Abstract

This study examines the role of gamification elements in engaging suppliers of sharing economy platforms in corporate social responsibility (CSR) activities. We expected that engaging business owners in CSR would improve the brand equity of these platforms by leveraging the business owners’ brand loyalty and brand association. The statistical population of the study is owners of Iranian accommodation who use sharing economy platforms. The size of the sample was 323 accommodation owners. The hypotheses of this study were tested using Smart PLS-3. The study confirmed all the research hypotheses and showed that engaging business owners in social responsibility activities using gamification elements on sharing economy platforms can lead to an increase in the brand equity of the sharing economy platforms. These results will reinforce the synergy between the platforms and their users by making both parties aware of it.

Introduction

The sharing economy (SE) is where customers and business owners (suppliers) are brought together by an online platform. It is a means by which individuals may leverage their assets, such as their cars, their property and, of course, their time so that these assets may be utilized more thoroughly. This increases the efficiency of society as a whole while either increasing the wealth of participating business owners, or increasing their work flexibility, or both (Kuhzady et al., 2021). Advocatesof the SE have often painted a picture of a utopia where business owners will be set free from the shackles of employment while their customers would be able to take advantage of the lower prices (Belk, 2007). Well known examples of SE platforms are Uber in the ride sharing (taxi substitute) field and Airbnb in the accommodation sharing (hotel substitute) field, though there are also imitators of these platforms which have different degrees of market presence in different parts of the world.

However, the vision presented by SE tends to place its emphasis on the freedom of individuals, whether customers or business owners, while ignoring the fact that one of the reasons for the lower costs and prices of the SE compared with traditional businesses is the lack of regulation designed to counteract some negative consequences. Criticisms of the SE approach (Kuhzady et al., 2021) have included negative social and environmental impacts (Ma et al., 2018), limited safety and security (Birinci et al., 2018) and lack of certainty caused by unknown parties (Hossain, 2020) that contradict the vision of SE platforms of being sustainable and socially responsible. Consumers demand social responsibility from SE platforms and therefore business owners must also adopt sustainability and corporate social responsibility (CSR) principles in their businesses (Mi and Coffman, 2019). Consequently, sustaining the SE requires the engagement of all stakeholders where platforms, consumers and business owners are stakeholders in making a sustainable and responsible SE.

Discussion and conclusion

The study examined the role of gamification elements in engaging accommodation owners in CSR activities and enhancing their experience on SE platforms and how it leads to enriching brand equity through mediating effects of accommodation owners’ satisfaction and trust that leads to brand loyalty and brand association.

ads to brand loyalty and brand association. The gamification elements have a significant effect on engaging accommodation owners in CSR activities on SE platforms based on selfdetermination theory. Analysis of the collected data showed that gamification can have a significant and strong effect on engaging accommodation owners in CSR activities on accommodation sharing platforms. This is consistent with previous research on the power of gamification. Researchers have shown that gamification can be used to transfer complex information and promote green behaviour among users (Souza et al., 2020). In this study, it was shown that gamification elements can be used, not only for customers, but also for the accommodation owners and can engage them in behaving sustainably and responsibly. Analysing the collected data indicates a significant effect of gamification elements on the experience of accommodation owners on SE platforms. This also is consistent with previous studies which indicate that gamification can activate hedonic emotions and ultimately enhance the user experience (Hsu and Chen, 2018). It was also concluded that this hedonic experience is not limited to customers but also includes the business owners.

Abstract

We estimate the effect of global supply chain disruptions on inflation for a panel of 28 European countries. Adverse shocks have a stronger and more persistent effect than favorable shocks.

Introduction

Disruptions to global supply chains, e.g. due to natural disasters and lockdowns, are considered a major driver of the drastic increase in inflation in Europe and other advanced economies after the COVID-19 pandemic. The evidence (Carrière-Swallow et al., 2023, Burriel et al., 2023, Ascari et al., 2023, Laumer, 2023, Khalil and Weber, 2022, Finck and Tillmann, 2023, Finck et al., 2023, Liu and Nguyen, 2023, Elsayed et al., 2023, De Santis, 2023) suggests that supply chain shocks indeed have a significant effect on inflation.

More recently, supply bottlenecks eased and indices of supply chain conditions (Benigno et al., 2022) are back at pre-pandemic levels. However, inflation remains high. The Economist (2023) asks: “Supply chains are back to normal. Why is inflation still so high?” This note provides one potential answer to this question. We estimate local projections for a panel of 28 European economies between 2010 and 2023 in order to quantify the effect of a supply chain disruption on headline inflation, core inflation and producer price inflation. The supply chain shock we use is the purified change in the Global Supply Chain Pressure Index (Benigno et al., 2022). Importantly, we allow positive, i.e. restrictive, and negative, i.e. expansionary, shocks to have different absolute effect sizes.

Conclusions

This note showed that the inflationary effects of disruptions to global supply chains are asymmetric. An increase in supply chain stress strongly contributes to the increase of inflation as seen after the COVID-19 pandemic. However, an easing of supply chain pressure contributes much less to the decline of inflation. Hence, our results provide one potential answer to the question asked by The Economist (2023).

Of course, asymmetric supply chain shocks are just one potential explanation of persistent inflation rates despite an easing of supply chain conditions. A tendency to de-globalize supply chains could raises costs even as shipping conditions normalize. Inflation could also remain elevated due to second-round effects of the initial spike in energy prices and costs of intermediate goods on wages. In addition, a shortage of labor post-Covid might also prevent inflation from returning to low levels. Finally, the sectoral shift of demand during the pandemic from services to goods is still visible in the data, which causes inflationary pressure in the presence of frictions.

Abstract

The entire world is facing the issue of climate change. Due to rapid industrialization, enormous waste generation is aggravating the situation. In this study, we investigate the role of audit quality in promoting sustainable waste management in firms. Using a sample of 8100 firm-year observations for the period 2002–2017 from 34 countries, we provide novel empirical evidence that good audit quality significantly reduces total corporate waste production. Further, our results are robust to alternate proxies of audit quality, and waste management, and only appear with unqualified audit reports. To alleviate the endogeneity issue, we use two different identification strategies; namely, PSM and GMM. Altogether, these findings demonstrate that Big4 auditing firms ensure the credibility and reliability of the non-financial disclosures of their auditees as apparent by their rigorous auditing processes. Moreover, the main implication of our study is that firms are subject to a decrease in their overall waste production when their external assurer is one of the BIG4 auditing firms.

Introduction

The word ‘Sustainability’ has received immense global attention over the last decade, as obvious by its evident visibility in, corporate mission and vision statements (Meppem & Gill, 1998). Hereby, many internationally approved climate agreements, such as the Paris Agreement, and the Sustainable Development Goals (SDGs), etc., have been used as a source for embedding sustainable development in the core strategies of both developed and developing economies (Alam et al., 2019). According to these agreements, immense greenhouse gas (GHG) emissions are regarded as the prime reason for the present environmental degradation (Alam et al., 2019). Besides, these statistics by the World Bank (2012) state that the annual amount of solid waste produced by our global economy amounts to one billion tons, thus highlighting the increased contribution of the waste sector to the increase in global temperatures. Conversely, the United Nations Environmental Programme (2010) in its report on waste and climate change states that the waste sector can move its position from a minor contributor to a major saver of emissions, as it reports only a 3–5% contribution of the waste sector in GHG emission production. These statistics point toward the development of a circular economy through improvement in the waste management practices of firms in the last 40 years (Romero-Hernández & Romero, 2018).

Moving forward, these global environmental concerns have entailed primary pressure on corporates as they are subject to the generation of a massive amount of waste during the production of goods and services (Gull, Atif, & Hussain, 2022; Hirsch, 2019). Further, firms in response to the pressure entailed by certain internal and external stakeholders are moving towards more sustainable practices, like waste management, recycling, reusing, etc. (Alam et al., 2019). These sustainable business practices are costly to introduce and maintain and therefore depend on the strength of a firm’s governance structure, as strong governance structures predict the level of waste produced by firms (Gull, Atif, & Hussain, 2022; Shahab et al., 2022). For this reason, prior research has extensively highlighted the importance of a firm’s external and internal governance in the promotion of corporate sustainability (Bacha et al., 2020; Earnhart & Harrington, 2021; Hussain et al., 2018; Jo et al., 2015; Saeed et al., 2022).

Conclusion

The immense increase in global temperatures has become a substantial concern and emerged as a real-world phenomenon in recent years (Alam et al., 2019). The increase in global annual waste production further ruins the situation (World Bank, 2012). For this reason, firms have increased their attention toward sustainable development in the face of the pressure entailed by the governments, policymakers, stakeholders, and external assurers of a firm (Alam et al., 2019; Saeed et al., 2022). Prior research has extensively studied the impact of external stakeholders on a firm’s environmental sustainability (Dakhli, 2021; Dicu et al., 2020). As Braam et al. (2016) and Earnhart and Harrington (2021) also analyse the importance of audit quality in enhancing corporate environmental performance. While prior literature lacks to define the role of audit quality in improving several other dimensions of corporate social responsibility such as waste management. Therefore, concerning the importance of waste management, our study fills this void and provides robust empirical evidence on the impact of audit quality on waste management.

This study employs a panel data set of 8100 firm-year observations from 34 countries between 2002 and 2017 and finds a negative relationship between audit quality (BIG4) and total waste generation (T_WASTE) (Earnhart & Harrington, 2021). Our results are robust to the use of several alternate proxies of waste management and audit quality. Moreover, we found our relationship to be more pronounced in firms that constitute CSR committees, have strong governance structures, have low institutional ownership, and are with high CSR intensity. While, in addition, we drive that audit quality is subject to reducing a firm’s overall waste generation only in the case of non-natural industries. Furthermore, to the extent possible, we rule out certain endogeneity concerns through the propensity score matching (PSM) and generalized methods of moments (GMM) techniques and analyse consistent results. Ultimately, our findings indicate that high audit quality plays the role of external governance helps firms to reduce their waste production.

Abstract

There is a debate at the highest levels of government and civil society over whether the rise in fraud is a blip exacerbated by the pandemic or a more fundamental transformation (or flip) in the structure of crime. This paper examines this debate by exploring the social factors influencing the level of fraud. It does so by conceptualising these factors as a fraud field, offering a novel way to visualise and consider vulnerability through the broad categories of ‘threats’ and ‘safeguards’ which influence levels of fraud. In doing so it offers the first attempt to map the wide range of ‘forces’ that influence levels of fraud and produces a mathematical expression of this, which will provide a basis for further debate, refinement and research. The threats include the myriad of opportunities, the large population of fraudsters, and the range of human and technology enablers that support the fraudsters. The principal safeguards that resist the fraud threat are culture, the law and the defensive resilience of individuals and organisations. Using the fraud field and official crime statistics, the paper argues that the safeguards are so structurally weak that the fraud epidemic is not a blip, but an opportunistic flip from traditional acquisitive crimes. The forces influencing levels of fraud mean high volumes of fraud will continue at the current levels or even accelerate further, unless there is a collective national strategy to strengthen the safeguards.

Introduction

A recent report by the prestigious international relations think tank, the Royal United Services Institute, described fraud as an epidemic that threatens national security (Wood et al., 2021). In stark contrast, a senior official responsible for the counter-fraud policy in a large government agency expressed to one of this paper’s authors their frustration in failing to secure greater interest and resources from colleagues and politicians because of the prevailing perception that the recent rise in fraud in the UK is a ‘blip’, exacerbated by the COVID pandemic. In another illustration of the sanguine view regarding fraud, one of the authors of this paper was contacted by an undergraduate student from another university, who asked what they thought of their lecturer’s view that fraud was just another moral panic. These views attenuating the fraud problem might not be representative, but the fact of such views in ‘informed’ opinion in the face of the overwhelming evidence of the substantial fraud problem illustrated by the Crime Survey of England and Wales, illustrates the need for further exploration and exposure of the problem. Differential rationalisation theory suggests this sanguine view is dangerous because it justifies inaction (Shepherd and Button, 2018). The political perception is partly informed by a marked fall in traditional crimes since the early 1990 s in the UK and other Western nations (Tonry, 2014). It is also subject to the manipulative politicalisation of statistics. For example, former Prime Minister, Boris Johnson announced to the House of Commons in January 2022 that “we have been cutting crime by 14 %” (HC Deb, 2022). He was subsequently admonished by the head of the UK Statistics Authority for failing to explain that the fall excluded fraud and computer misuse (Norgrove, 2022). Had Johnson included fraud and computer misuse, he would have had to announce a 14 % increase in total crime. These political machinations do, nevertheless, point to a very important question. Can the fraud epidemic be ignored as just another cyclical change in crime that will eventually decline or is it a permanent feature of 21st century British society?

Conclusion

Galvanised by the dismissive attitudes of some senior leaders in the UK, this paper challenges the notion that the fraud epidemic in the UK could be described as blip. The examination of the official crime statistics shows that acquisitive crime has switched from theft to fraud because fraud has become a more accessible offence and, from the offender’s perspective, it is lower risk. Using the novel fraud field concept to visualise fraud threats and safeguards, the paper has noted the significant forces influencing fraud levels and developed a novel mathematical expression of this. From this assessment the paper argues that the threat forces in favour of fraud currently overwhelm the safeguard forces. The array of threat forces has been hugely amplified by the disruptive impact of new technologies. In particular, because the essence of fraud is a false communication, the digital communication and transaction technologies are powerful enablers that provide a whole generation of fraudsters across the world with access to victims anywhere in the world. Indifference is the essential cause of the weakness of the safeguard forces: an indifferent public, marginal interests within law enforcement, irresponsible organisations, and dismissive politicians. Consequently, it is naïve and reckless to regard the current level of fraud in the UK as a blip, and it will continue at the current levels or accelerate without strategic intervention. The fraud field analysis suggests that the threat field can be tackled by collective action: strengthening law enforcement, obliging large organisations to transition from enablers to disablers by investing in resilience that protects both themselves and the public, and by greater international efforts to tackle the international dimension of fraud.

Abstract

This paper builds a network econometric model capable of analysing the impact of inflation on systemic risk. Its main contribution is the identification of a robust inverse relationship which reverses when controlling monetary policy. This reveals that the former effect is due to monetary policy reactions to inflation. It is further analysed whether this effect comes from overindebtness as in a Minsky moment. There is no evidence supporting it, which suggests that mechanisms other than excess credit underlie such a relationship. The results presented in this paper are of particular importance for understanding monetary policy reactions to current inflationary cycles.

Introduction

Analogously to many other macro-financial linkages, the effects of inflation on systemic risk are, to a large extent, still unknown. This is the result of a disconnection between the interplay of the economy and financial markets which has dominated macroeconomic research in recent decades. However, the financial crisis of 2007–2009 made clear that there is a constant interaction between the economic system and financial markets (Diebold and Yılmaz, 2015, Abbas et al., 2019, Balcilar and Bekun, 2020, Cotter et al., 2020, Silva et al., 2017, Festić et al., 2011, Aliyu, 2012), highlighting the need to consider additional contagion channels rather than the traditional interbank market (Silva et al., 2018). Thus, many of the macro-financial variables depend the other dimension, potentially in a non-linear way, as it has been theoretically argued (Bernanke et al., 1999, Gertler and Kiyotaki, 2010, Mendoza, 2010, Brunnermeier and Sannikov, 2014) and empirically estimated (Giglio et al., 2016).

In particular, the effects of inflation on systemic risk are of special importance nowadays. After more than 20 years of relatively low inflation (see red line Fig. 1, quantified on the right axis), the study of the inflation-financial stability binomial have not been of upmost importance. Thus, some studies have analysed the impact of inflation on the performance of the financial sector (Boyd et al., 2001), financial development (Festić et al., 2011), and many have analysed the relationship between inflation and public debt (Bhattarai et al., 2014, Krause and Moyen, 2016, Cherif and Hasanov, 2018). However, the recent inflationary shock has caused “seismic waves” for the stability of the financial system, as contractive monetary policy stances have revealed, among other concerns, overexposures to interest rate risks by financial institutions. Therefore, discounting monetary policy, there may exist a relationship between inflation and systemic risk which could make controlling inflation a major concern not only for the correct functioning of the economy, but also for ensuring the stability of the financial system. As shown in Fig. 1, this correlation between inflation and systemic risk connectedness may exist a priori.

Conclusions

This paper has provided some inferences about the effects of inflation on systemic risk in a financial network of twelve countries. It has been found that, after controlling the monetary policy reactions to inflation, inflation increases systemic risk. Furthermore, in the time span considered (2000–2022), inflation increases more systemic risk than interest rates. This provides partial equilibrium evidence in favour of aggressive monetary policy interventions to preserve financial stability and not only to ensure the correct functioning of the economy during inflationary shocks. Indeed, if inflation increases more systemic risk than interest rates, there exists an incentive for the central bank to increase interest rates in presence of rising inflation, since the effect of the latter outweights the negative effect of the bank rate hike for financial stability.

It has been further tested whether the channel through which inflation increases systemic risk is excessive lending during economic booms as in a Minsky moment. However, evidence has not been found which reveals that mechanisms other than excess credit are behind the relationship. All the results presented in this paper are robust to several variable selections and econometric specifications, and extend to inflation expectations as well. Further research can be directed towards increasing the understanding of the relationship between inflation and systemic risk with monetary policy, since a substantial part of it appears to be happening through interest rates.

Abstract

     Following an embedded sequential explanatory mixed-method research design in which quantitative and qualitative data were merged, this paper examines teachers’ experiences of stress and job satisfaction and their relation to the DI practice. The quantitative study uses data from the National Educational Panel Study in Germany (N = 209 teachers), while the qualitative study analyses interview responses of 24 secondary school teachers. Findings reveal that teachers experience positive effects from implementing DI, but also perceive the practice as slightly stressful. Additionally, the paper discusses teachers’ DI training needs and the implications of the results, and calls for further research.

Introduction

     In their classroom, teachers around the world are confronted with a highly diverse student population that differs not only in performance and academic readiness, but also in their learning preferences, cultural backgrounds, language competence, learning styles, and motivation, as well as social, methodological, and self-regulatory competencies (Hardy et al., 2019; Jokinen et al., 2012). In order to maximize each student’s learning potential, policymakers, and researchers urge teachers to embrace student diversity and adapt their instruction to the diverse learning needs of the students in their classrooms (e.g., Unesco, 2017).

     One pedagogical approach that acknowledges the differences among learners and aims to respond effectively to students’ varying learning needs is “differentiated instruction” (DI). DI is an approach by which teachers aim to provide optimal learning for all by carefully aligning learning tasks and activities with students’ learning needs (Roy et al., 2013; Tomlinson, 2014, 2017). Research has documented the positive effects of DI across the educational settings in which it has been implemented, reporting positive effects of DI on student achievement as well as learning interest and self-confidence (Eysink et al., 2017; Johnsen, 2003; Mc Quarrie & Mc Rae, 2010).

Conclusion

     We refined a dynamic CGE model to estimate the economic consequences of COVID-19 over eight semi-annual periods during 2020–2023. A baseline scenario in which the COVID pandemic is assumed not to occur was first established based on pre-pandemic growth forecasts. The COVID pandemic was then incorporated into the model and compared to baseline growth. The various causal factors of the pandemic were added sequentially to decompose their contributions to the overall impact of COVID on the U.S. economy. These causal factors include the mandatory closure of businesses and gradual reopenings, the avoidance of workplace and various activities (such as restaurant dining), the impact of deaths and illness on the labor force, the increase in hospitalizations and health care expenses, the fiscal stimulus implemented in 2020 and 2021, and the increase in pent-up demand once businesses were allowed to reopen. Sensitivity analysis was performed on disease spread with various interventions relating to vaccine availability, efficacy, and take-up. The decomposition of the influence of various causal factors will help policymakers make adjustments to offset the negative influences and reinforce the positive ones during the remainder of this pandemic and in anticipation of future ones.

     The analysis of the decomposition revealed that the largest losses from COVID were associated with the mandatory closure of businesses and the slow reopening process, followed by the avoidance of workplace and other activities by households. While deaths and illnesses resulted in a minimal decline in real GDP, primarily due to the decline in demand caused by the declining population, the increase in demand for health care led to a rise in real GDP. Pent-up demand is a significant factor in the recovery process, raising growth ever closer to the original baseline growth. Early rounds (1–4) of fiscal policy were also very helpful in alleviating some of the losses in economic growth due to mandatory business closures, avoidance, and other causal factors. The benefits of the last round of fiscal policy are considerably lower, and even negative, compared to earlier rounds due to crowding out of private investment and the need for businesses to repay loans.

Abstract

Inflation dynamics are investigated by estimating a generalized version of the New Keynesian Phillips curve (NKPC) of Galí and Gertler (1999) using Bayesian GMM. US macroeconomic data suggests that the generalized NKPC (GNKPC) performs best in terms of quasi-marginal likelihood among those considered both during and after the Great Inflation period. The estimated GNKPC indicates that when trend inflation fell after the Great Inflation period, the probability of price change decreased and the GNKPC flattened, which is in line with findings by previous studies.

Introduction

The dynamics of inflation have long been the subject of intense investigation in macroeconomics. To describe inflation dynamics, the New Keynesian Phillips curve (NKPC) is often derived by assuming either zero trend inflation or price indexation to trend and lagged inflation.1 However, these assumptions in the canonical NKPC are at odds with empirical observations. Recent studies thus examine the effect of nonzero trend inflation on the NKPC, particularly without the indexation.2 The studies have shown that such a generalized NKPC (GNKPC) has substantially distinct features from the canonical NKPC, thereby generating important implications for policy and welfare. This finding raises the question as to which is a more plausible description of inflation dynamics, the GNKPC or the canonical NKPC.

This paper estimates and evaluates the GNKPC using a novel model selection procedure under the framework of limited-information Bayesian estimation. In the empirical literature on NKPCs, two main approaches have been adopted: limited-information (or single-equation) methods and full-information (or system) methods. For example, the GMM estimation of the NKPC in Galí and Gertler (1999) and the minimum distance estimation of the GNKPC in Cogley and Sbordone (2008) can be classified as limited-information methods. On the other hand, NKPCs in the estimated dynamic stochastic general equilibrium (DSGE) models of Christiano et al. (2005) and Smets and Wouters (2007) can be categorized as full-information methods. In a recent paper, Hirose et al. (2020) conduct a full-information Bayesian analysis to compare a GNKPC and an NKPC in an otherwise identical DSGE model, and show that the model with the GNKPC outperforms that with the NKPC in terms of marginal likelihood.

Empirical Results

This section presents the results of the model selection and accounts for the estimation results of the selected model.

4.1 Comparison of Gal´ı-Gertler GNKPC, NKPC, and GNKPC with indexatioWe begin by comparing the empirical performance of the GNKPC (1), the NKPC (5), and the GNKPC with indexation. As noted in the preceding section, the performance is evaluated in terms of QML, which is computed with the two alternative modified harmonic mean estimators proposed by Geweke (1999) and by Sims et al. (2008). For each of the three, Table 3 reports log QML using the truncation parameter values of τ = 0.5, 0.9 for the estimator of Geweke (1999) and q = 0.5, 0.9 for that of Sims et al. (2008).

The third to fifth columns of Table 3 show that the GNKPC has higher QML than the NKPC and the GNKPC with indexation in all the three estimation periods for both estimators with both truncation parameter values. This result indicates that the GNKPC describes inflation dynamics better than the NKPC and the GNKPC with indexation both during and after the Great Inflation period as well as the full sample period. Moreover, the absence of the indexation, that is, retaining some unchanged prices in each quarter in line with micro evidence improves the GNKPC’s fit to the macroeconomic data. These findings coincide with those of Hirose et al. (2020). They conduct a full-information Bayesian analysis to compare a Gal´ı-Gertler GNKPC and NKPC in an otherwise identical DSGE model, and show that the model with the GNKPC outperforms that with the NKPC during both the Great Inflation and Great Moderation periods in terms of marginal likelihood. As noted in Introduction, recent studies have pointed out that GNKPCs possess substantially distinct features from canonical NKPCs, thereby generating important implications for policy and welfare. Therefore, our findings suggest that GNKPCs should be preferred to canonical NKPCs for the analysis of the Federal Reserve’s monetary policy.

Abstract

     Investors commonly rely on macroeconomic variables to drive capital allocation decisions. But other institutional factors may alter investor returns as well, particularly in emerging market countries. Given these concerns, this paper examines the effects of institutional factors—specifically democracy, transparency and corruption—on emerging market equity returns and flows. We find that institutional quality impacts stock market returns and flows in emerging markets where corruption, transparency, and democracy levels are below average. We also find that government-owned or controlled industries are positively impacted by a deterioration in the corruption and democracy indexes, while highly concentrated sectors, like the financial industry, are negatively impacted by improving transparency.

Introduction

     Investors often rely on macroeconomic factors (e.g., inflation, GDP growth) to drive allocation decisions (Ahlquist, 2006). But a burgeoning body of research suggests that investors should couple macroeconomic factors with market-specific institutional factors such as corruption when deciding where to allocate their capital across international markets. Institutional quality varies significantly across emerging market (EM) countries and within EM countries over time presenting an opportunity to explore the impact of institutional quality on EM stock market performance. As such, this paper examines if, and when, institutional quality impacts investor equity (i.e., stocks) returns and flows in emerging markets. Additionally, we assess if institutional quality has differential effects on investor equity returns in specific EM industries.

     The three institutional factors we focus on are: democracy, transparency, and corruption. The quality of these factors can affect market performance because they impact the reliability of the data in which investors rely upon to allocate capital. In addition, institutional quality can influence the cost of doing business, and affect the stability of markets.1 But how do each of these three institutional factors affect stock market performance in emerging markets.

Conclusions

     This paper examines the effect that varying levels of institutional quality regarding corruption, transparency, and democracy has on annual equity returns, flows, and industry returns in EM countries over an 18-year period. We find that an increasing level of transparency has a positive, significant impact on average annual market returns in each of the below median group of countries relative to corruption, transparency, and democracy. This result suggests that for emerging market countries where corruption, transparency, or democracy are poor, policies that improve transparency will have a positive impact on market returns.

     In addition, changes in institutional indices impact several EM industry returns. Specifically, we see higher democracy scores result in lower returns in the utility, oil and gas, and technology industries, while higher scores for corruption result in lower returns for the consumer services and utility industries. The commonality between these industries is that they have a high level of government ownership or management, particularly in emerging market countries, or are highly concentrated industries. Finally, we see higher corruption scores result in lower net equity flows, a result that may be driven by FDI into China. Less surprising is the finding that net equity flows are positively impacted by an increase in the democracy index in countries with below median democracy and transparency scores.

Abstract

JEL classifications

Keywords

1. Introduction

2. Background

2.1. Data

2.2. Trends of wine consumption and imports

2.3. FTAs’ preferential tariff rates on wines

3. Empirical analyses

3.1. Baseline specification and estimation technique

3.2. Alternative specification

4. Estimation results

5. Conclusion

References

Abstract

East Asia has experienced an unprecedented expansion in its wine market over the past two decades. This paper examines the extent to which import tariff reductions through bilateral free trade agreements (FTAs) have contributed to an increase in wine imports to Japan, China, and South Korea. Our empirical method involves estimating an augmented version of the gravity equation by the Poisson pseudo-maximum likelihood (PPML) technique. Analyzing a panel dataset for 1990–2016 covering 27 exporters, we find that overall a 1 percentage point reduction in tariff among FTA member countries is associated with an increase in the wine import volumes by 0.042%, which is seven times higher than a similar reduction in tariff on an MFN basis. The strongest trade creation effects are founded for bottle wine. The results are robust to various specifications.

1. Introduction

The deadlock-state of the multilateral trade negotiation under the World Trade Organization (WTO) has made the establishment of bilateral, reginal, and cross-regional free trade agreements (FTAs) a central trade policy for many countries during the past two decades. The number of FTAs in operation has grown for 22 in 1990 to 305 by 2020. Despite such growth, the question of whether or not FTAs actually create trade continues to remain a subject of controversy, as preferential tariff schemes under FTAs are not necessarily utilized given the extensive cost and bureaucracy associated with compliance with rules of origin, and the narrow tariff margins of the counterpart most favored nation (MFN) tariff rates (UNCTAD, 2018). Indeed, recent empirical trade literature concludes that trade creation brought about by FTAs is weak or even nil in most cases(Grant, 2013; Zhou, 2017).

This paper examines trade creation effects of FTAs in East Asia, with emphasis on their impact upon wine trade. Our focus on wine is motivated by the fact that relatively high MFN tariffs have been imposed on imported wine products in East Asian nations. For example, as of 2014, the simple average MFN tariff rates for all products were 5 % for Japan, 10 % for China, and 13 % for South Korea, whereas the MFN tariff rates for bottled wine were 14–15 % among these three countries (Table 2).1 In addition, East Asian countries have witnessed a dramatic increase in domestic demand for wine over the past three decades, transforming global wine markets (Mariani, Napoletano, Pomarici, & Vecchio, 2014). Given a large proportion of this increased demand has been absorbed by foreign producers, wine trade in East Asia appears to be well suited for evaluating the trade creation effects of FTAs. In addition, wine tariffs in Japan, China, and South Korea have changed significantly since the WTO Doha Round of multilateral trade negotiations in 2004.

This paper empirically investigates the extent to which preferential tariff reduction under FTAs increased wine imports to Japan, China, and Sourth Korea. Our empirical method involves estimating an augmented version of gravity equation by the Poisson pseudo-maximum likelihood (PPML) technique, with a panel dataset for 1990–2016 covering the 3 importers (Japan, China, and South Korea) and 27 exporters. Our baseline specifications include the gross domestic products (GDP) of importers and exporters, distance between importers and exporters, wine consumption per capita, wine production volume per vine, real exchange rate, MFN tariff rates, non-tariff measures, importer-fixed effects, exporter-fixed effects, and year-fixed effects. We estimate our model by bottle, bulk, and sparkling wines separately, as well as their pooled samples.

This Article seeks to map the possible paths of the development of China’s data protection law by examining the changing power relations among three major actors – the State, digital enterprises and the public in the context of China’s booming data-driven economy. We argue that focusing on different core values, these three major actors are the key driving forces shaping China’s data protection regime. Their dynamic and multidimensional power relations have been casting the development of China’s data protection law with various uncertainties. When persuing different, yet not always conflicting values, these three major actors may both cooperate and compete with each other. Based on our careful analysis of the shifting power relations, we identify and assess three possible paths of the development of China’s data protection law. We are much concerned that the proposed comprehensive data protection law might be a new attempt of the State to win legitimacy abroad, while actually trying to reinforce massive surveillance besides economic goals. We argue that a modest alternative may be that this law might show some genuine efforts for protecting data privacy, but still with poor enforcement. Last, we argue that the most desirable development would be that this law could provide basic but meaningful and effective protection for data privacy, and lay a good foundation for further development.

1. Introduction

On April 10 and April 11, 2018, Mark Zuckerberg testified before the U.S. Congress. He argued that strictly regulating U.S companies’ use of personal data would cause U.S. companies to fall behind Chinese companies when it comes to dataintensive innovation like artificial intelligence.1 His concern is that Chinese companies are not constrained by stringent data protection regulation and will gain an edge.2 Zuckerberg’s argument partially reveals that China’s weak personal data protection has allowed Chinese digital giants to achieve spectacular developments in past years. However, his argument is rather stereotyped, overlooking the complexity of the multilayered development of China’s data protection law, and thus largely overlooking the considerable progress of China’s data protection law.

1- Introduction

2- Literature review on co-movement of inflation

3- Data

4- Methodology

5- Results and discussion

6- Conclusion

References

Abstract

We investigate the pairwise causality of inflation rates across time and frequencies, inflation cycle synchronization and network structure of causality between five ASEAN countries: Indonesia, Malaysia, The Philippines, Singapore, and Thailand. We draw our empirical results and conclusions by implementing dynamic conditional correlations (DCCs), a wavelet measure of cohesion for inflation cycle evolution assessment, and the spillover network index model of Diebold and Yilmaz [1,2]. We find evidence of time-dependent variation in the strength of co-movement between inflation cycles across countries. Positive network causality between inflation cycles and inflation integration across the ASEAN countries are identified. The lead–lag properties of economic indicators are observed to depend on the cycle’s periodicity. The inflation synchronization is particularly pronounced in Thailand.

Introduction

Global macroeconomic developments have mainly focused on business cycle formation rather than inflation cycle formation, probably due to inflation cycle formation being easily linked with economic activity and growth [3–8]. However, given the intrinsic relationship of dependence and causality between interest rates, inflation cycles, and business cycles [9–15], the focus on macroeconomic developments has gradually shifted towards the analysis of cyclicality in macroeconomic fundamentals. Inflation cycles, in particular, due to the role inflation plays in business cycle formation and development and in causing its fluctuations, with decreasing and increasing business cycle trends varying according to investor response to market innovations, are largely perceived as opportunities for economic growth and as sources of economic risk, simultaneously. It is this complexity of inflation cycles, which underlies interwoven dynamic relationships between global, macro, micro and financial variables in the short- mid- and long runs, and a higher integration of international and regional economies via trade linkages and trade competition, what continues to draw the attention of policy makers, the private sector and the academia. Accordingly, relevant stakeholders are beginning to understand the economic and trade diversification opportunities as well as the risks behind high-long and low-short inflation cycle interdependence, in relation to regional or international trading partners. In addition, interest rate determination is now seen from the perspective of inflation cycles that could be positively or negatively correlated with inflation cycles of substantial trading partners, and it is in this context where the subject of inflation cycle synchronization becomes relevant for macroeconomic decision-making and for determining regional trading agreements [16].

1- Introduction

2- The Model and its simulation results

3- Policy measures of industry and government for cloud computing market

4- Conclusions

References

Abstract

The cloud computing market is rapidly expanding and changing the nature of ICT across all sectors; cloud computing transforms ICT from a tool dependent upon investment and physical ownership to one that can easily make use of outside resources. On the other hand, cloud computing services are being provided not only for simple data storage, but for many purposes through several different service models, such as SaaS (Software as a Service), PaaS (Platform as a Service) and IaaS (Infrastructure as a Service). Due to, among other factors, the nature of its network externalities, the market seems to be gradually shifting to a market with oligopolistic characteristics in which the services are provided by a limited number of big-name firms. In this paper, the impact of the shift of the cloud computing market to a market with oligopolistic characteristics on utility-based social welfare is quantitatively estimated and analyzed utilizing DSGE (Dynamic Stochastic General Equilibrium) model-based simulation. The main objectives of the paper, rather than to ascertain the exact change of utility-based social welfare, are (1) to determine whether there is a (realistic) shifting path of macroeconomic variables in Japan’s case, under the shift and (2) to illustrate the dynamic interaction of the macroeconomic variables. Utility-based social welfare is chosen, because for the purpose of evaluating policy measures it would be more suitable than GDP. Also, several kinds of policy measures for the sound development of the cloud computing market that the industry and government can take are discussed in a sense related to a market with oligopolistic characteristics.

Cloud computing and its market in Japan

In September 2011, the U.S. Department of Commerce’s (U.S. DOC) National Institute of Standards and Technology (NIST) released “The NIST Definition of Cloud Computing” and identified five important aspects of cloud computing, namely (1) on-demand self-service, (2) broad network access, (3) resource pooling, (4) rapid elasticity and (5) measured service.1 Given these characteristics, firms that choose to introduce cloud computing can operate on a platform provided by external cloudservice providers and accessed through digital networks. Because their operations were previously performed with their own hardware, software and data, all of which were self-owned, operated and maintained, an increase in efficiency is expected across all ICT-using sectors. As for cost, fixed costs, most of which have to be paid initially (initial cost), can be transformed to variable costs on a pay-as-you-go basis, and thus, financial efficiency is also expected to improve. In this respect, a firm that introduces cloud computing may save more, because if it procures its own system, it is likely that the specifications of that system would match the expected maximum workload in its product life of use rather than the specifications needed at the time of procurement. Moreover, because cloud computing lowers market entry costs, the number of market entrants is expected to increase. This would be especially true for Small and Medium-sized Enterprises (SMEs).2 3 Table 1 tabulates some of the published market forecasts related to cloud computing in Japan. The cloud computing market still occupies a small portion of the ICT market. However, it is expected to grow rapidly in the near future. According to the MM Research Institute, from 2016 through 2021, the domestic cloud market is expected to grow at the annual compounded rate of 20.6%, while ICT investment is expected to remain at the same level.