Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper evaluates empirically four types of cost that may result from an international sovereign default: reputational costs, international trade exclusion costs, costs to the domestic economy through the financial system, and political costs to the authorities. It finds that the economic costs are generally significant but short-lived, and sometimes do not operate through conventional channels. The political consequences of a debt crisis, by contrast, seem to be particularly dire for incumbent governments and finance ministers, broadly in line with what happens in currency crises.

Debts, External --- Default (Finance) --- Debts, Public. --- Financial crises --- Bank failures --- Econometric models. --- Failure of banks --- Crashes, Financial --- Crises, Financial --- Financial crashes --- Financial panics --- Panics (Finance) --- Stock exchange crashes --- Stock market panics --- Debts, Government --- Government debts --- National debts --- Public debt --- Public debts --- Sovereign debt --- Debts, Foreign --- Debts, International --- External debts --- Foreign debts --- International debts --- Business failures --- Crises --- Debt --- Bonds --- Deficit financing --- Finance --- Finance, Public --- Repudiation --- International finance --- Investments, Foreign --- Banks and Banking --- Exports and Imports --- Money and Monetary Policy --- International Lending and Debt Problems --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Financial Crises --- International economics --- Monetary economics --- Economic & financial crises & disasters --- Trade credits --- Banking crises --- Credit ratings --- Bank credit --- Debt default --- Credit --- Argentina

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper uses a unique dataset with matched information at the firm-bank level covering 13,000 firms and 550 banks in 36 emerging and developing economies over 2012-20. The analysis tests whether government-owned banks fulfill their social mandate by targeting credit constrained firms or firms that are more likely to generate positive externalities. The findings show that credit constrained firms are more likely to borrow from government-owned banks, and that this is especially the case in countries with good institutions. However, the paper does not find any evidence that government-owned banks target innovative firms or "green" firms. The findings show that in firms that borrow from government-owned banks, employment reacts less to business cycle conditions relative to firms that borrow from private banks. The paper further shows that employment is more stable in credit constrained firms that have a relationship with a government-owned banks with respect to credit constrained firms that borrow from a private bank.

Financial institutions. --- Credit.

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Understanding the impact of climate mitigation policies is key to designing effective carbon pricing tools. We use institutional features of the EU Emissions Trading System (ETS) and high-frequency data on more than 2,000 publicly listed European firms over 2011-21 to study the impact of carbon policies on stock returns. After extracting the surprise component of regulatory actions, we show that events resulting in higher carbon prices lead to negative abnormal returns which increase with a firm's carbon intensity. This negative relationship is even stronger for firms in sectors which do not participate in the EU ETS suggesting that investors price in transition risk stemming from the shift towards a low-carbon economy. We conclude that policies which increase carbon prices are effective in raising the cost of capital for emission-intensive firms.

Macroeconomics --- Economics: General --- Environmental Economics --- Environmental Conservation and Protection --- Investments: Stocks --- Environmental Policy --- Information and Market Efficiency --- Event Studies --- General Financial Markets: Government Policy and Regulation --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Corporate Finance and Governance: Government Policy and Regulation --- Climate --- Natural Disasters and Their Management --- Global Warming --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Price Level --- Inflation --- Deflation --- Environmental Economics: Government Policy --- Economic & financial crises & disasters --- Economics of specific sectors --- Environmental economics --- Climate change --- Investment & securities --- Environmental policy & protocols --- Greenhouse gas emissions --- Environment --- Stocks --- Financial institutions --- Asset prices --- Prices --- Currency crises --- Informal sector --- Economics --- Emissions trading --- Greenhouse gases --- Climatic changes --- Germany

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper revisits the link between FDI and economic growth in emerging and developing economies. Analysis of the early decades of the sample shows that there is no statistically significant correlation between FDI and growth for countries with average levels of education or financial depth. In line with previous contributions, this correlation is positive and statistically significant for countries with sufficiently well-developed financial sectors or high levels of human capital. However, the findings also show that the link between FDI and growth varies over time. For more recent periods, there is a positive and statistically significant relationship between FDI and growth for the average country, with local conditions having a negative effect on this link. The paper also develops a novel instrument aimed at addressing the endogeneity of FDI inflows. Instrumental variable estimates suggest that the results are unlikely to be driven by endogeneity, and the results on the role of absorptive capacities may be due to the GVC revolution in the 1990s.

Financial disclosure.

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)