Search results

This study aims to examine the role of financial inclusion and institutional factors such as corruption and the rule of law (RL) on the credit risk and stability of banks.

The study considers a sample of 61 developing countries and uses very robust estimation techniques that allow controlling for endogeneity, heteroskedasticity and serial correlation, such as instrumental variables method in two-stage least squares (IV-2SLS), instrumental variables generalized method of moments (IV-GMM), as well as system of generalized methods of moments in two stages (Sys-2GMM).

The results confirm that financial inclusion and strengthening the RL can significantly contribute to reducing credit risk and improving the financial stability of banks; in contrast, the authors find that weak control of corruption aggravates credit risk. In addition, they found that greater competitiveness in the banking sector increases credit risk.

This study supports the need to promote financial inclusion and strengthen institutional factors to improve the stability of the banking sector, as well as promote general well-being in the economy.

This study contributes to the scarce literature by simultaneously using institutional factors such as corruption and the RL and macroeconomic variables such as economic growth and inflation in the relationship between financial inclusion and the banking sector, as well as considering competitiveness as an explanatory factor for banks’ credit risk and stability.

The study aims to investigate the effect of cultural alignment and value congruency between children and founder on intergenerational succession and on the observation of family optimal outcomes.

A game-theoretical approach is used to develop a sequential game modeling the strategic interactions behind successor selection. The authors test its main predictions by conducting an experiment with 75 subjects.

A theoretical prediction that misalignment between children and founder leads to outcomes without intergenerational succession, or to outcomes with intergenerational succession that are not family optimal. These predictions are buttressed by our experiment, which also found evidence that the family optimal outcome is focal when there are multiple equilibria.

No light is thrown on the sources of cultural (mis)alignment, but only on some of its consequences. Further studies of a different nature are needed to better understand the former.

Cultural diffusion and value congruency within the family should be timely fostered to promote harmony during the succession process and raise the chances of successful succession.

The cultural alignment and value congruency between incumbent and successors is treated as shaping the incentives that both types of agents face in the successor-selection process. Further, experimental techniques have not been used to test the results obtained in games exploring issues in family firm succession. This paper aims to begin filling this gap.

This study aims to examine the impact of financial inclusion and financial innovation on corruption, considering the moderating role of education, as well as identify the specific modality of digital inclusion and payments that contribute to corruption reduction.

The study uses a representative sample consisting of 46 African countries in three different years 2011, 2014 and 2017. On the data, feasible generalized least squares (FGLS), instrumental variables – two stages least squares (IV-2SLS) and two-stage generalized method of moments (IV-2GMM) model estimation methods were employed.

The results suggest that financial inclusion and education significantly reduce corruption. As well, the interaction between financial inclusion and education reduces corruption. Additionally, the authors find that the expansion of bank credit and the use of credit and debit cards are the specific modes of financial inclusion and digital payments that can contribute to corruption reduction.

This study awakens policymakers in African countries about the need to consider education as an alternative measure to support financial inclusion and reduce the use of physical cash in transactions for an effective fight against corruption.

Regarding practical implications, the study shows that financial inclusion besides reducing poverty for households can contribute to macroeconomic stability in Africa.

The study uses a representative sample composed of 46 African countries and considers the role of education in moderating the relationship between financial inclusion and financial innovation on corruption. Furthermore, the study identifies the specific modality of financial inclusion and digital payments that contribute to corruption reduction.

Purpose – This study constitutes a first attempt to experimentally test the performance of a 100% auction versus a 100% free allocation of CO2 permits under the rules and parameters that mimic the EU ETS (imperfect competition, uncertainty in emissions' control, and allowing banking), with environmental targets more restrictive than the current ones but foreseeable for the near future.

Methodology/approach – Two experimental treatments were run to achieve our goal. Both included the rules and the parameters that parallel the EU ETS structure, the only difference being the rule for the primary allocation of permits.

Findings – Our experimental results indicate that the EU ETS has the potential to reduce CO2 emissions, achieving targets considerably more restrictive than the current ones at high efficiency levels, both with auctioned and free emission permits.

Practical implications – Concerns about undue scarcity, and corresponding high prices, in secondary markets generated by a primary auction market are not warranted under the proposed dynamic auction format. This adds arguments favoring auctioning over grandfathering as the rule for the initial allocation of emission permits in the EU ETS.

Originality/value of chapter – This study implements a theoretically appropriate auction format for the primary allocation of emission permits (the Ausubel (2004) auction) and incorporates a first attempt to include in the analysis measures of the risk preferences of subjects participating in emission permits experiments. These characteristics are for the first time implemented under a complex experimental design (including uncertainty of emission abatement, and banking), trying to parallel the EU ETS trading environment.

Field experiments have raised important issues of interpretation of bargaining behavior. There is evidence that bargaining behavior appears to vary across groups of populations, such as nationality, ethnicity and sex. Differences have been observed with respect to initial behavior and with respect to the adjustment pattern over time. Often, such behavioral differences are referred to as cultural, although the delineation of the cultural group has been confined to one or other observable characteristic in isolation. We show that this way of characterizing cultural differences is overly simplistic: at best, it leads to unreliable claims; at worst, it leads to erroneous conclusions. We reconsider the evidence provided by previous experiments using ultimatum game rules, and undertake new experiments that expand the controls for demographics. The lesson from our demonstration is that the task of designing experiments for the field offers many challenges if one wants to define and control for cultural impacts, but that field experiments also offer potential for providing new insights into these issues.

There are several ways to define words. One is to ascertain the formal definition by looking it up in the dictionary. Another is to identify what it is that you want the word-label to differentiate.

The objective of this paper is to assess the potential of Portuguese manufacturing firms with respect to two fundamental issues that have been at the core of important debates about comparative advantages of small firms and large ones: (1) Employment: Using a database compiled between 1982 and 1992, we analyse the contribution of small firms to job creation. This analysis aims to consider the different aspects of firm mobility: Entry, expansion, contraction and exit. The results indicate that, in the period considered, only small firms created employment and that this creation is mainly associated with the expansion of young firms located in the Littoral North and Centre regions of Portugal. Nevertheless, when we consider only small firms that are incumbents in all the period, results indicate that job creation is a feature specific to a small number of fast‐growing small firms. The effects of the economic cycle were tested too, and it was found that employment creation by small firms is less sensitive to economic fluctuations, as reductions in employment in small firms do not seem to grow in crisis periods. (2) Technical efficiency: Independently from the job creation potential, it is important to evaluate whether small firms use economic resources in an efficient manner. To assess the efficiency of small businesses relative to large ones, we use plant‐level information, thereby specifying and estimating a translog production model. This model allows estimating and comparing returns of scale and substituting elasticities for both small and large production units, covering a large number of six‐digit sectors for the year 1995. Preliminary results suggest that: (I) There are significant differences in the production technology between large and small establishments; (ii) small establishments do not appear to be more flexible than large ones in factor substitution; (iii) large size is not a condition for efficiency in production. Therefore, considering the importance and weight small firms have upon the manufacturing industry employment volume, and the lack of any evidence regarding technical inefficiencies in the production, we may infer that small firms justify the public powers’ attention, while designing and implementing policies which would support their survival as well as their growth. Such policies should enhance and refine their labour (and management) qualification techniques as well as design better strategies for disseminating information and new technologies. In fact, these policies would most certainly promote the development of Portuguese small firms, turning them into more innovating, flexible and competitive ones, even in those industries which traditionally comprise large firms.