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Article

Yang Li

China’s economic development in the past 40 years has an array of distinctive features that have attracted the attention of the world. The paper aims to discuss this issue.

Abstract

Purpose

China’s economic development in the past 40 years has an array of distinctive features that have attracted the attention of the world. The paper aims to discuss this issue.

Design/methodology/approach

The analysis logic is as follows: with regard to the mechanism, the above factors were met in a timely manner and jointly contributed positive energy to China’s economic growth, with the increase in the savings rate as the necessary condition and foundation, and the increase in the savings rate is attributed to the explosive expansion of the financial system at the beginning of reform and the formation of positive incentives for residents, enterprises and governments at all levels, and the expansion of the financial system and the formation of positive incentives are clearly the crystallization of the wisdom of Chinese-style progressive reform.

Findings

Therefore, we have every reason to believe that the growth prospects of the Chinese economy remain bright. The author is nonetheless confident that the new two-step strategy for economic development will be realized, proposed by the 19th CPC National Congress.

Originality/value

Moreover, the growth of China’s economy has long been accompanied by the “double surplus” of current accounts and capital and financial accounts in the international balance of payments, which is not completely consistent with the traditional paradigm of development economics. These phenomena are so unique that the international community calls it the “Mystery of China” or “China’s Development Path.”

Details

China Political Economy, vol. 2 no. 1
Type: Research Article
ISSN: 2516-1652

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Article

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination…

Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Details

Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

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Book part

Mustafa Avcın and Hasret Balcıoğlu

This study contributes to the existing literature that corporate governance consist of internal and external governance behavior which refers to the complementarity of the…

Abstract

This study contributes to the existing literature that corporate governance consist of internal and external governance behavior which refers to the complementarity of the elements of (1) competing values framework and (2) corporate legality framework theories and proper orientation in the provisions of the elements leads to a good corporate power in the modern legal environment. A questionnaire is designed, a survey is conducted based on the constructed corporate governance model in the study, which investigates the evolutionary background of the elements with the view of establishing the right corporate culture and corporate legality behavior. The empirical results revealed that there is a positive linear relationship between the elements of corporate culture provisions with internal governance behavior and a significant positive association between the elements of corporate legality provisions with external governance behavior. The model does not take into account long-term external factors. Therefore, measuring corporate governance may not be an easy task and may not be suitable for specific countries that have strong legal systems and corporate ownership. The elements in the model are practical to implement and facilitates corporate to improve shareholder involvement and governance reporting and hence prevent failure. The constructed model span almost every attribute embedding high quality corporate social responsibility and corporate governance for corporate to identify areas for improvement and contributes to existing corporate governance literature that, connecting corporate culture and corporate legality behavior positively affect financial markets and firm performance.

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Article

Konstantinos Vasilakopoulos, Christos Tzovas and Apostolos Ballas

This paper aims to investigate the impact that governance mechanisms have on European Union ‘banks income smoothing behavior.

Abstract

Purpose

This paper aims to investigate the impact that governance mechanisms have on European Union ‘banks income smoothing behavior.

Design methodology/approach

The authors examine the impact that corporate governance mechanisms included in European Commissions’ proposals regarding the improvement of corporate governance mechanisms (Green Paper) have upon European Union banks’ accounting policy decisions regarding the level of loan loss provisions (LLPs). In addition, the authors examine whether banks’ capital structure operates as an effective internal corporate governance practice. The authors investigate the association between certain corporate governance characteristics and the level of LLPs for a sample of 98 banks from 23 European Union countries for the period of 2010-2013, in the aftermath of the 2008 financial crisis. To test the hypotheses, a multivariate regression model is run. Similar to previous research, the authors use ordinary least squares analysis to test the results.

Findings

Empirical findings provide evidence that there is a positive association between LLPs and accounting income, implying the existence of an income-smoothing pattern of provisions. In addition, the results suggest that banks managers’ decision to smooth income may differ with regard to the board structure, the level of leverage and the provision of disclosure for remuneration for chief executive officer.

Originality/value

The findings of this study contribute to the existing literature concerning banks’ income smoothing behavior. These findings can be useful to regulators, as the authors provide some evidence regarding the effectiveness of the European Union corporate governance framework.

Details

Corporate Governance: The International Journal of Business in Society, vol. 18 no. 5
Type: Research Article
ISSN: 1472-0701

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Article

Domenico Curcio, Douglas Dyer, Angela Gallo and Igor Gianfrancesco

The purpose of this paper is to investigate the discretionary use of loan loss provisions in the Chinese banking sector during the global financial crisis. The objective…

Abstract

Purpose

The purpose of this paper is to investigate the discretionary use of loan loss provisions in the Chinese banking sector during the global financial crisis. The objective of this paper is twofold: to add new evidence to the scant literature dealing with a peculiar banking sector, such as the Chinese one, and to shed more light on banks’ provisioning behaviour during stressed financial markets conditions.

Design/methodology/approach

Using bank-level balance sheet and financial statements data, the authors test for income smoothing and capital management hypotheses, and detect differences in provisioning decisions of listed banks and unlisted financial intermediaries during turbulent financial markets conditions.

Findings

The authors find support for the income smoothing hypothesis, but not for the capital management one. Chinese listed banks appear to be less risky and less involved in income smoothing to shift their risk, when compared to unlisted credit institutions.

Social implications

The results obtained from this paper help to understand the functioning of bank provisioning regime in the Chinese banking system and how provisioning mechanisms can address the issues associated with the pro-cyclicality of bank capital requirements.

Originality/value

Though referred to a particular banking sector, such as the Chinese one, the results of this paper can provide a tremendous incentive to those national and international authorities that are bound to promote forward-looking provisioning practices. These practices would allow banks to build a buffer of reserves to face the downward pressure on earnings and capital associated with periods of worsening credit quality.

Details

Managerial Finance, vol. 40 no. 10
Type: Research Article
ISSN: 0307-4358

Keywords

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Article

Mohd Yaziz Mohd Isa and Md. Zabid Hj Abdul Rashid

This paper aims to investigate the adequacy of regulatory capital funds through loss provisioning policies because of worsening credit quality associated with distressed…

Abstract

Purpose

This paper aims to investigate the adequacy of regulatory capital funds through loss provisioning policies because of worsening credit quality associated with distressed financial conditions. A financial distress occurs when banks have difficulty in honoring financial commitments. This paper is expected to unveil how the provisioning mechanisms can address concerns associated with pro cyclicality of regulatory capital funds requirements, and how the banks behave in distressed financial conditions to share risks. The pro cyclicality of regulatory capital funds is the effect of various components of the financial system that aggravates the economic cycle such as during the expansion of the economy when banks are able to provide more loans and meet regulatory capital requirements with ease, while during the contraction of the economic cycle, can lead to deterioration of asset quality, and the resultant need to make loss provisions and recognize impairment. In turn, the situation puts further pressures on the capital requirements held by banks and their risk-sharing behavior. The paper analyzes a sample of Islamic banks in Malaysia.

Design/methodology/approach

By estimating credit risk-related information through loss provisioning policies, the paper uses an unbalanced panel data on all Islamic banks in the Association of Islamic Banking Institutions Malaysia from 2003 to 2014. The association consists of full-fledged Islamic banks and several foreign-owned entities.

Findings

The paper findings support that Islamic banks during observed period of distressed financial conditions were less discouraged to increase their regulatory capital funds to share risks. Intuitively, they were more encouraged to engage in risk-shifting behavior. Also, the risk-shifting behavior was found to have a significantly high potential in foreign-owned Islamic banks than in domestic Islamic banks.

Research limitations/implications

Although the study is based on a sample of Islamic banks in Malaysia, the findings suggest targeted interventions aimed at discouraging risk shifting or transfer of risks in an interest-free Islamic financing.

Practical implications

The outcome of this paper has practical implications for Islamic banks to build a buffer of capital funds to face downward pressures during heightened financial uncertainties while serving as protection to depositors. Moreover, this study has practical implications for shareholders to avail themselves the benefits of high investment accounts financing. The Islamic banks can continue to play their role in promoting inclusive growth, reducing inequality and accelerating poverty reduction.

Social implications

Although the current study is based on a sample of Islamic banks in Malaysia, the finding suggests that the extent of risk shifting was significantly more incentivized among the foreign-owned rather than the domestic Islamic banks. This information can be used to develop targeted interventions aimed at discouraging risk shifting or transfer of risks in an interest-free Islamic financing.

Originality/value

This paper is the first that investigates on adequacy of regulatory capital funds of Islamic banks through loss provisioning policies.

Details

Journal of Financial Reporting and Accounting, vol. 16 no. 1
Type: Research Article
ISSN: 1985-2517

Keywords

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Article

Robert McGaffin, Francois Viruly and Luke Boyle

The purpose of this paper is to understand how the nature of infrastructure as a public good has traditionally lent itself to state provision and to review how land-based…

Abstract

Purpose

The purpose of this paper is to understand how the nature of infrastructure as a public good has traditionally lent itself to state provision and to review how land-based financing (LBF) can be used to overcome the public infrastructure funding constraints in South Africa.

Design/methodology/approach

The paper is largely based on a review and analysis of the academic literature, government reports and reports from research institutions such as the World Bank, Department for International Development, Urban Land Institute and the Lincoln Institute.

Findings

The paper finds that although a number of LBF instruments are being used in South Africa, the majority of them are not suited to addressing the current infrastructure funding constraint. However, the paper finds that some LBF mechanisms, such as tax-increment financing (TIF), that are currently not used could play a role provided that certain preconditions are met.

Research limitations/implications

LBF has only partially been implemented in South Africa, thus the paper is limited to exploring the issues, challenges and necessary policy and regulatory changes needed to support LBF.

Practical implications

The review of LBF mechanisms currently being used in South Africa highlights many of their practical limitations. Furthermore, concrete proposals and legislative amendments are proposed in the paper regarding the implementation of additional funding instruments such as TIF.

Social implications

Infrastructure is regarded as a key precondition for socio-economic development. LBF offers a viable and important alternative for fiscally constraint governments in emerging economies to fund infrastructure provision.

Originality/value

The main contribution of the paper is its focus on the use of LBF in the under-researched Sub-Saharan African context.

Details

Journal of Property Investment & Finance, vol. 39 no. 3
Type: Research Article
ISSN: 1463-578X

Keywords

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Article

Lilliemay Cheung, Janet R. McColl-Kennedy and Leonard V. Coote

This paper aims to demonstrate how vulnerable consumer-citizens mobilize social capital following a natural disaster, showing how different forms of social capital

Abstract

Purpose

This paper aims to demonstrate how vulnerable consumer-citizens mobilize social capital following a natural disaster, showing how different forms of social capital contribute to well-being and resilience.

Design/methodology/approach

An embedded case study design comparing three different social networks is employed.

Findings

Understanding the active role consumer-citizens play in provisioning within social networks provides a deeper understanding of the important mechanisms that explain how different forms of social capital contribute to well-being. The three identified networks demonstrate different structural signatures composed of differing forms of social capital that arise following a natural disaster.

Research limitations/implications

Drawing on social capital theory, this study contributes to advancing transformative service research, providing implications for both theory and practice.

Originality/value

This study is one of the first to empirically compare networks in a natural disaster context, demonstrating the effects of bonding, bridging and linking social capital on well-being and community resilience. This study shows how social network analysis can be used to model network processes and mechanisms. Findings highlight the important role of social provisioning to vulnerable consumer-citizens as an alternate form of consumption.

Details

Journal of Services Marketing, vol. 31 no. 4/5
Type: Research Article
ISSN: 0887-6045

Keywords

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Book part

Pierre-Richard Agénor and Luiz A. Pereira da Silva

Purpose – To discuss, from the perspective of developing countries, recent proposals for reforming international standards for bank capital requirements.…

Abstract

Purpose – To discuss, from the perspective of developing countries, recent proposals for reforming international standards for bank capital requirements.

Methodology/approach – After evaluating, from the viewpoint of developing countries, the effectiveness of capital requirements reforms and progress in implementing existing regulatory accords, the chapter discusses the procyclical effects of Basel regimes, and suggests a reform proposal.

Findings – Minimum bank capital requirements proposals in developing countries should be complemented by the adoption of an incremental, size-based leverage ratio.

Originality/value of chapter – This chapter contributes to enlarge the academic and policy debate related to bank capital regulation, with a particular focus on the situation of developing countries.

Details

International Banking in the New Era: Post-Crisis Challenges and Opportunities
Type: Book
ISBN: 978-1-84950-913-8

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Article

Nor Azimah Abdul Aziz

The objective of this paper is to encourage compliance amongst the corporate community and to examine how statutory provisions will assist companies to implement internal…

Abstract

Purpose

The objective of this paper is to encourage compliance amongst the corporate community and to examine how statutory provisions will assist companies to implement internal control mechanisms and in managing risks, so as to achieve business efficiency.

Design/methodology/approach

This paper may be categorised as a general review paper that will elucidate on the efforts in integrating the corporate governance, internal control, and risk management provisions into the Companies Act 1965 (Act 125), (CA 1965) which is a principal legislation of company law in Malaysia.

Findings

With consistent compliance, companies will reap unlimited benefits that flow from efficient processes which will enhance corporate capabilities, effective management, coordination and the overall organisation's ability to create value and ultimately, in maximising its shareholders' wealth.

Originality/value

The paper shows that corporate risks could be managed and internal control could be achieved by companies through compliance with a legal framework that reinforces good governance and is infused with such provisions. The target audience of this paper is towards the officers of companies, corporate players as well as regulators, policy makers and legislators.

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