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Article
Publication date: 1 June 1954

E.G. Broad bent

IN Parts I, II and III of this series we have discussed the physical nature of divergence, control reversal and various forms of flutter, and have seen how these phenomena…

Abstract

IN Parts I, II and III of this series we have discussed the physical nature of divergence, control reversal and various forms of flutter, and have seen how these phenomena can be predicted by theory. The flutter problem is so complicated, however, that the aircraft designer needs the assistance of certain guiding principles; otherwise he may find when the aircraft is ready to fly that the flutter calculations which are just completed show that drastic modifications to the aircraft are necessary. These principles form the basis of this concluding part of the series and have two main objects: first to avoid large changes in design on flutter grounds and secondly to obtain a high efficiency from the flutter calculations.

Details

Aircraft Engineering and Aerospace Technology, vol. 26 no. 6
Type: Research Article
ISSN: 0002-2667

Article
Publication date: 22 November 2022

Jun Shen, Kai Zhao and Minjie Mo

This paper investigates how the gap between the host country's actual and optimal financial conditions affects foreign direct investment (FDI) inflows through evidence from China.

Abstract

Purpose

This paper investigates how the gap between the host country's actual and optimal financial conditions affects foreign direct investment (FDI) inflows through evidence from China.

Design/methodology/approach

The authors first employ principal component analysis (PCA) to measure FDI target countries' actual financial conditions and use 30 OECD countries as a reference group to assess the optimal financial condition. The authors then estimate a two-way fixed effect model with panel data of China's outward FDI in 64 countries for the period 2003–2017 to get the regression results. The authors' results overcome endogeneity and are robust.

Findings

Results show that (1) the gaps between host countries' actual and optimal financial conditions positively affect FDI inflows from China; (2) there is a heterogeneous effect between low-income and high-income countries. The gaps for high-income countries significantly increase FDI inflows from China, while the gaps are not significant for low-income countries.

Research limitations/implications

The authors examine how the gap affects FDI inflows from China. An increase of 1% in the target country's gap promotes a 6.3% increase in FDI inflows. However, the authors do not explore what mechanisms are key to these results. The authors will explore these questions in the future.

Originality/value

This paper complements the influence factors of FDI and enriches theories of FDI. The gap between actual and optimal financial conditions plays an essential role in FDI flows across countries for policymakers.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 5 October 2022

Dimitris G. Kirikos

Advocates of quantitative easing (QE) policies have emphasized some evidence that structural models do not predict long-term asset yields as well as naive forecasts…

Abstract

Purpose

Advocates of quantitative easing (QE) policies have emphasized some evidence that structural models do not predict long-term asset yields as well as naive forecasts, implying that predictions of price reversals cannot be profitable and that QE effects are not transitory. The purpose of this study is to reconsider the out-of-sample forecasting performance of structural time series processes relative to that of a random walk with or without drift.

Design/methodology/approach

This study uses bivariate vector autoregression and Markov switching representations to generate out-of-sample forecasts of ten-year sovereign bond yields, when the information set is augmented by including the growth rate of the monetary base, and the estimation relies on monthly data from countries that have pursued unconventional policies over the last decade.

Findings

The results show that naive forecasts are not better than those of structural time series models, based on root mean squared errors, while the Markov model provides additional information on price reversals, through probabilistic inferences regarding policy regime switches, which can induce agents to counteract QE interventions and reduce their effectiveness.

Originality/value

The novel features of this work are the use of a large information set including the instrument of unconventional monetary policy, the use of a structural model (Markov process) that can really inform about potential asset price reversals and the use of a large sample over which QE policies have been pursued.

Details

Journal of Financial Economic Policy, vol. 14 no. 6
Type: Research Article
ISSN: 1757-6385

Keywords

Book part
Publication date: 24 October 2013

Jungsoo Park, Hyun-Han Shin and Jeong Ho Suh

This chapter surveys papers and the related literature on the relationship between banks’ creditor structure and bank risk during the period of liquidity crises. Departing…

Abstract

This chapter surveys papers and the related literature on the relationship between banks’ creditor structure and bank risk during the period of liquidity crises. Departing from the conventional banking literature, which points to deteriorating asset quality to be the culprit for the amplified bank risk in the midst of financial crises, the studies in the aftermath of the global financial crisis look into the liability side of the bank balance sheet as a potential source for the augmented bank risk during the financial crisis when there is a liquidity contraction. Recent studies theorize and provide empirical evidence that banking institutions with a greater share of large lenders and an economy with high noncore bank liabilities in the banking sector may experience heightened bank risk or country risk. We also search for policy implications from this survey.

Details

Global Banking, Financial Markets and Crises
Type: Book
ISBN: 978-1-78350-170-0

Keywords

Book part
Publication date: 26 November 2019

Anindita Sengupta

Financial liberalization is assumed to be the integration of a country's local financial system with international financial markets and institutions. This integration…

Abstract

Financial liberalization is assumed to be the integration of a country's local financial system with international financial markets and institutions. This integration usually requires that governments liberalize the domestic financial sector and the capital account. Financial sectors were liberalized in most of the developing countries in Asia, Africa, and Latin America within the early 1990s. Among these countries, emerging economies are those who promise huge potential for growth but also pose significant political, monetary, and social risks. Brazil and India are often compared among the major emerging economies. Despite these general similarities between them, there are notable differences in various aspects of opening the balance of payments capital account in both countries. In this chapter, we have tried to analyze the long-run as well as short-run relationship between quarterly growth rate of GDP with the stock market, real market, and money market macroeconomic variables in India and Brazil during the period from the first quarter of 1996–1997 to the second quarter of 2018–2019. To estimate the cointegration relationship between growth rate of GDP and its determinants, we employ the bounds testing procedure (modified-ARDL) developed by Pesaran, Shin, and Smith (2001, Journal of Applied Econometrics, 16(3), 289–326). According to our results, stock market plays a positive role in long-term growth in India. Although during the beginning period of the neoliberal reforms, India faced strong domestic political opposition, our study shows that liberalizing the financial market has been fruitful for long-term growth. Our results in case of Brazil show that inflation has a negative and significant impact on long-run growth rate of GDP. The results further show that the share of gross fixed capital formation in GDP in Brazil has a positive and significant long-run relation with the growth rate of GDP. The empirical results further indicate that just like India, liberalization of the financial market and allowing foreign capital inflows have been beneficial for the economy of Brazil in the long run.

Details

The Gains and Pains of Financial Integration and Trade Liberalization
Type: Book
ISBN: 978-1-83867-004-7

Keywords

Book part
Publication date: 28 September 2020

Junkyu Lee and Peter Rosenkranz

The recent rise of nonperforming loans (NPLs) in some Asian economies calls for close analysis of the determinants, the potential macrofinancial feedback effects, and the…

Abstract

The recent rise of nonperforming loans (NPLs) in some Asian economies calls for close analysis of the determinants, the potential macrofinancial feedback effects, and the implications for financial stability in the region. Using a dynamic panel model, we assess the determinants of the evolution of bank-specific NPLs in Asia and find that macroeconomic conditions and bank-specific factors – such as rapid credit growth and excessive bank lending – contribute to the buildup of NPLs. Further, a panel vector autoregression (VAR) analysis of macrofinancial implications of NPLs in emerging Asia offers significant evidence for feedback effects of NPLs on the real economy and financial variables. Impulse response functions demonstrate that a rising NPL ratio decreases the GDP growth, credit supply and increases the unemployment rate. Our findings underline the importance of considering policy options to swiftly and effectively manage and respond to a buildup of NPLs. The national and regional mechanisms underlying NPL resolution are important for safeguarding financial stability in an increasingly interconnected global financial system.

Book part
Publication date: 14 December 2018

M. Kabir Hassan, Shadiya Hossain and Omer Unsal

In this chapter, the authors investigate the correlation between social and economic indicators and Islamic finance, to see whether increasing Islamic banking will…

Abstract

In this chapter, the authors investigate the correlation between social and economic indicators and Islamic finance, to see whether increasing Islamic banking will increase account penetration in Muslim majority countries. Inclusive financial services are beneficial to a country as a whole, especially for poorer individuals, giving them more access to investment and financing opportunities. Shari’ah law has guidelines for banking that Muslims must follow and many believe that commercial banks do not follow these guidelines. As many individuals cite religious reasons as their excuse for exclusion, there is potential to develop Islamic finance as a means of improving financial access in certain countries. The authors find that individuals from the countries in our study tend to be more religious and that there are potential economic and social benefits to an increase in Islamic banking in this region.

Details

Management of Islamic Finance: Principle, Practice, and Performance
Type: Book
ISBN: 978-1-78756-403-9

Keywords

Book part
Publication date: 21 May 2021

Peterson K. Ozili

Purpose: This chapter presents criticisms of financial inclusion.Methodology: This chapter uses critical discourse analysis to critique the modern financial inclusion…

Abstract

Purpose: This chapter presents criticisms of financial inclusion.

Methodology: This chapter uses critical discourse analysis to critique the modern financial inclusion agenda.

Findings: The findings reveal that (i) financial inclusion is an invitation to live by finance and leads to the financialization of poverty; (ii) some of the benefits of financial inclusion disappear after a few years; (iii) financial inclusion ignores how poverty affects financial decision-making; (iv) it promotes digital money which is difficult to understand; (v) financial inclusion promotes the use of transaction accounts; (vi) digital money is difficult to understand; and that (vii) some financial inclusion efforts bear a resemblance to a campaign against having cash-in-hand.

Implication: This study will help policymakers in their assessment of the economic, social, political, and cultural factors that hinder financial inclusion as well as the consequence of financial inclusion for society. For academics, this study will provide a critical perspective to on-going financial inclusion debates in the large positivist literature on financial inclusion.

Originality: Currently, there are no studies that use critical discourse analysis to analyze the broader concept of financial inclusion. This chapter is the first study that uses critical discourse analysis to critique some aspects of the modern financial inclusion agenda.

Details

New Challenges for Future Sustainability and Wellbeing
Type: Book
ISBN: 978-1-80043-969-6

Keywords

Book part
Publication date: 28 September 2020

Bang Nam Jeon, Hosung Lim and Ji Wu

This chapter examines spillover effects of global monetary shocks on lending by foreign banks in an emerging country, South Korea. Foreign banks play a significant role by…

Abstract

This chapter examines spillover effects of global monetary shocks on lending by foreign banks in an emerging country, South Korea. Foreign banks play a significant role by providing additional domestic credit and foreign currency liquidity and directing international capital flows via the banking sector. Using macroeconomic and banking data for the period of 2000Q1–2016Q2, the authors present evidence that foreign bank branches in Korea have responded in providing their foreign currency loans with one-quarter (three months) time lag to changes in monetary policies in their home countries (mainly, the United States and the Euro area). This short-run spillover effect of monetary policy shocks from the home countries to foreign banks in Korea seems consistent with the main findings from our bank-level data analysis. This chapter also discusses useful policy implications.

Details

Emerging Market Finance: New Challenges and Opportunities
Type: Book
ISBN: 978-1-83982-058-8

Keywords

Book part
Publication date: 21 October 2019

Peterson K. Ozili

This chapter provides a discussion on some issues in blockchain finance that regulators are concerned about – an area which bitcoin promoters have remained silent about…

Abstract

This chapter provides a discussion on some issues in blockchain finance that regulators are concerned about – an area which bitcoin promoters have remained silent about. Blockchain technology in finance has several benefits for financial intermediation in the financial system; notwithstanding, several issues persist which if addressed can make the adoption of blockchain technology in finance easier and accepted by regulators. The blockchain issues discussed in this chapter are relevant for recent debates in blockchain finance.

Details

Disruptive Innovation in Business and Finance in the Digital World
Type: Book
ISBN: 978-1-78973-381-5

Keywords

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