Post-crisis Years Research Articles

The impact of diversification on the profitability and risk of Chinese banks: evidence from a semiparametric approach

AbstractThis paper analyzes the effects of banking diversification and focus strategies on the profitability and risk of Chinese banks in the post-crisis years (2008–2019). For this purpose, semiparametric estimates are used. The main results indicate that Chinese banks do not gain much benefit in terms of profitability and risk from following income or asset diversification strategies, although the former are more beneficial than the latter. These results have important implications for the design of specific diversification strategies for different types of banks. Results suggest that state-owned banks could benefit from a greater degree of diversification to obtain more profits and simultaneously decrease their risk levels, while national shareholding commercial banks and city commercial banks should evaluate these strategies with more caution as the benefits from them are less obvious.

Statistical Analysis of Ineqality and Poverty with Under-Reporting Incomes of Russian Households

The subject of the article is the study of inequality and poverty, taking into account under-reporting household income. The purpose of the research was to estimate the under-reporting incomes of households and their impact on the smoothing income inequality and poverty based on representative data of the All-Russian Survey of Consumer Finance (2013, 2015, 2018, 2020 and 2022). It is relevant to analyze changes in inequality for individual population groups, as well as the contribution to inequality of individual sources of income, including those hidden from statistical observation. The novelty of the study is the obtained estimates of under-reporting household income, as well as the results of an analysis of their impact on smoothing income inequality and poverty based on the specified dataThe methodology included the use of econometric modeling according to the Pissarides – Weber approach, as well as decomposition of the Gini elasticity by income sources based on the Lerman – Yitzhaki algorithm. The results of estimations differ from those previously obtained according to the data of the Russia Longitudinal Monitoring Survey – Higher School of Economics. The resulting share of under- reporting income in the disposable resources of households averaged about 20% for 2013 to 2022 and decreased by 2,3% on average per year. Decomposition of the Gini index by income sources led to the conclusion that the main contribution to inequality was made by the non-poor population. Calculation of Gini income elasticities by income sources for poor and non-poor households (taking into account the imputed component of under-reporting income) revealed their differently directed impact on inequality. Wages and social transfers increase inequality among the poor and do not increase inequality among non-poor households. Estimating under-reporting income was higher for the group of poor households. At the same time, this component increased inequality in the post-crisis year 2015 and in the pandemic year 2020 for the group of non-poor households. The obtained results will provide important information to social policy makers, taking into account the influence of under-reporting income` on the poverty reduction and equalization of the standard of living of the Russian population

The effect of a political crisis on performance of community forests and protected areas in Madagascar

Understanding the effectiveness of conservation interventions during times of political instability is important given how much of the world’s biodiversity is concentrated in politically fragile nations. Here, we investigate the effect of a political crisis on the relative performance of community managed forests versus protected areas in terms of reducing deforestation in Madagascar, a biodiversity hotspot. We use remotely sensed data and statistical matching within an event study design to isolate the effect of the crisis and post-crisis period on performance. Annual rates of deforestation accelerated at the end of the crisis and were higher in community forests than in protected areas. After controlling for differences in location and other confounding variables, we find no difference in performance during the crisis, but community-managed forests performed worse in post-crisis years. These findings suggest that, as a political crisis subsides and deforestation pressures intensify, community-based conservation may be less resilient than state protection.

Does bank branch density reduce income inequality in the Spanish provinces?

This paper analyzes whether the density of bank branches is affecting income inequality in the Spanish provinces in the post-crisis years (2015–2019). The results show a non-significant impact for the analyzed period, and hold for a variety of scenarios, estimation methods and different types of bank. Then, although most previous literature suggests that bank branches reduce inequality, especially in advanced economies, that finding does not hold for the Spanish case. The advance of digitalization and the emergence of new forms of banking are potential candidates that might explain our results.

THE EVALUATION OF DEVELOPMENT EFFICIENCY FOR THE TOURISM AND RECREATION COMPLEX IN THE REGIONS OF RUSSIA WITH THE DEA METHOD

The article presents the results of assessing the development efficiency of the tourism and recreation complex of Russia’s regions for the period from 2017 to 2021. This period includes both years of stability, characterized by predominance of positive trends in tourism development, and crisis and post-crisis years associated with the effects of the COVID-19 pandemic. Taking into account the complexity of the structure of the tourism and recreation system and the need to improve territorial planning and management, an urgent task is to introduce a comprehensive, aggregated efficiency indicator to be used for assessment of regional tourism. The efficiency coefficient (efficiency score) calculated by means of the DEA (Data Envelope Analysis) method is proposed as such an indicator. The study is novel in that it develops a methodology for assessing the efficiency of regional tourism based on DEA. The essence of this method is as follows: basing on the theory of duality, having data of input and output parameters, it is possible to calculate the value of the efficiency indicator for a set of N-objects (in our study – subjects, i.e., constituent entities of the Russian Federation). For the calculations, we used a model focused on the ‘input’ and taking into account the variable scale effect. In models of this type, each inefficient object is compared with efficient objects that have the structure (ratios) of indicator values closest to the structure of this inefficient object. This allows one to determine how much to change the parameters of the tourism and recreation complex in order to achieve efficiency equal to 1 (which is the maximum score). The model used seven ‘input’ indicators and six ‘output’ indicators. The analysis of the results was carried out in the context of the tourist macro-territories designated in the strategic documents for the development of tourism in the Russian Federation. The data obtained indicate a decrease in the efficiency of tourism development in the Russian Federation, with the exception of a number of regions and two tourist macro-territories. The results of the study can be used to adjust regional tourism development programs.

Assessing the Attractiveness of the Investment Market in the Republic of Armenia

Due to the global financial and economic crisis that began in 2008, the Armenian economy found itself in a period of deep decline and, naturally, as expected, both domestic and foreign investment fell sharply. In the post-crisis years, as the economy gradually began to emerge from the crisis and gradually recover from the positive dynamics of macroeconomic indicators, however, no significant increase in investment flows was recorded; the investment market is still characterized by low activity.

Cardiovascular mortality in Northern Ireland during the 2008-2014 financial crisis years: who got the worst hit?


 Background: Internationally, cardiovascular mortality and economic recessions showed an established relationship. Northern Ireland was badly affected by the global financial crisis in 2008-2014 but little is known in terms of how cardiovascular mortality was affected.
 Objective: The aim of the present study was to investigate the potential impact of the 2008 economic crisis on the annual cerebrovascular accidents CVA and ischaemic heart disease IHD related mortality in Northern Ireland.
 Method: Mortality data were extracted from Northern Ireland Statistics and Research Agency database. We utilized generalized linear regression Poisson modelling to estimate the impact of economic crisis on the IHD and CVA mortality.
 Results: We found a significant increase of IHD-deaths during the financial crisis years in males over the age of 65 (β = 49.466, p value = 0.003) and females over the age of 65 (β = 57.721, p value = 0.001). However, CVA-mortality in the post crisis years rose significantly for females who were 65 years or older (β = 56.010, p value = 0.005) but not for males. The rest of the age groups were not significantly affected in terms of either CVA or IHD mortality.
 Conclusion: For the total population the only age category with significant increase in both IHD and CVA mortality in the post-2008 era was the over 65 (p values < 0.001 and = 0.012, respectively)
 Declaration of interest: None.
 Keywords: IHD, CVA, Northern Ireland, economic recession, working-age, socio-economic changes

A period of contention? The politics of post-crisis activation reform and the creeping marketisation of public employment services

ABSTRACT Public employment services (PES) have undergone significant change since 2011, reshaping the roles of the market, state, and community sector within Ireland’s mixed economy of welfare. The post-crisis years saw the replacement of FÁS with a new network of one-stop-shop Intreo activation services, and the procurement of new employment services for the long-term unemployed through competitive tendering and Payment-by-Results. This process of marketisation is now being extended to other PES currently delivered by community organisations under block grants, such as Local Employment Services and Job Clubs. We position Ireland’s PES landscape as a strategic action field wherein various providers compete with one another for position, power and resources during episodes of contention. Applying this lens to the ongoing reform of activation policy and PES institutions, the paper considers how the recent trajectory of PES marketisation has remained politically contentious. It examines the strategies of various providers and policy actors in shaping the politics of reform, focusing especially on the position of community organisations within the field and the degree to which they have been able to strategically mobilise against marketisation. Lessons are drawn about the nature of Irish politics and policy reform.

Home price growth and minority access to mortgage credit

This paper examines the relationship between home price growth and mortgage lending standards for minority applicants during the 2001–2006 (pre-crisis) and 2012–2017 (post-crisis) periods. Using the housing supply elasticity measure by Saiz (2010) to instrument for home price growth, I find that minorities in metropolitan areas with home price appreciation experienced looser mortgage lending standards during the pre-crisis period but tighter lending standards during the post-crisis years. Moreover, there was a greater increase in minority loan acceptance rate relative to non-minority loan acceptance rate in these areas during the pre-crisis period. The results suggest that home price appreciation improved minority access to mortgage credit through lower lending standards during the pre-crisis years.

The effect of the financial crisis on audit quality: European evidence

PurposeThis paper aims to examine the impact of the recent financial crisis on audit quality by analysing discretionary accruals.Design/methodology/approachThis study considers a sample of German, French, Italian and Spanish non-financial firms from 2005 to 2013 to investigate the auditor’s independence. It uses a cross-sectional and time-series ordinary least squares regression model to control for other predictors of the auditor’s independence when the financial crisis produces a decrease in audit quality.FindingsThe proportion of the non-financial firms having lower audit quality was higher during the financial crisis. In addition, during the crisis auditors were less likely to provide a higher audit quality for these non-financial firms. The level of audit quality returned to normal levels during the post-crisis years when the crisis had ceased.Originality/valueThese findings contribute to the literature on the impact of economic and financial changes on audit quality. In addition, this research finds that the Big Four accounting firms provide a higher audit quality in different circumstances from non-Big Four accounting firms, and that audit quality decreased during the crisis and returned to normal in the post-crisis period.

‘[La casa] non è più sexy in Italia.’ The absent politicization of housing in Italy, insights from Turin

During the years of economic crisis and austerity, and the subsequent economic growth dependent on real estate and tourism, housing has returned into the spotlight on the political agenda in Southern European countries and cities, where activists and social movements scaled up their struggles and created bridges with institutional actors, fostering policy change. The latter, however, did not happen in Italy. In this article, based on exploratory case study research carried out in the city of Turin, we present three themes that help explain what we call the 'absent politicization' of housing in Italy during the last decade: a multi-actor, multilevel housing policy capable of defusing specific problems; the absence of bridges between politicized and institutional actors; and the role played by party-politics, with attention to 'populist' Movimento 5 Stelle in power in Turin. By focusing on differences with Southern Europe, we contribute to overcoming dichotomies that have long dominated comparative housing studies; and contribute to linking housing studies with contentious urban politics in the post-crisis years.

Assessing the impact of global financial crisis on the intermediation efficiency of Indian banks in the presence of non-performing loans

PurposeBy incorporating the role of nonperforming loans (NPLs), the study aims to assess the impact of global financial crisis (GFC) on the intermediation efficiency of Indian banks for the period of 1998/99 to 2016/17.Design/methodology/approachTo obtain efficiency level of Indian banks, this study applied sequential data envelopment analysis (DEA) based directional distance function (DDF) approach, which performed simultaneous expansion of desirable output and reduction of undesirable output in the bank's loan production structure. Additionally, using fixed effect regression approach in the panel data framework, this study assesses both the phenomenon of σ- and unconditional β-efficiency convergence in public sector banks (PSBs), private banks (PBs), foreign banks (FBs) and overall scheduled commercial banks (SCBs) during the pre-crisis, crisis and post-crisis years in India.FindingsIrrespective of the bank's production model, the evidence suggests that the accounting NPLs as an undesirable output significantly deteriorating the intermediation technical efficiency levels of Indian banks, especially after the crisis years until the last year of the study period. This reflects that Indian banks failed more to achieve their financial intermediation objective in the post-crisis years as compared to the crisis and pre-crisis years. In-depth, statistical evidence of commercial bank ownership groups reveals that public sector banks exhibit a higher level of efficiency in pursuance of traditional loan-based activity followed by private and foreign banks. The study also found the existence of sigma convergence in technical efficiency levels of Indian banks and ownership groups as well.Originality/valueThis study is perhaps the first one, which present the robust evolution of Indian banks intermediation efficiency by taking into account both endogenous (i.e. NPLs as an undesirable output and equity as a quasi-fixed input in the bank production process) crisis and exogenous (i.e. global financial and economic stress) crises. Moreover, none of the existing studies have conducted sub-period wise analysis to show the apparent occurrence of both convergence properties in technical efficiency, adding novelty in the literature.

The Economy of the Border Municipalities of Finland in the Post-Crisis Years

The 2008–2009 crisis and the subsequent euro zone crisis dealt a serious blow to the Finnish economy. 2009 was marked by a significant reduction in the country's GDP, an increase in unemployment, and an increase in public debt. In the following years, Finland did not experience stable economic growth, and in 2014, mutual sanctions between Russia and the EU made their contribution. It was only in 2016 that the country began its systematic return to its pre-crisis state. Finnish municipalities bordering Russia since the 1990’s. the twentieth century is the least economically developed part of the country, which at the same time is most closely connected with our country due to its geographical location. In this regard, in this article, the author considered the economic situation of these municipalities on the basis of available official statistics. It was found that the dynamics of the considered indicators most often correlate with what was happening in the country as a whole. In 2014–2015, no special negative consequences from counter-sanctions on the part of our country were revealed. The exception was the indicators related to the service sector of border municipalities, which in 2014–2015 were noticeably worse than the average for Finland.

Internal devaluation: A controversial effort for adjustment within the Euro area

AbstractThe euro crisis and its lessons are still not a closed chapter for economists and policy makers. The challenge to find the most appropriate ways to prevent intra-area imbalances is still on the top of the agenda. Nominal adjustment (internal devaluation) remains one of the most critical aspects of this debate. Many are indeed interested in whether austerity measures in several countries “made sense.” But much more is at stake here than evaluating the past. The true question is whether the eurozone can rely on nominal adjustment to align internal economic fluctuations. This paper contributes to the answer by investigating the size of price changes and their impacts on output and trade in the wake of the euro crisis. Selecting the most appropriate variables to measure competitive outcomes, the basic idea of “expansionary contraction” is tested. We rely on a comprehensive panel of all Eurozone member states in the post-crisis years (2010–2017). The results suggest that flexible price levels cannot be taken for granted, and a link to competitiveness is not self-evident, either. Other channels of adjustment may prove to be more important, but scaling them up will ultimately require a sound consensus on the future architecture of the euro.

The European Union and political behaviour: The shadow of the Great Recession

The symposium aims to analyse the politicisation of the European issue following the onset of the Eurozone crisis, in particular its impact on individual attitudes and voting both at the national and supranational level. By way of an introduction, we address the state of the art on the importance of the Eurozone crisis for EU politicisation, as well as outlining each article and its contribution. While our authors may sometimes focus on different dependent variables, they all speak to the question of whether the Great Recession made a lasting difference, and whether EU politicisation matters. Most articles are longitudinal, and test for changes due to the crisis (Dassonneville, Lewis- Beck and Jabbour; Ruiz-Rufino; Talving and Vasilopoulou; Jurado and Navarrete). But preoccupation with the Great Recession is also present in the articles assessing the political learning that unfolded from it (Ruiz-Rufino), or the ones which investigate whether EU effects can be detected during the post-crisis years (Talving and Vasilopoulou; Lobo and Pannico; Heyne and Lobo). Despite the diversity of approaches, and certain differences in findings, each article contributes to a major debate ongoing in the literature, especially three key debates which have arisen: the crisis’ impact on European party systems, economic voting, and the degree of legitimacy of democratic systems.

Basel III and the Regulation of Market-Based Finance: The Tentative Reform

Since the mid-2010s, with memories of the global financial crisis of 2008 (GFC) progressively fading, there has been increasing recognition of the potential contributions of market-based finance. This refers to credit intermediation conducted by non-bank entities, effectively what was termed in 2007 shadow banking. A number of policy-makers in the post-crisis years have praised the opportunity to reconcile shadow banking with resilient market-based channels of intermediation. The G30 in 2016 stressed particularly the potential that lies in securitisation and other forms of market-based finance. In the process though, market-based finance is also proposing the re-emergence of a business model that in the pre-crisis years was known as securitised banking.The post-crisis narrative suggests that the regulatory corrections that have been implemented since 2008 should contribute to transforming shadow banking into resilient market-based finance. The Basel III framework sits at the heart of the post-crisis regulatory architecture, and it was designed to protect large financial institutions from the risks flowing from market-based channels of intermediation. This general optimism though clashed with the economic slowdown caused by the COVID-19 pandemic in the spring of 2020, particularly insofar as it exposed some deep-seated fragilities in the financial system.This article therefore engages with a critical appraisal of that regulatory edifice, analysing in particular its capacity to respond to risks associated with pre-2008 securitised banking, as well as the challenges emerging from the more recent morphing in market-based channels of intermediation. The new Basel framework appears to provide the necessary safeguards to guarantee the stable operations of restored capital markets. This article observes though that despite providing much needed regulatory improvements from the pre-crisis regime, the current framework is still falling short in protecting the financial system from the risks that are generated by the evolution of market-based finance.

Derivatives Market: World trends and development prospects

The article analyzes the problems of the development of the world derivatives market, which in the recent post-crisis years has increased its turnover to catastrophically huge parameters, significantly exceeding world GDP. This casts doubt on the reliability of the global financial system, since the overwhelming majority of these financial instruments are traded on the over-the-counter market and therefore are not subject to any regulation or control. The solution to these problems is associated, in the author's opinion, with the creation of a unified standardized system of exchange turnover of all types of derivative financial instruments, which should bring the volume of issued derivatives and real underlying assets in line with them.

Home price appreciation and residential lending standards

We explore the effect of home price appreciation on residential lending standards in the U.S. across different sample periods. Using housing supply elasticity measures as instrumental variables for home price changes, we find that rising home prices led to easing lending standards between 2001 and 2006. Mortgage acceptance rates increased more in MSAs that experienced higher home price appreciation, contributing to the credit boom. However, we find that home price appreciation is associated with tighter lending standards between 2012 and 2016, suggesting that banks took a more cautious view of home price appreciation after the financial crisis. To study the negative relationship between home price appreciation and lending standards during the post-crisis years, we examine loan acceptance rates of small and large banks separately. We find that it was the small banks who lowered loan acceptance rates in MSAs with higher home price appreciation, which caused the overall loan acceptance rates to decline.

A Crisis by and for Capital

In the industrial world, the post-crisis years were marked by systematic attempts by governments to retrench the laws, programmes and institutions that provided the working class with some degree of protection from the inherent instabilities and excesses of capitalist development. These corporate inspired and state-led attacks on workplace and labour market rights were largely a continuation of earlier decades of neoliberal retrenchment, when capital gained the upper hand in the class struggle and began to reverse what labour had won in the postwar period.

Population and Economic Cycles in the Main Spanish Urban Areas: The Migratory Component

The paper aims to analyse how the different economic phases that Spain has experienced in the first two decades of the 21st century (expansion, recession, and recovery) have influenced population stocks and migratory flows in the five largest metropolitan areas defined as Functional Urban Areas (FUAs) in Spain: Barcelona, Bilbao, Madrid, Seville and Valencia. Using Padrón Continuo (municipal registers) and Estadística de Variaciones Residenciales (residential change statistics) as data sources, both native and immigrant – i.e. born abroad – stocks, and internal and international migration flows are analysed. We study differences between (a) diverse groups of foreigners (by continental origin), also comparing them to natives; and (b) different types of residential mobility by migrants’ previous place of residence: “intrametropolitan” movements (between urban cores and peripheries), migration flows between the five urban areas and the rest of Spain, and international migration.
 Results show that intrametropolitan migration flows between the five urban cores and their peripheries were characterised by suburbanisation during the expansion phase. These flows were particularly relevant for Spanish-born persons and, among foreign-born migrants, for people born in the Americas (mainly Latin Americans). These flows to the suburban periphery decreased during the economic crisis, and in 2013 and 2014 net intrametropolitan migration of most foreign groups was characterised by recentralisation. Spaniards’ intrametropolitan movements almost reached equilibrium during the recession years: Natives decreased their moves from cores to rings, while they were increasingly attracted to urban centres. Owing to the incipient economic recovery, suburbanisation is progressively recovering its previous strength. As for other types of residential moves, foreign-born migrants moving from abroad and the rest of Spain to the five FUAs during the economic expansion phase reversed the direction of their flows in the economic crisis years, migrating abroad or dispersing throughout Spain in search of jobs. Consequently, their stocks declined in some years. Currently, due to the incipient economic recovery, the five FUAs are attracting internal and international foreign-born immigrants once again, so their foreign-born population stocks are increasing in both cores and peripheries. Spaniards show the opposite behaviour regarding flows to and from the five areas analysed – they tended to disperse throughout the rest of Spain during the economic expansion phase. This trend continued during the crisis years, but at a slower pace, as natives became increasingly attracted to urban cores. Furthermore, this latter trend has strengthened during the post-crisis years. Finally, considering foreign-born and Spanish populations together, large urban areas are increasingly attractive. This global tendency is to the detriment of rural areas and of non-metropolitan small and medium size towns, which lose population due to negative net migration.
 * This article belongs to a special issue on “Internal Migration as a Driver of Regional Population Change in Europe: Updating Ravenstein”.