Impact of correspondent bank de-risking on money service businesses in Jamaica

2019 ◽  
Vol 27 (4) ◽  
pp. 479-493
Author(s):  
Leo-Rey Gordon
Keyword(s):  
Commercial Banks ◽  
Foreign Currency ◽  
Spillover Effect ◽  
Spillover Effects ◽  
Unintended Consequences ◽  
Economic Consequences ◽  
Content Type ◽  
Financing Of Terrorism ◽  
The Impact ◽  
Quantitative Assessments

Purpose The paper aims to provide needed quantitative assessments of the impact of the withdrawal of correspondent banking to small emerging economies. It serves to identify the extent to which global anti-money laundering and combatting the financing of terrorism (AML/CFT) standards have influenced global banks’ decision to withdraw correspondent banking from some jurisdictions and the subsequent economic spillover effects on other non-bank financial entities. Design/methodology/approach Separate semi-structured surveys are issued to banks and money services businesses in Jamaica. Analysis of the responses identify the initial impact of de-risking on banks and the subsequent spillover effect on the other aspects of the financial system. Findings Results show significant spillover effects on money services businesses in their ability to transact in foreign currency with local commercial banks. Further, the scale of this impact is greater and costlier for smaller entities. Research limitations/implications The economic consequences of the direct and indirect impact of correspondent bank de-risking are increased concentration risks and the potential expansion of shadow financial activity. Practical implications Tighter AML/CFT standards coupled with action of over-compliance has created unintended consequences for small developing countries across the globe. In Jamaica, commercial banks have either lost correspondent relationships or have had restrictions placed on the types of services available. It creates risks to economic growth and development through the hindrance of access to international financial markets for payments, trade and commerce. Originality/value This study is the first among research on the issue of correspondent bank de-risking to provide quantitative assessments of the impact on local financial systems.

Analysis of risk spillover effect of copper option in China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wuyi Ye ◽  
Yiqi Wang ◽  
Jinhai Zhao
Keyword(s):  
Value At Risk ◽  
Risk Model ◽  
Spillover Effect ◽  
Spillover Effects ◽  
Futures Market ◽  
Content Type ◽  
Conditional Autoregressive ◽  
Derivative Markets ◽  
The Impact ◽  
Risk Spillover Effects

Purpose The purpose of this paper is to compare the changes in the risk spillover effects between the copper spot and futures markets before and after the issuance of copper options, analyze the risk spillover effects between the three markets after the issuance of the options and can provide effective suggestions for regulators and investors who hedge risks. Design/methodology/approach The MV-CAViaR model is an extended form of the vector autoregressive model (VAR) to the quantile model, and it is also a special form of the MVMQ-CAViaR model. Based on the VAR quantile model, this model has undergone continuous promotion of the Conditional Autoregressive Value-at-Risk Model (CAViaR) and the Multi-quantile Conditional Autoregressive Value-at-Risk Model (MQ-CAViaR), and finally got the current form of the model. Findings The issuance of options has led to certain changes in the risk spillover effect between the copper spot and its derivative markets, and the risk aggregation effect in the futures market has always been significant. Therefore, when supervising the copper product market and investors using copper derivatives to avoid market risks, they need to pay attention to the impact of futures on the spot market, the impact of options on the futures market and the risk spillover effects of spot and futures on the options market. Practical implications The empirical results of this paper can be used to hedge market risk investment strategies, and the changes in market relationships also provide an effective basis for the supervision of the copper product market by the supervisory authority. Originality/value It is the first literature research to discuss the risk and the impact of spillover effects of copper options on China copper market and its derivative markets. The MV-CAViaR model can capture the mutual risk influence between markets by modeling multiple markets simultaneously.

Estimating umbrella-branding spillovers: a retailer perspective

2017 ◽  
Vol 51 (9/10) ◽  
pp. 1695-1712 ◽  
Author(s):  
Mouna Sebri ◽  
Georges Zaccour
Keyword(s):  
Market Share ◽  
Focal Point ◽  
Spillover Effect ◽  
Spillover Effects ◽  
Future Research ◽  
Brand Performance ◽  
Content Type ◽  
Umbrella Branding ◽  
Share Model ◽  
The Impact

Purpose The starting conjecture is that the market share of a brand in one category benefits from its performance in another category, and vice versa. The purpose of this paper is to assess the umbrella-branding spillovers by investigating the presence of synergy effect between categories when a retailer and/or a manufacturer decide to adopt/use the same name for his products. In fact, besides the cross-category dependency due to substitutability or complementarity, products can also be linked through their brand name in presence of an umbrella-branding strategy. Design/methodology/approach The authors propose an extended market-share model to account for the spillover effect at the brand level. The spillover is modeled to be generated by the brand's performance and not specific to marketing instruments, as done in the literature. They adopt a multiplicative competitive interaction (MCI) form for the attraction function. Based on aggregated data of two complementary oral-hygiene categories, the authors estimate the umbrella-branding spillover parameters using the iterate three-stage least squares (I3SLS) method. They contrast the results in three scenarios: no spillover, brand-constant spillover and brand-specific spillover. Findings The ensuing results indicate that umbrella-branding spillover is (i) significant and positive, i.e. the brand performance is boosted by its performance in a related category, through the so-called brand-attraction multiplier; (ii) asymmetric, i.e. the spillover is not equal in both directions; and associated to the market strength of each competing brand; (iii) variable across brands. The results show that not accounting for umbrella-branding spillover leads to misestimating the parameters and has a considerable impact on price-elasticities computation. Research limitations/implications Because store brands and some national brands exist in many categories, and thus because consumers make inferences when they face a large number of brands in different categories, spillover effects cannot be labelled as simply complementary or substitution-related. Future research may provide insight about the spillover phenomenon in a more general framework that would consider the spillover occurring between more than two categories. Practical implications Providing accurate assessment for umbrella-branding spillovers governing the competing brands, the results offer a relevant and straightforward method for decision makers to precisely assess the impact of a marketing effort in one category on the retailer's global performance. The findings provide better forecasts of market response in terms of sales and profit, within a cross-category perspective. Originality/value This study develops and estimates a market-share model with the aim of measuring brand-category spillover effects. The literature dealt with cross-category interactions in terms of substitutability or complementarity between the products offered in the two or more categories under investigation. Here, the focal point (and contribution) of the authors is the link at the brand level. Indeed, the authors only require that a minimum of one brand is offered in at least two of the categories of interest. Further, the spillover considered is not specific to marketing instruments, but is generated by the brand performance (attraction or market share), which is the result of both the firms marketing-mix choice and competitors marketing policies.

Ecological well-being performance and influencing factors in China: from the perspective of income inequality

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lijun Zhou ◽  
Zongqing Zhang
Keyword(s):  
Income Inequality ◽  
Influencing Factors ◽  
Spillover Effect ◽  
Well Being ◽  
Spillover Effects ◽  
Content Type ◽  
Spatial Spillover ◽  
Effective Decision ◽  
The Impact ◽  
Spatial Spillover Effect

PurposeChina's increasing income inequality might cause a series of problems, such as the slowdown of economic growth, social and economic tension, the decline of the ecological environment quality and the threat to citizens' health. Consequently, income inequality will inevitably affect the ecological well-being performance (EWP) level of China's provinces through the above aspects. Analyzing the impact of income inequality on EWP and its spatial spillover effects are conducive to improving the level of EWP in China. Therefore, the research purpose of this paper is to use China's provincial data from 2001 to 2017 to analyze the impact of income inequality on EWP and the spatial spillover effect based on the evaluation of the EWP value of each province.Design/methodology/approachAt first, this study utilizes the super efficiency slacks-based measure model (Super-SBM model) to calculate the EWP values of 30 provinces in China, which can evaluate and rank the effective decision units in the SBM model and make up for the defect that the effective decision units cannot be distinguished. Then this study applies the spatial Durbin model and Tobit regression model (SDM-Tobit model) to explore the impact of income inequality and other influencing factors on EWP and the spatial spillover effects in adjacent areas.FindingsFirstly, the average EWP in China fluctuated slightly and showed a downward trend from 2001 to 2017. In addition, the EWP values of the provinces in the western region are usually weaker than those in the eastern and central regions. Moreover, income inequality is negatively correlated with EWP, and the EWP has a spatial spillover effect, which means the EWP level in a region is affected by EWP values in the adjacent regions. Furthermore, the industrial structure and urbanization level are both negatively related to EWP, while technology level, investment openness, trade openness and education level are positively related to EWP.Originality/valueCompared with the existing research, the possible contribution of this research is that it takes income inequality as one of the important influencing factors of EWP and adopts the SDM-Tobit model to analyze the impact mechanism of income inequality on EWP from the perspective of time and space, providing new ideas for improving the EWP of various provinces in China.

Effects of government supports and credits on Turkish agriculture

2019 ◽  
Vol 9 (4) ◽  
pp. 391-401 ◽  
Author(s):  
Ahmet Ali Koç ◽  
T. Edward Yu ◽  
Taylan Kıymaz ◽  
Bijay Prasad Sharma
Keyword(s):  
Spillover Effect ◽  
Value Added ◽  
Spillover Effects ◽  
Data Set ◽  
Agricultural Output ◽  
Content Type ◽  
Spatial Spillover ◽  
Percent Increase ◽  
Spatial Spillover Effects ◽  
The Impact

Purpose Domestic supports on Turkish agriculture have substantially increased over the past decade while empirical evaluation of their output impact is limited. Also, the existing literature often neglects potential spatial spillover effects of agricultural policies or subsidies. The purpose of this paper is to quantify the direct and spillover effects of Turkish agricultural domestic measures and agricultural credits use on the added agricultural value. Design/methodology/approach This study applied a spatial panel model incorporating spatial interactions among the dependent and explanatory variables to evaluate the impact of government support and credit on Turkish agricultural output. A provincial data set of agricultural output values, input factors and government subsidies from 2004 to 2014 was used to model the spatial spillover effects of government supports. Findings Results show that a one percent increase in agricultural credits in a given province leads to an average increase of 0.17 percent overall in agricultural value-added per hectare, including 0.05 percent from the direct effect and 0.12 percent from the spillover effect. Contrary to agricultural credits, a one percent increase in government supports in a province generates a mixed direct and spillover effects, resulting in an overall reduction of 0.13 percent in agricultural value-added per hectare in Turkey. Research limitations/implications This study could be extended by controlling for climate, biodiversity and investment factors to agricultural output in addition to input and policy factors if such data were available. Originality/value This study fills the gap in the literature by determining the total effect, including direct and spatial spillover effect, of domestic supports and credits on Turkish agricultural value. The findings provide crucial information to decision makers regarding the importance of incorporating spatial spillover effects in the design of agricultural policy.

scholarly journals Incentives and Unintended Consequences: Spillover Effects in Food Choice

2019 ◽  
Vol 11 (4) ◽  
pp. 66-95
Author(s):  
Manuela Angelucci ◽  
Silvia Prina ◽  
Heather Royer ◽  
Anya Samek
Keyword(s):  
Field Experiment ◽  
Food Choice ◽  
Spillover Effect ◽  
Spillover Effects ◽  
Unintended Consequences ◽  
Positive Spillover ◽  
The Impact ◽  
Positive Impacts ◽  
Negative Spillover

Little is known about how peers influence the impact of incentives. We study how peers’ actions and incentives can lead to peer spillover effects. Using a field experiment on snack choice in the school lunchroom (choice of grapes versus cookies), we randomize who receives incentives, the fraction of peers incentivized, and whether or not it can be observed that peers’ choices are incentivized. We show that, while peers’ actions of picking grapes have a positive spillover effect on children’s take-up of grapes, seeing that peers are incentivized to pick grapes has a negative spillover effect on take-up. When incentivized choices are public, incentivizing all children to pick grapes, relative to incentivizing none, has no statistically significant effect on take-up, as the negative spillover offsets the positive impacts of incentives. (JEL C93, D12, I21, J13)

Volatility integration of gold and crude oil prices with the interest rates in India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shailesh Rastogi ◽  
Adesh Doifode ◽  
Jagjeevan Kanoujiya ◽  
Satyendra Pratap Singh
Keyword(s):  
Interest Rate ◽  
Crude Oil ◽  
Interest Rates ◽  
Global Economy ◽  
Spillover Effect ◽  
Price Volatility ◽  
Volatility Spillover ◽  
Content Type ◽  
Crude Oil Prices ◽  
The Impact

PurposeCrude oil, gold and interest rates are some of the key indicators of the health of domestic as well as global economy. The purpose of the study is to find the shock volatility and price volatility effects of gold and crude oil market on interest rates in India.Design/methodology/approachThis study finds the mutual and directional association of the volatility of gold, crude oil and interest rates in India. The bi-variate GARCH models (Diagonal VEC GARCH and BEKK GARCH) are applied on the sample data of gold price, crude oil price and yield (interest rate) gathered from November 30, 2015 to November 16, 2020 (weekly basis) to investigate the volatility association including the volatility spillover effect in the three markets.FindingsThe main findings of the study focus on having a long-term conditional correlation between gold and interest rates, but there is no evidence of volatility spillover from gold and crude oil on the interest rates. The findings of the study are of great importance especially to the policymakers, as they state that the fluctuations in prices of gold and crude oil do not adversely impact the interest rates in India. Therefore, the fluctuations in prices of gold and crude may generally impact the economy, but it has nothing to do with interest rate in particular. This implies that domestic and foreign investments in the country will not be affected by gold and crude oil that are largely driven by interest rates in the country.Practical implicationsGold and crude oil are two very important commodities that have their importance not only for domestic affairs but also for international business. They veritably influence the economy including forex exchange for any nation. In addition to this, the researchers believe the findings will provide insights to policymakers, stakeholders and investors.Originality/valueGold and crude oil undoubtedly influence the exchange rates but their impact on the interest rates in an economy is not definite and remains ambiguous owing to the mixed findings of the studies. The lack of studies related to the impact of gold and crude oil on the interest rates, despite them being essentials for the health of any economy is the main motivation of this study. This study is novel as it investigates the volatility impact of crude oil and gold on interest rates and contributes to the existing literature with its findings.

Engagement valence duality and spillover effects in online brand communities

2017 ◽  
Vol 27 (4) ◽  
pp. 877-897 ◽  
Author(s):  
Jana Lay-Hwa Bowden ◽  
Jodie Conduit ◽  
Linda D. Hollebeek ◽  
Vilma Luoma-aho ◽  
Birgit Apenes Solem
Keyword(s):  
Comparative Method ◽  
Spillover Effect ◽  
Spillover Effects ◽  
Consumer Engagement ◽  
Content Type ◽  
Brand Communities ◽  
Brand Engagement ◽  
Online Brand Communities ◽  
Constant Comparative Method ◽  
Depth Interviews

Purpose Online brand communities (OBCs) are an effective avenue for brands to engage consumers. While engaging with the brand, consumers simultaneously interact with other OBC members; thus engaging with multiple, interrelated engagement objects concurrently. The purpose of this paper is to explore both positively and negatively valenced consumer engagement with multiple engagement objects, the interplay between these, and the spillover effect from consumers’ engagement with the OBC to their engagement with the brand. Design/methodology/approach Drawing on 16 in-depth interviews with OBC members of a luxury accessory brand, a constant comparative method was adopted using axial and selective coding procedures. The objective was to understand the nature of participants’ engagement with the brand, the OBC, and the interplay between individuals’ engagement with these objects. The coding framework and resultant interpretive frameworks address engagement valence, outcomes, and direction. Findings This study illustrates consumer expressions of consumers’ positively and negatively valenced engagement with a focal brand, and with the OBC. Further, it demonstrates the interplay (spillover effect) that occurs between consumers’ engagement with the OBC, to their engagement with the brand. While the existence of positively valenced engagement with the OBC was found to further enhance consumer brand engagement (i.e. reflecting an engagement accumulation effect), negatively valenced engagement with the OBC was found to reduce consumer brand engagement (i.e. reflecting an engagement detraction effect). Originality/value While consumer engagement has been recognized to have both positive and negative manifestations, this study demonstrates that consumers’ engagement valence may differ across interrelated engagement objects (i.e. the brand and the OBC). Further, we demonstrate the existence of engagement spillover effects from the OBC to the brand for both positively and negatively valenced engagement.

A study of the relationship between employee wage and commercial banks efficiency in China

2016 ◽  
Vol 7 (2) ◽  
pp. 147-159
Author(s):  
Jiangtao Li ◽  
Jianyue Ji ◽  
Yanxia Wang
Keyword(s):  
Commercial Bank ◽  
Commercial Banks ◽  
Calculated Data ◽  
Wage Structure ◽  
Tobit Regression ◽  
Bank Efficiency ◽  
Content Type ◽  
Per Capita ◽  
The Impact ◽  
The Relationship

Purpose Efficiency of a commercial bank affects both its competitiveness and the role it plays in the process of economic development. Although great efforts have been exerted in developing the various aspects of banking efficiency, there seems to be a lack of research on examining the impact of the bank efficiency from the employee wage perspective. The mechanism of how employee wage affects commercial bank efficiency and the relationship between the two were analyzed in this paper. Based on the growing body of research on efficiency in banking, the aim of this paper is to examine if competitiveness of employee wages at any commercial bank has any impact on the bank efficiency score. Design/methodology/approach The method used was quantitative analysis, which was based on comparing the evaluated efficiencies of the banks with employee wages published in the bank reports. The empirical data in this paper were based on 16 Chinese listed commercial banks from 2004 to 2012. The per capita wage of commercial banks was selected as the wage indicator, and the efficiency value obtained by the slack-based measure (SBM) model was selected as the efficiency indicator. According to the calculated data, the Tobit regression model was built to analyze the relationship between employee wage and commercial bank efficiency. Findings The research results show that employee wage is the key variable that influences the efficiency of Chinese commercial banks, and the inverted U-shaped relationship between employee wage and commercial banks efficiency shows up. Practical implications The wage structure data of the composition of basic pay and bonus were not available at the time of conducting the research. Per capita wages were used instead to reflect the employee wage levels of Chinese banks. Originality/value This study can provide some help for the banking industry by analyzing the wage levels from the perspective of efficiency and also further enriches the theoretical system of the relationship between employee wage and bank efficiency.

Supplier development under cooperative and non-cooperative investment structures

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abhishek Srivastava ◽  
Parimal Kumar ◽  
Arqum Mateen
Keyword(s):  
Investment Decision ◽  
Spillover Effect ◽  
Investment Decisions ◽  
The Other ◽  
Supplier Development ◽  
Content Type ◽  
Cooperative Development ◽  
Investment Structure ◽  
Cooperative Investment ◽  
The Impact

PurposeThis study analyzes supplier development investment decisions under a triadic setting (two buyers and a common supplier). In a triadic setting, the supplier development investment decision of one buyer can have a spillover effect of the benefits on other buyer. Therefore, it is utmost important for the investing buyer to understand the impact of benefit spillover on other competing buyers'. Therefore, one of the purposes of this study to analyze the supplier development investment decision of buyers under two scenarios. First, under cooperative development structure where both buyers jointly invest in supplier and share equal benefits. Second, non-cooperative investment structure where both buyers individually invest in supplier development and share unequal benefits.Design/methodology/approachIn order to assess the impact of supplier development investment decisions on the profitability of buyers and the common supplier, the authors used game-theoretic approach. The authors design a Stackelberg leader-follower game where the supplier acts as Stackelberg leader and buyers follow the supplier's pricing decision to maximize their profit level. Additionally, both buyers decide either to cooperate or non-cooperate while investing in supplier development.FindingsThe results show that the cooperative investment is always an optimal strategy for buyers and supplier. Interestingly, the efficient buyer's share of investment level is lower under non-cooperative investment structure and he is better-off due to its capability of taking advantage from the other buyer's investment. However, the inefficient buyer, on the other hand, is worse-off under non-cooperative investment. Furthermore, comparative analysis between the two shows that initially, the buyer who extracts more profit because of the other buyers' development investment tends to prefer the non-cooperative development investment set up. However, after a certain point, the same buyer is better-off under cooperative development investment through cooperation, and sharing equal benefit of the supplier's development, as the supplier in turn, starts charging a higher wholesale price under non-cooperative investment case.Originality/valueTo the best of authors’ knowledge, extant literature on supplier development has mostly focused on. One supplier-one buyer; thus, the learning spillover effect has almost been unexplored. In real-life, different buyers often purchase from the shared supplier. Therefore, it is important to analyze the spillover of supplier development benefits due to investment of one buyer on other buyer and deriving the condition under which buyers would be incentivized to invest jointly or individually.

Nexus between Southeast Asian stock markets, bitcoin and gold: spillover effect before and during the COVID-19 pandemic

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yosuke Kakinuma
Keyword(s):  
Southeast Asia ◽  
Stock Markets ◽  
Spillover Effect ◽  
Spillover Effects ◽  
Southeast Asian ◽  
Series Data ◽  
Financial Assets ◽  
Volatility Spillover ◽  
Content Type ◽  
Asset Classes

Purpose This study aims to provide empirical evidence on the return and volatility spillover effects between Southeast Asian stock markets, bitcoin and gold in the periods before and during the COVID-19 pandemic. The interdependence among different asset classes, the two leading stock markets in Southeast Asia (Singapore and Thailand), bitcoin and gold, is analyzed for diversification opportunities. Design/methodology/approach The vector autoregressive-Baba, Engle, Kraft, and Kroner-generalized autoregressive conditional heteroskedasticity model is used to capture the return and volatility spillover effects between different financial assets. The data cover the period from October 2013 to May 2021. The full period is divided into two sub-sample periods, the pre-pandemic period and the during-pandemic period, to examine whether the financial turbulence caused by COVID-19 affects the interconnectedness between the assets. Findings The stocks in Southeast Asia, bitcoin and gold become more interdependent during the pandemic. During turbulent times, the contagion effect is inevitable regardless of region and asset class. Furthermore, bitcoin does not provide protection for investors in Southeast Asia. The pricing mechanism and technology behind bitcoin are different from common stocks, yet the results indicate the co-movement of bitcoin and the Singaporean and Thai stocks during the crisis. Finally, risk-averse investors should ensure that gold constitutes a significant proportion of their portfolio, approximately 40%–55%. This strategy provides the most effective hedge against risk. Originality/value The mean return and volatility spillover is analyzed between bitcoin, gold and two preeminent stock markets in Southeast Asia. Most prior studies test the spillover effect between the same asset classes such as equities in different regions or different commodities, currencies and cryptocurrencies. Moreover, the time-series data are divided into two groups based on the structural break caused by the COVID-19 pandemic. The findings of this study offer practical implications for risk management and portfolio diversification. Diversification opportunities are becoming scarce as different financial assets witness increasing integration.

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