The reforms of China's financial system have significantly changed the country's financial sector. One noteworthy phenomenon is that many nonfinancial firms have obtained equity stakes in financial institution...The reforms of China's financial system have significantly changed the country's financial sector. One noteworthy phenomenon is that many nonfinancial firms have obtained equity stakes in financial institutions. This study investigates the motivations behind and economic consequences of this recent proliferation of investments in financial institutions by nonfinancial listed firms. We find that the motivations for holding equity stakes in financial institutions include alleviating the pressure of industry competition, reducing transaction costs, and diversification to reduce risk. These investments, however, have double-edged effects on the performance of the investing firms. While their investment income increases, their operating income and overall return on assets decrease, as the investment income cannot compensate for the decrease in other operating income. The investing firms' cost of debt also increases, their cash-holding decreases, and stock price performance does not improve after investing in financial institutions. These effects contrast with the enthusiasm nonfinancial listed firms have for investing in financial institutions. The empirical findings in this study can inform financial industry regulators and decision-makers in listed firms. We advise nonfinancial firms to be cautious when considering investing in financial institutions.展开更多
Earth observation(EO) technologies,such as very high-resolution optical satellite data available from Maxar,can enhance economic consequence modeling of disasters by capturing the fine-grained and real-time behavioral...Earth observation(EO) technologies,such as very high-resolution optical satellite data available from Maxar,can enhance economic consequence modeling of disasters by capturing the fine-grained and real-time behavioral responses of businesses and the public.We investigated this unique approach to economic consequence modeling to determine whether crowd-sourced interpretations of EO data can be used to illuminate key economic behavioral responses that could be used for computable general equilibrium modeling of supply chain repercussions and resilience effects.We applied our methodology to the COVID-19 pandemic experience in Los Angeles County,California as a case study.We also proposed a dynamic adjustment approach to account for the changing character of EO through longer-term disasters in the economic modeling context.We found that despite limitations,EO data can increase sectoral and temporal resolution,which leads to significant differences from other data sources in terms of direct and total impact results.The findings from this analytical approach have important implications for economic consequence modeling of disasters,as well as providing useful information to policymakers and emergency managers,whose goal is to reduce disaster costs and to improve economic resilience.展开更多
基金financial support from the National Natural Science Foundation of China (Project Nos.:71372151 and 71272201)
文摘The reforms of China's financial system have significantly changed the country's financial sector. One noteworthy phenomenon is that many nonfinancial firms have obtained equity stakes in financial institutions. This study investigates the motivations behind and economic consequences of this recent proliferation of investments in financial institutions by nonfinancial listed firms. We find that the motivations for holding equity stakes in financial institutions include alleviating the pressure of industry competition, reducing transaction costs, and diversification to reduce risk. These investments, however, have double-edged effects on the performance of the investing firms. While their investment income increases, their operating income and overall return on assets decrease, as the investment income cannot compensate for the decrease in other operating income. The investing firms' cost of debt also increases, their cash-holding decreases, and stock price performance does not improve after investing in financial institutions. These effects contrast with the enthusiasm nonfinancial listed firms have for investing in financial institutions. The empirical findings in this study can inform financial industry regulators and decision-makers in listed firms. We advise nonfinancial firms to be cautious when considering investing in financial institutions.
基金funded by the NASA Disasters Program grant#NH18ZDA001N001N.
文摘Earth observation(EO) technologies,such as very high-resolution optical satellite data available from Maxar,can enhance economic consequence modeling of disasters by capturing the fine-grained and real-time behavioral responses of businesses and the public.We investigated this unique approach to economic consequence modeling to determine whether crowd-sourced interpretations of EO data can be used to illuminate key economic behavioral responses that could be used for computable general equilibrium modeling of supply chain repercussions and resilience effects.We applied our methodology to the COVID-19 pandemic experience in Los Angeles County,California as a case study.We also proposed a dynamic adjustment approach to account for the changing character of EO through longer-term disasters in the economic modeling context.We found that despite limitations,EO data can increase sectoral and temporal resolution,which leads to significant differences from other data sources in terms of direct and total impact results.The findings from this analytical approach have important implications for economic consequence modeling of disasters,as well as providing useful information to policymakers and emergency managers,whose goal is to reduce disaster costs and to improve economic resilience.
