Global Financial Research Articles

Exploring the impact of renewable energy, green taxes and trade openness on carbon neutrality: New insights from BRICS countries

The world faces two significant challenges: promoting sustainable economic growth and reaching carbon neutrality. In BRICS countries, these challenges are shaped by renewable energy, green taxes, and trade openness. These countries were selected for their strategic location and the abundance of relevant data collected over the period of 1990–2021, providing a distinctive window into the energy and economic dynamics of the area. The link between renewable energy consumption, green taxes, trade openness, and natural resources and their effects on carbon emissions in BRICS countries is examined in this study using the Fully Modified Ordinary Least Square Method (FMOLS) estimator and the Drisc Kraay estimator for the robustness test. The findings indicate that using renewable energy and green taxes primarily contribute to reducing emissions, particularly at higher emissions levels. The study reveals that various factors, namely financial globalization, trade openness, efficient resource management, and population growth, substantially impact carbon neutrality. Population growth positively impacts carbon neutrality, while using renewable energy sources mitigates it. Furthermore, the empirical findings show a statistically significant positive association between financial globalization, efficient resource management, and carbon neutrality in BRICS nations. Therefore, it is necessary to implement an integrated ecological governance strategy to control and direct financial resources towards sustainable development and green energy.

Macroeconomic determinants of non-renewable and renewable energy consumption in India: The roles of international trade, innovative technologies, financial globalization, carbon emissions, financial development, and urbanization

Against scenarios of rising fossil fuel dependence and slow renewable energy adoption rates, this study appraises macroeconomic factors affecting non-renewable and renewable energy consumption in India. Additionally, this study makes a novel attempt to evaluate the determinants of divide between India's non-renewable and renewable energy consumption levels. Overall, the findings are three-fold. Firstly, it is found that in the short-run India's non-renewable energy consumption levels are positively and negatively determined by technological innovation and financial globalization, respectively. Besides, in the long-run, non-renewable energy consumption is positively influenced by international trade, financial globalization, carbon emission, and financial development; conversely, technological innovation reduces non-renewable energy consumption. Secondly, India's renewable energy consumption levels, in the short-run, are positively determined by international trade and technological innovation, while financial development impedes renewable energy consumption. Moreover, in the long-run, renewable energy consumption is positively and negatively impacted by technological innovation and financial globalization, respectively. Thirdly, the results confirm that financial globalization in the short-run and technological innovation in the long-run reduce the divide between India's non-renewable and renewable energy consumption levels. Contrarily, in the long-run, carbon emissions, international trade, financial globalization, and financial development widen this divide. Accordingly, policy suggestions are provided for the Indian government.

Сравнительная картина и проблемы иностранного портфельного инвестирования в реальном секторе экономики / Comparative picture and problems of foreign portfolio investment

The article is devoted to the comparative picture and problems of foreign portfolio investment in the real sector of the economy. The article analyzes the main obstacles that arise in the process of attracting foreign portfolio investments. The factors influencing the increase in the flow of foreign portfolio investments, the possibility of their rapid attraction and effective distribution are considered. Sustainable development of the economy of any country today is impossible without active participation in world economic relations. Along with international trade, international flows of investment capital, carried out on the basis of effective cooperation between countries, are becoming increasingly important. In recent years, the issue of attracting external capital to the Armenian economy has become topical. Foreign investment is one of the most important conditions for stabilization and growth of the country's economy. This is primarily due to the fact that firms’ own financial resources are limited, which is due to a number of reasons in Armenian reality, such as high return on invested capital, high taxes, etc. The movement of global financial capital through the channels of the global financial system occurs in various forms, among which international portfolio investments, including investments in equity and debt securities, occupy a special place. Financial globalization is accelerating the trend towards expanding the market segment of international portfolio investments.

Financial globalization, digital financial system and economic wealth in Africa

The study examines the joint effect of foreign direct investment (FDI) and financial inclusion on economic wealth in a digital system. By employing the dynamic system GMM for a dataset of 54 African economies over the period, 2004–2022, both the FDI and the dimensions of financial inclusion have a positive effect on economic wealth. We also find that FDI and financial inclusion are complements in determining economic wealth. We provide evidence that a digital system induces a relatively greater effect of FDI and financial inclusion on economic wealth compared to its direct effect. The study found that financial inclusion relatively enhances the effect of FDI on economic wealth in countries that operate in a highly industrialized sector of the economy compared to those in a low industrialized economy. In addition, the complementarity effects are more profound in a digitalized technological environment compared to those with less focus on digitalization.

Low- and middle-income countries’ external debt cycle and global economic prospect

The rapid growth of peripheral countries has brought significant changes to the global economic and financial system, making it crucial to examine the relationship between their cyclical debt fluctuations and the world economy. Using the Bayesian dynamic factor model, this paper documents the presence of a set of common factors, known as global debt cycles, in the external debt accumulation of the low- and middle-income countries (LMICs). The interesting finding is that this debt cycles differ from well-known factors for global financial cycles in capital flows, such as U.S. monetary policy and global risk aversion. Even after controlling the factors for global financial cycles, our results reveal a significantly negative predictive effect of estimated debt cycles on global economic growth. Moreover, we demonstrate that this negative effect is primarily dominated by LMICs occupying prominent positions in international debt market networks, especially during the post-2008 financial crisis period. These findings emphasize the increasing importance of peripheral countries in the world system, which has been largely ignored in existing literature.

Assessing the Impact of Derivatives on the 2008 Financial Crisis and the Effectiveness of Subsequent Regulatory Reforms

The 2008 financial crisis was a global financial catastrophe that reflected the misuse of financial derivatives in financial markets, such as credit default swaps, asset-backed securities and collateralized debt obligations, exposing significant weaknesses in the global financial system. These financial instruments were designed to hedge against debt risk, but their lack of transparency and massive misuse ultimately led to the accumulation of systemic risk that accelerated the financial crisis. Since then, regulatory authorities around the world have realized the necessity for stronger regulatory frameworks, and a series of significant reforms have been implemented, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act in the United States, the European Market Infrastructure Regulation in the European Union, and the Basel III international regulatory framework, with the objectives of increasing transparency in financial markets and improving the risk management measures of financial institutions. This paper will explore the role of derivatives in the 2008 financial crisis and examine the effectiveness of these regulatory measures introduced after the crisis in enhancing stability of financial system.

The Evolution of Futures and Options Markets: From Agricultural Roots to High-Frequency Trading

The evolution of futures and options markets from simple agricultural hedging tools to complex financial instruments has been marked by significant technological advancements, particularly the advent of electronic trading and high-frequency trading (HFT). This paper traces the development of these markets, highlighting key milestones and innovations that have shaped their current form. High-frequency trading, while enhancing liquidity and reducing transaction costs, has also introduced significant challenges, including increased market volatility, the potential for market manipulation, and systemic risks, as seen in events like the 2010 Flash Crash. This research provides a comprehensive analysis of the legal and regulatory frameworks governing futures and options markets, with a focus on both Indian and international contexts. It examines the effectiveness of existing regulations in addressing the challenges posed by modern trading practices and explores the need for continuous adaptation in regulatory approaches. Through a detailed review of relevant case laws, statutory provisions, and scholarly literature, the paper identifies gaps in current regulatory practices and proposes recommendations to enhance market transparency, fairness, and stability. The study concludes that while the evolution of futures and options markets has brought undeniable benefits in terms of efficiency and risk management, these markets must be carefully regulated to mitigate the risks associated with high-frequency and algorithmic trading. Adaptive regulatory frameworks, enhanced transparency measures, and international cooperation are essential for ensuring that these markets continue to contribute positively to the global financial system.

Global-local nexus in sustainable development: the influence of international green investment on local environmental spending

Strengthening the financial capabilities of local governments is essential for achieving the Sustainable Development Goals. Previous research has primarily focused on the flows of finance across countries and regions, neglecting the interaction between international investment and local fiscal response. To address this gap, this study first developed the typology of local environmental spending, and then linked it to a panel dataset composed of 4,439 CDM projects in China and expenditure at the provincial level from 2005 to 2017 to explore the role of international green finance. By categorizing local environmental spending into capital spending and recurrent spending, the findings reveal that international green investment primarily influences the former type, with regional and project type variations. With explanation and discussions of the results, this study contributes to sustainability research by investigating the global-local nexus through a fiscal lens and provides policy insights for local capacity building and global financial system design.

A step towards a sustainable environment in top-10 nuclear energy consumer countries: The role of financial globalization and nuclear energy

Nuclear energy is considered an effective means of enhancing environmental sustainability. Considering this point, this study aims to explore the impact of nuclear energy, financial globalization, technological innovation, and economic growth on ecological sustainability in the top-10 nuclear energy-consuming economies from 1995 to 2020. The load capacity factor is used as a novel proxy for ecological sustainability, explaining how human actions affect ecological sustainability and how nature compensates for human-induced damage. The study employs a novel non-parametric MMQR approach to obtain coefficients across heterogeneous quantiles. The MMQR estimation findings indicate that: (i) nuclear and renewable energy consumption and financial globalization promote environmental sustainability by increasing the LCF; (ii) economic growth degrades ecological sustainability by decreasing the LCF; and (iii) the results from Granger causality suggest a causal link among economic growth, technological innovation, nuclear energy, and LCF. The study recommends that the governments of the top-10 nuclear energy-consuming countries facilitate more investment in green technologies and green energy to achieve environmental sustainability.

The new world monetary system – prerequisites for creation and implementation mechanisms

The article examines the main directions of creating a new global monetary system as the basis for the formation of an alternative global financial architecture. The strengthening of the role of the BRICS countries in the global financial and monetary system is shown. The main financial indicators of the New Development Bank (NDB) are analyzed, including the history of its creation, share capital, loan portfolio, borrowed funds from the global capital market. The prospects for the development of the NTB and its ability to participate in the formation of a new global financial and monetary system independent of the Anglo-Saxon financial elite and international financial institutions controlled by it are assessed. The possibilities of introducing a single Brics unit of account into the NBR are being considered.

How do energy efficiency, technology, natural resources and globalization impact environmental sustainability? Fresh evidence from load capacity curve theory

For sustainable development, the roles of energy efficiency and renewable energy is undeniable. We are passing through the era of globalization and economies are expanding their economic activities across borders. In this scenario, nations are striving for sustainable economic development without hurting the climatic conditions. Therefore, this study employs Bai and Carrion-i-Silvestre unit root test and Westerlund cointegration tests. The variables were found to have mix order of integration and Westerlund test shows cointegration in the panel data. The Method of Moments Quantile Regression (MMQR) is used to ascertain the effects of energy efficiency and economic, environmental, and globalization factors on the load capacity factor (LCF), a measure of environmental quality in G-20 countries. Key findings supporting the Load Capability Curve (LCC) theory show that while initial economic growth (GDP) has a negative impact (coefficient of −0.035 at the median quantile), advanced economic growth (GDP2) improves LCF (coefficient of 0.513 at the 90th quantile and 0.388 at the median). The median quantile coefficient of 0.055 indicates a positive association between the consumption of renewable energy and LCF. Natural resources exhibit a coefficient of 0.061 at the 90th quantile and 0.037 at the median. However, there are drawbacks to both financial globalization and contemporary environmental technology; their coefficients at the median quantile are −0.021 and −0.058, respectively. The work suggests targeted strategies, including more stringent environmental legislation, backing for renewable energy, sustainable resource management, advancements in environmental technologies, regulation of financial globalization, and bolstering of international cooperation.

The single supranational BRICS digital currency as a factor of independence from the dollar-centric international financial system

The single supranational BRICS digital currency as a factor of independence from the dollar-centric international financial system

Islamic Finance and Economic Performance: A Panel Analysis in Selected Countries

Financial crises, and stock markets over the years have amply shown how investors’ sentiment affect asset prices and the effectiveness of stock markets. Such a crisis brought down financial institutions sent stock markets tumbling, and left consumers scrambling due to subprime mortgages. With this, Islamic finance adoption has driven demand for Islamic financial products being free from interest. Hence, this study aimed to determine how Islamic finance can influence the economy of 19 selected countries adopting Islamic finance. These countries have marginal to significant scores in Islamic Finance across the years. This study utilized panel data from 2013 to 2021, which was gathered from the Global Islamic Finance Report, Global Innovation Report, and World Bank. A number of diagnostic tests and analyses were performed in order to reach a result that addressed the objectives and problem statement. The Panel Corrected Standard Errors analysis was used as the final model to treat heteroscedasticity, cross-sectional dependence, and autocorrelation. Based on the regression results, Islamic finance has a positive and statistically significant effect on the economy. The regression results indicate a positive and statistically significant impact of Islamic finance on the economies of the studied countries. This finding underscores the potential of Islamic finance to stimulate economic growth, enhance financial stability, and foster inclusivity in financial markets. Consequently, the findings highlight the pivotal role of macroeconomic variables and the adoption of Islamic finance principles in shaping economic outcomes.

Synergy for climate actions in G7 countries: Unraveling the role of environmental policy stringency between technological innovation and CO2 emission interplay with DOLS, FMOLS and MMQR approaches

The significant and indestructible repercussions of global warming have an enormous effect on economies worldwide. Inevitably the preservation of the environment remains a crucial element in the pursuit of sustainable development goals. The primary aim of this study is to assess the moderating effect of environmental policy stringency (EPS) between technological innovation (INV) and CO2 emission and direct association between financial development (FD), and financial globalization (FG) and environmental quality among the G7 countries. This analysis is conducted using a dataset covering the time period from 1990 to 2020, employing the Dynamic Ordinary least Square (DOLS), Fully Modified Ordinary Least Square (FMOLS), Canonical Cointegration Regression (CCR), and Method of Moment Quantile Regression (MMQR) estimation approaches. The results of DOLS, FMOLS, & CCR indicates that INV*EPS increase environmental quality by −0.21168, −0.21257 and −0.21255, respectively. Further, the outcomes of MMQR demonstrate that combine effect of INV & EPS contributes −0.2003 to −0.2264 across all quantiles from 20th to 80th. This indicates that technological innovation leads to enhanced environmental quality by mitigating CO2 emissions and implementation of more stringent environmental rules enhance the positive effects of green technologies by employing eco-friendly technologies to achieve carbon neutrality target. In order to effectively attain sustainable development goals, the study suggests that in economies that exhibit a higher degree of innovation, strong financial system, the adoption and implementation of environmentally sustainable technologies have a significant influence on the mitigation of CO2 emissions and the enhancement of environmental conditions. The study findings suggest few polices to policymakers: enhancing the green finance structure and strengthening the design of environmental regulations to promote green innovation. Research and development (R&D) activities have the potential to significantly contribute to the reduction of CO2 emissions through the effective application of scale effects and the implementation of efficient marketing tactics.

Study of the Reaction of Stock Markets to the Cancel Culture Phenomenon in Relation to Russia

Suspension of business in Russia by most foreign corporations after the events of 24 February 2022 led to the fact that the social phenomenon of “cancel culture” is now also considered within the framework of global economy and finance. In recent years, the IT industry is appraised as one of the fastest-growing, and the study of its reaction to global events is highlyrelevant. Using the Event Study method, this study proves that there is no significant impact of the declaration of the Russia-Ukraine conflict on US stock market dynamics of IT companies with branches in Russia. The analysis of individual cases from the sample of companies shows that the companies’ decision to suspend or continue business in Russia depended only on the presence of a significant share of revenues in Russia, the degree of reputational and sanctions risks, and the specifics of corporate ESG policies. The model is limited by the sample and period of analysis. In order to verify model reliability, we applied the t-test that determined the significance of the results. The research is of practical relevance because internationally operating companies may use its data to evaluate risks and make strategic decisions.

Towards a more transformative approach to climate finance

ABSTRACT Without deliberate and proactive attempts to redirect and regulate flows of public and private finance, achieving the goals of the Paris Agreement will remain elusive. Yet, despite extensive engagement with different dimensions of climate finance by academics and policy practitioners alike, the financial system continues to be fundamentally misaligned with climate goals by locking in high-carbon development pathways while inadequately resourcing climate adaptation. Moving beyond dominant discourses about mobilising and de-risking private finance, this paper seeks to identify potential alternative interventions and leverage points to align the mobilization and redirection of finance with a more transformative approach to climate finance that targets the sources of climate change in a globally unequal fossil-fuel economy. This implies making greater use of the many policy tools that governments have at their disposal with regards to taxation and regulation, often deployed to fund the welfare state or for macroeconomic management, but which constitute powerful levers for mobilising and redirecting climate finance that have been excluded thus far from conventional definitions of climate finance used by the international community. Consciously moving beyond a narrower focus on financing decarbonization, this implies greater attention to redirecting, hypothecating and regulating the whole ecosystem of global finance so that the goals and organization of the global financial system and global climate action are better aligned.

Econometric Determinants of Chinese Developmental Finance in Sub-Saharan Africa; Further Evidence using a Flow-Type Decomposed Poisson Pseudo-Maximum Likelihood Model

Chinese “aid” has long engendered criticism. Western pundits and policymakers posit it as a political tool employed by Beijing to asway foreign policy concessions and secure natural resources access for its domestic industries, often atthe expense of the recipient country. However, we argue that large amounts of these claims lack empirical scrutiny or have been hindered by enduring conceptual, methodological, and data-centric constraints. This paper thus aims to refine and integrate prevailing methodological practices to produce a more nuanced understanding of Chinese motivations. Using empirical regression analysis and a newly released granular dataset spanning 48 Sub-Saharan African countries from 2000-2021, we: (1) decompose Chinese “aid” into flow types of relative concessionality; (2) utilize a Poisson pseudo-maximum likelihood (PPML) estimator to mitigate log-transformation and heteroskedasticity concerns present within traditional modeling of zero-inflated datasets; (3) retain a subset of contemporary values to deal with issues related to simultaneity in our regressors. Our findings suggest that while developmental goals primarily drive concessional aid, commercial lending is moreso influenced by economic self-interest, which is often incorrectly conflated with “aid” in the traditional sense. Further, Chinese “aid” does not flow disproportionately to corrupt or authoritarian regimes. This challenges the dominant “rogue donor” narrative and contributes to a more comprehensive perspective on China's emerging role in global developmental finance.

Financial capitalism going to heaven the ultrathin ultraluxury supertalls of Manhattan

This photo essay is an introduction to a new architectural typology that has emerged as recently as in the 2010s: the speculatively built ultrathin, ultraluxury residential skyscraper, serving as the apotheosis of architecture and global finance intertwined. In stark contrast to what their marketing materials suggest, these supertalls are rarely lived in. Their primary purpose is to store the surplus capital of their ultrawealthy buyers safely—and, of course, to generate jaw-dropping returns for the development companies. Ultraluxury supertalls are present in many global metropolises. Still, in this essay, I will focus on Manhattan, where the skyline has been radically reshaped in the past 10 years by this new crop of skyscrapers, many built around 57th Street, also known as Billionaires’ Row. The paper, accompanied by photographs of the views of some of these towers, will aim to describe this new architectural typology, its target audience, legislative origins, and engineering records and give a feel into what it is like to be on the top of the world—or at least own a few thousand square feet of it. The text is based on artistic research methods: while posing as Gabriella, an apartment-hunting Hungarian billionaire, I accessed and documented the views of 25 of these buildings. Thus, this essay is enriched with details from sales brochures and photographs and transcribed conversation fragments from the viewings.

Southern creative robotics – A collaborative framework to implement computational design, fabrication and robotics

Scientific knowledge, ideally neutral and impartial, is inevitably shaped by geographical, economic, and cultural contexts. This research contends that overcoming the constraints of human and economic scarcity, inertia, and limited funding access demands development of collaborative research networks. To this end, four university laboratories from Brazil and Chile - UFRJ, UBB, UTFSM and UAI - have united to advance robotics applied to architecture. The methodology begins with an analysis of Industry 4.0, Fab Lab implementations, and robotics in architecture in the region. They identify key research aspects by mapping each laboratory’s activities and technologies to pinpoint expertise and potential collaborative areas. The authors propose a summary table comparing the labs and a chronological overview to track regional robotics advancement. To raise awareness among peers, the initiative involves joint actions such as courses, workshops and technical visits. 1 Recognising the scarcity of robotic units and the inapplicability of procedures from wealthier contexts, the authors draw on their lab experience to propose guidelines for implementing robotics research units in academia within the region. This includes technological alternatives, installation considerations, and detailed configuration reviews. The deployment of additional robotic units is a means to foster collaboration and bolster the network. Anticipated outcomes encompass increased critical mass, collaborative research initiatives, faculty and student exchange across institutions, higher publication rates, knowledge acquisition, and improved access to global funding agencies. In summary, the Southern Creative Robotics network initiative aims to catalyse the creative integration of digital manufacturing and robotics technology within design in the Ibero-American context.

School Dropout, Absenteeism and Coverage of Sexual and Reproductive Health Services in South Africa: Are Those Most at Risk Reached?

School attendance or completion is important for adolescents’ development. Adolescents who drop out or are regularly absent from school are at higher risk of adverse sexual and reproductive health (SRH) outcomes. However, there is little evidence evaluating SRH service coverage among adolescents in and out of school. In the context of a large-scale combination HIV and pregnancy prevention intervention funded by the Global Fund, we compared the SRH intervention coverage and SRH risks among adolescent girls who dropped out of school with those who were still in school or who had completed grade 12 in South Africa. Among those still in school, we compared the SRH intervention coverage and SRH risk profiles of those with high versus low or no absenteeism. In 2017 to 2018, we conducted a household survey of adolescent girls aged 15 to 19 years in six of the ten combination intervention districts. Of 2515 participants, 7.6% had dropped out of school. Among the 1864 participants still in school, 10.8% had high absenteeism. Ever having had sex, and condomless sex were more prevalent among dropouts compared with non-dropouts. Dropouts were more likely to access SRH services such as condoms and contraceptives, except the combination prevention intervention services which were more likely to reach those who had not dropped out and were equally likely to reach those in school with high versus low/no absenteeism. Combination SRH prevention programmes can improve the accessibility of SRH services for adolescents in school/who complete school.