http://www.bis.org/cbhub/list/country/country_finland/index.rss Latest research hub papers from Finland en http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp0613.aspx Bank of Finland BOFIT Discussion Papers by Mustafa Disli, Koen Schoors and Jos Meir Political connections and depositor discipline 2013-04-30T06:19:00Z >?Abstract We examine the effects of political connections on depositor discipline in a sample of Turkish banks. Banks with former members of parliament at the helm enjoy reduced depositor discipline, especially if the former politician's party is currently in power - less so if the former politician served as a minister. Banks with structural problems are more likely to appoint former politicians, but our results remain robust after controlling for selection effects. Ministers may reduce depositor discipline less because they signal severe problems and because the additional government deposits they bring to the bank during their term tend to leave with them. Political connections and depositor discipline 2013-04-30T06:19:00Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp0613.aspx Koen Schoors Mustafa Disli Jos Meir Mustafa Disli, Koen Schoors and Jos Meir 2013-04-29 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp0513.aspx Bank of Finland BOFIT Discussion Papers by Andrew J. Filardo and Pierre L. Siklos Prolonged reserves accumulation, credit booms, asset prices and monetary policy in Asia 2013-04-04T12:35:59Z >?AbstractThis paper examines past evidence of prolonged periods of reserve accumulation in Asian emerging market economies and the direct and indirect implications for monetary stability through the potential impact of such episodes on financial stability. The empirical research focuses on identifying periods of prolonged interventions and correlations with key macrofinancial aggregates. Related changes in central bank balance sheets are also examined, especially in periods when the interventions are linked to strong capital inflows. In particular, we consider whether changes in the central bank's balance sheet from prolonged intervention lead to spillovers to the balance sheet of the private sector. We explore the possible forms of the spillovers and the consequences on asset prices (e.g., housing prices, equity prices, the growth in domestic credit). Policy implications are drawn. Finally, we propose a new indicator of reserves adequacy and excessive foreign exchange reserves accumulation based on a factor model. Two broad conclusions emerge from the stylized facts and the econometric evidence. First, the best protection against costly reserves accumulation is a more flexible exchange rate. Second, the necessity to accumulate reserves as a bulwark against goods price inflation is misplaced. Instead, there is a strong link between asset price movements and the likelihood of accumulating foreign exchange reserves that are costly. Prolonged reserves accumulation, credit booms, asset prices and monetary policy in Asia 2013-04-04T12:35:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp0513.aspx Andrew J. Filardo Pierre L. Siklos Andrew J. Filardo and Pierre L. Siklos 2013-04-04 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp0413.aspx Bank of Finland BOFIT Discussion Papers by Iikka Korhonen and Anatoly Peresetsky What determines stock market behavior in Russia and other emerging countries? 2013-03-15T17:34:59Z >AbstractWe empirically test the dependence of the Russian stock market on the world stock market and world oil prices in the period 1997:10-2012:02. We also consider three Eastern European stock markets (Poland, the Czech Republic, and Hungary), as well as two markets outside Europe (Turkey and South Africa). We apply a rolling regression to identify periods when oil prices or stock indices in the US and Japan were important. Surprisingly, oil prices are not significant for the Russian stock market after 2006.A TGARCH-BEKK model is employed to assess the degree of correlation between markets, taking into account the global market stochastic trend. We find that correlation between markets increased between 2000 and 2012. Growth was especially high in Eastern European markets during 2004-2006, which is likely connected with the EU accession of these countries in 2004.? What determines stock market behavior in Russia and other emerging countries? 2013-03-15T17:34:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp0413.aspx Anatoly Peresetsky Iikka Korhonen Iikka Korhonen and Anatoly Peresetsky 2013-03-15 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp0113.aspx Bank of Finland BOFIT Discussion Papers by Aaron Mehrotra On the use of sterilisation bonds in emerging Asia 2013-02-06T17:36:59Z >?AbstractWe document recent developments in the use of sterilisation bonds by six central banks in emerging Asia, and discuss the implications for monetary policy and the financial sector. An important development in the sterilisation of foreign exchange interventions in past years has been the frequent use of central banks' own paper. There has been an attempt to lengthen the maturity structure of sterilisation bills, and maturities have risen, especially in 2010-11. The choice of sterilisation instrument is likely to depend partly on their relative costs. In particular, as the yield on central bank securities has fallen relative to the rate of remuneration of required reserves, some central banks in Asia have increasingly used central bank securities for sterilisation. On the use of sterilisation bonds in emerging Asia 2013-02-06T17:36:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp0113.aspx Aaron N. Mehrotra Aaron Mehrotra 2013-01-18 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp0213.aspx Bank of Finland BOFIT Discussion Papers by Zuzana Fungácová, Rima Turk Ariss and Laurent Weill Does excessive liquidity creation trigger bank failures? 2013-02-06T17:36:59Z >AbstractThis paper introduces the "Excessive Liquidity Creation Hypothesis," whereby a rise in a bank's core liquidity creation activity increases its probability of failure. Russia experienced many bank failures over the past decade, making it an ideal natural field experiment for testing this hypothesis. Using Berger and Bouwman's (2009) liquidity creation measures, we find that excessive liquidity creation significantly increased the probability of bank failure during our observation period (2000-2007). This finding survives multiple robustness checks. Our results further suggest that regulatory authorities can mitigate systemic distress and reduce the costs to society from bank failures through early identification and enhanced monitoring of excessive liquidity creators.? Does excessive liquidity creation trigger bank failures? 2013-02-06T17:36:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp0213.aspx Rima Turk Ariss Laurent Weill Zuzana Fungácová Zuzana Fungácová, Rima Turk Ariss and Laurent Weill 2013-01-23 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp0313.aspx Bank of Finland BOFIT Discussion Papers by Martin Gächter, Aleksandra Riedl and Doris Ritzberger-Grünwald Business cycle convergence or decoupling? Economic adjustment in CESEE during the crisis 2013-02-06T17:36:59Z >AbstractWe analyze business cycle convergence in the EU by focusing on the decoupling vs. convergence hypothesis for central, eastern and south eastern Europe (CESEE). In a nutshell, we fnd that business cycles in CESEE have decoupled considerably from the euro area (EA) during the financial crisis in terms of both cyclical dispersion (i.e. the deviation of output gaps) and cyclical correlation. The results are mainly driven by smaller countries, which can be explained by the fact that small economies seem to have larger cyclical swings as they are more dependent on external demand, which causes a decoupling in terms of higher output gap deviations from the EA cycle in times of economic crises. At the same time, this does not necessarily affect business cycle synchronization as measured by cyclical correlations, where the strength of the linear relationship of two cycles is measured. However, despite the recent declines in the co-movement, we generally observe high correlation levels of CESEE countries with the EA after their EU accession in 2004. Finally, we find a significant decoupling of trend growth rates between EA and CESEE until the onset of the financial crises. Since the beginning of the crisis, trend growth rates have declined both in CESEE and the EA with the trend growth differential decreasing significantly from about three to below two percentage points in 2011. Business cycle convergence or decoupling? Economic adjustment in CESEE during the crisis 2013-02-06T17:36:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp0313.aspx Doris Ritzberger-Grünwald Martin Gächter Aleksandra Riedl Martin Gächter, Aleksandra Riedl and Doris Ritzberger-Grünwald 2013-02-05 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp3112.aspx Bank of Finland BOFIT Discussion Papers by Zuzana Fungácová, Pierre Pessarossi and Laurent Weill Is bank competition detrimental to efficiency? Evidence from China 2012-12-18T12:35:59Z This paper addresses the relationship between bank competition and efficiency by computing Lerner indices and cost efficiency scores for a sample of Chinese banks over the period 2002-2011. Granger-causality tests are performed in a dynamic GMM panel estimator framework to evaluate the sign and direction of causality between them. We observe no increase in bank competition over the period, even as cost efficiency improves. In a departure from the empirical literature showing that competition negatively granger-causes cost efficiency for Western banks, we find no significant relation between competition and efficiency. This suggests that measures to increase bank competition in the Chinese context are not detrimental to efficiency. Is bank competition detrimental to efficiency? Evidence from China 2012-12-18T12:35:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp3112.aspx Full text http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Documents/2012/dp3112.pdf Pierre Pessarossi Laurent Weill Zuzana Fungácová Zuzana Fungácová, Pierre Pessarossi and Laurent Weill 2012-12-18 Bank of Finland BOFIT Discussion Papers D40 G21 http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp3012.aspx Bank of Finland BOFIT Discussion Papers by Michael Funke and Michael Paetz Financial system reforms and China's monetary policy framework: A DSGE-based assessment of initiatives and proposals 2012-12-11T17:34:00Z >?AbstractThis paper evaluates various financial system reform initiatives and proposals in China in a DSGE modelling setting. The key reform steps analysed include phasing out benchmark interest rates, deepening the direct finance market, reducing government's quantity-based intervention on financial institutions. Our counterfactual model simulation results suggest that the reforms will be beneficial only, if Chinese monetary policy continues to rely on quantity-based interventions on financial institutions or tightens the interest rate rule. Financial system reforms and China's monetary policy framework: A DSGE-based assessment of initiatives and proposals 2012-12-11T17:34:00Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp3012.aspx Michael Paetz Michael Funke Michael Funke and Michael Paetz 2012-12-11 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2812.aspx Bank of Finland BOFIT Discussion Papers by Yi David Wang Convertibility restriction in China's foreign exchange market and its impact on forward pricing 2012-11-30T12:37:00Z >?AbstractIn contrast to the well established markets such as the dollar-euro market, recent CIP deviations observed in the onshore dollar-RMB forward market were primarily caused by conversion restrictions in the spot market rather than by changes in credit risk and/or liquidity constraint. This paper proposes a theoretical framework by which the Chinese authorities impose conversion restrictions in the spot market in an attempt to achieve capital flow balance, but face the tradeoff between achieving such balance and disturbing current account transactions. Consequently, the level of conversion restriction should increase with the amount of capital account transactions and decrease with the amount of current account transactions. Such conversion restriction in turn places a binding constraint on forward traders' ability to cover their forward positions, resulting in the observed CIP deviation. More particularly, the model predicts that the onshore forward rate will equal a weighted average of the CIP-implied forward rate and the market's expectation of the future spot rate, were the weighting is determined by the level of conversion restriction. As a secondary result, the model also implies that offshore non-deliverable forwards reflect the market's expectation of the future spot rate. Our empirical results are consistent with these predictions. Convertibility restriction in China's foreign exchange market and its impact on forward pricing 2012-11-30T12:37:00Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2812.aspx Yi David Wang Yi David Wang 2012-11-30 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2912.aspx Bank of Finland BOFIT Discussion Papers by Risto Herrala and Rima Turk Ariss Credit conditions and firm investment: Evidence from the MENA region 2012-11-30T12:37:00Z >?AbstractThe Arab Spring is a clear indicator of the urgency of achieving inclusive growth and ensuring job creation in the Middle East and North Africa (MENA) region, where private sector development is still hindered by limited access to credit. Following Kiyotaki and Moore's (1997) seminal model, we apply a novel methodological approach to a unique data set of MENA firms to estimate credit limits and their impacts on capital accumulation. Notably, we find higher credit limits in countries where the Arab Spring erupted than in other MENA countries and that their marginal effect on capital accumulation has been statistically and economically significant. Credit conditions and firm investment: Evidence from the MENA region 2012-11-30T12:37:00Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2912.aspx Rima Turk Ariss Risto Herrala Risto Herrala and Rima Turk Ariss 2012-11-30 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2712.aspx Bank of Finland BOFIT Discussion Papers by Xi Chen and Michael Funke Real-time warning signs of emerging and collapsing Chinese house price bubbles 2012-11-13T17:34:59Z >?AbstractThe recent increase in Chinese house prices has led to concerns that China is vulnerable to asset price shocks. In this paper, we apply recently developed recursive unit root tests to spot the beginning and the end of potential speculative bubbles in Chinese house price cycles. Overall, we find that except for 2009-2010 actual house prices are not significantly disconnected from fundamentals. Thus, the evidence for speculative house price bubbles in China is in general weak. Real-time warning signs of emerging and collapsing Chinese house price bubbles 2012-11-13T17:34:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2712.aspx Michael Funke Xi Chen Xi Chen and Michael Funke 2012-11-13 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2612.aspx Bank of Finland BOFIT Discussion Papers by Martin Feldkircher The Determinants of Vulnerability to the Global Financial Crisis 2008 to 2009: Credit Growth and Other Sources of Risk 2012-11-02T12:33:59Z >?AbstractIn this paper, we identify initial macroeconomic and financial market conditions that help explain the distinct response of the real economy of a particular country to the recent global financial crisis. Using four measures of crisis severity, we examine a data set with over 90 potential explanatory factors employing techniques that are robust to model uncertainty. Four findings are of particular note. First, we find empirical evidence for the pivotal role of pre-crisis credit growth in shaping the real economy's response to the crisis. Specifically, a 1% increase in pre-crisis lending translates into a 0.2% increase in the cumulative loss in real output. Moreover, the combination of pronounced growth in lending ahead of the crisis and the country's exposure to external funding from advanced economies is shown to intensify the real downturn. Economies with booming real activity before the crisis are found to be less resilient to the global shock. Buoyant growth in real GDP in parallel with strong growth of credit particularly exacerbated the effects of the recent crisis on the real economy. Finally, we provide empirical evidence on the importance of holding international reserves in explaining the response of the real economy to the crisis. The effect of international reserves accumulation as a shelter to the global shock rises in credit provided by the domestic banking sector. The results are shown to be robust to several estimation techniques, including those allowing for cross-country spillovers. The Determinants of Vulnerability to the Global Financial Crisis 2008 to 2009: Credit Growth and Other Sources of Risk 2012-11-02T12:33:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2612.aspx Martin Feldkircher Martin Feldkircher 2012-11-02 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2512.aspx Bank of Finland BOFIT Discussion Papers by Duo Qin and Xinhua He Modelling the impact of aggregate financial shocks external to the Chinese economy 2012-10-18T12:35:59Z >?AbstractWays of extracting financial condition indices (FCI) are explored and alternative FCIs external to the Chinese economy are constructed to model their predictive content. The exploration aims at highlighting the rich and varied dynamic features of financial variables underlying FCIs and the importance of synchronising dynamic information between FCIs and the real-sector variables to be forecasted. The modelling experiment aims at improving the forecasting model upon which the FCIs are assessed. Four variables are chosen as the likely macro channel of the FCIs affecting the Chinese economy. It is found that the FCI-led models enjoy forecasting advantages over a benchmark model in three out of the four variables, although the benchmark model is not dominated by the FCI-led models when judged by in-sample encompassing tests. The evidence indicates the increasing exposure of the Chinese economy to the global financial conditions. Modelling the impact of aggregate financial shocks external to the Chinese economy 2012-10-18T12:35:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2512.aspx Xinhua He Duo Qin Duo Qin and Xinhua He 2012-10-18 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2412.aspx Bank of Finland BOFIT Discussion Papers by Christoph Fischer Currency blocs in the 21st century 2012-10-15T17:36:59Z >?AbstractBased on a classification of countries and territories according to their regime and anchor currency choice, the study considers the two major currency blocs of the present world. A nested logit regression suggests that long-term structural economic variables determine a given country's currency bloc affiliation. The dollar bloc differs from the euro bloc in that there exists a group of countries that peg temporarily to the US dollar without having close economic affinities with the bloc. The estimated parameters are consistent with an additive random utility model interpretation. A currency bloc equilibrium in the spirit of Alesina and Barro (2002) is derived empirically. Currency blocs in the 21st century 2012-10-15T17:36:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2412.aspx Christoph Fischer Christoph Fischer 2012-10-15 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/_layouts/BOF/favicon.ico Bank of Finland Discussion Papers by Jess Benhabib - George W. Evans - Seppo Honkapohja Liquidity traps and expectation dynamics: Fiscal stimulus or fiscal austerity? 2012-10-09T19:10:00Z ?We examine global dynamics under infinite-horizon learning in New Keynesian models where the interest-rate rule is subject to the zero lower bound. As in Evans, Guse and Honkapohja (2008), the intended steady state is locally but not globally stable. Unstable deflationary paths emerge after large pessimistic shocks to expectations. For large expectation shocks that push interest rates to the zero bound, a temporary fiscal stimulus or a policy of fiscal austerity, appropriately tailored in magnitude and duration, will insulate the economy from deflation traps. However "fiscal switching rules" that automatically kick in without discretionary fine tuning can be equally effective. Liquidity traps and expectation dynamics: Fiscal stimulus or fiscal austerity? 2012-10-09T19:10:00Z Abstract http://www.suomenpankki.fi/en/julkaisut/tutkimukset/keskustelualoitteet/Pages/dp2012_27.aspx Full text http://www.suomenpankki.fi/_layouts/BOF/favicon.ico George W. Evans Jess Benhabib Seppo Honkapohja Jess Benhabib - George W. Evans - Seppo Honkapohja 2012-10-09 Bank of Finland Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2312.aspx Bank of Finland BOFIT Discussion Papers by Gabor Pula and Daniel Santabárbara Is China climbing up the quality ladder? 2012-10-08T17:30:59Z >?AbstractThere is an ongoing debate in the literature about the quality content of Chinese exports and to what extent China imposes a threat to the market positions of advanced economies. While China's export structure is very similar to that of the advanced world, its export unit values are well below the level of developed economies. Building on the assumption that unit values reflect quality the prevailing view of the literature is that China exports low quality varieties of the same products than its advanced competitors. This paper challenges this view by relaxing the assumption that unit values reflect quality. We derive the quality of Chinese exports to the European Union by estimating disaggregated demand functions from a discrete choice model. The paper has three major findings. First, China's share on the European Union market is larger than would be justified only by its low average prices, implying that the quality of Chinese exports is high compared to many competitors. Second, China has gained quality relative to other competitors since 1995, indicating that China is climbing up the quality ladder. Finally, our analysis on the supply side determinants reveals that the relatively high quality of Chinese exports is related to processing trade and the increasing role of global production networks in China. Is China climbing up the quality ladder? 2012-10-08T17:30:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2312.aspx Gabor Pula Daniel Santabárbara Gabor Pula and Daniel Santabárbara 2012-10-02 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2212.aspx Bank of Finland BOFIT Discussion Papers by Alexey Ponomarenko Early warning indicators of asset price boom/bust cycles in emerging markets 2012-10-08T17:30:59Z >?AbstractWe apply recently developed early warning indicators systems to a cross-section of emerging markets. We find that, with little or no modification, models designed to predict asset price booms/busts in advanced countries may be useful for emerging markets. The concept of monitoring a set of asset prices, real activity (especially investment) and financial (especially credit) indicators is generally found to be efficacious. Early warning indicators of asset price boom/bust cycles in emerging markets 2012-10-08T17:30:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2212.aspx Alexey Ponomarenko Alexey Ponomarenko 2012-10-02 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp1912.aspx Bank of Finland BOFIT Discussion Papers by Konstantins Benkovskis and Julia Wörz Non-price competitiveness of exports from emerging countries 2012-09-24T17:40:59Z >?This analysis of global competitiveness of emerging market economies accounts for non-price aspects of competitiveness. Building on the methodology pioneered by Feenstra (1994) and Broda and Weinstein (2006), we construct an export price index that adjusts for changes in the set of competitors (variety) and changes in non-price factors (quality in a broad sense) for nine emerging economies (Argentina, Brazil, Chile, China, India, Indonesia, Mexico, Russia and Turkey). The highly disaggregated dataset covers the period 1999-2010 and is based on the standardized 6-digit Harmonized System (HS). Unlike studies that use a CPI-based real effective exchange rate, our method highlights notable differences in non-price competitiveness across markets. China shows a huge gain in international competitiveness due to non-price factors, suggesting that China critics may be overstressing the role of renminbi undervaluation in explaining China's competitive position. Oil exports account for strong improvement in Russia's non-price competitiveness, as well as the modest losses of competitiveness for Argentina and Indonesia. Brazil, Chile, India and Turkey show discernible improvements in their competitive position when accounting for non-price factors. Mexico's competitiveness deteriorates regardless of the index chosen. Non-price competitiveness of exports from emerging countries 2012-09-24T17:40:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp1912.aspx Konstantins Benkovskis Julia Wörz Konstantins Benkovskis and Julia Wörz 2012-09-24 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2012.aspx Bank of Finland BOFIT Discussion Papers by Martin Feldkircher and Iikka Korhonen The rise of China and its implications for emerging markets - Evidence from a GVAR model 2012-09-24T17:40:59Z >?This paper studies empirically the role of China in the world economy. We examine both the way the Chinese economy reacts to selected exogenous macroeconomic shocks and the repercussions for the world economy of a shock emanating from China. With regard to the latter, we focus on the responses of emerging markets, in particular those in Europe. Based on a global VAR (GVAR) model and a new data set that excels in country coverage and covers the most recent time period including the global financial crisis, our results are threefold: First, we show that a +1% shock to Chinese output translates to a permanent increase of 1.2% in Chinese real GDP and a 0.1% to 0.5% rise in output for most large economies. The countries of Central Eastern Europe (CEE) and the former Commonwealth of Independent States (CIS) also experience an output rise of 0.2%, while countries in South-Eastern Europe see a permanent 0.1% reduction in output. Secondly, to benchmark the shock to Chinese output, we examine the response to a +1% shock to US GDP. The results show that the US economy remains dominant in the world economy despite the rapid rise of China in recent years. In this vein, output rises in advanced economies by 1% to 1.4% and in the CIS and CEE regions by 1.5% and 0.7% respectively. By contrast China seems to be little affected by the US shock. Finally, we examine the effect of a +50% hike in oil prices on China and emerging economies. As one of the largest oil exporters, Russia's real output increases by about 6%. In contrast, the surge in oil prices puts a drag on Chinese output, amounting to 4.5% in the long-run. The rise of China and its implications for emerging markets - Evidence from a GVAR model 2012-09-24T17:40:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2012.aspx Iikka Korhonen Martin Feldkircher Martin Feldkircher and Iikka Korhonen 2012-09-24 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2112.aspx Bank of Finland BOFIT Discussion Papers by Pierre Pessarossi and Laurent Weill Does CEO turnover matter in China? Evidence from the stock market 2012-09-24T17:40:59Z >?We study the consequences of CEO turnover announcements on the stock prices of firms in China, where most listed firms remain majority-owned by the state. Our proposition is that state ownership may affect stock market reaction to CEO replacement because state-owned firms often pursue multiple, potentially contradictory, objectives, i.e. economic performance and social objectives. Applying standard event study methodology to a sample of 1,094 announcements from 2002 to 2010, we find that CEO turnover typically produces a positive stock market reaction. The reaction is significantly positive, however, only for enterprises owned by the central government, and not significant for enterprises owned by local governments or privately owned enterprises. These results suggest that a CEO turnover in a central state-owned enterprise signals a renewed commitment to the economic performance objective by state officials. The small size of CEO labor market suggests that other shareholders have a relatively small pool of CEO talent to proceed to managerial improvement when a CEO turnover takes place. Does CEO turnover matter in China? Evidence from the stock market 2012-09-24T17:40:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp2112.aspx Pierre Pessarossi Laurent Weill Pierre Pessarossi and Laurent Weill 2012-09-24 Bank of Finland BOFIT Discussion Papers http://www.suomenpankki.fi/en/julkaisut/tutkimukset/keskustelualoitteet/Documents/BoF_DP_1226.pdf Bank of Finland Discussion Papers by Yiwei Fang - Bill Francis - Iftekhar Hasan More than connectedness - Heterogeneity of CEO social network and firm value 2012-08-27T18:21:00Z This paper examines through various channels the effects of CEO social network heterogeneity on firm value. We construct four measures of heterogeneity based on demographic attributes, intellectual backgrounds, professional experience, and geographical exposures of individuals in the CEO social network. We find that CEO social network heterogeneity leads to higher Tobin's Q of firms. Greater CEO social network heterogeneity also leads to: (i) more innovation, (ii) more foreign sales growth, (iii) higher investment sensitivity to Tobin's Q, and (iv) better M&A performance. Overall, our results indicate that CEO social network heterogeneity is an aspect of CEO social capital and soft skills that deserves the attention of shareholders. More than connectedness - Heterogeneity of CEO social network and firm value 2012-08-27T18:21:00Z Abstract http://www.suomenpankki.fi/en/julkaisut/tutkimukset/keskustelualoitteet/Pages/dp2012_26.aspx Full text http://www.suomenpankki.fi/en/julkaisut/tutkimukset/keskustelualoitteet/Documents/BoF_DP_1226.pdf Yiwei Fang Bill Francis Iftekhar Hasan Yiwei Fang - Bill Francis - Iftekhar Hasan 2012-08-20 Bank of Finland Discussion Papers D71 G30 G32 Z10 http://www.suomenpankki.fi/en/julkaisut/tutkimukset/keskustelualoitteet/Documents/BoF_DP_1225.pdf Bank of Finland Discussion Papers by Martin Ellison - Thomas J. Sargent Welfare cost of business cycles in economies with individual consumption risk 2012-08-14T16:12:59Z The welfare cost of random consumption fluctuations is known from De Santis (2007) to be increasing in the level of individual consumption risk in the economy. It is also known from Barillas et al. (2009) to increase if agents in the economy care about robustness to model misspecification. In this paper, we combine these two effects and calculate the cost of business cycles in an economy with consumers who face individual consumption risk and who fear model misspecification. We find that individual risk has a greater impact on the cost of business cycles if agents already have a preference for robustness. Correspondingly, we find that endowing agents with concerns about a preference for robustness is more costly if there is already individual risk in the economy. The combined effect exceeds the sum of the individual effects. Welfare cost of business cycles in economies with individual consumption risk 2012-08-14T16:12:59Z Abstract http://www.suomenpankki.fi/en/julkaisut/tutkimukset/keskustelualoitteet/Pages/dp2012_25.aspx Full text http://www.suomenpankki.fi/en/julkaisut/tutkimukset/keskustelualoitteet/Documents/BoF_DP_1225.pdf Thomas J. Sargent Martin Ellison Martin Ellison, Thomas J. Sargent 2012-07-30 Bank of Finland Discussion Papers D81 E32 E63 http://www.suomenpankki.fi/en/julkaisut/tutkimukset/keskustelualoitteet/Documents/BoF_DP_1224.pdf Bank of Finland Discussion Papers by Timo Korkeamäki - Tuomas Takalo Valuation of innovation: The case of iPhone 2012-07-17T12:35:00Z We study the value of innovation in a case study of one of the most visible innovative products in recent years, Apple's iPhone. The value effects of news announcements, patent publications, and trademarks relating to iPhone are taken into account. Our estimate of the lower bound on the value of iPhone is fairly high, 30 billion U.S. (event-day) dollars or 10% to 13% of the firm's market cap (at the end of 2009). We find that patentable technology explains about 25% of the total value, which derives from market reactions to publication of patent applications rather than grants. We also observe a weak negative reaction among Apple's rivals to news about iPhone. Apple appears to capture most of the value within the iPhone supply chain. Valuation of innovation: The case of iPhone 2012-07-17T12:35:00Z Abstract http://www.suomenpankki.fi/en/julkaisut/tutkimukset/keskustelualoitteet/Pages/dp2012_24.aspx Full text http://www.suomenpankki.fi/en/julkaisut/tutkimukset/keskustelualoitteet/Documents/BoF_DP_1224.pdf Tuomas Takalo Timo Korkeamäki Timo Korkeamäki - Tuomas Takalo 2012-07-17 Bank of Finland Discussion Papers http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Documents/2012/dp1612.pdf Bank of Finland BOFIT Discussion Papers by Qianying Chen, Michael Funke and Michael Paetz Market and Non-Market Monetary Policy Tools in a Calibrated DSGE Model for Mainland China 2012-07-17T12:35:00Z Market and Non-Market Monetary Policy Tools in a Calibrated DSGE Model for Mainland China 2012-07-17T12:35:00Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp1612.aspx Full text http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Documents/2012/dp1612.pdf Qianying Chen Michael Paetz Michael Funke Qianying Chen, Michael Funke and Michael Paetz 2012-07-17 Bank of Finland BOFIT Discussion Papers E42 E52 E58 http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Documents/2012/dp1512.pdf Bank of Finland BOFIT Discussion Papers by Niko Korte Predictive power of confidence indicators for the Russian economy 2012-07-12T12:37:59Z This study examines the forecasting power of confidence indicators for the Russian economy. ARX models are fitted to the six confidence or composite indicators, which were then compared to a simple benchmark AR-model. The study used the output of the five main branches as the reference series. Empirical evidence suggests that confidence indicators do have forecasting power. The power is strongly influenced by the way which the indicator is constructed from the component series. The HSBC Purchasing Managers' Index (PMI), the OECD Composite Leading Indicator (CLI) and the OECD Business Confidence Indicator (BCI) were the best performers in terms of both the information criterion and forecasting accuracy. Predictive power of confidence indicators for the Russian economy 2012-07-12T12:37:59Z Abstract http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Pages/dp1512.aspx Full text http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Documents/2012/dp1512.pdf Niko Korte Niko Korte 2012-07-12 Bank of Finland BOFIT Discussion Papers E37 P27