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Book part
Publication date: 25 September 2020

Berna Kaçar and Huriye Gonca Diler

Introduction: Monetary policy resolutions issued by central banks play effective role in economy when accompanied with interest variable. In Keynesian approach to finance…

Abstract

Introduction: Monetary policy resolutions issued by central banks play effective role in economy when accompanied with interest variable. In Keynesian approach to finance, interest is treated as the main determinant underlying financial policy resolutions. Thus interest is a pivotal factor in monetary transmission mechanism. Tight monetary policy practices, essentially decreasing money supply, eventually lead to a slump in investments, total demand and national income due to the increase in real interest rates.

Objective: The aim of this study is to determine what type of effects do monetary policy practitioner in Turkey have on macroeconomic variables via the interest channel of monetary transmission mechanism.

Methodology: Based on this objective, variables that could help in unveiling CBT overnight interest rates, direct fixed capital investment (GSSO), real gross domestic product (RGDP), industry production index (SUE) and domestic producer price index (YUFE) variables and that could explain monetary functions of transmission mechanism’s interest channel were selected. For the variables constituting the research topic, collected data belong the period of 2003Q1–2018Q3.

Findings: In the study relation between the variables has been analyzed under two parts via harnessing Toda–Yamamoto casualty test. In the first part, results of Toda–Yamamoto causality test from RGDP, GSSO and interest rate (FO) variables have been presented. The results manifest that interest channel directly affects direct fixed capital investment and RGDP. Interest channel was found to be effective on these variables of the analysis. In the second part, Toda–Yamamoto causality test was harnessed for SUE, YUFE and FO variables. Interest channel did not provide a result that affected YUFE and SUE.

Details

Uncertainty and Challenges in Contemporary Economic Behaviour
Type: Book
ISBN: 978-1-80043-095-2

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Article
Publication date: 9 September 2011

Yang Fan and Teng Jianzhou

This paper aims to study the monetary transmission mechanism of China from January 1996 to December 2009 under endogenous structural breaks.

Abstract

Purpose

This paper aims to study the monetary transmission mechanism of China from January 1996 to December 2009 under endogenous structural breaks.

Design/methodology/approach

The study constructs a benchmark VAR model and then adds the proxy variables for four channels of monetary policy transmission as endogenous or exogenous variables in the model to study the transmission mechanism in China. Considering a number of reforms carried out in the economic and financial field in the past two decades and the possibility of structural changes in the monetary transmission mechanism, the methodology proposed by Qu and Perron is employed to allow for endogenous structural changes in the model.

Findings

By conducting a comparative analysis, conclusions can be drawn from this paper that bank lending is always the dominating channel for monetary policy to influence economy in China and the roles of the interest rate channel and the exchange rate channel have been improved in recent years. However, the role of the asset price channel in monetary policy transmission has weakened since late 2001.

Originality/value

This paper combines the quasi‐maximum likelihood procedure proposed by Qu and Perron in 2007 with a benchmark VAR model, thus providing a new approach to study monetary transmission mechanism and the conclusions can be more sensible.

Details

China Finance Review International, vol. 1 no. 4
Type: Research Article
ISSN: 2044-1398

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Article
Publication date: 1 August 1999

Schubert Foo Siu Cheung Hui and See Wai Yip

The Internet environment, with its packet‐switched network and lack of resource reservation mechanisms, has made the delivery of low bit‐rate real‐time communication…

Abstract

The Internet environment, with its packet‐switched network and lack of resource reservation mechanisms, has made the delivery of low bit‐rate real‐time communication services particularly difficult and challenging. The high potential transmission delay and data packet loss under varying network conditions will lead to unpleasant and unintelligible audio and jerky video play‐out. The Internet TCP/IP protocol suite can be extended with new mechanisms in an attempt to tackle such problems. In this research, an integrated transmission mechanism that incorporates a number of existing techniques to enhance the quality and deliver “acceptable” real‐time services is proposed. These techniques include the use of data compression, data buffering, dynamic rate control, packet lost replacement, silence deletion and virtual video play‐out mechanism. The proposed transmission mechanism is designed as a generic communication system so that it can be used in different systems and conditions. This approach has been successfully implemented and demonstrated using three separate systems that include the Internet Phone, WebVideo and video‐conferencing tool.

Details

Internet Research, vol. 9 no. 3
Type: Research Article
ISSN: 1066-2243

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Article
Publication date: 10 May 2019

Nargiza Alymkulova and Junus Ganiev

The global financial crisis hit the economy of the Kyrgyz Republic by the third wave of its transmission in early 2009. The purpose of this study is to examine the impact…

Abstract

Purpose

The global financial crisis hit the economy of the Kyrgyz Republic by the third wave of its transmission in early 2009. The purpose of this study is to examine the impact of the global financial economic crisis on the transition economy of the Kyrgyz Republic. As there is a low level of the Kyrgyz Republic’s integration into the global financial and economic processes, it is obvious that channels of transmissions are different.

Design/methodology/approach

The empirical model is the vector autoregression approach. The quarterly data from 2005 to 2013 of the remittances from abroad, trade volumes, exchange rates, credits, deposits and liquidity of the banking system, gross domestic product (GDP) and foreign direct investment (FDI) were used in the empirical analysis.

Findings

The authors found a significant positive relation between transmission channels such as remittances flow, banking sector, international trade and GDP within the first six months. Thus, a decline in the aforementioned variables has a significant affirmative effect on the country’s GDP. Notwithstanding, the exchange-rate channel adversely influences GDP. Thereby, the depreciation of the national currency leads to an increase in GDP.

Originality/value

The study findings allow the Kyrgyz policymakers to foresee the global crisis transmission through the primary channels of transmission mechanism. Nevertheless, a decrease of the deposit level by 1 per cent leads to 2.91 per cent decline in FDI inflows. On the contrary, an increase of the exchange rate by 1 per cent leads to 1.54 per cent decrease in imports.

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Book part
Publication date: 1 October 2014

Xuan Vinh Vo and Phuc Canh Nguyen

A thorough understanding of transmission mechanism is a key to a successful conduct of monetary policy. This chapter attempts to improve knowledge in this respect by…

Abstract

A thorough understanding of transmission mechanism is a key to a successful conduct of monetary policy. This chapter attempts to improve knowledge in this respect by examining the impacts of commercial bank risks on the transmission of monetary policy. We investigate the impact of monetary policy on bank risk in Vietnam pre and post 2008 global financial crisis employing a unique and disaggregated bank level data set from 2003 to 2012. The results of panel data estimation indicate that the bank lending channel of monetary is evidenced in Vietnam. In addition, we find that the transmission mechanism is affected by characteristics of commercial banks.

Details

Risk Management Post Financial Crisis: A Period of Monetary Easing
Type: Book
ISBN: 978-1-78441-027-8

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Article
Publication date: 14 November 2016

Artur Swierczek

The purpose of this paper is to explore the link between interorganizational integration with respect to its intensity and span, as well as the propagation and…

Abstract

Purpose

The purpose of this paper is to explore the link between interorganizational integration with respect to its intensity and span, as well as the propagation and amplification of disruptions alongside a supply chain.

Design/methodology/approach

The paper opted for an exploratory study using a survey of companies. In order to extract the constructs manifesting the span and intensity of integration between companies in supply chains, the principal component analysis was employed. The obtained factor scores were then used as classification criteria in the cluster analysis. It enabled to include similar organizations in terms of intensity and span of supply chain integration. In order to validate the obtained results, the analysis of variance (ANOVA) was conducted and regression models were developed.

Findings

The findings of the study show that there is a relationship between the intensity and span of supply chain integration and the “snowball effect” in the transmission of disruptions. The obtained findings show that the span of supply chain integration is negatively associated with the strength of the “snowball effect” in the transmission of disruptions. In addition, the results suggest that more intense supply chain integration contributes to the “snowball effect” in material flows in the forward and backward transmission of disruptions.

Research limitations/implications

Although the current study investigates the intensity and span of integration within the basic, extended and ultimate supply chain structure, it still lacks the broader analysis of the “snowball effect” in the transmission of disruptions. The study investigates this phenomenon only within the basic supply chain structure, constituted by the primary members. Another challenge is to examine if the effects of external risk factors (e.g. natural disasters) may also be transferred to other links in the supply chain structure, and what are the similarities and differences (if any) between the mechanism of propagation and amplification of disruptions elicited by internal and external risk factors. Another future direction of study is to define other ways of identification and measurement of the “snowball effect” in order to make cross-industrial and international comparisons of disruptions amplified in the transmission more standardized and objective. In the current study, the phenomenon of the “snowball effect” is anchored in the subjective opinions of managers who may view the problem from different angles. Consequently, the study is limited to individual perceptions of the strength of disruptions affecting the solicited company, its customers and suppliers.

Practical implications

In practical terms, the findings provide crucial information for the framework of supply chain risk management and therefore enable its more efficient and effective implementation. The better the managers understand the nature of the “snowball effect” in the transmission of disruptions, the easier it is for them to allocate resources and apply necessary managerial tools to mitigate the negative consequences of risk more effectively. The deliverables of the study also confirm that the interorganizational exchange of information accompanying the supply chain integration enables to mitigate the strength of the “snowball effect” in the transmission of disruptions. Another important implication is the broadening of practical expertise concerning the use of integration not only as a means of obtaining and sustaining supply chain effectiveness and efficiency, but also as the way to mitigate the “snowball effect” in the transmission of disruptions. Therefore, nowadays the supply chain managers are facing another challenging task – namely, how to balance supply chain integration in terms of span and intensity to ensure profits from integration and mitigate the negative risk consequences transmitted among the links in supply chains.

Originality/value

The paper elaborates on the underestimated issue of the “snowball effect” in the transmission of disruptions and its drivers. In particular, the paper attempts at filling the gap in empirical studies concerning the relationships between the “snowball effect” in the transmission of disruptions and supply chain integration.

Details

The International Journal of Logistics Management, vol. 27 no. 3
Type: Research Article
ISSN: 0957-4093

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Article
Publication date: 2 January 2018

Xiaoxia Dong, Colin Brown, Scott Waldron and Jing Zhang

The purpose of this paper is to analyze price transmission in the Chinese pork market between 1994 and 2016 and examine any incidence and causes of asymmetric price transmission.

Abstract

Purpose

The purpose of this paper is to analyze price transmission in the Chinese pork market between 1994 and 2016 and examine any incidence and causes of asymmetric price transmission.

Design/methodology/approach

The approach uses threshold autoregressive models, asymmetric error correction models and autoregressive moving average models to examine the price transmission using monthly pig and pork prices from 1994 to 2016.

Findings

While a symmetric price transmission between pork and pig prices was identified for the period between June 1994 and June 2007, an asymmetric price transmission response between pork and pig prices was found for the period July 2007 to June 2016. Key factors behind the asymmetric price transmission include the chicken price and China’s provisional purchasing and stockpiling policy which is having a counter-productive impact on prices.

Originality/value

The paper contributes to the literature by examining price transmission in two different periods: 1994 to 2007 where prices are lower and more stable; and 2007 to 2016 where prices are higher and volatile. The paper examines the impact of production and market policies on price transmission in the Chinese pork and pig market, with several policy implications.

Details

British Food Journal, vol. 120 no. 1
Type: Research Article
ISSN: 0007-070X

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Article
Publication date: 7 July 2021

Aula Ahmad Hafidh

This paper investigates the structural model of vector autoregression (SVAR) of the interdependent relationship of inflation, monetary policy and Islamic banking variables…

Abstract

Purpose

This paper investigates the structural model of vector autoregression (SVAR) of the interdependent relationship of inflation, monetary policy and Islamic banking variables (RDEP, RFIN, DEP, FIN) in Indonesia. By using monthly data for the period 2001M01-2019M12, the impulse response function (IRF), forecasting error decomposition variation (FEDV) is used to track the impact of Sharia variables on inflation (prices).

Design/methodology/approach

This research use quantitative approach with SVAR model to reveal the problem.

Findings

The empirical results of SVAR, the IRF show that policy shocks have a negative impact on all variables in Islamic banking except the equivalent deposit interest rate (RDEP). The impact of both conventional (7DRR) and Sharia (SBIS) policies has a similar pattern. While the transmission of Sharia monetary variables as a policy operational target in influencing inflation is positive. In addition, the FEDV clearly revealed that the variation in the Sharia financial sector was relatively large in monetary policy shocks and their role in influencing prices.

Originality/value

The empirical results of SVAR, the IRF show that policy shocks have a negative impact on all variables in Islamic banking except the equivalent deposit interest rate ‘RDEP’. The impact of both conventional “7DRR” and Sharia “SBIS” policies has a similar pattern. While the transmission of Sharia monetary variables as a policy operational target in influencing inflation is positive. In addition, the FEDV clearly revealed that the variation in the Sharia financial sector was relatively large in monetary policy shocks and their role in influencing prices.

Details

Islamic Economic Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1319-1616

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Book part
Publication date: 25 July 2019

Perry Warjiyo and Solikin M. Juhro

Abstract

Details

Central Bank Policy: Theory and Practice
Type: Book
ISBN: 978-1-78973-751-6

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Article
Publication date: 1 January 2005

Colin Jones

The paper advocates a Darwinian explanation of the process of firm transformation. Existing but generally opposing views related to the selection‐adaptation debates are…

Abstract

Purpose

The paper advocates a Darwinian explanation of the process of firm transformation. Existing but generally opposing views related to the selection‐adaptation debates are united to consider the dialogic nature of both approaches. It is argued that a Darwinian approach, as opposed to a neo‐Darwinian or Lamarckian approach, provides the means to scale the sides of a debate that has for too long divided scholars interested in firm and industry transformation.

Design/methodology/approach

The paper addresses three specific issues to develop its Darwinian argument. First, the various works of Geoff Hodgson that have for many years advanced Darwin's evolutionary ideas are used to argue the nature and application of Darwinism in the socio‐economic domain. Second, the nature of what constitutes the elements of firm‐environment interaction is considered to establish basic areas of focus through which the process of firm transformation is more understandable. Finally, the construct absorptive capacity is likened to a mechanism of transmission through which the learning processes associated with the acquisition of favoured variations can be reconciled with the generic evolutionary processes of variation, selection, and retention.

Findings

To understand the process of firm learning, the role of habits and routines must be outlined in specific detail. They cannot be assumed to perform interacting and replicating roles simultaneously. To do so undermines the fundamental qualities of an evolutionary theory.

Originality/value

The preliminary framework advanced takes us beyond the Darwinian‐Lamarckian debate and provides elements of focus from which a greater understanding of the process of firm/industry transformation is possible.

Details

Management Decision, vol. 43 no. 1
Type: Research Article
ISSN: 0025-1747

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