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Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited
Article Type: Editorial From: Journal of Financial Economic Policy, Volume 3, Issue 3
Our editorial policy is to publish research that covers a broad range of topics that can help promote better financial and economic policies in countries around the world, including policies that are formulated and implemented at both the government and corporate levels. We encourage the submission of articles that offer new analyses of challenges for well-functioning financial markets and how countries and firms are responding to these challenges. The journal seeks articles that provide useful guidance to policymakers.
Papers in this issue
The third issue of 2011 features five articles. The first article, by Marco A. Espinosa-Vega and Juan Solé, employs a network analysis approach to assess the risk exposure from interbank linkages. The authors utilize a simulation approach to demonstrate the usefulness of risk analysis for both on and off-balance sheet issues. Further, the paper provides an important contribution to better understanding the risk issues that countries face when experiencing a financial crisis as during the recent and severe one from 2008 to 2010. Using the approach outlined, regulators may be better able to identify adverse spillover effects from a financial crisis to the real economy and hence take early action to mitigate such effects.
The second paper is by Ignacio Lozano and Karen Rodríguez and focuses on fiscal policy and its subsequent economic effects in Colombia. Utilizing a relatively long time period from 1980 to 2007, the authors address the economic effects of a number of changes to the Colombian economy. They find that GDP responds favorably for a number of quarters subsequent to government action with regard to an increase in spending or a reduction in the level of taxation. Also of interest is the finding that private investment and private consumption respond in a positive manner to such simulative fiscal policy actions.
The third paper addresses a quite interesting issue related to the US Government stock holdings in a variety of financial and other institutions. Specifically, as a result of the recent financial crisis, the USA, government took an ownership position in a number of firms with the intent to sell its interest when the economy sufficiently improved. Citicorp is one such firm. Linus Wilson examines the sale of a large amount of Citicorp stock by the US Treasury Department. The sale of the Citicorp shares began in April 2010 and ended in December 2010. Wilson examines the impact of such sales on the demand for Citicorp shares. He finds that the process of selling the shares over a period of months resulted in a downward sloping demand curve. The implication is that policymakers may wish to consider whether its exit strategy should be a rapid sale or a more gradual sale. This paper offers insights into the impact of the timing of such sales.
The fourth paper in this issue, by Riccardo Calcagno, Roman Kraeussl, Chiara Monticone, examines the response of small- and medium-sized enterprises in Italy to a change brought about by provisions in the Financial Budget Law of 2007. This law provides for greater options for employees in terms of investment in pension funds. Overall, they find some evidence of a reduction in the credit capacity of such firms.
The final paper, by Godfred A. Bokpin, Zangina Isshaq, Francis Aboagye-Otchere, empirically studies the relationship among corporate governance, ownership structure and corporate liquidity for a developing economy. They find a positive relationship between ownership structure and performance as measured by Tobin’s Q.
James Barth, John JaheraCo-Editors