Impact Of Shocks Research Articles

The Impact of Parental Health Shocks on Child Schooling and Labour: Evidence From Thailand

The Impact of Parental Health Shocks on Child Schooling and Labour: Evidence From Thailand

Investigating the Relationship Between the Dynamics of the Structure of Intermediate Consumption and Output of Industries: Cross-Country Analysis

This paper examines one of the main prerequisites of the inter-industry balance methodology on the proportional dependence of the output of industries and their intermediate consumption. The statistical base of the study is the world input-output tables collected for the period from 2000 to 2014. According to the results of the work, it was revealed that the prerequisite of a proportional change in the vector of intermediate consumption with a change in output is not consistent. However, significant positive relationships were found between intermediate consumption and the output of industries. On the basis of the identified relationships, we conducted a clustering procedure on industries, where, in particular, clusters with strong, medium, and weak relationships between intermediate consumption and output are distinguished. Thus, the paper proposes to expand the input-output methodology by introducing proportionality coefficients for changes in the intermediate consumption of an industry with a change in its output. Proportionality coefficients are proposed to be obtained on the basis of regression equations built on statistical data from the input-output tables. It should be especially noted that in addition to obtaining point forecasts of intermediate consumption for each industry when its output changes, it is also possible to obtain probability distributions for the gross output of each industry, their value added, wages, taxes, and profits through Monte Carlo simulations based on the constructed regression equations, which will facilitate a scenario analysis of the development of the considered economic system. The results of this work can be useful to executive authorities in planning large state economic projects as well as in assessing the impact of external shocks on the countryʼs economy.

International exposure and the transmission of financial shocks: Evidence from China

This study explores the impact of adverse financial shocks on Chinese firms through the bank lending channel and the firm borrowing channel. Using new data linking Chinese firms to their bank(s) and three measures of exposure to international markets, we find that banks with greater exposure to the international markets cut lending more during the financial and sovereign debt crises or when there is a negative shock to OECD GDP growth. Furthermore, state-owned bank loans are more pro-cyclical than private bank loans, and would have been even more pro-cyclical if state-owned banks had not assumed any responsibility for stimulus policies. With regard to the firm borrowing channel, we find that firms with higher weighted aggregate exposure to the international markets through banks have lower net debt, cash, employment, and capital investment during crises or when there is a negative shock to OECD GDP growth. Our results have significant implications for how global financial shocks are transmitted in a regulated financial market such as China.

Building and system design's impact on thermal resilience to overheating during heatwaves: An uncertainty and sensitivity analysis

Rising heatwaves necessitate thermally resilient buildings to mitigate occupant heat-stress and mortality, ensuring habitable conditions during thermal shocks. This study's aim and novelty is to identify key design parameters affecting three thermal resilience aspects -(i) shock impact or SET-Dh i.e., degree hours above standard effective temperature threshold of 28 °C (ii) absorptivity time (tabs) and (iii) recovery time (trec) across varying degrees of shock intensities (doS-low, medium and high). A reference Belgian apartment is simulated with varying design parameters (building orientation, envelope and glazing properties, glazing percentage, airtightness, operation and control of passive strategies, cooling systems) during three types of heatwaves. Uncertainty analysis quantified the impact of design variations on thermal resilience, while global sensitivity analysis pinpointed key parameters affecting resilience during different shocks. The study shows that while 87 % of design variations remain thermally resilient during shorter shocks, only 21 % do so during longer shocks and that WWR, cooling capacity, and passive strategies (operation of natural night ventilation and solar shading) have twice the impact on thermal resilience compared to building orientation and glazing properties. While tabs is affected by heat build-up factors (e.g., WWR, solar shading), trec is influenced by heat removal factors (e.g., cooling capacity, NNV). Parameters such as heavy thermal mass extend heat absorption but also delays heat dissipation during prolonged heatwaves. This study guides designers and architects to focus on interventions that enhance buildings' thermal resilience during both short and long heatwaves, aiding in climate adaptation and the ability to withstand future extreme heat periods.

Financial risk analysis of Public-Private Partnership (PPP) projects case study on Pandaan - Malang Toll Road

This study aims to analyze the financial risks faced by the Pandaan-Malang Toll Road PPP (Public-Private Partnership) project in Indonesia. Data collection techniques include semi-structured in-depth interviews with parties related to the PPP project, including the Directorate General of Infrastructure Financing, the Tolling Road Management Agency (government), and Business Entities (PT Jasamarga Pandaan Malang). The collected data will be analyzed to determine the financial risk factors faced by PPP projects and the financial controls carried out to overcome financial risks in PPP. The results show that the risk of errors in forecasting in the calculation of demand, cost, and revenue projections is a risk that almost often occurs. The Government emphasizes the importance of optimizing the role of PII (Persero) or Indonesia Infrastructure Guarantee Fund (IIGF) as an Infrastructure Guarantee Business Entity (BUPI) to ensure financial sustainability and minimize the impact of sudden shocks on the State Budget due to the provision of Government Guarantees for cooperation projects. This study provides insights or frameworks that can be applied to similar projects, helping to improve risk assessment and decision-making processes in future infrastructure developments.

Does carbon emission trading scheme inhibit corporate executives' pursuit of excess compensation? Evidence from a quasi-natural experiment in China

Carbon regulation, which affects corporate management's carbon reduction and related decisions, has the potential to influence corporate executives' pursuit of excess compensation. Using the pilot policy of the carbon emissions trading scheme (CETS) in China as a quasi-natural experiment, we examine the impact of this policy shock on corporate executives' excess compensation through data from listed manufacturing companies from 2007 to 2020. Our findings show that the executives' excess compensation of manufacturing companies in the pilot regions shows a significant decline owing to the policy shock of CETS, which is supported by a rich set of robustness tests. Furthermore, the mechanism tests indicate that reducing agency costs and stimulating employment demand are two channels for CETS to inhibit excess compensation of corporate executives, and that the factor marketization and the nature of firms' property rights play moderating roles in this inhibitory effect. Heterogeneity analysis indicates that the inhibitory effect of CETS on the excess compensation of corporate executives also varies depending on the differences in corporate governance characteristics. Overall, these findings provide evidence for the regulatory effect of CETS in the contract design of corporate executives' compensation and also provide empirical support for emerging economies to alleviate income inequality by achieving carbon equality.

Underemployment and wage growth during COVID-19

This study provides new insights into the labour market outcomes of underemployed individuals, particularly the full-time underemployed who are often not included in official statistics. Using a difference-in-differences approach, we describe the impact of the COVID-19 pandemic on earnings progression for underemployed individuals in New Zealand relative to their fully-utilised counterparts. We find that both the employment and earnings-growth gap between the underemployed and fully-utilised decreased during the pandemic years. These results highlight the importance of considering the impact of economic shocks on different labour market groups and that while existing literature highlights that more vulnerable groups are less resilient to economic shocks, in line with previous New Zealand research, our results suggest that the COVID-19 pandemic was different.

The causal impact of a business cycle shock on road crashes and its determinants – A synthetic control group analysis

Introduction: Research suggests that recessions correlate with reductions in crash counts. However, knowledge is still scarce regarding the causality of this association, and the mechanisms through which economic shocks affect crash numbers are not well understood. We address these research gaps by applying an econometric methodology that has so far not been used for these research questions. Method: We use a quasi-natural experimental approach as our identification strategy. By exploiting the spatial heterogeneity of a shock, we define affected and less affected regions as treatment and control units. A synthetic control approach is applied to identify the causal impact of a shock on crash counts and explore the mechanisms contributing to this effect. As a case study, we use the 2008/09 financial crisis in Germany and exploit its high spatial variation. Results: We find that the crisis caused a significant crash rate reduction of 8% in the treated region. Only 1/4 of this reduction can be attributed to the decline in exposure. The remaining 3/4 are associated with the crisis-induced decrease in crash risk. Decomposing this effect shows that the crash rates in rural areas, of newly registered vehicles, of young adults, related to alcohol and speeding decline more than the overall crash rate. In contrast, crash rates of severe crashes, of heavy-goods vehicles, at night and on weekends are not the driving factors of the decrease in crash rates. Several robustness tests validate the results. Conclusions: Crash counts declined significantly due to the economic crisis. However, the magnitude of the influence is highly dependent on the crash characteristics. Practical applications: Understanding the trajectory of crash counts is crucial for implementing traffic safety measures and working towards vision zero. Our study shows that macroeconomic parameters are important potential confounding factors that should be considered in accident analysis.

Air pollution, health status and public awareness of environmental problems in China

Understanding public awareness of environmental problems is vital for effectively formulating sustainable policies. This paper aims to investigate the impacts of two perspectives—external air pollution and individual health status—on public awareness by leveraging panel data from two waves of the China Family Panel Studies (CFPS) conducted between 2018 and 2020. The model integrates provincial-level PM2.5 concentration indicators and SO2, PMs, and NOx emissions. The results reveal a significantly positive correlation between air pollution and public awareness of environmental problems in China. Additionally, this study examines the impact of self-assessed health shock by categorizing it into worse and better health. The influence of better health is insignificant. Conversely, when individuals experience worse health, they may perceive it as a psychological loss, leading to a significant increase in public awareness of environmental problems. This study provides valuable insights for mitigating air pollution and reinforcing public health in developing countries.

The impact of macroeconomic policy and supply shocks on sectoral output and the implications for policy

The impact of macroeconomic policy and supply shocks on sectoral output and the implications for policy

Resilience of the group lending model to a COVID-19 induced shock: evidence from an Indian microfinance fund

PurposeThe authors study the effect of an exogenous shock in the form of Coronavirus lockdowns on individual default and on default contagion within the microfinance (MF) sector in India. The authors rely on proprietary data obtained from an MF institution for the period from Nov 2019 to Dec 2020. The authors show that default increased to 95.29% in the month of April 2020, when Covid lockdowns were fully in place. However, borrowers bounced back thereafter, either making full or partial payments, so that defaults had fallen to 5.92% by December 2020. Static features of the group lending model like peer monitoring and joint liability help explain 90% of the monthly deficit during Covid lockdowns among uneducated borrowers. Dynamic features such as contingent renewal help explain why defaults were cured quickly through timely repayments. Finally, there is an absence of default contagion at the district level. Indeed, lagged own default explains 96.6% of variation in individual default, rather than contagion through group, village or district-level defaults. The authors conclude that the MF sector is resilient to exogenous shocks like the pandemic.Design/methodology/approachThe authors use time series panel regressions, as well as cross-sectional regressions.FindingsThe authors find that borrower defaults increased significantly to 95.29% during the month of April 2020, when Covid lockdowns were fully in place. However, borrowers bounced back almost immediately, either making full or partial payments, such that defaults had fallen to 5.92% by December 2020. The group lending model does remarkably well in explaining defaults even during Covid lockdowns. Among the majority (92%) of borrowers who are residents of rural districts, the group lending model appears to blunt the impact of the exogenous shock on rates of default. Indeed, panel regressions demonstrate that the group lending model helps explain 90% of the monthly deficit among uneducated borrowers. Logistic regressions indicate that the group lending model is less persuasive among relatively affluent borrowers residing in semi-urban or urban areas who have some formal schooling. Contingent renewal is shown to be an effective disciplining mechanism when a group does default due to the Covid lockdowns. The authors find that groups who defaulted in April 2020 but repaid the outstanding balance within the next two months were more likely to receive subsequent loans from the lender. On the other hand, groups who defaulted in April 2020 and did not repay the outstanding balance until December 2020 did not receive follow-on financing. Finally, the authors find that lagged individual default is the primary source of individual default, rather than contagion through group, village or district-level defaults.Research limitations/implicationsThe limitation of the study is that it is confined to a single MF institution in India.Social implicationsThe authors conclude that the social capital that is the foundation of the group lending model succeeds in limiting both the risk and contagion of default from an exogenous shock, such as the Covid pandemic.Originality/valueTo the best of the authors’ knowledge, the authors are the first to examine defaults in the Indian MF sector during the Covid lockdowns in April 2020.

Central bank information effects in Japan: the role of uncertainty channel

AbstractThis study identifies central bank information shocks and pure monetary policy shocks for Japan by combining high-frequency identification with sign restrictions. The empirical findings provide robust evidence of the central bank information effect in Japan. Specifically, the central bank’s optimistic outlook, conveyed through contractionary monetary actions, reduces economic uncertainty and leads to increases in stock prices and output. Additionally, changes in uncertainty play a significant role in the transmission of the central bank’s information effect. The overall impact of monetary policy and information shocks, as identified through our method, is found to be larger than that identified using conventional techniques such as Cholesky decomposition.

What are the costs of rigidity? A general equilibrium study of the fuel market in Argentina

The policy that is most widely applied to the biofuel market in the world is the mandatory blend. This policy aims to induce the use of biofuels by setting a minimum level of biofuel per unit of blended fuel. This paper studies the costs and benefits of such a policy. To do so, a Recursive Computable General Equilibrium model (CGE), calibrated with a new own-developed energy-oriented Social Accounting Matrix of Argentina for 2018, has been developed. Such a model is extended by explicitly embedding a constrained fuel blending model into the CGE setup. This research addresses the following questions: What are the costs and benefits of a mandatory blend compared to a full flexibility scenario? Is it better to induce the use of biofuels through a tax on fossil fuels or a blending constraint? What is the impact of international price shocks when considering different blending regimes? This paper finds that the mandatory policy has a negative impact on the economic activity, poverty, income distribution, and energy affordability, but a positive one on emissions. When analysing the convenience of a special tax on fossil fuels instead of a mandatory regime, this paper finds that the cost and benefits of each policy are distributed differently over time. The special tax on fossil fuels performs better in the short run while the mandatory blend does so in the long run. Finally, this paper finds that flexibility in the fuel market improves the country's performance when there are shocks on international prices.

The Financial Feasibility of Investing in a Sustainability Index in India

ESG is at the center of dialogue for investments, corporate governance and management. It used as an acronym for ‘Environmental, Social and Governance’ factors. The rapid rise of ESG has led to the prominence of socially responsible investing and has created a dual objective for investor’s capital. Researchers have previously studied the volatility of sustainable investments and whether SRI affects portfolio performance. Analyzing the financial feasibility of investing in a sustainability index was done by utilizing the historical data of returns on BSE ESG Index, NIFTY 500 Index and the BSE ESG 100 Index from October 2017 to April 2024. S&P BSE 100 ESG Index was used as a proxy for a sustainability index and the S&P BSE 100 Index was the index used to proxy traditional investments. This study has utilized financial ratios along with EGARCH and Granger causality test to understand the risk-reward characteristics of sustainable investments and compare them with traditional investments to understand whether it is financially viable to be a sustainably responsible investor. T test was conducted to identify whether is a significant difference between the returns of the sustainability index and its parent index. Results suggest that the sustainability index has a lower risk-adjusted return than traditional investments however, there is not a significant difference between the returns of the sustainability index and its parent index. There is a presence of strong persistent volatility in the sustainability index and negative shocks have a greater impact on the volatility of the index. Data also suggests a bi-directional relationship between the S&P 500 ESG Index and India’s sustainability index. The study recommends investors to consider the cost associated with investing in sustainability themed instruments while also taking into considerations the factors which are responsible for volatility of sustainable investments as well as the asymmetrical impact of negative shocks on returns.

The Impact of Oil Price Shocks on Oil and Gas Production Amidst Geopolitical Risk in OPEC: Insights from Method of Moments Quantile Regression

The Impact of Oil Price Shocks on Oil and Gas Production Amidst Geopolitical Risk in OPEC: Insights from Method of Moments Quantile Regression

The Impact of Transitional Shock on Newer Nurses in a Contemporary Healthcare Environment.

The aim of this study was to understand newer nurses' perception and expectations of their work environment, professional and institutional satisfaction, and motivating/decision-making factors around nursing and intent to leave their positions. Studies have shown newly graduated nurses face many challenges transitioning from a student to an independently practicing nurse. The COVID pandemic complicated this transition and created new stressors resulting in discouragement and turnover for newer nurses. This study used a qualitative approach through purposive sampling, semistructured qualitative interviews, and content analytic techniques. Transitional Shock Theory was used as the theoretical framework. Four themes emerged from the study: 1) confronting the reality; 2) betrayal/mistrust; 3) relational integrity; and 4) enablers of clinical competence. The findings will help nurse leaders understand the importance of organizational-level supports to improve the transition of newer nurses in typical periods and in times of additional stress.

Ecological footprint spillover effects in Europe: New insights from dynamic spatial panel data model with common shocks

This comprehensive study addresses the urgent global challenges of climate change and environmental degradation by focusing on the Ecological Footprint (EF). Unlike previous studies, it introduces a novel approach incorporating spatial spillover, temporal effects, and common shocks in panel data analysis. The spatial spillover effect highlights the influence of trade, pollution havens, and competition between neighboring countries on EF. The temporal effects emphasize the significance of historical production patterns and export strategies in shaping the current EF. The study also considers the impact of exogenous common shocks, such as international agreements and global events, on EF. Utilizing a dynamic spatial panel data model with common shocks, the research examines 40 European countries from 1992 to 2020, revealing the significant impact of biocapacity, energy consumption, industrialization, and globalization on EF. Findings indicate that spatial spillover effects contribute to EF transfer, emphasizing the need for collaborative global efforts. The study sheds light on the interconnectedness of environmental impacts and underscores the importance of considering both weak and strong forms of cross-sectional dependence in achieving accurate estimations. The research enriches our understanding of EF determinants and provides nuanced insights for policymakers striving to develop effective strategies for sustainable resource management and environmental conservation.

Impact of Oil Price Shocks on Russian Macroeconomic Performance

Impact of Oil Price Shocks on Russian Macroeconomic Performance

Financial Inclusion, Poverty Reduction, and Economic Growth in Nigeria: An Empirical Study Using SVAR Approach (1980-2020)

This study examines the empirical analysis of financial inclusion, poverty reduction and economic growth in Nigeria from 1981 to 2020 using the Structural Vector Auto-Regressive (SVAR) model for analysis, with Gross Domestic Product (GDP) as dependent variable and Branches of Commercial Banks (CBBA), Automated Teller Machine (ATMAD), Mobile Phone-Based Transactions and Broad Money Supply (MS) as explanatory variables. The findings of the study reveal that the unit root test shows that Real Gross Domestic Product (RGDP), Commercial Bank Branches (CBB), Money Supply (MS) and Poverty Rate (PR) are stationary at first difference. The results also reveal that in Nigeria, availability and access to money have a positive shock impact on RGDP, and CBB also has a favourable shock effect on RGDP in Nigeria. However, the PR has a negative impact on the RGDP. Therefore, the study recommends that the government should increase its efforts to promote financial inclusion and the Central Bank of Nigeria (CBN) should make commercial banks increase not only their branches but also increase the number of Automated Teller Machines (ATMs).

The Impact of Early Fertility Shocks on Women’s Fertility and Labor Market Outcomes

The Impact of Early Fertility Shocks on Women’s Fertility and Labor Market Outcomes