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The purpose of this paper is to analyse the long-term nature of the interrelationship between interest rate and exchange rate.

By employing Mexican data, the authors estimate a non-linear autoregressive distributed lags (NARDL) model to investigate the nature of the changes and the interaction between interest rate and exchange rate in response to monetary authorities’ actions.

The results show that, contrary to simplistic predictions, the real exchange rate causes the real interest rate in an asymmetric way. The bounds testing approach of the NARDL models suggests the presence of co-integration among the variables and the exchange rate variations appear to have significant long-run effects on the interest rate. Most importantly, these effects are asymmetric and positive variations in the exchange rate have a lower impact on the interest rate. It is also interesting to report that the reverse is not true: the interest rate in the long-run exerts no statistical significant impact on the exchange rate.

The asymmetric long-term relationship between real exchange rate and real interest rate is evidence of why monetary authorities are reluctant to free float exchange rate. In Mexico, as in most developing countries, monetary policy strongly responds to exchange rate movements because these have relevant effects on commercial trade. Moreover, in dollarized economies these effects are stronger because of pass-through impacts to inflation, income distribution and balance-sheet equilibrium (the well-known “original sin”).

Under inflation targeting and flexible exchange rate regime, despite central banks pursue the control of short-term interest rate, in the long-run one could observe that it is the exchange rate that influences the interest rate, and that this reverse causality is stronger in emerging economies. This paper contributes by analysing the asymmetric relationship between the variables.

The aim of this study is to determine whether financial contagion is transmitted through macroeconomic fundamentals, not only in weaker countries but also in strong European Monetary Union (EMU) economies.

This study conducts, for the first time, an analysis of the spillover effects resulting from a shock to Italian sovereign risk on the banking systems and credit default swaps (CDS) of five EMU core countries during the period 2012–2018, employing a global vector autoregressive (GVAR) approach. Spatial interdependence is quantified through the cross-country distance in the deficit-to-gross domestic product (GDP) ratio.

The findings reveal the existence of both a “doom-loop” between banks and sovereign bonds and a “bad neighbours” effect. The susceptibility to spillovers is notably higher in economies displaying a larger deficit-to-GDP ratio. These results suggest that differences in fiscal fundamentals could drive financial contagion even within core countries, indicating a need for evaluating the stability of the entire EMU system.

Unlike previous studies, we utilize the cross-country distance in the deficit-to-GDP ratio as a measure of fiscal fundamentals distance for the countries under investigation. To the best of our knowledge, our study is the first to analyse this matter in EMU core countries using a GVAR methodology.

The idea of this study is to provide a solid Financial Condition Index (FCI) that allows the monetary transmission policy to be monitored in a country which in recent decades has suffered from major financial and monetary crises.

The authors construct three FCIs for Mexico to analyse the role of financial asset prices in formulating monetary policy under an inflation-targeting regime. Using monthly data from 1995 to 2017, the authors estimate FCIs with two different methodologies and build the index by taking into account the mechanism of transmission of monetary policy and incorporating the most relevant financial variables.

This study’s results show that, likewise for developing countries as Mexico, an FCI could be a useful tool for managing monetary policy in reducing macroeconomic fluctuations.

Apart from building a predictor of possible financial stress, the authors construct an FCI for a central bank that pursues inflation targeting and to analyse the role of financial asset prices in formulating monetary policy.

1. We construct three FCIs for Mexico to analyse the role of financial asset prices in formulating monetary policy under an inflation-targeting regime.

2. The FCIs are based on (1) a vector autoregression model (VAR); (2) an autoregressive distributed lag model (ARDL) and (3) a factor-augmented vector autoregression model (FAVAR).

3. FCI could become a new target for monetary policy within a hybrid inflation-targeting framework.

4. FCI could be a good tool for managing monetary policy in developing countries with a low-inflation environment.

We construct three FCIs for Mexico to analyse the role of financial asset prices in formulating monetary policy under an inflation-targeting regime.

The FCIs are based on (1) a vector autoregression model (VAR); (2) an autoregressive distributed lag model (ARDL) and (3) a factor-augmented vector autoregression model (FAVAR).

FCI could become a new target for monetary policy within a hybrid inflation-targeting framework.

FCI could be a good tool for managing monetary policy in developing countries with a low-inflation environment.

The purpose of this paper is to examine the relationship between banking development and the size of shadow economies by employing data on 137 countries over the period from 1995 to 2007. Both cross‐sectional and panel analysis suggest that an improvement in the development of the banking sector is associated with a smaller shadow economy. In addition, the authors find that both the depth and the efficiency of the banking sector matter in reducing the size of shadow economies. These results are robust to a variety of specifications that address multi‐colinearity and endogeneity issues.

Empirical cross‐section and panel analysis were undertaken.

The authors find that both the depth and the efficiency of the banking sector matter in reducing the size of shadow economies.

This paper is original. Existing literature has identified a number of factors (e.g. the burden of taxation or regulation, the quality of government, legal enforcement, corruption, etc.) that create such incentives. In this paper the authors highlight another factor – the level of banking development – as a determinant of the shadow economy.

The purpose of this paper is to empirically investigate the determinants and the impact of financial development on shadow economy in OIC countries and then compared with non-OIC countries.

The study applies advanced panel GMM technique.

The study finds that macro-variables (unemployment, economic growth, money supply and foreign trade) and institutional variables reduce shadow economy both in OIC and non-OIC countries. The study also explores that financial development mitigates shadow economy; however, its impact is significantly less in case of OIC economies compared to the non-OIC countries.

Since the focus of this study is OIC countries vs non-OIC countries, the research only includes discussion about shadow economy in 42 OIC member states and 99 non-OIC economies. The decision to restrict the study to 42 OIC economies and 99 non-OIC nations is due to the availability of data.

The study suggests that free market and good business environment in the formal economy are the keys to have less shadow economy. Good institutional setup and ease in regulations can attract firms and businesses from informal sector to the official economy, while political instability is one of the main factors for having large size of shadow economy.

The OIC member countries should implement policies which improve accessibility to finance of every citizen of the country.

Despite the growing importance of shadow economy, the literature investigating determinants and the role of financial development in shadow economy is scarce. To the best of the authors' knowledge, there is no literature that examined the shadow economy in the context of OIC member countries. Furthermore, this study has covered a large number of OIC and non-OIC economics over time and across different groups using largest data and advanced panel GMM techniques.

This research aims to explore the influence of the wine tourism development on the sustainable competitive advantage of Spanish wineries as well as the role of employee well-being and organizational commitment on this main relationship.

This research formulates a theoretical model and then examines it through structural equation modeling. The analysis is based on data collected from 196 wineries in Spain, compiled during the period from September 2022 to January 2023.

The results of this study show a positive and significant effect between the wine tourism development and the sustainable competitive advantage of wineries in Spain as well as the mediating role of employee well-being and organizational commitment in this main connection.

Based on the study’s findings, winery managers are advised to develop wine tourism strategies that include guided tours emphasizing sustainability, curated food and wine experiences, cultural activities and specialized employee training programs to improve service quality, strengthen organizational commitment, and eventually achieve a sustainable competitive advantage.

The distinctiveness of this research stems from various key aspects: first, it enhances insight into the benefits linked to the wine tourism research field; second, this is the inaugural study to explore wine tourism development as a driving force for sustainable competitive advantage within Spanish wineries and; third, prior studies have not concurrently examined the functions of employee well-being and organizational commitment in mediating the connection between wine tourism development and the wineries’ sustainable competitive advantage.

The purpose of this study is to evaluate whether the implementation of sustainable business models contributes to improving a firm’s performance during a global crisis, such as the one caused by COVID-19. Based on the triple bottom line theory, the paper explores the relation between the creation of value through solid corporate social responsibility (CSR) strategies, United Nations (UN) Global Compact’s (GC) business model proposals and Global Reporting Initiative’s (GRI) reporting scheme.

The present paper studies companies within the European Union, focusing specifically on the long-term impact of using the world’s most widely used standards for sustainability reporting – the GRI’s standards and/or the UNGC management models, as well as on the firm’s performance based on the financial results during COVID-19 crisis. To achieve this goal, the study analyses the share price of firms publicly listed in the FTSEMIB (benchmark index of Italy’s largest trading platform) out of those companies that are implementing the UN and GRI’s tools.

Findings show how a commitment to sustainable business models and long-term CSR strategies can contribute to firm’s ability to overcome periods of economic crisis. Furthermore, implementing GRI standards and UNGC guidelines within the business model seems to have a positive impact in overcoming a hard context such as COVID-19. In addition, it contributes to a better understanding of stakeholders’ needs, consumer profiling and value creation.

This study evaluates firms’ business models, considering the effects of decisions made in the context of COVID-19. The role of UNGC and GRI is evaluated in terms of their contribution to firms’ financial performance and corporate reputation during a context of hardship. Consequently, this study contributes to academia and practice, adding value in areas related to strategic planning and business model design.