Choose an application

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

This paper examines how financial development influences the debt dollarization of nonfinancial firms in a sample of emerging market economies (EMEs). The macroeconomic channels are identified from an optimal portfolio allocation model and assessed empirically using the accounting information of nonfinancial firms from 21 EMEs during 2009–2017. The results show that financial development, measured by the private credit-to-GDP ratio, mainly reduces the influence of exchange rate volatility in determining a firm's debt currency composition, among other channels. Furthermore, the effect of exchange rate volatility becomes statistically insignificant beyond an estimated threshold credit-to-GDP ratio of 100 percent.

Banks and Banking --- Finance: General --- Foreign Exchange --- Investments: General --- Money and Monetary Policy --- International Lending and Debt Problems --- Portfolio Choice --- Investment Decisions --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Investment --- Capital --- Intangible Capital --- Capacity --- Financial Markets and the Macroeconomy --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Currency --- Foreign exchange --- Monetary economics --- Macroeconomics --- Finance --- Financial services law & regulation --- Exchange rates --- Currencies --- Depreciation --- Financial sector development --- Exchange rate risk --- Money --- National accounts --- Financial markets --- Financial regulation and supervision --- Saving and investment --- Financial services industry --- Financial risk management --- United States

Choose an application

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

Central banks often buy or sell reserves-–-so called FX interventions (FXIs)---to dampen sharp exchange rate movements caused by volatile capital flows. At the same time, these interventions may entail unintended side effects. In this paper, we investigate whether FXIs incentivize firms to take on more unhedged FX debt, thereby increasing medium-term corporate vulnerabilities. Using a novel dataset with close to 5,000 nonfinancial firms across 19 emerging markets covering 2002--2017, we find that the firm-level share of FX debt rises following intensive use of FXIs, particularly for non-exporting firms in shallow financial markets with no FX debt to begin with. The magnitude of this effect is economically significant, with one standard deviation increase in FXI leading to an average 2 percentage points increase in the FX debt share. For reference, the median share of FX debt in the sample is zero.

Foreign Exchange --- Money and Monetary Policy --- International Lending and Debt Problems --- Portfolio Choice --- Investment Decisions --- Economic Development: Financial Markets --- Saving and Capital Investment --- Corporate Finance and Governance --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Currency --- Foreign exchange --- Monetary economics --- Exchange rate arrangements --- Exchange rates --- Currencies --- Exchange rate flexibility --- Money --- United States

Choose an application

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

There is much speculation regarding a “race for dominance” among financial centers in Asia, arising from the anticipated financial opening up of China. This frame of reference is, to an extent, a predilection that results from a traditional understanding of financial centers as possessing historical, geographic, and scale economy advantages. This paper, however, suggests that there is an alternative prism through which the evolution of financial centers in Asia needs to be viewed. It underscores the importance of “complementarity” rather than “dominance” to better serve regional and global financial stability. We posit that such complementarity is vital, through network analysis of the roles of Hong Kong SAR and Singapore as the current leading financial centers in the region. This analysis suggests that a competition for dominance can result in de-stabilizing levels of interconnectivity that render the global “network” as a whole more susceptible to rapid propagation of shocks. We then examine the regulatory and policy challenges that may be encountered in furthering such complementary coexistence.

Financial institutions --- Financial services industry --- Services, Financial --- Service industries --- Financial intermediaries --- Lending institutions --- Associations, institutions, etc. --- State supervision --- Banks and Banking --- Finance: General --- Industries: Financial Services --- Financial Institutions and Services: Government Policy and Regulation --- General Financial Markets: General (includes Measurement and Data) --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Finance --- Banking --- Competition --- Financial services --- Foreign banks --- Stock markets --- Financial markets --- Securities markets --- Banks and banking --- Banks and banking, Foreign --- Stock exchanges --- Capital market --- Hong Kong Special Administrative Region, People's Republic of China

Choose an application

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

Total factor productivity growth was stagnant or slowing in many advanced countries even prior to the crisis. This paper documents sector-level productivity patterns across advanced economies prior to the crisis and examines the role of product and labor market rigidities as well as innovation and investments in information technology and human capital in driving productivity differences across sectors and countries. Since productivity payoffs of reforms evolve over time, we also focus on large changes in the structural indicators examine their dynamic impact on productivity, employment, and output. Our results suggest that reform priorities depend on country-specific settings, including the scale of specific policy distortions and the distance from the technology frontier. Productivity gains from reforms are large and materialize predominantly in the medium term, with some important variations across industries and countries.

Finance: General --- Macroeconomics --- Public Finance --- Production and Operations Management --- Macroeconomic Analyses of Economic Development --- Technological Change: Government Policy --- Measurement of Economic Growth --- Aggregate Productivity --- Cross-Country Output Convergence --- Production --- Cost --- Capital and Total Factor Productivity --- Capacity --- Macroeconomics: Production --- Labor Economics: General --- General Financial Markets: General (includes Measurement and Data) --- Taxation, Subsidies, and Revenue: General --- Labour --- income economics --- Finance --- Public finance & taxation --- Total factor productivity --- Productivity --- Labor --- Commodity markets --- Information technology in revenue administration --- Financial markets --- Revenue administration --- Industrial productivity --- Labor economics --- Commodity exchanges --- Revenue --- United States