Crisis Period Research Articles

Assessing the Relationship between Political Financing and Policy Bias in B40 Welfare Policies during COVID-19

This conceptual paper delves into the intricate relationship between political financing and policy bias in the implementation of welfare policies for the B40 (Below 40 is the 40% of the total population that earns the lowest tier of household income compared to the first group of T20-Top 20% and second category M40-Middle 40%) cluster in Kuala Lumpur Malaysia amidst the COVID-19 pandemic. The B40 cluster comprises the most economically vulnerable segment of the population residing in public housing (the heavily subsidized government-owned residential areas for underprivileged citizens with certain household income categories). This study aims to unravel how political financing influences the formulation and execution of welfare policies, potentially leading to bias in resource allocation and support provision. Through an exhaustive review of existing scholarly literature and analysis of pertinent case studies, this paper embarks on examining the degree to which political financing impacts the decision-making process concerning welfare policies. The analysis focuses on identifying potential biases in policy formulation that may favor the interests of political entities providing financial backing to policymakers. Furthermore, the study also explores the implications of such biases on the equitable distribution of resources to the B40 cluster during the global COVID-19 crisis. The conceptual framework employed in this paper draws from theories of political economy, corruption, and public policy. By dissecting the extant body of literature, the paper aims to offer a nuanced comprehension of the dynamics between political financing and policy bias in the realm of welfare policies for the B40 cluster. The eventual findings are poised to enrich the theoretical understanding of the influence exerted by political financing on the formulation and execution of welfare policies, particularly during periods of global crisis. By identifying policy biases stemming from political financing, this study aspires to catalyze critical discussions on the imperative of transparent and accountable decision-making processes. Such deliberations are vital to ensuring the fair and effective implementation of welfare policies for the B40 cluster in Kuala Lumpur amidst the COVID-19 pandemic. This paper thus serves as a clarion call for enhanced governance mechanisms and institutional reforms to uphold the principles of fairness, equity, and social justice in welfare policy formulation and implementation. This study contributes to the existing literature by shedding light on the nexus between political financing and policy bias in the context of welfare policies for vulnerable populations. It underscores the importance of addressing systemic flaws in governance and decision-making processes to mitigate the adverse effects of political influence on welfare policy outcomes. Moreover, the findings of this study have practical implications for policymakers, advocacy groups, civil society organizations and other stakeholders involved in shaping welfare policy agendas and advocating for reform initiatives. In conclusion, this paper calls for a concerted effort to promote transparency, accountability, and integrity in the formulation and implementation of welfare policies. By fostering a culture of ethical governance and democratic participation, policymakers can ensure that welfare programs serve the interests of the most vulnerable members of society and contribute to equitable and sustainable development outcomes.

When R&D investment improves firm value: the role of board gender diversity

Purpose Agency theory postulates that research and development (R&D) investments are subject to managerial discretion and thus may not enhance firm value as expected. The inconclusive empirical findings in the literature is a testament of that. This paper aims to investigate the interplay between board gender diversity (i.e. women on boards) and value relevance of firms’ effort to innovate as indicated by firms’ R&D investments. Design/methodology/approach Through a sample of 1,626 US-listed firms from the period 2004 to 2019, the authors examine whether board gender diversity promotes or hampers value relevance of firms’ efforts to innovate. The authors use ordinary least squares as the baseline model and address potential endogeneity through instrumental variable two-stage least square, and selection bias through Heckman selection model. Finally, the authors use the financial crisis of 2008 as a natural experiment to investigate the effect of board gender diversity during the crisis period. Findings The results show that board gender diversity positively moderates the relation between R&D and firm value. In times of financial crisis, R&D does not destroy firm value in firms with gender diverse board. The results are robust to measurement error, endogeneity issue, particularly simultaneity and selection bias. Practical implications The findings in this study have several practical implications. Firms that invest heavily in R&D should be mindful of gender diversity in their board recruitment strategies to enhance innovation outputs and firm value. Current and potential investors (i.e. shareholders) should take into consideration board gender diversity in their investment decision-making processes as the results show that gender diverse boards promote more effective governance, which, in turn, leads to better alignment of R&D investments with shareholder value. Regulators aiming to improve corporate governance policies should encourage gender diversity on the boards. The results align with global initiatives such as the United Nations Sustainable Development Goals, particularly Goal 5 on gender equality. Policymakers may use the findings in this study to advocate for more gender diverse governance structures within corporations. Originality/value This study investigates the role gender diverse boards play in creating value from firms’ R&D activities.

How do global commodities react to increasing geopolitical risks? New insights into the Russia-Ukraine and Palestine-Israel conflicts

The present study examines the impact of geopolitical risk on global commodities returns by including both major conflicts spanning from January 3, 2023 to December 18, 2023 to cover both the Russia-Ukraine and Palestine-Israel wars. Our study utilizes the QVAR model, the Quantile-on-Quantile regression (QQR) and the frequency causality test. Surprisingly, during the pre-conflict period, our findings reveal a weak positive influence of GPR on commodities, indicating their resilience to extreme negative shocks. Variance decompositions further highlight the limited role of GPR in explaining the commodity price variance. The spillover analysis highlights a low interconnectedness between GPR and commodities, demonstrating a high hedging effectiveness against expected negative GPR shocks. The heterogeneous reaction of commodities to extremely positive GPR shocks suggests diverse responses, emphasizing the need for nuanced investment strategies. Conversely, during the crisis periods, commodities exhibit a resilience to both negative and positive shocks from geopolitical tensions, therefore, presenting diversification opportunities for investors. The causality frequency analysis emphasizes the complex dynamics between GPR and commodities in both the time and frequency domains. Our study also offers significant implications for investors, portfolio managers, and policymakers, advocating for recognition of the weak pre-conflict link between GPR and commodities.

Empowering women in central banking

ABSTRACT When are women appointed to the board of central banks? While progressive societal gender norms may facilitate women's ascension to leadership positions, recent research indicates that women are more likely to assume leadership positions during crisis periods. Because of the widely documented 'male dominance' in the policy domain of central banking, analyzing changes in women's descriptive representation on central bank boards provides a unique laboratory to study the role of women in economic policymaking. Building on previous literature on women's political leadership, we argue that sovereign debt crises are powerful catalysts for lifting women into leadership positions. We hypothesize that appointing women to central bank leadership positions during sovereign financial distress signals a policy change to bolster monetary policy credibility. Using data covering 90 countries from 2000 to 2017, we show that women are more likely to be appointed to central bank leadership positions during a sovereign debt crisis. A sovereign debt crisis increases the likelihood of women’s appointments to a central bank board by 21.1 percent. To mitigate concerns that our results are spurious, we implement a battery of robustness checks. Our study suggests that women's empowerment can be beneficial in restoring monetary policy credibility during sovereign financial distress.

Can municipal bonds hedge US state-level climate risks?

Using daily data on municipal bonds and equity returns from the 50 US states, we find barring extreme periods of financial, macroeconomic, and health crises, the underlying conditional correlation between these two assets is negative. When we capture the effect of climate risk quantiles on the entire conditional distribution of the underlying time-varying stock-bond correlation, we generally observe a negative impact at different levels of climate risks, although this could turn positive in the event of extreme climate disasters. In summary, the role of municipal bonds as a hedge against climate risks cannot be denied, carrying important implications for investors.

Probability of Corporate Bankruptcy over Two Periods of Crisis (2007-2010 vs 2019-2022): Application to Italian Manufacturing SMEs Using a Three Years Rating Model

Probability of Corporate Bankruptcy over Two Periods of Crisis (2007-2010 vs 2019-2022): Application to Italian Manufacturing SMEs Using a Three Years Rating Model

“The new normal isn’t normal”: to what extent has the Covid-19 pandemic affected secondary school children’s mental health and wellbeing in the North of England?

ABSTRACT This paper reports on a study exploring the impact of the Covid-19 pandemic on secondary school children's mental health and well-being in the North of England. It explores three research questions: to what extent has the Covid-19 pandemic affected secondary school children’s mental health and wellbeing in England? What did students value most for their mental health and wellbeing in a secondary school context during the Covid-19 pandemic? What are the implications for the post-pandemic future? A qualitative multi-method research design was used consisting of an online questionnaire survey (n = 605) and follow-up focus group interviews (n = 16). The findings of the study show that the pandemic and associated restrictions had a detrimental effect on the lives of a very large proportion of the young people in our study, with greater impact on girls than boys. From the analysis the resilience and ability of the participants to “bounce back” from the upheavals caused by the restrictions was apparent. However, for a significant minority the adverse impacts on their mental health and wellbeing continue to affect their lives. The idea of returning to “normal” following a period of crisis and turmoil such as the Covid-19 pandemic, emerges as an unhelpful concept because of the implied associated expectation of a smooth return to the routines prior to the pandemic crisis. This assumption is problematic as this study’s findings demonstrate. The “new” normal is experienced differently by students, especially girls, to what was “normal” experience before the pandemic and this has significant implications for schools.

Artificial intelligence and big data tokens: Where cognition unites, herding patterns take flight

Artificial intelligence (AI) and big data tokens have emerged as unique investment options, garnering interest due to their connectedness with other assets and financial markets. Utilizing Chang et al. (2000)'s cross-sectional absolute deviation (CSAD) model, we investigate static and time-varying herding in the AI and big data token markets. This research contributes to the growing discourse on AI and big data token investment through the lens of behavioral finance, with a particular focus on examining investor herding. The study's findings confirm market-wide herding of AI and big data tokens. The results suggest that investors exhibit herding in up markets, low volatility, and low volume days. Conversely, anti-herding is more prevalent in down markets, high volatility, and high volume days. Our analysis shows that herding is time-varying and emerges during a crisis period. The finding carries robust regulatory and policy implications to mitigate systemic risk and safeguard investor interests, ensuring market stability and resilience. The provided insights offer a valuable understanding of investors’ behavior across various market scenarios.

Using household death questions from surveys to assess adult mortality in periods of health crisis: An application for Peru, 2018–2022

Using household death questions from surveys to assess adult mortality in periods of health crisis: An application for Peru, 2018–2022

A Comparative Study of Islamic Banking Growth in Malaysia and Bahrain: A Consideration of COVID-19 Pandemic

This study examines the factors influencing Islamic banking growth in Malaysia and Bahrain, key components of the broader Islamic finance industry crucial for economic development. Focusing on 14 Islamic banks in Malaysia and 10 in Bahrain over a 10-year period, the research investigates the impact of liquidity, profitability, asset quality, and capital on Islamic banking growth. Three models are introduced, pooling data for both countries and separately analysing Malaysia and Bahrain. The study introduces three models: 1) Model A, which pools all Malaysian and Bahrain Islamic banks; ii) Model B, which represents Islamic banks in Malaysia; and iii) Model C, which represents Bahraini Islamic banks. Newey-West regression is being used for Models A and B, while Pooled Ordinary Leased Square (POLS) is being utilized for Model C. The study reveals that Bahrain's Islamic banking growth surpasses Malaysia's. There are different drivers that influence the growth in each country. Asset quality and capital are significantly influencing the growth of both Malaysian and Bahraini Islamic banks, while Malaysian Islamic banking growth is significantly influenced by profitability. Additionally, liquidity is significantly influencing the growth of Bahraini Islamic banks. However, the growth of Islamic banking does not significantly differ during a crisis or non-crisis period for each country. These findings underscore the necessity for tailored approaches in both nations to enhance Islamic banking growth, contributing to the broader development of Islamic finance.

HARMONY OF DUALITIES IN HERMAN HESSESSTEPPENWOLF

The personal life of the German- Swiss Nobel Laureate Herman Hesse (1877 – 1962) can be regarded as a period of crises, aggression, depression, cultural pre-conditioning and dogmatism. Despite his pietistic upbringing, he suffered adversities, resulting into mental trauma, emotional turbulence and inconsolable disgrace. These unpleasant experiences caused extreme depression and he had to receive Jungian psychoanalysis from Dr. Lang and Dr. Jung. This refuge in psychoanalysis brought him solace. Pietism, once a pain, became a life-long support for his spiritual journey and literary yearnings. He was, however, diagnosed with bipolar-II disorder due to his intense mood shifts, the factors being ambivalence, guilt, aggression and sexual conflict. The current work is an attempt to exemplify the impact of this disorder in his novels with special reference to his cult classic Steppenwolf , wherein the protagonist Harry Haller portrays the dichotomy of the personality, being split between a human being and a wolf. This novel which was published in 1927 is a complex, philosophical novel and deals with the themes like identity crisis, duality of human nature and quest for a meaningful life, to ultimately attain spiritual transcendence and harmony of dualities.

HARMONY OF DUALITIES IN HERMAN HESSES STEPPENWOLF

The personal life of the German- Swiss Nobel Laureate Herman Hesse (1877 – 1962) can be regarded as a period of crises, aggression, depression, cultural pre-conditioning and dogmatism. Despite his pietistic upbringing, he suffered adversities, resulting into mental trauma, emotional turbulence and inconsolable disgrace. These unpleasant experiences caused extreme depression and he had to receive Jungian psychoanalysis from Dr. Lang and Dr. Jung. This refuge in psychoanalysis brought him solace. Pietism, once a pain, became a life-long support for his spiritual journey and literary yearnings. He was, however, diagnosed with bipolar-II disorder due to his intense mood shifts, the factors being ambivalence, guilt, aggression and sexual conflict. The current work is an attempt to exemplify the impact of this disorder in his novels with special reference to his cult classic Steppenwolf , wherein the protagonist Harry Haller portrays the dichotomy of the personality, being split between a human being and a wolf. This novel which was published in 1927 is a complex, philosophical novel and deals with the themes like identity crisis, duality of human nature and quest for a meaningful life, to ultimately attain spiritual transcendence and harmony of dualities.

Risk connectedness between international oil and stock markets during the COVID-19 pandemic and the Russia-Ukraine conflict: Fresh evidence from the higher-order moments

Quantifying the connectedness across the oil and stock markets is vital for global asset allocation, systemic risk regulation, and prudent policy making. However, existing studies are mostly confined to return (first moment) and volatility (second moment) levels. This paper integrates the GARCHSK model with the TVP-VAR extended joint connectedness approach to examine higher-order moment risk connectedness between international oil and stock markets in both G7 and BRICS countries, thereby encompassing a wide range of global markets. This paper also discusses the impacts of geopolitical risks, acts, and threats on the total spillovers of volatility and higher-order moments based on the wavelet coherence method. Empirical results demonstrate that the risk spillovers between oil and stock markets are moment-dependent with the total kurtosis spillovers being stronger than the volatility and skewness spillovers. WTI, Brent, INE oil futures, and the Chinese and Japanese stock markets are consistent net receivers of spillovers whereas the remaining G7 stock markets are net transmitters. G7 and the Russian stock markets transmit significant net spillovers of higher-order moments to oil futures. The dynamic spillovers of volatility, skewness, and kurtosis are all time-varying and highly sensitive to the outbreak of major crisis events, especially the China-US trade war, the COVID-19 outbreak, and the Russia-Ukraine conflict. Driving factor analysis shows that the impacts of geopolitical risks, acts, and threats on total spillovers vary over time and across various frequency bands. Geopolitical risks strongly impact the total skewness spillovers during the crisis periods. Geopolitical acts exert a stronger influence on total kurtosis spillovers than geopolitical risks or threats. These findings can offer practical implications for cross-market investors, portfolio managers, market regulators, and policymakers.

From Xenophon's Constitution of the Lacedaimonians to See the Instrumental Role of the Ideal Spartan Image in His Historical Writing

In 1933, French historian Olier raised the issue of the "Spartan Illusion" and believed that ancient historians' impressions of Sparta must have been artificially processed based on the author's writing purpose. Xenophon's The Constitution of Lacedaemonians is the crucial surviving material of a contemporary author who personally experienced and recorded the specific internal conditions of the Spartan city-state. It is also a concentrated expression of the Spartan illusion. As a historian of the Greek city-state crisis period, Xenophon not only paid more attention to Sparta in the process of writing "Greek Chronicles" due to his legendary personal experience, but also focused more on the image of ideal Sparta. Thinking about sex, theodicy, and political philosophy were integrated into historical writing, making the image of Sparta the focus of Xenophon's historical writing and philosophical thinking, and a tool for him to write history. Previous research has mainly focused on a series of subtle thoughts that Xenophon developed by borrowing the Spartan illusion. This article intends to formally explore and summarize the process of Xenophon manufacturing and using this writing instrument, and whether it achieves its expected results.

Exchange rate in emerging markets: Shock absorber or source of shock?

This paper examines the stabilization role of flexible exchange rates for emerging economies within the Latin America and Asia regions. Based on a structural VAR model, we utilize zero, sign and exchange rate pass-through restrictions to identify structural macroeconomic shocks. Overall, we find that exogenous exchange rate shocks drive around half of total exchange rate fluctuations in emerging economies. Despite this predominant role, we find evidence that exchange rates do not act as a source of shocks to the real economy, but they instead absorb and reduce output growth and inflation volatilities. Based on counterfactual analyses, we further find that this shock-insulation property is highly shock-dependent, where the benefits of flexible exchange rates are sizable for demand and global monetary policy shocks, but are overall small in the face of supply shocks. Results also differ across time horizons, where the shock stabilization benefits are mainly limited to the short run for output, but also extend to the medium term for inflation. We also find that the net benefits of flexible exchange rates as a shock absorber are in general larger for emerging economies in Latin America than in Asia, particularly during crises periods. Finally, while we find that the stabilization role of exchange rates hinges upon the nature of underlying structural shocks, there is also a positive association with structural determinants such as a country's degree of exchange rate flexibility and trade openness.

One money, one voice? Evaluating ideological positions of euro area central banks

We provide new insights into the effectiveness of central bank communication in the euro area relying on a novel methodology. The time-varying text based ideal point model (TV-TBIP) is used focusing on two crucial topics communicated by central bankers, namely price stability and financial stability. The methodology permits identification of the ideological position of the speaker. We find that the ECB transitions between a high ideal point state reminiscent of interventionist monetary policy and their effects on financial markets and a low ideal point state with emphasis on risks to fragmentation from monetary policy and financial stability policies. The individual euro area central banks tend to mirror the ECB’s position which suggests that some specialization/coordination of responsibilities from the communications activities of euro area national central banks takes place. National central banks’ positions change gradually and usually during crisis periods. In contrast, the ECB’s ideological position is very stable. We also conduct several econometric tests that point to national inflation rates influencing ideological positions. Additionally, we find that professional forecasts are responsive to the position taken of central bankers in their speeches.

The impact of anti-COVID measures on accommodation performance.

This article analyses mass accommodation facilities to examine the development of Czech tourism during the COVID-19 pandemic of 2020 and 2021. The questionnaire survey was carried out in March 2021 in mass accommodation facilities. 131 responses were received from hotels and guesthouses throughout Czechia, which represents a return rate of 20%. Data were processed using Pearson's chi-square test to determine the effect of changes in facility type and category, quality, location, and primary focus before the outbreak of the pandemic. A statistical analysis of data on overnight stays was also used with data from the public database of the Czech Statistical Office. The study confirmed the increasing importance of domestic tourism and the greater sensitivity of destinations dependent on foreign tourists. Future strategies should be associated with destination rather than corporate management. The challenges are linked to the strengthening of environmentally friendly and sustainable tourism. To what extent the post-covid situation will return to the original model and to what extent it will at least partially reflect the changes that took place during the crisis period is a question for future research. Moving from operational to strategic measures would be advisable.

Modeling the risk of bank default

This paper is devoted to modeling the probability of default of Russian banks in 2015–2020. There are relatively few studies on defaults of Russian banks after 2015, and our work intends to partly fill this gap. The purpose of this research is to determine the main variables which significantly impact the risk of default of Russian banks. The work seeks to identify additional factors associated with an increased risk of bank defaults during a relatively stable period of development of the Russian economy (2015–2020) without external shocks, such as COVID‑19 or international sanctions. We apply an integrated approach to modeling the risk of bank defaults. Empirical methodology is represented by logit and probit models, as well as Cox regression. The set of potential predictors for bank defaults include the variables, characterizing various aspects of credit institutions functioning (in accordance with the CAMELS system), as well as macroeconomic variables. The most significant predictors of default turn out to be the capital adequacy ratio N1, bank net assets, the ratio of total loans to assets and the size of secured loan portfolio. In general, the results we obtain are consistent with the CAMELS system of indicators assessing the sustainability of commercial banks, while the impact of macroeconomic indicators tends to be insignificant. The results of the study could be of interest to the regulator both for the purposes of ongoing monitoring of financial stability as well as for default risk prevention; to credit institutions which elaborate internal systems for monitoring their financial soundness; and to financial market participants to select the most stable companies in terms of investment and allocation of funds. Further directions of research are related to the inclusion of a crisis period into the analysis and comparing the set of significant predictors for bank defaults during a crisis and a stable period of economic development, as well as the use of alternative methods, in particular, machine learning algorithms.

A Semiotic Analysis of Nonverbal Linguistic Signals Used On Billboard Posters as a Means of Creating Public Awareness During the Covid-19 Pandemic in Douala

This paper examines the use of nonverbal linguistic signals on billboard posters during the Covid-19 pandemic in Douala. It has been noticed that nonverbal signals such as sweating, wearing a nose mask, washing of hands with clean running water and soap and standing two metres apart from each other and the use of colours such as white and red among others play an important role in the way human beings communicate especially during a period of crisis. Although it is nonverbal, this means of communication acts more than the verbal one. This work focuses on nonverbal linguistic features used on billboard posters in the city of Douala as a means of creating public awareness in relation to the Covid-19 pandemic so that the contamination and mortality rate can be reduced. This study is of great value because it demonstrates how people should live during a pandemic era without being contaminated. This research uses a qualitative research design. The researcher culled some pictures that were pasted on billboards during the crisis (2020-2021) on the streets of Douala. Insight was drawn from Barthes (1964) theory of semiotics. The findings indicated that people washed their hands with clean running water and soap, they wore masks, arrows were used to show how people should stand with others in public, colours such as red was used to show how dangerous this virus is and the white colour was also used to indicate that people need to be clean during this period so that they can minimise the chances of being contaminated. Capitalisation was used either in red or black to attract the attention of the public to the messages written on the billboards. The researcher concludes that people should develop the culture of reading public notices especially billboard posters during epidemics and pandemics so that they can save their lives.

Deglobalization and China’s Visions for Reconfiguring Development Space

ABSTRACT Recent years have seen proliferating media references to ‘deglobalization’, frequently drawing historical analogies with periods of crisis and dislocation, such as the 1930s. At the same time, scholars have traced shifting geographies of development as a multi-centred unfolding of capitalist dynamics, entanglements and worldmaking projects, amidst failures and crises in/of development, sometimes discussed in terms of ‘abjection’. Negotiating these conjunctures and narratives, this paper re-considers and contextualises media debates about deglobalization, placing them in discussion with how Chinese narratives are re-visualising global development. In tracing the rise of ‘New Development Thinking’ (新发展理念) in China, we consider how global development as a project has increasingly come to occupy centre-stage in China’s sense of repositioning itself as a world power. Our conclusions reflect on the resultant consequences and challenges.