Has minority foreign investment in China�s banks improved their cost efficiency?

Since 2001, foreign investors have been permitted to acquire minority ownership stakes in China�s banks. This paper assesses whether there is any evidence of a cost efficiency payoff in those banks that have taken on foreign investment. Data Envelopment Analysis is first used to generate measures of cost efficiency for China�s banks over the period 2001-2006. A second stage regression is then performed to determine whether foreign investment has an impact on cost efficiency. The results indicate a positive impact, although one that is only marginally significant. Policy implications are discussed.

China's exchange rate policy: The case against abandoning the dollar peg

This paper critically comments on the policy literature surrounding China's exchange rate regime. It first seeks to expose as myths several popularly raised contentions regarding the dollar peg employed by China, including the belief that the RMB is clearly undervalued and that its value is a prominent cause of the US trade deficit. The paper then describes a consensus position that has emerged which argues that in the interests of better promoting its own macroeconomic stability, China should abandon the peg in favor of a more flexible exchange rate regime. We see numerous weaknesses in this position but a few stand out. Available data do not suggest that flexible regimes outperform fixed regimes in terms of inflationary outcomes. Moving to a flexible regime is also far from proximate policy response to the problems that are in evidence in China's economy. Institutional realities that make moving to a flexible regime difficult also appear to have been seriously overlooked. The paper concludes by noting that in the longer term moving to a more flexible regime may be in China's best interests. But for now, the focus needs to be firmly in the area of domestic financial reform

Ownership Structure and Microfinance Institutions’ Performance: A Case of Latin America

The purpose of the paper is to determine how financial performance and social performance is influenced by ownership status of micro finance institutions (MFIs). For this purpose, data is collected from Latin American MFIs. As dependent variables are dichotomous including NGO-type MFIs and Bank-type MFIs, we used logit and probit model. The results show that NGO-type MFIs are negatively related with financial performance and Bank-type MFIs are negatively related with social performance. The results confirm the previous studies as well as logical relations. The study negates the presence of mission drift in case of NGO-type MFIs and Bank-type MFIs that may open up a new wave of discussion and encourage future researchers to highlight antecedents of such relations

The heterogeneous impact of sectoral foreign aid inflows on sectoral growth: SUR evidence from selected Sub-Saharan African and MENA countries

A great deal of the foreign aid–growth literature finds that the net effect of aggregate aid on total growth appears to be insignificant. This study argues that this aid–growth nexus can be better explained by testing the variation responses for each of growth sectors to their corresponding allocated aid inflows. It aims to investigate the heterogeneous effects of sectorally allocated aid inflows on their corresponding growth sectors (industry, agriculture and services) using data from 37 Sub-Saharan African and MENA-recipient developing nations from 1996 to 2017. We constructed two measures; one is the (SAASG) Sectoral-Allocated-Aid-for Sectoral-Growth, which was used as a major measure in the first two econometric specifications, and another one was the revised Clemens early-impact aid categories measure, which was used as the secondary measure in the third specification. The seemingly unrelated regression framework (SUR) was employed as the basic estimation approach, while the GMM approach was used to check robustness. The empirical findings revealed clear systematic impacts associated with aid distributed to each sector of growth, which may explain why the net effect of overall aid on total growth appears to be insignificant. The findings show that allocated aid inflows have a strong positive impact on agricultural growth, helping boost overall growth, whereas aid allocated to the service and industrial growth sectors tends to minimize the net benefits of total aid on growth due to financial and institutional reasons. The success of the planned scaling-up of aid to recipient countries depends on the financial system, institutional quality policies, and the ability to design a way to maintain incentives in the MENA and SSA regions’ selected recipient countries to overcome structural bottlenecks of sectoral growth

Reinvestigating the Role of Coal Consumption in Indian Economy: An ARDL and Causality analysis

The present study investigates the role of coal consumption on the economic growth in India from 1980-2016. We use panel data estimation techniques for long run and VECM Granger causality for short run analysis to find the direction of causality between coal consumption and economic growth. The model specification also incorporates the urbanization, labor, fiscal deficit and service sector value added. In long-run analysis, the results confirm the unidirectional relationship from economic growth to coal consumption. On contrary, in short-run, bidirectional causal relationship between coal consumption and Indian economic growth confirms that higher coal consumption supports the Indian economy through energy. Furthermore, bidirectional causality is confirmed between economic growth and population; besides, the results show the unidirectional causality from service sector to economic growth

Reinvestigating the Role of Coal Consumption in Indian Economy: An ARDL and Causality analysis

The present study investigates the role of coal consumption on the economic growth in India from 1980-2016. We use panel data estimation techniques for long run and VECM Granger causality for short run analysis to find the direction of causality between coal consumption and economic growth. The model specification also incorporates the urbanization, labor, fiscal deficit and service sector value added. In long-run analysis, the results confirm the unidirectional relationship from economic growth to coal consumption. On contrary, in short-run, bidirectional causal relationship between coal consumption and Indian economic growth confirms that higher coal consumption supports the Indian economy through energy. Furthermore, bidirectional causality is confirmed between economic growth and population; besides, the results show the unidirectional causality from service sector to economic growth

Ownership Structure and Microfinance Institutions’ Performance: A Case of Latin America

The purpose of the paper is to determine how financial performance and social performance is influenced by ownership status of micro finance institutions (MFIs). For this purpose, data is collected from Latin American MFIs. As dependent variables are dichotomous including NGO-type MFIs and Bank-type MFIs, we used logit and probit model. The results show that NGO-type MFIs are negatively related with financial performance and Bank-type MFIs are negatively related with social performance. The results confirm the previous studies as well as logical relations. The study negates the presence of mission drift in case of NGO-type MFIs and Bank-type MFIs that may open up a new wave of discussion and encourage future researchers to highlight antecedents of such relations

Role of FDI and Foreign Remittances in Boosting and Economic Growth: Evidence from Brazil

The paper has two main objectives; (i) Firstly, to investigate the relationship between economic growth and economic indicators of Brazil economy, (ii) Secondly, to examine the impact of FDI on Gross domestic product of Brazil economy. The study employed time series data from 1986 to 2014 of the remittance, FDI, capital formation and domestic savings to know the impact on Gross domestic product of Brazil. The paper analyzed the growth and economy nexus by applying econometric models such as; Granger causality test, OLS methods and unit root test (both ADF and PP). According to empirical estimations, foreign remittances and capital formation has significant and positive contribution towards economic growth for Brazil. However, foreign direct investment and savings show insignificant response towards gross domestic product of Brazil economy. The Brazil economy needs massive reforms to properly utilize the foreign and domestic investments on industrial, agriculture, and technology sector. In addition, the capital formation is playing an important role in the economic development due to positive impact on economic growth. The study proposed some fruitful policy implication for Brazil to boost the economic growth and living standard of people