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The paper examines the effects of increased financial integration on the economy and, specifically, the welfare of depositors and the business sector. A simple model of a small open economy with a fragile banking sector and imperfect capital mobility is developed. Increased international integration of the market for bank deposits makes runs on banks more likely and unambiguously hurts the domestic business sector. Depositors may gain or lose depending on the parameters. Even when depositors gain, the overall effect on the economy depends on the size of foreign assets held relative to the costs of bank crises.

Banks and Banking --- Corporate Finance --- Exports and Imports --- Financial Aspects of Economic Integration --- Open Economy Macroeconomics --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- International Investment --- Long-term Capital Movements --- Corporate Finance and Governance: General --- Banking --- International economics --- Ownership & organization of enterprises --- Foreign assets --- Bank deposits --- Corporate sector --- Foreign banks --- Banks and banking --- Investments, Foreign --- Business enterprises --- Banks and banking, Foreign

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This paper reviews and draws lessons from the stabilization and reform program that Korea implemented in response to the 1997-98 crisis. The economy recovered quickly from the deep recession in 1998 and its vulnerability to a balance of payments crisis has been reduced sharply. Significant progress has also been made in stabilizing the financial system and addressing corporate distress, and wide-ranging reforms have made Korea’s economy more open, competitive, and market driven. Notwithstanding these achievements, more needs to be done before the soundness of the corporate and financial sectors is firmly established.

Banks and Banking --- Corporate Finance --- Financial Risk Management --- Industries: Financial Services --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Corporate Finance and Governance: General --- Financial Institutions and Services: General --- Financial Crises --- Banking --- Ownership & organization of enterprises --- Economic & financial crises & disasters --- Finance --- Corporate sector --- Financial sector --- Commercial banks --- Financial crises --- Economic sectors --- Financial institutions --- Loans --- Banks and banking --- Business enterprises --- Financial services industry --- Korea, Republic of

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This technical note assesses the vulnerabilities of household and corporate sector balance sheets and quantifies the potential impacts from macroeconomic shocks using sensitivity and contingent claims analyses. The note analyzes the risks to the Spanish financial stability arising from household indebtedness. The analysis expands the use of microlevel data to assess household vulnerabilities, distinguishing between indebted and nonindebted households as well as accounting for the allocation of debt, debt service burden, and households’ income and assets.

Finance --- Spain --- Economic conditions. --- Corporate Finance --- Macroeconomics --- Real Estate --- Industries: Financial Services --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Aggregate Factor Income Distribution --- Housing Supply and Markets --- Corporate Finance and Governance: General --- Property & real estate --- Ownership & organization of enterprises --- Income --- Housing prices --- Loans --- Corporate sector --- Financial institutions --- National accounts --- Prices --- Economic sectors --- Housing --- Business enterprises

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Productivity growth in Japan, as in most advanced economies, has moderated. This paper finds supportive evidence for the important role of small and medium-sized enterprises (SMEs) in explaining Japan’s modest productivity growth. Results show a substantial dispersion in firm-level productivity growth across sectors and even across firms within the same sector. SMEs, on average, exhibit lower productivity growth than non-SMEs in Japan, with smaller and older SMEs showing particularly low productivity growth. Estimates suggest that boosting productivity growth in all of the worst-performing SMEs could improve overall productivity growth by up to 1.8 percentage points. The SME credit guarantee system, SME financing constraints, demographic factors, and lack of intangible capital investment are discussed as contributors to the slow productivity growth of Japan’s small and old SMEs.

Industrial productivity --- Corporate Finance --- Investments: General --- Production and Operations Management --- Macroeconomics: Production --- Human Capital --- Skills --- Occupational Choice --- Labor Productivity --- Corporate Finance and Governance: General --- Investment --- Capital --- Intangible Capital --- Capacity --- Macroeconomics --- Ownership & organization of enterprises --- Productivity --- Labor productivity --- Small and medium enterprises --- Intangible capital --- Production --- Economic sectors --- National accounts --- Small business --- Saving and investment --- Japan

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With growing academic and policy interest in research and development (R&D) tax incentives, the question about their effectiveness has become ever more relevant. In the absence of an exogenous policy reform, the simultaneous determination of companies’ tax positions and their R&D spending causes an identification problem in evaluating tax incentives. To overcome this identification challenge, we exploit a U.K. policy reform and use the population of corporation tax records that provide precise information on the amount of firm-level R&D expenditure. Using difference-in-differences and other panel regression approaches, we find a positive and significant impact of tax incentives on R&D spending, and an implied user cost elasticity estimate of around -1.6. This translates to more than a pound in additional private R&D for each pound foregone in corporation tax revenue.

Finance, Public. --- Cameralistics --- Public finance --- Public finances --- Currency question --- Corporate Finance --- Personal Finance -Taxation --- Public Finance --- Taxation --- Business Taxes and Subsidies --- Taxation, Subsidies, and Revenue: General --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Corporate Finance and Governance: General --- National Government Expenditures and Related Policies: General --- Public finance & taxation --- Ownership & organization of enterprises --- Tax incentives --- Tax allowances --- Small and medium enterprises --- Marginal effective tax rate --- Expenditure --- Taxes --- Economic sectors --- Tax policy --- Income tax --- Small business --- Tax administration and procedure --- Expenditures, Public --- United Kingdom