How does environmental performance affect financial performance? Evidence from Japanese manufacturing firms

This paper examines the effects of environmental performance on financial performance using the data of Japanese manufacturing firms from 2004 to 2008. As the environmental performance, our study considers the two different environmental issues of waste and greenhouse gas emissions in capturing the effects of corporate environmental management on financial performance. In addition, to clarify how each financial performance responds to a firm’s effort in dealing with different environmental issues, we utilize many financial performance indices reflecting various market evaluations. Our estimation results show the different effects of each environmental performance on financial performances. For example, while an increase in waste emissions generally improves financial performance, their reduction ameliorates financial performance in dirty industries. In addition, while greenhouse gas reduction leads to an increase in return on equity, it does not have a significant effect on return on sales which reflects the evaluation in the goods market, and it leads to a decrease in the natural logarithm of Tobin’s q, which indicates the value of intangible assets.Environmental Performance; Financial Performance; Japanese Manufacturing Firms; Waste Emissions; Greenhouse Gas Emissions

The effect of foreign aid on corruption: A quantile regression approach

This paper investigates the effect of foreign aid on corruption using a quantile regression method. Our estimation results illustrate that foreign aid generally lessens corruption and, in particular, its reduction effect is larger in countries with low levels of corruption. In addition, considering foreign aid by donors, our analysis indicates that while multilateral aid has a larger reduction impact on corruption, bilateral aid from the world’s leading donors, such as France, the United Kingdom, and the United States, has no significant effect on corruption. However, bilateral aid from Japan is shown to be statistically significant in lessening corruption.Foreign Aid; Corruption; Quantile Regression

A study on the socio-economic determinants of suicide: Evidence from 13 European OECD countries

This paper examines the factors affecting suicide in 13 European OECD countries from a socio-economic perspective. We use the autoregressive distributed lag approach to cointegration as the estimation methodology. Our results reveal that an increasing impact of divorce rates and a decreasing effect of per capita real GDP on suicide are confirmed in 9 countries. However, the evidence on the effects of fertility rates and per capita alcohol consumption are relatively less. For fertility rates, the results reveal that its increase leads to a decrease in suicide rates in four countries and a rise in suicide rates in one country. As for per capita alcohol consumption, the evidence supporting its significantly increasing effects on suicide rates is only confirmed in three countries. In addition, the tests of the cumulative sum and the cumulative sum of squares of the recursive residuals provide evidence indicating the stability of the estimated model.Suicide; European OECD Countries; Socio-economic Factors

Greenhouse gas emissions and the role of the Kyoto Protocol

Our study empirically investigates the effects of the Kyoto Protocol’s quantified emission limitation or reduction commitments on various greenhouse gas (GHG) emissions such as CO2, CH4, N2O and other greenhouse gases, consisting of HFCs, PFCs and SF6. These GHG emissions are considered to be the main source of global warming issues and 39 countries approved to meet the commitments by ratifying the Kyoto Protocol. Our empirical analysis is based on the STIRPAT model, the stochastic version of the IPAT model, using the data of 119 countries in 1990, 1995, 2000 and 2005. Our main findings are that the effects of the commitments to the Kyoto Protocol (1) are significantly negative for the cases of CO2 and CH4 emissions, (2) are not significant for the case of N2O emissions and (3) are significantly positive for the case of other greenhouse gas emissions. These results have important policy implications for global warming issues.Greenhouse gas emissions; Kyoto Protocol; Sustainability; IPAT; Panel data

A study on the relationship between corruption and government size: the role of democracy

Previous studies on the effect of government size on corruption have produced mixed results. For the purpose of explaining these ambiguous results, our study investigates the effect of government size on corruption by taking into account the role of democracy level in each country. Using annual data from 82 countries from 1995 to 2008, the estimation results indicate that an increase in government size can lead to a decrease in corruption if democracy level is sufficiently high and, in contrast, can lead to an increase in corruption if it is too low. As a robustness check, estimations using a different index of corruption and a different proxy for government size are also conducted. The results show that our main results are robust. Furthermore, to deal with endogeneity problems, we conduct an instrumental variable estimation, the results of which support our main results. These findings provide some important implications for policymakers seeking to conduct government intervention without aggravating corruption.Corruption; Government Size; Democracy; Instrumental Variable Estimation

Empirical Study on the Determinants of CO2 Emissions: Evidence from OECD Countries

This paper empirically investigates the environmental Kuznets curve (EKC) for CO2 emissions in the cases of 11 OECD countries by taking into account the role of nuclear energy in electricity production. The autoregressive distributed lag (ARDL) approach to cointegration is employed as the estimation method. Our results indicate that energy consumption has a positive impact on CO2 emissions in most countries in the study. However, the impact of trade is not statistically significant. The results provide evidence for a role of nuclear power in reducing CO2 emissions only in some countries. Additionally, although the estimated long-run coefficients of income and its square satisfy the EKC hypothesis in Finland, Japan, Korea and Spain, only Finland’s EKC turning point is inside the sample period of the study, providing poor evidence in support of the EKC hypothesis.CO2; Environment; EKC; OECD; ARDL

Corruption, Globalization, and Economic Growth: Theory and Evidence

We investigate, both theoretically and empirically, how the negative effects of government corruption on economic growth are magnified or reduced by capital account liberalization. Our model shows that highly corrupt countries impose higher tax rates than do less corrupt countries, thereby, magnifying the negative impacts of government corruption on economic growth in the highly corrupt countries and reducing the impacts in the less corrupt countries if capital account liberalization is enacted. Empirical evidence obtained from an analysis of the panel data collected from 111 countries supports our theoretical predictions. Our theoretical and empirical results contribute to the recent policy debates on the merits or demerits of capital account liberalization.Economic growth; Government Corruption; Capital account liberalization; Two-country model

A panel study on the relationship between corruption and government size

Using panel data from 1996 to 2005, this paper shows that the effect of government size on corruption is positive at a low level of democracy, but it is negative at a high level. This finding could fill the gaps in previous studies whose findings on the relationship between corruption and government size are controversial.Corruption; Government size; Democracy; Panel data

Finance and Inequality: How Does Globalization Change Their Relationship?

This research demonstrates that international financial integration changes the way in which financial development affects inequality within a country. Specifically, both the cross-country analysis and the dynamic panel data analysis using data collected from more than 100 countries provide evidence indicating that if the financial market of a country is highly open to the world market, financial development widens inequality within that country, whereas if the financial market of a country is highly closed to the world market, financial development narrows inequality within that country. Our theoretical framework provides a possible explanation for our empirical findings.Financial integration; Inequality; Financial development; Credit constraints; Capital flows