Main Transmission Channels Research Articles

Rủi ro biến đổi khí hậu và rủi ro phá sản doanh nghiệp: Ảnh hưởng của khí thải carbon CO2 tại Việt Nam

Climate change risk is emerging as a significant risk for economies and businesses today. Climate change risk affects businesses through two main transmission channels: physical risk and transition risk. Transition risk is causing certain impacts on businesses as low carbon (CO2) emission policies are being implemented. The goal of green growth and transitioning the economy to low carbon (CO2) emissions is posing challenges for businesses. Therefore, understanding the direct and indirect impacts of climate change risks on businesses will be of great interest to policymakers, capital providers, and different levels of corporate management. In this study, the author provides an in-depth perspective on the impact of climate change risk and the bankruptcy risk of businesses. By measuring climate change risk through corporate carbon (CO2) emissions, the author finds that companies with higher CO2 emissions are at greater risk of bankruptcy. The research sample includes listed companies in Vietnam during the 2012 2022 period, comprising a total of 2191 companies and 15,873 year-observations, and utilizes logistic regression with panel data.

The local human capital costs of oil exploitation

This paper explores the local-level impacts of oil exploitation on human capital accumulation in Colombia, a resource-rich developing country. We provide evidence based on detailed spatial and temporal data on oil exploitation and education, using the number of wells to measure treatment intensity at the school level. To derive causal estimates, we rely on an instrumental variable approach that exploits the exogeneity of international oil prices and a proxy of local oil endowments. The results indicate that although oil exploitation does not impact enrollment in higher education, it may negatively affect human capital in Colombia since it generates a delay in the decision to enroll. Furthermore, it incentivizes talent allocation away from STEM and professional degrees. Our results suggest no effect on either the quality of secondary education or tertiary education completion. These results are robust to a number of specification changes, and we stress the role of local markets and spillovers as the main transmission channel. In particular, we find that higher oil production increases formal wages, without finding evidence of a premium to tertiary education enrollment in oil-producing areas, and there is a positive spillover to other economic sectors.

Analysis of the influence of nonlinear energy sink parameters applicable to helicopter main reduction systems

Abstract In response to the vibration problem of helicopter fuselage caused by continuous rotor periodic excitation force, a nonlinear energy sink is considered to be installed on the main reduction transmission channel to reduce the vibration level of the fuselage. This article conducts an analysis of the influence of nonlinear energy sink structure parameters under harmonic excitation force, establishes a coupled dynamic model of helicopter main reduction/absorber/fuselage, and uses harmonic balance method and stability analysis theory to analyze the periodic solution and stability of the system. Using the vibration amplitude of the system as the evaluation criterion, the influence of damping, stiffness, and mass ratio on the vibration suppression effect of the nonlinear energy sink was explored. The results showed that as the damping of the nonlinear energy sink increased, the resonance frequency of the coupled system shifted to the left, and the vibration amplitude of the main reduction system increased; As the stiffness of the nonlinear energy sink increases, the vibration amplitude of the coupled system will first decrease and then increase, gradually approaching the vibration amplitude of the system without coupled dampers; The influence of mass ratio on system amplitude follows the same trend as the influence of stiffness. By optimizing, the structural parameters of the nonlinear absorber with good vibration suppression effect are ultimately obtained.

How does implementing the Extractive Industries Transparency Initiative (EITI) affect economic growth? Evidence from developing countries

Although there is no consensus on the relationship between natural resource abundance and economic growth, much of the economic literature suggests that natural resource abundance negatively affects economic growth in developing countries, leading to the resource curse theory. This situation led the international community to create the Extractive Industries Transparency Initiative (EITI) in 2003 to promote the effective contribution of natural resources to economic growth through a process involving governments, extractive industries, and civil society. Considering 99 developing countries from 1995 to 2019 and applying recent heterogeneity-robust difference-in-differences (DID) estimators, we find a positive and statistically significant relationship between EITI implementation and economic growth. Several robustness checks support this result. Most interestingly, the analysis of EITI’s dynamic effects reveals that these effects occur only in the short and medium terms. In addition, we tested several potential transmission channels and identified the increase in foreign direct investment and the rise in resource revenue as the main transmission channels. Moreover, we postulate and investigate four possible explanations behind the EITI’s mixed results on long-term growth: the lack of evidence of a negative relationship between natural resource abundance and long-term economic growth over the study period, a possible increasing reliance on non-resource taxes, a possible signaling effect targeted by member countries, and the lack of effect of EITI implementation on reducing corruption. Finally, the document provides economic policy recommendations for better governance in the management of natural resources in order to increase their contribution to development financing. Furthermore, improving governance in managing critical minerals is vital to avoid a “new curse of critical minerals”.

Protectionism, bilateral integration, and the cross section of exchange rate returns in US presidential debates

We study the impact of US presidential election TV debates on the cross section of intraday exchange rate returns of 96 currencies from 1996 to 2016. The performance of the candidates in the debate is an exogenous shock to the election probability. We find that currencies of countries with high levels of bilateral foreign trade with the US depreciate if the election probability of the protectionist candidate increases during the debate, while no significant impact is detected for countries with bilateral US exports to GDP below 2 percent. Expectations about protectionist measures are the main transmission channel of debate outcomes, while the candidates' stance towards military and immigration play a minor role.

The effects of climate extreme events on selected food crop yields in Sub-Saharan Africa

The agricultural sector is essential for economic growth. However, agricultural performance can be limited by factors such as climatic risks. This paper aims to analyse the effect of climate extreme events on selected food crop yield in sub-Saharan Africa (SSA). The study uses data from the Food and Agriculture Organisation (FAO) database for maize, rice, and sorghum yields. Also, we used data obtained from the International Disaster Database of the Centre for Research on the Epidemiology of Disasters (CRED) for floods and droughts over the period 1990–2020. The data were analysed based on the Fully Modified Ordinary Least Squares (FMOLS). The results showed that climate extreme events negatively affected maize, rice and sorghum yields. Also, the findings showed that floods and droughts in past years negatively influence current yields of maize, rice and sorghum. Moreover, agricultural labour force, fertilizer and financial development are the main transmission channels through which floods and droughts can affect maize, rice and sorghum yields. The study concludes by recommending that policies aimed at promoting climate change adaptation measures as well as agricultural insurance could make the agriculture sector more resilient to climate extreme events and in turn that could improve agricultural productivity and reduce food insecurity.

The spillover effects of U.S. uncertainties on the systemic tail risk of Chinese enterprises

This study examines the impact of U.S. uncertainties, as indicated by the Macroeconomic Uncertainty Index (MU), Financial Uncertainty Index (FU), and Economic Policy Uncertainty Index (EPU), on the systemic tail risk within Chinese enterprises. Our findings reveal a significant positive relationship between U.S. uncertainties and systemic tail risk of Chinese enterprises. Additionally, this relationship is mediated through two main transmission channels—investor sentiment and financing constraints.

Free zones and manufactured export competitiveness from Africa

AbstractThis study analyzes the effect of free zones on the competitiveness of manufactured exports from Africa. Particular interest is devoted to the channels through which free zones affect export competitiveness. The empirical analysis covers a sample of 29 countries for the period 1996–2018. Using panel data techniques, the results show that the free zone has a positive and significant effect on export competitiveness. The main transmission channels identified are foreign direct investment inflow, human capital, and institutional quality. As the main policy implication, policymakers in Africa need to invest more in human capital development and improve the attractiveness of the investment environment as a priority for having productive free zones.

Do Acts of Corruption Committed by Officials in Charge of Municipal Financial Management Reduce Local Public Revenue? A Case Study From Cameroon

This article analyses the effect of acts of corruption committed by officials in charge of the financial management of municipalities on the mobilization of local public revenue in Cameroon. From a sample of 213 communes out of the 360 in Cameroon, we specify and estimate a panel data model using the Generalized Least Squares (GLS) method over the period 2010–2020. Our results show that corruption measured by convictions of officials in charge of the financial management of municipalities by the financial jurisdiction of accounts in Cameroon reduces local public revenue. Our results identify tax compliance captured through access to education, health and average per capita income as the main transmission channels. The study calls for the intensification of controls on the financial management of municipalities and the strengthening of sanctions imposed on public officials who have been convicted of financial embezzlement.

Africa's resource curse: The key role of property rights

The purpose of this paper is to examine whether property rights can change the curse of natural resources into a blessing in African countries. To examine the above question, this study uses the Fraser Institute's and V-dem's index of property rights. Using data from 47 African countries over the period 2000–2020, the system GMM estimates suggest that the negative growth effects of resource rents may turn positive in countries with greater property rights. Furthermore, the quality of the judicial system as a proxy measure of property rights indicates that independence, impartiality, accountability, and the absence of corruption in judicial decisions also mitigate the negative effect of resources on growth. In addition, entrepreneurship, labor productivity, industrialization, and unemployment reduction are the main transmission channels. Strengthening property rights in Africa is therefore an effective policy to reverse the curse related to natural resources.

Effect of Financial Frictions on Monetary Policy Conduct: A Comparative Analysis of DSGE Models with and without Financial Frictions

In this study, we explored the impact of bank leverage and financial frictions on the transmission of real and financial shocks. Two new Keynesian dynamic stochastic general equilibrium (DSGE) models, with and without financial frictions, were employed in the context of the Tunisian economy. In the analysis, we considered three types of shocks—productivity, monetary, and adverse bank capital shocks. The findings reveal that, in the model with financial frictions, the response of macroeconomic and financial variables to demand and supply shocks was more pronounced than in the baseline model, where frictions primarily exist at the borrower level. In this study, we underscored the significance of financial shocks, particularly negative bank capital shocks, in triggering substantial macroeconomic and financial fluctuations, especially when banks operate with higher leverage ratios. Additionally, the inclusion of financial frictions in the DSGE model enhanced its ability to capture the empirical features of real and financial shocks, providing valuable insights for effective monetary policymaking. The results provide foundational insights for Tunisian policymakers to assess the impact of financial frictions in the context of the Tunisian economy. This is significant for the Central Bank of Tunisia, which has not yet adopted a specific DSGE model. Therefore, through our analysis, we determined the amplificatory role of financial frictions in the dynamics of macroeconomic and financial variables in Tunisia and examined the main transmission channels of shock propagation.

The impact of COVID‐19 pandemic on the Thai economy and the effectiveness of monetary policy: A Bayesian DSGE model approach

AbstractThis study estimates a medium‐scale dynamic stochastic general equilibrium model for the Thai economy to evaluate the impact of the COVID‐19 pandemic containment policy on key macroeconomic aggregates. The shock to labor supply is considered as the main transmission channel. The paper discussed the role of monetary policy in regard to economic recovery and also identified the dominant shocks driving the business cycle. Thai quarterly series from 2011Q1 to 2021Q2 is used for the Bayesian estimation of the model. Though the pandemic shock caused a sharp decline in output, consumption and investment, the results suggest a fast recovery in the growth rates of the variables in about 2.5 years. At the same time, the dominant shocks that account for output variation in the medium to long term are investment, labor supply and productivity shocks. Monetary policy is effective in shortening the recovery due to its impact on private investment. The key drivers of Thai household consumption in the long run are investment, labor supply and productivity shocks. On average, the investment shock appears to be the key driver of the business cycle at all horizons.

Exploring the impact of digital inclusive finance on consumption volatility: Insights from household entrepreneurship and income volatility

The application of digital technology has reshaped all aspects of social life, and the impact of financial technology on the economy is unprecedented. Consumption is an eternal issue in economic development; however, most existing studies have concentrated on how digital inclusive Finance affects household consumption levels, giving little attention to consumption volatility. Nonetheless, policies that overlook consumption volatility are less likely to achieve societal welfare goals, particularly in developing countries. This study aims to fill this gap and unveil the “black box” of the impact of digital inclusive Finance on consumption volatility, which can benefit the development of economic resilience. Utilizing data from the China Household Finance Survey, our research assesses the impact of digital inclusive Finance on household consumption volatility and discovers that digital inclusive Finance significantly smooths out these fluctuations. Mechanism tests further indicate that the main transmission channels for this impact are promoting entrepreneurship and reducing income volatility. Moreover, heterogeneity tests show that the effect of digital inclusive Finance in smoothing household consumption volatility is more pronounced in households with sound financial standing, higher financial literacy, and internet access, especially in rural areas. These findings enrich the literature on digital inclusive Finance's role in managing volatility and extend the theory on the inclusive nature of digital inclusive Finance, offering valuable practical implications for developing countries.

The effects of the monetary transmission mechanisms on inflation in Türkiye

The goal of this paper is to examine the impacts of the monetary transmission mechanisms on inflation in Türkiye using monthly data over the period 2006:M01-2021:M11. To this end, the paper considers the interest rate channel, the exchange rate channel, and the credit channel as the main monetary transmission channels. For unit root and cointegration analyses, the paper relaxes the assumption of linearity and employs time series methods based on nonlinear models. Besides, the paper performs a causality test based on the bootstrapping procedure. The findings indicate that the inflation rate is positively related to the interest rate, the exchange rate, and the credit growth rate and that all these variables have predictive power in forecasting future inflation rates in Türkiye. These results imply the existence of efficient monetary transmission channels in Türkiye. Theoretical and practical implications are discussed.

Impact valuation of droughts in soybean and maize production: the case of Argentina

PurposeIn Argentina, soy and maize represent 28% of the total country exports, affecting the balance of payments, international reserves accumulation and sovereign credit risk. In the past 10 years, three extreme and moderate droughts have affected the agricultural areas, causing significant losses in soybean and maize production. This study aims to estimate the economic impact generated by different drought levels for soy and maize production areas through a financial perspective that allows the estimation of the cash flow and income losses.Design/methodology/approachBy analyzing the extreme deviations in yields during dry periods, the losses generated by droughts were valuated among 183 departments nationwide.FindingsThe aggregated results indicated a total loss of US$24.170m, representing 57.45% of the international reserves of the Argentinean Central Bank in 2021. This estimate shows the magnitude of the climate impact on the Argentinean economy, indicating that severe droughts have macroeconomic impacts, with the external sector as the main transmission channel in an economy with historic restrictions on the balance of payments, international reserve accumulation and sovereign credit risk.Originality/valueThis study analyses the macroeconomic impact of drought on Argentinean soybean and maize production.

A hybrid electricity-economy model to assess the aggregate impacts of low-carbon transition: An application to France

The article investigates different macroeconomic channels of transmission of the low-carbon transition in two official scenarios for the French power system under different oil price scenarios. A hybrid model combines, with a two-way soft link, a dynamic general equilibrium model and a partial equilibrium model for the power generation mix. The results show that the decarbonization of the economy and growth can be driven by technical progress and substitution mechanisms triggered by low-carbon transition policies. The main transmission channels are the demand for energy through the relative price of energy and the relative efficiency of energy, and the demand for durable goods. Considering the evolution of relative electricity prices, for an economy transitioning toward mass electrification, seems to be key in our model. And, if recycled, the carbon tax may not significantly harm the economic welfare of households but weigh (slightly) on the firms in the long run.

Can financial technology development reduce household energy consumption? Evidence from China.

This paper examines whether financial technology (FinTech) development affect household energy consumption. The proposed point that FinTech can reduce household energy consumption is theoretically discussed and empirically tested using data from the 2017 Digital Financial Inclusion Index, the 2018 China Family Panel Studies (CFPS), the 2018 China Environmental Statistical Yearbook and the 2018 China Science and Technology Statistical Yearbook. The results show that FinTech contributes to reducing household energy consumption. Several retests, including the instrumental variable, replacement sample and propensity score matching methods, prove its robustness. Mechanism tests show that investment in environmental governance and technological innovation promotion are the two main transmission channels. We also find that the reducing effect is more significant in the following groups: the low-middle income level classes, the eastern regional residents, those with bachelor's degrees and above, the those aged over 60 and rural residents. The outcomes of this paper call for government departments to positively guide FinTech development to reduce household energy consumption. From another perspective, the conclusions drawn from our analysis make a great reference value for countries and provide new ideas for Chinese carbon peaking and carbon neutralisation goals.

The sins of the church: The long-term impacts of Christian missionary praxis on HIV and sexual behaviour in Zambia

ABSTRACT This study examines the long-term effect of Christian missionary exposure on HIV infection and related sexual behaviour in Zambia. I use distance to a historical missionary church and health facility as proxies for missionary exposure. I constructed a geocoded data set combining information on the historical locations of churches and missionary health centres with contemporary individual-level data. I find that individuals who live close to a historical missionary church have a higher likelihood of being infected with HIV. I find no significant effect of proximity to a missionary health centre on HIV. Considering that heterosexual transmission is the main channel of HIV transmission in Zambia, I analyse the effect of missionary exposure on sexual behaviour. The following patterns emerge: individuals who live close to a Protestant church are less likely to engage in premarital sexual abstinence; they also have their first sexual encounter at an earlier age, with the effect being stronger for men than women. Living near a Catholic church is associated with having a higher number of sexual partners.

Does financial development contribute to the achievement of the “Zero Hunger” goal in Africa?

AbstractThis study examines the effects of financial development on undernourishment with panel data from 40 African countries. We show that financial development in all its dimensions reduces undernourishment. In addition, financial development, financial institutions, the financial market, and financial market depth reduce child stunting. We also identify education, health expenditure, access to electricity, and control of corruption as the main transmission channels through which financial development reduces undernourishment. These results have important implications for the achievement of the “Zero Hunger” goal in Africa and for improving child nutrition.

Research on the Influence of Monetary Policy on Stock Market Return

These changes in China's stock market are influenced by factors such as the share-trading reform and the international financial crisis. During this period, a series of monetary policies implemented in China also had some profound effects on China's stock market. Capital market has always been the main transmission channel of monetary policy. In recent years, China's interest rate system, share-trading system and other reforms have been gradually implemented, and the reform of interest rate marketization has achieved certain results, but it has also brought more uncertainty to the transmission of stock market and monetary policy. With the continuous expansion of the stock market, it has played an important role in the transmission process of monetary policy. At the same time, monetary policy can affect the price of financial assets, thus changing people's behavioral decisions and achieving monetary policy goals. When the actual monetary policy changes beyond or below expectations, it will cause the change of stock price. The existence of expectation effect makes the relationship between monetary policy and stock price change more complicated: taking loose monetary policy as an example, when the actual degree of easing is greater than investors' expectations, stock prices will be positively stimulated by easing; When the degree of easing is less than investors' expectations, the stock price will turn downward. Therefore, it is worth studying to analyze the influence mechanism among monetary policy, stock market and real economy.