|
|
2022. vol. 26. No. 1
|
|
9–36
|
Institutional investors have been increasing ownership in the corporate sector in developed markets in recent years. The investment horizons of institutional investors can be either short-term or long-term, which can impact the strategic development of a company. In this study, we investigate the impact of long-term institutional investors on the quality of corporate governance and firm performance. Through regression analysis on a sample of nonfinancial US companies from RUSSELL 3000 index companies, we find evidence that increasing the long-term ownership of long-term institutional investors improves the quality of a company's corporate governance. Moreover, our research suggests that the effect is more substantial for more concentrated ownership. By improving the quality of corporate governance, long-term investors ultimately positively impact a company's performance. The critical governance indicators used in the research were the percentage of independent directors on the board, the proportion of women on the board, the degree of independence of the nominating committee, and the proportion of insider ownership. The investment horizon of institutional investors was determined based on the turnover of their investment portfolios. Government agencies can use the study results to create incentives for higher long-term investment in companies, by current shareholders of companies when choosing a new major shareholder, and by minority shareholders when selecting companies to invest in. The paper is divided into three parts. The first part provides an overview of the academic research on various aspects of the topic. The second part describes the data sources and specifications of the empirical models we used to test the hypotheses. The third part presents the results of the conducted research and conclusions. |
|
37–68
|
The paper discusses possibilities and limitations in constructing regional input-output multipliers. Several approaches to constructing total multipliers are regarded. Examination of direct requirements coefficients stability shows that, although observed differences between input-output coefficients could be significant, they affect output volume for most cases moderately. The brief time consistency analysis shows that it is reasonable to use the input–output data for period between updates, but with some reservations. At the same time, the more is the data aggregation level, the more realistic results can be obtained. The non-survey approach and location quotients technique was implemented to construct regional simple and total input–output multipliers for several regions with various economic structures. Total multipliers calculations are modified by using three regional factors adjustments: propensity to consume, labor migration, and household consumption structure. The results show that such adjustments could be helpful in case of regions with high share of labor migrants in regional employment, as well as in case of regions with well-developed tourism industry, allowing to get more precise induced effects estimates. According to the calculations, the most significant effect of the adjustments can be observed in the budget sector with a large share of labor payments in output (education and health care), and construction. |
|
69–103
|
The landscape of the Russian banking sector has changed significantly over the past few years, with the number of banks having halved in 2013 since the new leadership of the Bank of Russia came in. This paper is devoted to the study of the reasons for the revocation of Russian banks' licenses, as well as to the identification of factors that increase or decrease the probabil ity of license revocation for one reason or another. To identify the possible causes of revocations, we gathered data on all license withdrawals and cases of temporary administrations interventions in the period from January 1, 2013 to January 1, 2021, including official press releases of the Bank of Russia and the news background that accompanied each such case. Based on the analyzed information, all cases of revocations were classified into two groups of reasons: economic reasons and violations of anti-money laundering laws. Based on the results of the estimation of multinomial logistic regressions using official data from balance sheets and income statements of Russian commercial banks from the Bank of Russia website, we have identified factors contributing to the increase in the probability of license revocation for each reason on the horizon of one year. In particular, high bank profitability and the amount of government securities on the bank's balance sheet decrease the probability of revocation for economic reasons only, while high proportion of stocks in assets is typical for banks engaged in money laundering and falsification of financial reports. An increase in the share of loan loss provision and a decrease in the share of overdue debt were accompanied by an increase in the probabili ty of license revocation only due to money laundering, which may also indicate fraud reporting and concealment of overdue debt. |
|
104–119
|
In this paper, we analyze the impact of a low interest rate environment on banks’ risk-weighted assets (RWA)/total assets ratio, also known as RWA density. In theory, a low RWA density can imply a bank´s lower risk, lower capital requirements and, therefore, a higher return on average equity (ROAE), implying a bank’s higher competitiveness. In the theoretical part, we identify the key factors affecting RWA variability, which is correlated with RWA density. In the empirical part, based on a sample of 352 banks from the Eurozone, Japan, Sweden, Switzerland and Denmark during the period 2011–2017, we apply the system of the Generalized Method of Moments. We did not find any evidence to support the main hypothesis that a low interest rate environment will influence banks’ RWA density after 1 year. We rejected our hypothesis even for periods of 2 and 3 years. Our contribution to the literature is three-fold. Firstly, we discuss the theoretical and practical aspects of RWA variability and density. Secondly, unlike other researchers, we also focus on macro-level determinants (including a low interest rate environment), and identify ROAE and bank heterogeneity as significant determinants of RWA density. Finally, we examine a large data sample, which enables us to identify the key determinants of RWA density and to obtain robust results from across different regions and bank business models in the recent period. Our findings survive a battery of robustness checks and provide some solid support for regulators when they propose new bank capital requirements and reform the calculation of RWA. |
|
120–144
|
The aim of this paper is to analyse the convergence of housing prices in German regions using spatial regional data. We provide empirical analysis on the panel data set of 397 German regions for the period 2004–2020 taking into account their relative geographical location and prices. The main contribution of our paper is the analysis of convergence in housing prices, considering the historical aspects of the divergence of German regions. We discover if the housing prices become more homogenous over the years or not and also study the effect of various factors on the housing market. We build spatial econometric models for both selling and rental price, taking into account such demand factors as unemployment level, pendulum migration ratio, wages, number of employees, gross regional product, migration flow for regions, emigration and immigration for Bundesländer. Additionally, we consider the effect of price and determinants of neighboring regions. As the result of the analysis, we can conclude that factors which lead to personal income growth affect the price growth rate positively and vice versa. Emigration lowers the demand together with the price growth rate. Immigration contrary rises the demand and price growth rate. In the paper, we show that convergence among German regions exists over past years, mostly for rental prices, as the speed for them is higher. The practical significance of the current work is its applicability to regional economic and migration policy formation. Moreover, the analysis can be extended to the housing policy of other countries in order to allow cross-country comparisons. |
Arvian Triantoro,
Khalid Zaman,
Sriyanto Sriyanto,
Hailan Salamun,
Shabnam Shabnam,
Sasmoko Sasmoko,
Yasinta Indrianti,
Abdul-Rashid Abdul-Aziz,
Mohd Khata Jabor
Corruption, Violence, and the Rule of Law Affecting Regulatory Control: Forecast Evaluation
|
145–164
|
Political challenges, unfairness, and dishonesty are the governing issues that need substantial reforms to improve the high regulatory quality standards. The study's objective is to examine the impact of corruption, violence, and the rule of law on Pakistan's regulatory control. The study used four forecasting techniques, i.e., Root Mean Square Error (RSER), Mean Absolute Error (MAE), Mean Absolute Percentage Error (MAPE), and Theil inequality coefficient, on the available data series from 1996–2019. The study first obtained the forecast factors of the stated variables by using the Vector Autoregressive (VAR) technique and then used these variables in the least-squares regression technique to obtain the forecast parameter estimates. The simulation results show that corruption, violence, and the rule of law would likely negatively affect the country's regulatory control. The ex-ante analysis shows that the corruption level increases sharply reaches its highest point, and becomes constant. The rule of law initially decreases and then begins to rise steeply. Regulatory control initially decreases and is likely to increase at a decreasing rate. Finally, political stability is likely to decrease over the time horizon. Innovation accounting matrix estimates show that corruption would likely change the country's regulatory control, followed by the rule of law and violence in the next ten years. The study is the first to explore the dynamics of governance indicators in an inter-temporal setting. The study concludes that the country should devise broad-based governance reform policies to eliminate the high incidence of corruption, violence, and injustice and move forward towards implementing regulatory control for sustained growth. |
|
|
|
|