Search results

There are two important determinants in the banking system which directly affect the number of credit deliveries to the economy in the first round and impact the growth and developmental status of the economies in the second round. They are the amount of non-performing assets (NPA) and the number of banking funds invested in the governments’ securities. The present chapter, thus, focuses on the trends of these two and their associations with the credit, GDP and human development of the countries. First, it develops a basic theoretical structure of credit creation in the banking system and then develops theoretical linkages among the two lead variables, NPA and investment, in relation to the rest of the economy. Then, it goes for empirical exercises from the perspectives of the descriptive statistical analysis. The trends of NPA and investment show rising trends in almost all countries. Furthermore, it is found that the signs of correlation coefficients between the two with credit, GDP and HDI are positive in most cases of the list of developing countries and negative in some cases of the list of developed countries.

In continuation to Chapter 3, the present chapter tries to quantify the impact of credit upon GDP and HDI as the first attempt and the linkages of NPA and security investments with credit, GDP and HDI of the countries as the second attempt. For these purposes, this chapter starts with the measurements of credit elasticity with respect to GDP and HDI to know the impact of credit on the private sectors upon the income and human development of the countries. Then, it focuses on the implications of common banking operating tools such as their investments in the governments’ securities in relation to credit to the private sectors, GDP and HDI of the selected countries in a panel data format. The results of the credit elasticity of GDP show that it has taken the positive sign in all of the countries and the negative changes are very little in number. Furthermore, the results on the linkages show that all the variables are mostly cointegrated and therefore maintain stable and equilibrium relationships in the long run among them. But the short-run results show that investment and credit make a cause to NPA, and investment and NPA make a cause to GDP. No variables make any interrelationships with the HDI in either the long-run or short-run systems. Thus, the countries in the list should put more emphasis on the working of the financial sectors as the key partner in the income-generating activities.

The purpose of this study is to empirically estimate the impact of a government microcredit program on the handloom weavers to promote small and medium enterprises (SMEs) in Bangladesh.

The data were collected from 311 handloom weavers from the Sirajganj District of Bangladesh from July to December 2015 using a multistage sampling technique. The analysis was conducted using a two-stage least squares regression model incorporating instrumental variables to control for the probable endogeneity problem associated with the study.

This study finds that government microcredit had no significant impact on borrowers' investment in their business, whereas credit received from multiple sources other than government credit had a significant negative impact. Additionally, literacy level, household assets and the number of operational handloom units positively affected investment, while the number of non-operational handloom units and distance negatively affected the investment.

This study's findings are more specific for the selected case and may not be generalizable to all kinds of SMEs.

The policy implications are targeted at increasing loan size based on the number of operational handloom units to improve the performance of government and other microcredit programs to facilitate the growth of SMEs in Bangladesh.

This study specifically focuses on estimating the financial performance of government microcredit programs for SME development within the handloom industry, which has not been sufficiently explored in the literature.

The purpose of this paper is to identify whether the rise in intangible asset investment is related to trade credit investment and whether this relationship is driven by financial constraint and other firm factors.

The study conducts fixed effect regressions testing the relationship between trade credit investment and intangible asset levels. The relationship is further examined for all firms based on product type, financial constraint and sales growth.

There is a negative relationship between investment in trade credit and the level of intangible assets as a proportion of total assets. This negative relationship is largely explained by firms in industries that traditionally utilize more trade credit, firms with financial constraints and firms with low sales growth.

The level of investment in intangible assets continues to rise, while investment in trade credit is declining. This paper is the first to identify whether these trends could be related and to provide some explanation why.

This study is the first to link investment in trade credit with investment in intangible assets. There is a negative relationship that is most pronounced for firms that typically offer more trade credit, that are experiencing financial constraint and that are experiencing low growth.

The purpose of this paper is to expand the investor sentiment’s effect on investment efficiency to the layer of “credit financing,” studying whether investor sentiment can affect credit financing level and the inner mechanism of the effect.

The authors obtain firm-level data from the Shanghai and Shenzhen stock markets and using panel estimation techniques examine whether investor sentiment can affect credit financing level and the inner mechanism of the effect.

This paper finds that credit financing plays the role of partial media in the process of investor sentiment affecting investment efficiency. Based on the funds increasing effect, with the high-investor sentiment and increasing credit financing, corporations alleviate the financing constraints, but also provide a convenient for the abuse of corporate funds. So, investor sentiment positively associates with enterprises’ overinvestment, while investor sentiment negatively associates with enterprises’ underinvestment. Relying on the particular system background and property right environment in China, this paper finds that investor sentiment has an effect on the overinvestment of state-owned enterprises and the underinvestment of private enterprises through credit financing channel, while it does not function in the overinvestment of private enterprises. The reason of the difference is that under the soft budget constraint in the country, the credit preference of state-owned enterprises and the creditor’s rights management of banks are partially absent.

By fusing the special financial environment and institutional background, this thesis further includes in the analysis frame the difference in governance effect by credit financing between state-owned and privately owned listed companies, and further analyzes the difference in impact on investment efficiency in enterprises of different natures after investor sentiment has affected enterprise credit financing.

This paper has verified the constraint assumption and deepened the research work on bank credit supply and answered practical questions such as whether the banks in the country exercise supervision function over the listed companies and on which kind of listed companies the supervision function plays a more effective role.

As an unofficial substitution mechanism, bank-enterprise relationship can elevate the investment efficiency by private owned enterprises. Based on the timely research results on credit financing, reference is provided for private listed companies to utilize investor sentiment to improve its investment efficiency.

This paper has proved the specific path which creates the dual effects on resources allocation by investor sentiment, that is, the intermediary transmission in credit financing, clarifying the mechanism of action by which investor sentiment affects the efficiency of enterprise investment and making incremental contribution to the research of how investor sentiment affects the efficiency of enterprise investment.

The purpose of this paper is to critically examine the argument linking land registration to agricultural investment and to provide theoretical reasons as to why this linkage may not materialise in Africa within the short to medium term.

The paper takes the form of a critical review of the relevant literature on land registration, access to credit and agricultural investment; arguments are built on empirical studies found in the literature and theoretical concepts.

It has been established in this paper that the links between landed property registration and agricultural investments are made defective in Africa by factors such as poverty, lack of appropriate agro‐based infrastructure and the fact that land registration per se does not improve the profitability of agriculture, neither does it improve access to credit.

The fact that this paper is based on literature review may be seen as a weakness to some extent.

Even though previous researchers have looked at the relationship between landed property registration and agricultural investment in the developing world, they fall short of critically explaining why land registration has been found not to enhance agricultural investment. This paper fills the gap through a combination of various theoretical and practical arguments which could call for a rethinking on the policies for promoting agricultural growth. The rigorous theoretical argument may also provide the basis for further empirical research.

The purpose of this paper is to determine if there are positive microeconomic effects from a state‐funded loan participation program on farm productivity and investment behavior.

The authors take the approach that access to credit solves a liquidity problem. If a credit constraint exists it results in a suboptimal allocation of resources and a reduction in farm output and profitability. A two‐stage regression model approach is used to analyze farmer survey and loan application data. In the first stage, a probit regression model is used to identify the farmers who are likely to be credit rationed. In the second stage, switching regression models are used to observe the effect of credit rationing on farm productivity and on farm investment behavior.

It is found that there are liquidity effects of credit constraints for a significant share of the beginning and low‐resource farmers who participated in the state‐funded farm loan program. After controlling for various farm and farmer characteristics, the estimated productivity and investment demand equations imply that a 1 percent increase in credit received by credit constrained farmers under the state program increased their gross income by about 0.49 percent, and their investments in depreciable assets by about 0.33 percent.

This paper is the first to apply the switching regression model to a state‐funded farm loan program for the purpose of evaluating the financial impacts on farmer participants.

This study aims to investigate the cross-sectional and time-series dynamics of realized Certified Emission Reduction (CER) credits issued and the role of investments for a seminal sample of China’s Clean Development Mechanism (CDM) projects specializing in the wind sector.

The study investigates the dynamics of realized CER credits issued and the role of investments using traditional cross-sectional and time-series regression analysis.

The study results find that the level of investment per megawatt (MW) of power generation is an important predictor for the expected number of realized CER credits issued in the cross-section of China’s wind CDM projects. Additionally, the study finds evidence of time trends and seasonality when examining the time series of realized monthly CER credits: CER credits issued are lower in the summer and higher in the winter.

The study results highlight the importance of financing CDM projects and suggest guidelines in which investors are able to better assess how much to invest based on the anticipated CER credits in the Project Design Document. Additionally, the results suggest opportunities for the CDM Executive Board surrounding the Project Design Document and the anticipated CER credits contained therein. The present study contributes to the literature on strategic tools for addressing climate change and offer insights that narrow the gap between empirical finance and sustainable business practice in the context of CDM projects.

This paper aims to consider the role of investment funds in the credit intermediation process and discuss various forms of systemic risk their involvement might give rise to. It concludes by drawing some conclusions on the policy challenges facing authorities charged with regulating shadow banking.

The paper is based on findings from prior research and statistics.

On a general level, the paper shows that even though traditional investment funds and hedge funds may be very different in terms of their investment strategies and business models, some of them share several commonalities from a systemic risk perspective. More specifically, it discusses how instability in the funding profile of investment funds may threaten their ability to substitute banks’ maturity and liquidity transformation; that their potential funding liquidity shortages, asset reallocations and leverage may contribute to procyclicality in credit and market runs on the systemic money and short-term credit markets; and that insufficient risk separation may elude managerial and supervisory oversight, and force banks to reduce or interrupt credit intermediation.

The paper points to the lack of timely and comprehensive data for uncovering the stages and entities involved in shadow banking. Without sufficient data, the task of policy bodies, regulators or macroprudential authorities to fully grasp shadow banking and its contribution to systemic risk is daunting.

The paper represents (to the author’ knowledge) the first analysis of the role of investments in shadow banking.