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International reserves, currency depreciation and public debt: New evidence of buffer effects in Africa Emerg. Mark. Rev. (IF 4.359) Pub Date : 2024-03-23 Issiaka Coulibaly, Blaise Gnimassoun, Hamza Mighri, Jamel Saadaoui
The paper adds to the literature on the issue of public debt in African economies, by investigating the role foreign exchange reserves play in improving the level of indebtedness and as buffer of the negative effect of exchange rate depreciation while considering the exchange rate policy. Our results show a direct link between the level of foreign currency reserves and that of external debt in Africa
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In the radiance of enlightenment: The influence of nontheistic religions on corporate default risk Emerg. Mark. Rev. (IF 4.359) Pub Date : 2024-03-18 Yuruo Feng, Wei Hao, Jiali Fang, Udomsak Wongchoti
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Empowering African entrepreneurs: The crucial role of financial inclusion in mediating the relationship between contextual factors and entrepreneurial willingness Emerg. Mark. Rev. (IF 4.359) Pub Date : 2024-02-10 Zakaria Elouaourti, Aomar Ibourk
Our study aims to investigate the role of financial inclusion as a mediator in the relationship between contextual factors and entrepreneurial willingness in Africa. While previous research has emphasized the importance of improving institutional and contextual factors to foster entrepreneurship, our study adds a new dimension by highlighting the critical need for tailored financial services that can
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FX-hedging for Latin American investors Emerg. Mark. Rev. (IF 4.359) Pub Date : 2024-02-09 Rodrigo Alfaro, Natan Goldberger
In this paper, we conduct an empirical evaluation of currency hedging (FXH) strategies designed for Latin American investors managing portfolios of US assets with performance measured in their local currency. By analyzing the volatility and value-at-risk (VaR) of the hedged portfolio, our results reveal that FXH is inefficient in lowering portfolio risk when applied to underlying foreign risk-assets
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Antiquity, capitalism & development: The finance-growth perspective Emerg. Mark. Rev. (IF 4.359) Pub Date : 2024-02-08 Ákos Dombi, Theocharis N. Grigoriadis, Junbing Zhu
This paper explores the impact of state antiquity (the length of established statehood) on capitalism. We argue that extractive institutions may prevail in societies with ancient roots and offer the in-depth analysis of one particular channel through which these institutions may impair economic growth: the finance-growth nexus. We propose that in countries with ancient statehood, the financial sector
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Corporate governance, home country governance, and MNE CSR: Evidence from Ghana Emerg. Mark. Rev. (IF 4.359) Pub Date : 2024-02-07 Emmanuel Junior Tenakwah, Junxin Chen, Sammy Xiaoyan Ying, Yongqing Li, Huiying Wu
This study examines how the corporate social responsibility (CSR) of multinational enterprises (MNEs) operating in Ghana is affected by home country governance and corporate governance. Using data manually collected from a sample of MNEs from 2010 to 2018, we find that (1) MNE CSR is positively affected by home country governance; and (2) the positive effect of home country governance is strengthened
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Global contagion of US COVID-19 panic news Emerg. Mark. Rev. (IF 4.359) Pub Date : 2024-02-04 Yong Joo Kang, Dojoon Park, Young Ho Eom
We investigate the contagion of US COVID-19 panic news, measured by the sentiment-based RavenPack US Panic Index, on the local stock market returns of 48 countries. Local stock market returns are found to be more significantly negatively associated with the US panic news than local panic news. Our results show that a 1% increase in the US Panic Index reduces local stock returns by 1.44%. The result
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Retail fund flows and performance: Insights from supervisory data Emerg. Mark. Rev. (IF 4.359) Pub Date : 2024-02-01 Martin Hodula, Milan Szabo, Josef Bajzík
This paper explores inflows and outflows patterns in retail equity mutual funds related to past and future performance derived from detailed monthly security-level holdings of funds in the Czech Republic. We find that retail investors become sensitive to bad performance in times of aggregate illiquidity and while investing in funds that hold more illiquid assets. Moreover, we document that when facing
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Dynamic patterns and the latent community structure of sectoral volatility and jump risk contagion Emerg. Mark. Rev. (IF 4.359) Pub Date : 2024-01-30 Wandi Zhao, Yang Gao
This study explores the latent driving structure of sectoral risk contagion in terms of volatility and jump through the factor model framework for high-dimensional matrix-valued time series. We find strong inter-sector volatility and jump spillover effects at the mean level and higher effects at extreme tails, while jump spillovers reflect sharper structural shifts with the promotion of major financial
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Shadow economy implications of financial development in Africa: Do income groups also matter? Emerg. Mark. Rev. (IF 4.359) Pub Date : 2024-01-12 Lanre Ibrahim Ridwan, Kazeem Bello Ajide, Javier Cifuentes-Faura, Mamdouh Abdulaziz Saleh Al-Faryan
This study explores the link between financial development and the shadow economy in 45 African economies from 1991 to 2019. While overall financial indices show no clear impact on the shadow economy across the entire sample, a nuanced pattern emerges when considering income groups. In low-income countries, financial institutions' index significantly amplify the shadow economy, whereas in lower middle-income
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Do recessions induce Schumpeterian creative destruction? Micro Evidence from India Emerg. Mark. Rev. (IF 4.359) Pub Date : 2024-01-11 Seema Saini, Wasim Ahmad, Gazi Salah Uddin
According to the Schumpeterian cleansing hypothesis, economic downturns force inefficient firms off the market, freeing resources that can be allocated to more efficient firms. India, as an emerging economy, may experience a similar reallocation. The study uses micro-level data for publicly traded firms, including manufacturing and services sector firms, from 1988 to 2020. We find that reallocation
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The performance of Islamic and conventional microfinance loans in Afghanistan: The Taliban and beyond Emerg. Mark. Rev. (IF 4.359) Pub Date : 2024-01-06 Mustafa Disli, Shakir Jalaly
The Afghanistan microfinance industry has witnessed laurels in recent decades, making it crucial to closely monitor its development and sustainability. This study aims to assess the performance of Islamic and conventional microfinance loans in two aspects: first, by examining the occurrence of loan defaults, and second, by distinguishing between loan performance in areas controlled by the Taliban and
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Fintech business and corporate social responsibility practices Emerg. Mark. Rev. (IF 4.359) Pub Date : 2024-01-01 Bin Li, Fei Guo, Lei Xu, Siqi Meng
Through a proprietary dataset of listed firms on the Shanghai and Shenzhen Stock Exchanges, we establish a positive link between firms' financial technology (Fintech) business and their corporate social responsibility (CSR) practices. Such a link can be more pronounced among firms of stronger political connections, lower agency costs, and better internal control. Enhanced supply of bank loans, internal
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Bank's balance sheet management as a bargaining tool: Evidence from Brazilian labor strikes Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-12-23 Patrick Behr, Weichao Wang, Sylvester Adasi Manu
We investigate whether and how banks adjust their financial positions in the wake of labor strikes. Using hand-collected data at the bank-municipality level in Brazil during 2006–2016, we find that banks significantly increase loan loss provisions, reduce loans disbursed, and hold less liquidity just before the bank labor strikes. These results are consistent with a bargaining hypothesis, suggesting
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Are FX communications effective? Evidence from emerging markets Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-12-14 Julián Parra-Polanía, Andrés Sánchez-Jabba, Miguel Sarmiento
This paper examines the effects of foreign exchange (FX) communications on FX markets in Colombia and Mexico. Our estimations follow the calendar-time portfolio approach using daily data between 2000 and 2019 on exchange rates and known risk factors. We find an asymmetric effect of such communications: while there is strong evidence indicating that communications aimed at weakening the local currency
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Global supply chain inflationary pressures and monetary policy in Mexico Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-12-08 Juan R. Hernández, Daniel Ventosa-Santaulària, J. Eduardo Valencia
In this paper, we examine the impact of stress in the global supply chains on inflation and monetary policy in Mexico, a representative emerging market economy. Using non-linear local projections, we estimate the degree of monetary policy tightening required in a high-stress supply chain environment and compare it to that in a low-stress environment. We instrument the monetary policy shocks with shocks
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Farm location and occupational choices in Sub-Saharan Africa: Implications for agricultural households in Tanzania Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-12-02 Japhet Zephyr Mtaturu
This paper examines how agricultural households in Tanzania use a labor coping strategy in occupational choices between agricultural and non-agricultural sectors due to farm locational effect. It investigates whether agricultural households diversify their income generating activities away from agriculture by using Multinomial logit Marginal Effects model. It employs three rounds panel data from the
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Identifying the external and internal drivers of exchange rate volatility in small open economies Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-12-01 Uluc Aysun
This paper estimates a 3-country DSGE model to identify the drivers of exchange rate volatility in small open economies (SOE). In addition to the usual cross-country linkages through trade and asset holdings, the model features common shocks that affect economies symmetrically. Using data from Jamaica, the US and the G-7 region (excluding the US), the paper finds that external financial shocks are
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Liquidity risk in FinTech lending: Early impact of the COVID-19 pandemic on the P2P lending market Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-11-26 Asror Nigmonov, Syed Shams, Khorshed Alam
This study empirically investigates the impact of the COVID-19 pandemic on the liquidity risk incurred by the peer-to-peer (P2P) lending market. As the pandemic adversely affects financial markets globally, a better understanding of the dynamics of successful P2P lending is necessary under the conditions of financial distress. By using the cross-country database of secondary market listing outcomes
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Financial crisis, global liquidity and trade credit channel: Evidence from Türkiye Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-10-16 Can Kadırgan, Pınar Özlü
This paper examines the role of trade credit in the transmission of global liquidity conditions. Specifically, we investigate whether trade credit complements or substitutes the decline in bank lending activity as global liquidity tightens. Using a detailed bank and firm-level dataset for Turkish firms, we find that firms which are more bank-finance constrained have less access to trade credit as global
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Your skin or mine: Ensuring the viability of a central counterparty Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-10-11 Melinda Friesz, Kata Váradi
Through their clearing and settlement activity, central counterparties (CCP) ensure the stability of the financial system. They operate a multilevel guarantee system containing the initial margin requirements, the default fund contributions, and their own contribution, referred to as skin-in-the-game (SITG). Using a Monte-Carlo simulation method-based framework, the study examines how the value of
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Global value chains in sub-Saharan Africa: The role of business regulations, policies and institutions Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-10-02 Shawkat Hammoudeh, Aviral Kumar Tiwari, Emmanuel Joel Aikins Abakah, David Adeabah
This paper investigates the impact of business regulations, policies and institutions on global value chains (GVCs) in Sub-Saharan Africa (SSA). It uses the latest release of the Eora MRIO IO database to compute the GVC indictors. The World Bank's doing business indicators are used as business regulatory measures and the Country Policy and Institutional Assessment (CPIA) indicators are also used as
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Nonperforming loans and related lending: Evidence from Ukraine Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-09-27 Iegor Vyshnevskyi, Wook Sohn
This study examines bank-specific factors that determine nonperforming loans (NPLs) in Ukraine. Analysis of an unbalanced sample of 207 banks from 2008 to 2020 reveals that the NPLs of banks increase with related lending, suggesting that related lending is detrimental to the soundness of bank loans owing to the standard information advantage that can be offset by the bank's conflict of interest in
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The Nexus among board diversity and bank stability: Implications from gender, nationality and education Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-09-27 Marwa Elnahass, Rana Alharbi, Toka S. Mohamed, Josie McLaren
This study investigates how diversity in the board of directors affects bank stability. We examine diversity in terms of gender, academic education, and nationality. Using a unique (global) sample from 14 countries, we find strong evidence that banks with female directors on the board are positively associated with bank stability. Directors holding high educational qualifications (PhD) are positively
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Finance and export diversifications Nexus in Russian regions: Role of trade globalization and regional potential Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-09-09 Mohammed Shakib, Kazi Sohag, M. Kabir Hassan, Rogneda Vasilyeva
We investigate if financial development (FD) can reduce the export concentration in regional context, corroborating the role of the World Trade Organization (WTO) membership, sanctions and investment potential. Given the considerable heterogeneity in data across regions and over time, we apply the Method of Moments Quantile Regression (MMQR) to analyze panel time-series data from 2009 to 2019. Our
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CEO social power, board inclusiveness, and corporate performance after ethnic conflicts Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-08-14 Kamil K. Nazliben, Luc Renneboog, Emil Uduwalage
We investigate the impact of CEO power on corporate performance in Sri Lanka, characterized by demarcated ethno-linguistic and religious boundaries and devastating ethnic conflicts with subsequent reconciliation. We focus on a CEO's social-dominance power, based on ethnicity, gender, and political connections. Social-dominance power (lack of ethno-religious-linguistic and gender diversity) augments
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Impacts of COVID-19 pandemic on corporate cash holdings: Evidence from Korea Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-08-06 Hae Jin Chung, Hogyu Jhang, Doojin Ryu
We examine how corporate cash management in Korea has evolved during the COVID-19 crisis, focusing on the interaction between COVID-19-related uncertainty and financing frictions. Compared with the 2008 global financial crisis, massive expansionary financial policy measures have resulted in low external financing costs shortly after the early negative shocks to external financing. This provides a unique
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Multivariate dynamics between emerging markets and digital asset markets: An application of the SNP-DCC model Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-07-29 Inés Jiménez, Andrés Mora-Valencia, Javier Perote
As crypto markets become more integrated, measuring their spillovers with financial markets becomes fundamental for portfolio choice and risk management. We investigate high-order moment transmission between emerging/developed and digital asset markets through a flexible semi-nonparametric approach that accounts for dynamic conditional correlation and spillover effects, not only in conditional volatility
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Energy firms in emerging markets: Systemic risk and diversification opportunities Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-07-27 Helena Chuliá, Jorge A. Muñoz-Mendoza, Jorge M. Uribe
Previous studies in energy stock markets have analyzed market connectedness using aggregate indexes and focusing on developed markets. We depart from the extant literature and we focus our attention on companies listed on emerging stock markets and examine connectedness from the firm's perspective. Using a two-step approach, we remove the common global factors from energy stock returns and estimate
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When financial advice rocks the market Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-07-12
We document the impact of recommendations by a hugely influential Chilean pension advisor, H&L, on pension investments by individuals, domestic stock market outcomes, and pension fund manager investment strategies. Following H&L's retirement portfolio recommendations, pension investors shifted amounts that, in a week, often exceeded 100% of monthly domestic stock trading volume. The market believed
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Dynamic connectedness between global commodity sectors, news sentiment, and sub-Saharan African equities Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-07-13
We examine the static and time-varying spillovers between global commodity sectors, economic news sentiment, and sub-Saharan African (SSA) equities. In a time-varying parameter vector autoregressions spillover connectedness approach, we find that: (i) there are significant spillovers between SSA equities, economic news sentiment, and global commodity sectors; (ii) the connectedness evolves across different
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Greenhouse gas emissions, firm value, and the investor base: Evidence from Korea Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-06-22 Hope H. Han, Jiyoon Lee, Boxian Wang
This paper examines the association between greenhouse gas (GHG) emissions, firm value and foreign ownership for Korean firms. In Korea, firms that emit GHG more than a given threshold have been mandated to disclose the levels of GHG emissions since 2011. We find that firms bound to disclose GHG emissions are likely to be valued less compared to firms without disclosure obligations. In addition, foreign
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Emerging equity markets in a globalized world Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-05-25 Geert Bekaert, Campbell R. Harvey, Tomas Mondino
Does the globalization process of the past 25 years obviate the need to segregate global equities into developed and emerging market buckets? We argue the answer is no. Emerging equity markets differ in a statistically significant fashion from developed markets, featuring much lower levels of GDP per capita and equity integration. They also have significantly lower stock market development levels and
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Public bank lending in Africa in times of crisis Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-04-28 Florian Léon
This paper examines State-owned bank lending in Africa in times of crisis. We exploit a sample of 112 banks, including 24 State-owned banks, operating in 8 West African countries over the period 2000–2019. We focus on how bank ownership affects lending, during and after crises. Results indicate that, contrary to domestic-private banks, public banks continue to lend at the same rate during and slightly
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Can corporate financing through the stock market create systemic risk? Evidence from the BRVM securities market Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-04-15 Désiré Kanga, Issouf Soumaré, Edoh Amenounvé
This paper investigates the systemic risk in the West African Economic and Monetary Union (WAEMU) stock exchange (Bourse Régionale des Valeurs Mobilières - BRVM). It examines the extent to which growing activities in this stock market generate systemic risk. We find strong linkages across all economic sectors of listed firms, with the financial and industrial sectors being the center of the system
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How far have we come and where should we go after 30+ years of research on Africa's emerging financial markets? A systematic review and a bibliometric network analysis Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-04-13 David Adeabah, Emmanuel Joel Aikins Abakah, Aviral Kumar Tiwari, Shawkat Hammoudeh
In this study, we perform a systematic literature review and a bibliometric network analysis of studies on Africa's financial markets from 1992 to 2021. The findings are as follows. First, we observe a steady growth of financial markets research in Africa over the 30-year period under consideration, which is suggestive of increasing interest and commitment to research on financial markets in Africa
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Corrigendum to “Endogenous market development for government securities in lower-income economies” [Emerging Markets Review 50 (2022) 100844] Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-04-06 Tadashi Endo
Abstract not available
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Banks' leverage in foreign exchange derivatives in times of crisis: A tale of two countries Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-04-05 Carlos Giraldo, Iader Giraldo, Jose E. Gomez-Gonzalez, Jorge M. Uribe
Before the outbreak of the Global Financial Crisis, on May 6, 2007, the Colombian central bank imposed a cap on the Gross Leverage Position in Foreign Exchange Derivatives of financial intermediaries. It was the only country in the world that implemented this prudential policy. Using synthetic control methods, we construct counterfactual scenarios and show that this policy intervention, while costly
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Stock liquidity during COVID-19 crisis: A cross-country analysis of developed and emerging economies, and economic policy uncertainty Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-03-30 Omar Al Farooque, Ghasan Baghdadi, Hai Hong Trinh, Sarod Khandaker
We investigate the impact of the COVID-19 on firms' stock liquidity across six developed and emerging economies. Unlike prior literature, we further compare the effects of the pandemic between developed and emerging economies, high and low economic policy uncertainty (EPU), and large and small firms. Our results document the significant negative impact of infection cases and deaths on firms' stock
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Trade reform, infrastructure investment, and structural transformation in Africa: Evidence from Guinea-Bissau Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-03-31 Semertesides Bitica Fereira, Júlio Vicente Cateia
This study examines the impacts of trade reform and infrastructure investment on structural transformation and poverty alleviation in Guinea-Bissau using a dynamic computable general equilibrium model. We found that partial or complete tariff rate cuts accompanied by a scaling-up infrastructure investment funded by debt only positively impact macro-and micro-outcomes but do not generate structural
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Currency risk and the dynamics of German investors entry and exit in Russia Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-03-30 Ivan Deseatnicov, Olga Klochko
Using a complete manually collected set of 3435 Russian firms with German capital in 2003–2020, we examine the effect of currency risk on the dynamics of German investors' entry and exit into the Russian market via foreign direct investment. We document that German investors were relatively tolerant towards currency risk before 2014, and became highly sensitive post 2014. We conclude that, along with
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Machine learning and the cross-section of emerging market stock returns Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-03-17 Matthias X. Hanauer, Tobias Kalsbach
This paper compares various machine learning models to predict the cross-section of emerging market stock returns. We document that allowing for non-linearities and interactions leads to economically and statistically superior out-of-sample returns compared to traditional linear models. Although we find that both linear and machine learning models show higher predictability for stocks associated with
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Systemic risk spillovers and the determinants in the stock markets of the Belt and Road countries Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-03-17 Yusen Feng, Gang-Jin Wang, You Zhu, Chi Xie
We construct time-varying tail risk networks to investigate systemic risk spillovers in the Belt and Road (B&R) stock markets during 2008–2021. Network metrics clearly reflect aggregate risk level and individual risk accumulation for the B&R stock markets under extreme events (e.g., 2008 financial crisis and COVID-19 pandemic). Tail-event driven network quantile regression analysis shows that network
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Predictability of risk appetite in Turkey: Local versus global factors Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-03-11 Eray Gemici, Remzi Gök, Elie Bouri
We examine the impacts of four local and five global factors on the risk appetite in Turkey using weekly data for the period 2008–2022. There are significant causal effects of both global and local factors under various market conditions. Local factors, particularly CDS spreads, exert stronger causal effects than global factors, and qualified investors are more predictable than domestic or foreign
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Time and frequency connectedness of uncertainties in cryptocurrency, stock, currency, energy, and precious metals markets Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-03-13 Efe Caglar Cagli, Pinar Evrim Mandaci
This paper examines the connectedness of uncertainty in cryptocurrency, stock, currency, and commodity markets. We use the novel news-based cryptocurrency uncertainty indices of Lucey et al. (2021) and global implied volatility indices as uncertainty proxies for stock, currency, energy, and precious metals markets. We analyze weekly data between January 2014 and May 2021, employing the time and frequency
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The evolution of financial reporting quality for companies listed on the Tadawul Stock Exchange in Saudi Arabia: New emerging markets' evidence Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-02-21 Waleed Alsuhaibani, Robert Houmes, Daphne Wang
Motivated by the Saudi Arabian government's objective to diversify its economy away from oil and correct deficiencies associated with the Saudi stock market crash of 2006, a series of significant capital market infrastructure reforms were initiated that began with the 2007 reorganization of the Tadawul Stock Exchange (TSE) and the Capital Market Authority (CMA) as its sole regulator. This paper adds
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Banking market power and its determinants: New insights from MENA countries Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-02-17 Mohamed Chaffai, Paolo Coccorese
This paper evaluates the degree and determinants of banks' market power in 13 MENA countries for the years 2000 to 2018, with a special focus on customers' switching costs and banks' cost efficiency. We find that MENA banks enjoy a substantial degree of market power on the loan market, while their customers have to face remarkable costs in case of switching to other banks. Banking market power increases
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Spillovers and connectedness among BRICS stock markets, cryptocurrencies, and uncertainty: Evidence from the quantile vector autoregression network Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-02-06 Rabeh Khalfaoui, Shawkat Hammoudeh, Mohd Ziaur Rehman
In this study we advance the understanding of the spillovers and connectedness network among conventional and Islamic BRICS stock markets, cryptos (Bitcoin, Ethereum, Litecoin) and various global uncertainties, using a quantile vector autoregression method and daily data covering the period October 8, 2016, to May 28, 2021. Further, the study uses a network and sensitivity analyses to assess the nexus
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Number of creditors and the real effects of credit supply disruptions Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-02-08 Sajad Ebrahimi, Ali Ebrahimnejad, Mahdi Rastad
This paper examines the role of bank-firm relationships in transmitting credit supply shocks to the real side of the economy in an emerging market. Using a hand-collected dataset for Iranian public companies, we exploit firms' exposure to a bank involved in a massive Ponzi scheme in 2011. We document a nearly 8 percentage point drop in annual employment growth rate for firms connected to the troubled
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Credit gaps as banking crisis predictors: A different tune for middle- and low-income countries Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-01-21 Vincent Bouvatier, Sofiane El Ouardi
The aim of this paper is to assess the quality of credit-based variables as early warning indicators of systemic banking crises. The existing literature focuses mainly on developed economies and shows that the best performing indicator is the credit-to-GDP gap computed via one-sided HP filter (the so-called Basel credit gap). The empirical evidence legitimates the use of the credit-to-GDP gap as a
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The evolution of consumption inequality and risk-insurance in Chile Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-01-13 Carlos Madeira
Using micro survey data, I show that income and consumption inequality fell substantially in Chile since 1987. Consumption inequality between and within groups fell substantially over the last 35 years, especially for within groups. During this period, households' use of financial services increased substantially. Estimating a standard consumption model, the results reject both the autarky and the
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FinTech and the COVID-19 pandemic: Evidence from electronic payment systems Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-01-04 Daniel Tut
This paper investigates the effects of the coronavirus disease 2019 (COVID-19) pandemic on financial institutions and on consumers' adoption of Financial Technology (FinTech) for payments. This paper documents the following findings in Kenya. (1) The COVID-19 pandemic accelerated the adoption and increased the payment concentration of FinTech. We document an approximately 54% increase in mobile banking
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The impact of proximity within elite corporate networks on the Shariah governance-firm performance nexus: Evidence from the global Shariah elite Emerg. Mark. Rev. (IF 4.359) Pub Date : 2023-01-05 Seng Kiong Kok, Azar Shahgholian
Research shows the importance of social networks in the generation of valuable firm resources through informational flows. We extend this conceptualization to Shariah governance and the global Shariah elite as embodied by the Shariah supervisory board. Utilizing a unique dataset of 140 Islamic financial institutions over 2011–2015, across 16 nations, we find that interlocking behavior amongst Shariah
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Turkey: From a thriving economic past towards a rugged future? - An empirical analysis on the Turkish financial markets Emerg. Mark. Rev. (IF 4.359) Pub Date : 2022-12-22 Nikolaos Stoupos, Christos Nikas, Apostolos Kiohos
Turkey had been economically thriving after the end of the economic crisis of 2001. Nonetheless, the recent depreciation of the Turkish lira proved the eventual fragility of the Turkish economy. This research attempts to examine whether the financial markets behavior had forecast this economic collapse. The results support that negative dynamics take place between the nominal exchange rate of Turkish
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The COVID-19 pandemic and financial markets in Central Europe: Macroeconomic measures and international policy spillovers Emerg. Mark. Rev. (IF 4.359) Pub Date : 2022-12-26 Wojciech Grabowski, Jakub Janus, Ewa Stawasz-Grabowska
This paper investigates the effects of macroeconomic policy announcements on financial markets in three Central European economies: Czechia, Hungary, and Poland (CE–3). We focus on the unprecedented stabilisation policies implemented from March to December 2020 during the COVID-19 pandemic, including unconventional monetary measures and large stimulus programs. Detailed categories of monetary and fiscal
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A machine learning approach for comparing the largest firm effect Emerg. Mark. Rev. (IF 4.359) Pub Date : 2022-12-26 Jang Ho Kim, Jiwoon Han, Taehyeon Kang, Frank J. Fabozzi
Market capitalization of firms provides valuable information for analyzing stock markets and the size factor is widely used in factor-based investing. Some markets, such as the Korean market, are especially interesting in this respect because they contain extremely large public firms. This study analyzes the effect of the largest firm on factor investing through machine learning models that are effective
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Credit risk in Islamic microfinance institutions: The role of women, groups, and rural borrowers Emerg. Mark. Rev. (IF 4.359) Pub Date : 2022-12-25 Toka S. Mohamed, Mohammed M. Elgammal
Using international data, we find that Islamic MFIs experience reduced credit risk by offering more groups loans, serving more women, and serving more borrowers in rural locations. Conventional MFIs benefit from fewer group loans, less loans to rural borrowers, and a greater focus on female borrowers. Our results contribute to microfinance and financial inclusion literature by highlighting the potential
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What drives the growth of shadow banks? Evidence from emerging markets Emerg. Mark. Rev. (IF 4.359) Pub Date : 2022-12-25 Dhulika Arora, Smita Kashiramka
The present study analyses the factors affecting the growth of Non-Banking Financial Institutions (NBFI) and finance companies in 11 emerging market economies (EMEs) that the FSB monitors. Using data for the period 2002 to 2019 and employing the panel corrected standard errors (PCSE) method, the results indicate that the growth of banks, search for yield, demand from institutional investors, and bank
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Interpersonal versus interbank lending networks: The role of intermediation in risk-sharing Emerg. Mark. Rev. (IF 4.359) Pub Date : 2022-11-29 Edina Berlinger, Márton Gosztonyi, Dániel Havran, Zoltán Pollák
Analyzing the interpersonal lending network of a Hungarian village in a disadvantaged region, we find strong intermediary activity and a tiered core-periphery structure. We show that the main motive behind lending is not altruism or profit-seeking, but risk-sharing which is the most accentuated in poor-to-poor and Roma-to-Roma relations. Comparing this informal lending market to a formal interbank