic underfunding and the transition to low-carbon economies.

Зеленая экономика и право

The article investigates the legal foundations of the green economy. The authors determine the role of green bonds in regulating the economy, paying special attention to the study of their legal nature and obligations arising within the framework of the implementation of the specified debt legal instrument. Conclusions are drawn that can be used in law-making activities, as well as in the process of implementing financial policy by public authorities on the need to expand legal regulation and practice of using government borrowing in the form of bond issuance, while taking into account the specifics of repayment of government debt obligations in the field under study.

Financial technocrats as competitive regime creators: The founding and design of the Network for Greening the Financial System

AbstractWhy did a group of eight central bankers and financial supervisors from across the globe create a Network for Greening the Financial System in 2017? Why did they design this network as they did? The founders were an uncommon coalition, led by French financial authorities working closely with their Dutch, British, and Chinese counterparts, and backed by others from Germany, Mexico, Singapore, and Sweden. They were engaged in an unusual act of competitive regime creation at a moment when the United States was abandoning global leadership vis‐a‐vis climate change. This purpose led them to create a financial transgovernmental network that was distinctive in its roles, membership, and governance. Addressing these questions not only improves understanding of a body that has emerged as a leading voice in global discussions about the environmental aspects of financial policy. It also contributes to wider scholarship on financial transgovernmental networks and the greening of central banks.

The role of environmental tax in guiding global climate policies to mitigate climate changes in European region

AbstractThe purpose of this study is to perform a practical inquiry into the influence of environmental tax laws on the execution of climate‐related financial policies. Our research will assess the effectiveness of environmental tax measures in 23 European countries from 2011 to 2020. The panel‐corrected standard error (PCSE) model and the feasible generalized least squares (FGLS) model are used in the empirical examination of the link between environmental tax laws and the implementation of climate‐related financial measures. This study is based on panel data with cross‐sectional dependence. The results of our estimation highlight the need to improve policy effectiveness by using all four ecological tax indicators. These include total environmental tax revenue, energy tax revenue, pollution and resource tax revenue, and transportation tax revenue. Furthermore, we provide actual evidence clarifying the process by which the implementation of environmental tax policies improves the efficacy of climate‐related financial policies in the short term as well as the long term. According to the findings, a third of environmental tax policy indicators have a long‐term effect on the implementation of climate‐related financial measures, with no short‐term effects seen. Our findings are critical for economists and policy‐makers who support the environmental tax as an effective tool to promote a country's climate policy implementations.

Driving change: Understanding consumers’ reasons influencing electric vehicle adoption from the lens of behavioural reasoning theory

The present study attempts to explore consumer-centric reasons affecting the adoption of electric vehicles (EVs) are investigated using behavioural reasoning theory (BRT). Our study is among the first to examine consumer's EV adoption intention using BRT through the integration of the reasons “for and against” electric vehicle (EV) adoption. On data of 312 urban consumers, second order confirmatory factor analysis (CFA) revealed the existence of underlying reasons and SEM helped in testing the proposed relationships. This study also investigates the interaction effect of financial incentive policy with the consumer reasons on EV adoption. Findings revealed that “reasons for” adoption are environmental concern, perceived technology, and maintenance of knowledge and “reasons against” adoption are scepticism, price, and instrumental utility. Environmental beliefs and values influence the “reasons for” consumer intentions to approve electric vehicle adoption. Financial incentives policy was found significant in dampening the impact of reasons against adoption of electric vehicle. The study delineates the strategies for strengthening the promotion of electric vehicles.