Exchange Rate Risk, Political Environment and Chinese Outward FDI in Emerging Economies： A Panel Data Analysis

This study attempts to investigate the effect of financial and political risk on Chinese outward FDI activities in 56 emerging economies for a period from 2003 to 2013. Exchange rate is taken as a main indicator of financial risks and political risks are evaluated using ICRG （International Country Risk Guide） index. Generalized method of moments with panel data of Chinese outward FDI （foreign direct investment） in new emerging economies is used to find how Chinese finns intend to invest abroad with respect to exchange rate level, volatility, and expectation. The major findings show that RMB appreciation proved to have a positive effect on Chinese outward FDI in emerging economies. But Chinese OFDI （outward foreign direct investment） seems not to respond to exchange rate volatility. The expectation of RMB＇s appreciation has positive effect on Chinese OFDI in emerging economies. Results also show that more political risk leads to more Chinese OFDI in emerging economies.

Can Emerging Economies Catch-up Sustainably？-An Analysis of BRICS＇ Economic Growth Pattern

The BRICS （Brazil, Russia, India, China and South Africa） and other emerging economies have become a driving global force for the past twenty years. However, their growth patterns are obsolete, impeding the quality and competitiveness of their economic growth, while simultaneously threatening the sustainability of their economic convergence with developed nations. Transforming the domestic growth pattern-the solution to the middle-income trap-has therefore become a key priority for each of these economies. This paper presents a comparative analysis of how to transform the pattern of economic growth in BRICS and achieve sustainable economic convergence with a comparative analysis of the pattern of economic growth and problems among BRICS countries.

Global Emerging Economies:Development Realities and Prospects

Economic globalization has catalyzed the global flow of economic factors and set the stage for the rise of fast-developing emerging economies with worldwide influence.Research has found that the emerging economies of China,Brazil,Russia,India,and South Africa have experienced significantly varying changes in their per capita GDP over time.Over the past decade,China has maintained a steady rate of economic growth with subdued volatility.In contrast,Brazil,Russia,India,and South Africa have all registered more volatility in their rates of growth.China has no significant correlation with other emerging economies in terms of imports and exports in goods and services and foreign direct investment(FDI),and their mutual influences are not evident.Going forward,for sustainable socio-economic development,China needs to optimize its industrial structure,promote the enhancement of ecological and institutional environments,and bring about all-round socio-economic progress,by initiating a new round of opening up at a higher level,broadening the space for international cooperation,building an open economy,promoting equal opportunity,and pursuing an inclusive path of growth.

Corporate Probability of Default(PD)Modelling for Banks in Emerging Economies:A Case Study of Zimbabwe Stock Exchange(ZSE)Listed Counters

The paper extends Merton’s Probability of Default(PD)model to the case for transaction costs or market friction for estimation of the PDs of listed banking corporations.A closed form formula for the PD model is obtained and validated using financial data drawn from banks listed on the Zimbabwe Stock Exchange(ZSE).It has been observed that most corporations in emerging economies have been finding it extremely difficult to list,continue listed or manage risk emanating from credit exposures undertaken.In the absence of risk the role of the financial sector of an economy to efficiently and effectively allocate resources between the public and private sectors would be simplified,economically and rationally determined.Reliable or precise computation of the Probability of Default(PD)of a borrower is one of the most critical tasks in credit risk management for commercial banks that were applying the Internal Rating Based Approach(IRBA)under the Basel Capital Accords Ⅱ and Ⅲ frameworks.The study sought to develop a Probability of Default(PD)model that banking corporations in emerging economies such as Zimbabwe could adopt and implement in the Multiple Currency System(MCS)in their desire to grow and develop through their lending businesses.The research study adopted a PD model similar to the Asset Valuation Model(AVM)by Merton(1974)and initially extended by Black-Scholes(1973)and Crouhy et al.(2000)and applied it on a basket of Zimbabwe Stock Exchange listed counters after having adjusted the model for the transaction cost variable.The study therefore succeeded in coming up with a PD model that was worth adopting and implementing by Zimbabwe Stock Exchange(ZSE)listed corporations in their desire to grow towards sustainable development.It was realised that a contemporary PD model adjusted for transaction cost is pertinent for reflection of practical conditions banks face in estimation of their risk metrics such as PD.Transaction costs faced by banks in emerging economies are very huge that they cannot be assumed to be insignificant when it comes to valuation of PDs of banking corporations.The inclusion of transaction costs in estimation of PDs of ZSE listed banks is likely to create a paradigm shift in financial theory on risk metrics in the modern world.The study ends by recommending the need for all Zimbabwean listed corporations to adopt and implement an AVM adjusted for transaction costs if they were to successfully measure and manage both their investment and credit exposure endeavours in the multiple currency system period.

China and Emerging Economies in Global Financial Governance:Legitimacy,Accountability and Democracy

Global financial governance refers to the way in which global financial affairs are managed. As there is no global government, global financial governance typically involves a range of actors including states, as well as regional and international organizations aimed at negotiating responses to problems that affect more than one state or region, far from only providing the public good of financial stability through global economy integration and global financial legislation. In geopolitical context of the 21 st century, emerging economies still have maintained a low profile in global financial governance, despite their growing economic power and the rhetoric of being a responsible great power, and there is little evidence that they will seek international leadership. Moreover,compared to the other emerging powers in the BRICS(Brazil, Russia, India, China and South Africa) group,China has under-participated in global governance in terms of contributing personnel, finance and ideas to major multilateral institutions and programs. It is really an interesting question in international economics and politics area. Firstly, this paper examines comparative data on the emerging economies countries' participation in global financial governance and explains the reason why China has relatively low involvement in global financial governance. Secondly, this paper analyzes norms and legitimacy in global financial governance, and thus outlines the emerging economies constraints on public policy of global financial market integration in the light of the foregoing analysis of legitimacy, accountability and democracy. Finally, some global financial governance development strategy and possible policy solutions are discussed as well.

Political Confidence in the New Emerging Economies： A Comparative Analysis of the BRICS Countries

The aim of this paper is to describe and analyze people＇s confidence in political institutions in the BRICS countries： Brazil, Russia, India, China, and South Africa. I argue that the quality of macroeconomic indicators cannot explain the variation in political confidence between the five most dynamic new emerging economies, and that there is no substantial difference among young, middle-aged, and senior-agent groups. By combing data from the Asia Barometer Survey and the World Value Survey, the author provides two complementary approaches, one sociocultural and the other micropolitical, to reveal the factors that influence people＇s confidence in four major political institutions. The explanatory effects of these two approaches are mixed. Political identity and values, in most cases, have a significant impact on political confidence. On the other hand, high levels of interpersonal social trust, individual happiness, and satisfaction with living standards also show positive influences.

A Milestone For Emerging Economies

The Sanya summit taps the potential of BRICS collaboration On April14,leaders of Brazil,Russia,India,China and South Africa,known as BRICS,held a one-day summit in Sanya,a resort city in south China’s Hainan Province.The group’s third summit presented thriving cooperation momentum among these emerging economies.Achievements The Sanya Declaration was the major policy statement to emerge from the conference.While including economic spheres,

Does the Internal Audit Function Play a Role in Mitigating Earnings Management?

This paper aims to investigate the effect of the characteristics of the internal audit function(IAF)on earnings management(EM)for a sample of 27 Tunisian listed companies.The authors employed the Correlated Panels Corrected Standard Errors model to estimate the regression equation.The results showed that EM is negatively associated with internal audit effectiveness,frequency of audit committee meetings with Chief Audit Executives(CAEs),the partial outsourcing of internal audit,and the firm’s size.Moreover,the authors found a positive relationship between EM and the use of IAF as a training ground for management and the private sector.This study is important to academics,regulators,and policymakers in introducing new governance reforms to strengthen the IAF as an important internal governance mechanism to reduce earnings management practices in emerging countries.The results also provide useful information for investors to examine the effect of internal audit characteristics on earnings management.

Determinants of corporate cash holdings in tranquil and turbulent period:evidence from an emerging economy

Using a sample of 280 firms listed on the Pakistan Stock Exchange,we empirically investigate factors that determine corporate cash holdings in different periods from 2005 to 2014.We divide the sample into three sub-periods—pre-crisis,crisis,and post-crisis—and apply a panel data model to estimate the results.The results suggest that financial crises affect firms’cash holdings policies.Further,findings show that financial crisis has influenced the relationship of size and leverage with cash holdings.In particular,cash flow,liquidity,and tangibility are major determinants of cash holdings in the sub-periods.We present important implications for corporate managers,academicians,and policymakers.

Corporate governance and financing decisions by Saudi companies

This paper aims to contribute to the corporate governance literature in emerging economies by examining the effect of some corporate governance mechanisms on financing decisions in Saudi Arabian listed companies. A multiple regression model is used to examine the association between financing decisions and corporate governance mechanisms for a sample of 37 listed Saudi companies. In particular, we examine the effect of board size, ownership concentration and corporate governance reporting on the debt-to-equity ratio. Corporate governance reporting is measured by the content analysis approach. After controlling for companies＇ profitability and their growth opportunities, we found that both board size and ownership concentration are positively associated with debt-to-equity ratio. We limit our analysis to a small sample of firms that use the internet to communicate corporate governance information between October 2005 and January 2006. The findings suggest that managers are likely to choose higher financial leverage when they have stronger corporate governance （large number of directors on the board and higher ownership concentration）. However, we did not find any statistical association between corporate governance disclosure and debt-to-equity ratio. This suggests that firm＇s asymmetric information is not an important driver of the financing decision of Saudi Arabian companies. This might be due to the nature of the Saudi business environment. We strongly believe that this paper provides a novel contribution to the existing literature as we are the first to examine this issue in Saudi Arabia.

The Pattern of Financial Crises in Greece＇ A Historical Perspective

The main goal of this paper is to trace the long record of financial crises from the perspective of an emerging economy. Two questions are addressed. First, what explains the incidence and severity of financial crises in an emerging market economy？ And, second, what is the role of learning; how does the country learn from its past experience in financial crises to improve institutions and develop better techniques so as to successfully manage successive crisis events？ To the best of our knowledge, this is the first attempt to provide a crisis event taxonomy looking at a systematic categorisation of the crises episodes that the country experienced over its 200-year life span, from its independence and the foundation of the Modem Greek state in 1829 to the recent 2008 crisis. To answer the above questions, I first present evidence on financial crises in Greece over a long time span of two centuries. Greece is chosen as our working template since it is a country with a rich history in financial crises. In particular, we try to identify different varieties of crises events, providing thus a crisis chronology. Moreover, we present some stylised facts on the incidence, the frequency and the severity of crises events. And second, we discuss the key determinants of the crises episodes, closely related to country specific factors, such as credit expansion, fiscal imbalances and the limited reserve coverage of the monetary base.

Exploring the Retailer＇s Relational Satisfaction in a Non-western Context： Evidence From the Tunisian Post 2011 ＇s RevolutionSetting

The current research aims to find out whether the model of the retailer＇s relational satisfaction, developed in a western setting is relevant in a different economic and cultural field of investigation： the Tunisian post 2011 revolution＇s emerging context, and in a different industry： the retail industry. It explores the distinctive economic and cultural features that affect the retailer＇s relational satisfaction with its consumer goods manufacturers. The study employs a survey based on a face-to-face administered questionnaire. Two hundred and thirty four responses from a survey with Tunisian retailers as well as international retailers operating in Tunisia were obtained. All constructs are measured using five-point Likert type scales （1 = strongly disagree, 5 = strongly agree）. Analyses are conducted using exploratory factor analysis and reliability analysis. The results support the original model with however some differences derived from the Tunisian economic setting as a whole, the characteristics of the Tunisian consumer goods industry as well as the clan characteristic feature of the Tunisian collectivistic culture. Thus, the amount of discounts obtained, does no longer contribute to the retailer＇s economic satisfaction. Moreover, when it comes to social satisfaction, the respondents get uncomfortable, even to deal with a potential negative interaction with their suppliers. For retail companies involved in internationalization in the Maghreb Region, and especially in Tunisia, it seems that other competitive advantages than prices are to be developed, such as the development of private label or other services that create positive perceived value for the Tunisian customer. From a cultural standpoint, western managers have rather to go away from a formalized channel relationship management, while taking into account the importance of interpersonal influence. The study sheds light on the heterogeneity of the so-called Arab-Muslim world. This is highlighted in the management of channel relationship in Tunisia, that is influenced by： （1） The government＇s price regulation and control, especially in many food products; （2） The relative weak importance of discounts in gaining retailer＇s economic satisfaction; （3） The reshaping of the local retailing sector due to the arrival of international retail companies; （4） The clan feature of the Tunisian collectivistic culture that advocates putting priority on interpersonal influence in channel relationship＇s management.

Cluster-Based Advantages in the Innovation Process： The Diffusion of Nanotechnology in Two Chinese Cities

Researchers have shown that ＂cluster＂ is a more useful unit of analysis than ＂nation＂ in innovation studies. Clusters are characterized by interconnected organizations, shared resources and frequent knowledge flows. Within national boundaries, multiple clusters with different relative advantages may coexist, and exhibit very different innovation patterns. Yet, in studies of innovation in emerging economies, there remains little attention on cluster-based advantages, and how these advantages generate distinct patterns of innovation. To bridge this gap, this study analyzes the diffusion patterns of nanotechnology in two Chinese clusters--Beijing and Shanghai. With different relative advantages, the diffusion of nanotechnology has been oriented by different levels of ＂imitation＂ and ＂innovation＂ forces in the two Chinese clusters. This study applies the Bass Model to quantify imitation and innovation forces, and compare the resultant diffusion patterns of nanotechnology in the two clusters with other technologies. Supplementary qualitative data is also provided to show how Chinese scientists perceive their relative advantages in different clusters. Among other things, the findings suggest that scientists of emerging economies favor the learning-by-doing principle while utilizing external networks.

Corporate innovation and environmental investment:The moderating role of institutional environment

Corporate environmental investment helps improve corporate environmental performance,which,therefore,is an effective micro-level solution to mitigate environmental concerns generated by corporate excessive resource exploitation and energy use.Using Chinese listed firms within environment-related industries over the period 2011–2018 as the research setting,this study applies the panel data model to investigate the impact of corporate innovation on environmental investment,as well as the moderating effects of institutional factors.The results show that corporate innovation significantly improves firms'environmental investment with 1%Research&Development(R&D)investment ratio increase generating 2326 CNY(around 351 USD at 2018 exchange rate)increase in environmental investment;the moderating effect of environment policy is positive and significant while the moderating effect of internationalisation level is not significant,indicating that current environment policy implementation helps to strengthen the positive impact of corporate innovation on environmental investment while the role of internationalisation level in this nexus is not observed.From a micro-level perspective,the findings of this study shed light on mitigating environmental concerns through enhancing corporate innovation,and provide evidence that China's corporate internationalisation process awaits more regulatory controls.