This paper examines how accounting quality, as measured by earnings opacity, affects the stock market wealth effect, which in turn is shown to be linked to economic growth. Stock…
Abstract
This paper examines how accounting quality, as measured by earnings opacity, affects the stock market wealth effect, which in turn is shown to be linked to economic growth. Stock market wealth effect is negatively affected by earnings opacity. The data also indicate that the exogenous component of the stock market wealth effect — the component defined by earnings opacity‐ is positively associated with economic growth. The direct effect of earnings opacity on economic growth is, as expected negative, but insignificant.
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M. IMAM ALAM and TANWEER HASAN
The present study investigates the direction of causality between stock market development and economic growth in the case of the United States. We use the Johansen‐Juselius…
Abstract
The present study investigates the direction of causality between stock market development and economic growth in the case of the United States. We use the Johansen‐Juselius cointegration procedure followed by vector error‐correction modelling. We examine both the long‐run cointegrating relationships and associated causal orderings, and short‐run interactions among the variables. The results indicate that there are stable long‐run equilibrium relationships among the variables and that the stock market contains information about future changes in real income.
Helisse Levine, Marc Fudge and Geoffrey Propheter
Rainy day stabilization funds (RDSFs) and local option sales taxes (LOSTs) are two strategies local governments deploy to combat fiscal stress. While the literature on both is…
Abstract
Rainy day stabilization funds (RDSFs) and local option sales taxes (LOSTs) are two strategies local governments deploy to combat fiscal stress. While the literature on both is robust, it has thus far failed to consider empirically that the two may be connected. One way the marginal LOST dollar could be spent is by saving it for future use. We test the connection with a sample of 414 counties and correct for selection bias with the Heckman correction technique. We find that each $10 increase in LOST revenue per capita is associated with a $0.10 increase in undesignated general fund balance. Though small, the positive effect size supports the theory that LOSTs contribute to a greater propensity to save.
The purpose of this postmortem is to assess whether the design, implementation, and maintenance of financial policies during the period from 1996 through 2006 were primary causes…
Abstract
Purpose
The purpose of this postmortem is to assess whether the design, implementation, and maintenance of financial policies during the period from 1996 through 2006 were primary causes of the financial system's demise.
Design/methodology/approach
To draw conclusions about the policy determinants of the crisis, the paper studies five important policies: Securities and Exchange Commission (SEC) policies toward credit rating agencies, Federal Reserve policies concerning bank capital and credit default swaps, SEC and Federal Reserve policies about over‐the‐counter derivatives, SEC policies toward the consolidated supervision of major investment banks, and government policies toward two housing‐finance entities, Fannie Mae and Freddie Mac.
Findings
The evidence is inconsistent with the view that the collapse of the financial system was caused only by the popping of the housing bubble (“accident”) and the herding behavior of financiers rushing to create and market increasingly complex and questionable financial products (“suicide”). Rather, the evidence indicates that senior policymakers repeatedly designed, implemented, and maintained policies that destabilized the global financial system in the decade before the crisis. Moreover, although the major regulatory agencies were aware of the growing fragility of the financial system due to their policies, they chose not to modify those policies, suggesting that “negligent homicide” contributed to the financial system's collapse.
Originality/value
Although influential policymakers presume that international capital flows, euphoric traders, and insufficient regulatory power caused the crisis, this paper shows that these factors played only a partial role. Thus, current reforms represent only a partial and thus incomplete step in establishing a stable and well‐functioning financial system. Since systemic institutional failures helped cause the crisis, systemic institutional reforms must be a part of a comprehensively effective response.
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James R. Barth, Gerard Caprio and Ross Levine
The purpose of this paper is to discuss and provide new data and measures of bank regulatory and supervisory policies in 180 countries from 1999 to 2011.
Abstract
Purpose
The purpose of this paper is to discuss and provide new data and measures of bank regulatory and supervisory policies in 180 countries from 1999 to 2011.
Design/methodology/approach
The authors' approach is based upon the quantification of hundreds of questions, including information on permissible bank activities, capital requirements, the powers of official supervisory agencies, information disclosure requirements, external governance mechanisms, deposit insurance, barriers to entry, and loan provisioning, to form indices of key bank regulatory and supervisory policies.
Findings
It is found that the regulation and supervision of banks varies widely across countries in many different dimensions. Furthermore, there has not been a convergence in bank regulatory regimes over the past decade despite the worst global financial crisis since the Great Depression.
Research limitations/implications
The data are based on survey responses and this requires that the answers be accurate. To better ensure this is the case, several checks were made to ensure greater accuracy in all the answers. Using this database one can perform various statistical analyses in attempt to determine which bank regulatory regimes work best to promote well‐functioning banking systems.
Originality/value
The authors' data and measures are new and unique so as enable policy makers and researchers to examine cross‐country comparisons and analyses of changes in banking policies over time.
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Xiu Cravens, Timothy A. Drake, Ellen Goldring and Patrick Schuermann
The purpose of this paper is to study the viability of implementing a protocol-guided model designed to provide structure and focus for teacher collaboration from Shanghai in…
Abstract
Purpose
The purpose of this paper is to study the viability of implementing a protocol-guided model designed to provide structure and focus for teacher collaboration from Shanghai in today’s US public schools. The authors examine whether the new model, Teacher Peer Excellence Group (TPEG), fosters the desired key features of productive communities of practice where teachers can jointly construct, transform, preserve, and continuously deepen the meaning of effective teaching. The authors also explore the extent to which existing school conditions – principal instructional leadership, trust, teacher efficacy, and teachers’ sense of school-wide professional community – enable or moderate the desired outcomes.
Design/methodology/approach
Data for this paper are drawn from a series of surveys administered to teachers from 24 pilot schools in six school districts over two school years. Descriptive and multilevel modeling analyses are conducted.
Findings
The findings provide encouraging evidence that, given sufficient support and guidance, teachers report higher levels of engagement in deprivatized practice and instructional collaboration. These findings also hold after controlling for key enabling conditions and school characteristics.
Social implications
The TPEG approach challenges school leaders to take on the responsibilities of helping teachers make their practice public, sharable, and better – three critical objectives in the shift to develop the profession of teaching.
Originality/value
The indication of TPEG model’s positive impact on strengthening the features of communities of practice in selected public schools provides the impetus for further efforts in understanding the transformational changes needed and challenges ahead at the classroom, school, and district levels.
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Charlie Tyer and Jennifer Willand
Reviewing the development of budgeting in America in the twentieth century, this article assesses where public budgeting is as it approaches the twenty-first century. Five periods…
Abstract
Reviewing the development of budgeting in America in the twentieth century, this article assesses where public budgeting is as it approaches the twenty-first century. Five periods are identified in American budgeting, drawing upon the work of Schick and Rubin: control, management, planning, prioritization and accountability. Budgeting in the 1990s is described as characterized by accountability and a “new” performance budgeting emphasis. The authors argue that the budget reform movement is still alive and well in American government, with local governments once more leading the way.
Using a sample of 86 countries over the 1960–1999 period, this paper investigates the differential growth effects of ethnic division across cultural regions. While the evidence…
Abstract
Using a sample of 86 countries over the 1960–1999 period, this paper investigates the differential growth effects of ethnic division across cultural regions. While the evidence supports a negative relationship between ethnic fragmentation and economic growth, this relationship is significant only for Africa and Latin America. This study also uses a religious measure of ethnic fragmentation, and finds that religious diversity has a positive impact on growth. This impact, however, is present only in the Middle East and East Asia. Some possible reasons behind the heterogeneous effects of ethnic diversity are also explored.
This paper aims to examine the influence of sustainability reporting on bank performance. Furthermore, this study investigates the impact of the country’s economic development…
Abstract
Purpose
This paper aims to examine the influence of sustainability reporting on bank performance. Furthermore, this study investigates the impact of the country’s economic development, financial system and crisis in moderating sustainability reporting and bank performance relationship.
Design/methodology/approach
The sample consists of 400 listed banks from 19 countries over the 2009–2022 period. Panel fixed-effect regression is applied, and System Generalized Method of Moments is used as robustness to address endogeneity concerns. The results are robust and survive several sensitivity tests.
Findings
The results, aligning with legitimacy and agency theories, suggest a negative relationship between sustainability reporting and bank performance. Based on further classifications, results suggest the negative (positive) impact of country’s financial system (economic development) in moderating the sustainability reporting and bank performance nexus. Finally, this study documents the positive influence of sustainability reporting on bank performance during the crisis period. Overall, the findings fail to support the reduced information asymmetry accruing from higher sustainability disclosures in developing and bank-based economies.
Practical implications
This study has important implications for regulators, policymakers and other stakeholders, especially in light of recent banking scandals that have deteriorated stakeholders' faith in financial institutions' reporting quality.
Originality/value
This study extends the scant literature on sustainability reporting in banking from a cost-benefit vantage point. Furthermore, to the best of the author’s knowledge, no previous research has examined the moderating role of the country’s financial structure and crisis in sustainability reporting and bank performance relationship.
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An analysis of domestic and foreign banks’ internal performance by investigating their financial ratios shows that banks in Bahrain, Oman, the United Arab Emirates (GCC countries…
Abstract
An analysis of domestic and foreign banks’ internal performance by investigating their financial ratios shows that banks in Bahrain, Oman, the United Arab Emirates (GCC countries) have improved their performance over the past several years. Commercial banks in these GCC economies are well capitalised and have adopted modern banking services. Most banks are found to be financially sound by international standards, measured by all key financial ratios. Their operations can be characterised by satisfactory asset quality, more than minimum BIS capital/asset ratio, and high level of profitability. External performance is measured by evaluating banks’ market shares, regulatory compliance and public confidence; and most of the banks show better progress. Harmonization of the banks’ supervisory and accounting systems towards IAS has contributed to the safety and competitiveness of the banking sector.