Concentration and financial stability in the property-liability insurance sector: global evidence

2017 ◽  
Vol 18 (3) ◽  
pp. 284-302 ◽  
Author(s):  
Muhammed Altuntas ◽  
Jannes Rauch
Keyword(s):  
Financial Stability ◽  
Empirical Support ◽  
Policy Implications ◽  
Large Set ◽  
Data Set ◽  
Content Type ◽  
Global Database ◽  
Insurance Sector ◽  
Insurance Firms ◽  
The Stability

Purpose This paper aims to examine the effect of concentration in the insurance sector on insurer stability for a large set of developed and developing countries. In particular, the authors test whether concentration reduces financial fragility in the insurance sector (“concentration-stability view”) or decreases stability in the insurance sector (“concentration-fragility view”). Design/methodology/approach The authors use a data set of 14,402 firm-year observations of property-liability insurers who appear in A.M. Best’s Statement File Global database during the period 2004-2012. They use regression analyses to examine the effect of concentration on the stability of insurance firms and apply different measures of concentration. Findings The results provide empirical support for the “concentration- fragility view”; that is, higher levels of concentration are associated with decreases in the insurance sector’s financial stability. Research limitations/implications The results have important policy implications, given that a primary purpose of insurance regulation is to protect policyholders against insurance firm defaults. Originality/value No previous research analyzes how recent trends in competition and consolidation, which have led to changes in insurance market concentration, affect the stability of insurance firms around the world. This research is the first paper that provides evidence on the relation between concentration and stability in the insurance sector.

Fusion based learning approach for predicting concrete pouring productivity based on construction and supply parameters

2016 ◽  
Vol 16 (2) ◽  
pp. 185-202 ◽  
Author(s):  
Mojtaba Maghrebi ◽  
Ali Shamsoddini ◽  
S. Travis Waller
Keyword(s):  
Supply Chain ◽  
Production Rate ◽  
Learning Method ◽  
Data Set ◽  
Content Type ◽  
Field Database ◽  
The Stability ◽  
Stable Learning ◽  
Ready Mixed Concrete ◽  
Practical Implications

Purpose The purpose of this paper is to predict the concrete pouring production rate by considering both construction and supply parameters, and by using a more stable learning method. Design/methodology/approach Unlike similar approaches, this paper considers not only construction site parameters, but also supply chain parameters. Machine learner fusion-regression (MLF-R) is used to predict the production rate of concrete pouring tasks. Findings MLF-R is used on a field database including 2,600 deliveries to 507 different locations. The proposed data set and the results are compared with ANN-Gaussian, ANN-Sigmoid and Adaboost.R2 (ANN-Gaussian). The results show better performance of MLF-R obtaining the least root mean square error (RMSE) compared with other methods. Moreover, the RMSEs derived from the predictions by MLF-R in some trials had the least standard deviation, indicating the stability of this approach among similar used approaches. Practical implications The size of the database used in this study is much larger than the size of databases used in previous studies. It helps authors draw their conclusions more confidently and introduce more generalised models that can be used in the ready-mixed concrete industry. Originality/value Introducing a more stable learning method for predicting the concrete pouring production rate helps not only construction parameters, but also traffic and supply chain parameters.

Do intraday week effect in currencies hourly trading reflect leverage and asymmetric anomalies? Policy implications for traders

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wajid Shakeel Ahmed ◽  
Muhammad Sohaib ◽  
Jamal Maqsood ◽  
Ateeb Siddiqui
Keyword(s):  
Emerging Economies ◽  
Garch Model ◽  
Study Data ◽  
Policy Implications ◽  
Asymmetric Effect ◽  
Data Set ◽  
Content Type ◽  
Study Results ◽  
Rational Choices ◽  
Trading Pattern

Purpose The purpose of this study is to determine if intraday week (IDW) effect of the currencies reflect leverage and asymmetric impact in currencies market. The study data set comprises of intraday patterns of 15 currencies from developed and emerging economies. Design methodology approach The study applies the exponential generalized autoregressive conditional heteroscedasticity (E-GARCH) model technique to observe the IDW leverage and asymmetric effect after introducing hourly dummies variables, namely, IDWmon, IDWwed, IDWfrid and IDWfrid-mon. Findings The study results favor the propositions and confirm that IDW effect do exist in the international forex markets in relation to hourly trading pattern for respective currencies. Mostly, currencies do depreciate on Monday and Wednesday compared to the rest of the days. However, on the last trading day, i.e. Friday currencies observe an appreciation pattern which is for both economies. The results have an evidence of leverage and asymmetric effect confirmed by the E-GARCH model as a result of press releases and influence by micro-factors in the currency markets. Practical implications The study believes to have theoretical connection related to the better understanding of currencies trend for developed and emerging economies, as the IDW effect exists. Moreover, confirmation of both the leverage and asymmetric effect in observed currencies would be able to assist the investors in making rational choices during the trading hours and would confirm considerable profits through profit incentivized strategies. Originality value The study not only add knowledge to the previous study work in relation to the hourly trading pattern of currencies with reference to the IDW effects but also highlights the leverage and asymmetric effect in currencies that will help in formulating future trading strategies particular to emerging economies.

Different firm responses to the COVID-19 pandemic shocks: machine-learning evidence on the Vietnamese labor market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lam Hoang Viet Le ◽  
Toan Luu Duc Huynh ◽  
Bryan S. Weber ◽  
Bao Khac Quoc Nguyen
Keyword(s):  
Machine Learning ◽  
Labor Market ◽  
Large Scale ◽  
Government Support ◽  
Policy Implications ◽  
Machine Learning Techniques ◽  
Firm Characteristics ◽  
Data Set ◽  
Content Type ◽  
Firm Responses

PurposeThis paper aims to identify the disproportionate impacts of the COVID-19 pandemic on labor markets.Design/methodology/approachThe authors conduct a large-scale survey on 16,000 firms from 82 industries in Ho Chi Minh City, Vietnam, and analyze the data set by using different machine-learning methods.FindingsFirst, job loss and reduction in state-owned enterprises have been significantly larger than in other types of organizations. Second, employees of foreign direct investment enterprises suffer a significantly lower labor income than those of other groups. Third, the adverse effects of the COVID-19 pandemic on the labor market are heterogeneous across industries and geographies. Finally, firms with high revenue in 2019 are more likely to adopt preventive measures, including the reduction of labor forces. The authors also find a significant correlation between firms' revenue and labor reduction as traditional econometrics and machine-learning techniques suggest.Originality/valueThis study has two main policy implications. First, although government support through taxes has been provided, the authors highlight evidence that there may be some additional benefit from targeting firms that have characteristics associated with layoffs or other negative labor responses. Second, the authors provide information that shows which firm characteristics are associated with particular labor market responses such as layoffs, which may help target stimulus packages. Although the COVID-19 pandemic affects most industries and occupations, heterogeneous firm responses suggest that there could be several varieties of targeted policies-targeting firms that are likely to reduce labor forces or firms likely to face reduced revenue. In this paper, the authors outline several industries and firm characteristics which appear to more directly be reducing employee counts or having negative labor responses which may lead to more cost–effect stimulus.

Financial literacy and its determinants: the case of rural farm households in Ghana

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Martinson Ankrah Twumasi ◽  
Yuansheng Jiang ◽  
Salina Adhikari ◽  
Caven Adu Gyamfi ◽  
Isaac Asare
Keyword(s):  
Developing Countries ◽  
Financial Literacy ◽  
Financial Education ◽  
Policy Implications ◽  
Farm Households ◽  
Community Group ◽  
Data Set ◽  
Content Type ◽  
Wide Range ◽  
Rural Dwellers

PurposeThis paper aims to examine the determinants of rural dwellers financial literacy in Ghana.Design/methodology/approachA cross-sectional primary data set was used to estimate the factors influencing rural farm households' financial literacy using the IV-Tobit model.FindingsThe findings reveal that most rural residents are financially illiterate. The econometrics model results depicted that respondents' socioeconomic and demographic characteristics such as gender, income, age and education significantly affect financial literacy. Again, respondents who are risk seekers and listen or watch education programs are more likely to be financially literate.Research limitations/implicationsThe paper examined the determinants of rural dwellers financial literacy in four regions in Ghana. Future research should consider all or many regions for an informed generalization of findings.Practical implicationsThis paper provides evidence that rural dwellers are financially illiterate and it would require the policymakers or non-governmental organizations (NGOs) to establish a village or community group that comprises a wide range of bankers and government officials to help rural dwellers acquire some financial skills. Also, the positive relationship between media (whether respondent watches or listens to educational programs) and financial literacy implies that policymakers should focus on improving individuals' financial knowledge through training programs and utilize the media as a channel to propagate financial education to the public.Originality/valueAlthough previous studies have examined the determinants of financial literacy, little is known in developing countries and, in particular, rural communities. The authors fill this gap by contributing to the scanty existing literature in developing countries in several ways. First, this is the first study to examine the financial literacy level of rural dwellers in Ghana. Second, to not undermine the credibility of the estimation results, this study addresses the potential endogeneity issue, which other researchers have not adequately recognized. Finally, the study expands the scant literature on the subject and provides critical policy implications that will help policymakers formulate financial market policies that will contribute to rural dwellers financial literacy enhancement.

scholarly journals Financial and economic stability as ‘two sides of a coin’

2015 ◽  
Vol 7 (4) ◽  
pp. 327-353 ◽  
Author(s):  
Muhammad Ali Nasir ◽  
Mushtaq Ahmad ◽  
Ferhan Ahmad ◽  
Junjie Wu
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Financial Stability ◽  
Strong Association ◽  
Price Stability ◽  
Economic Stability ◽  
Data Set ◽  
Content Type ◽  
The Real ◽  
Stability And Instability

Purpose – The purpose of this paper is to provide a different context for considering issues of financial stability and instability, with reference to economic growth and price stability in particular. Design/methodology/approach – This paper pursued an empirical exploration of six pillars of financial stability, based on a data set for the UK extending from 1985 (Q1) to 2008 (Q2), through the construction of a vector error correction model, including an impulse response function analysis. Findings – The findings show a strong association between the financial and economic stability even in a non-crisis regime. This includes, for example, a strong association exists between the stock market and the real economy; exchange rate appreciation may not provide for long-term real economic growth; inflation does not contribute to real economic growth, both the sensitivity of the economy to yields and a significant lag in transitional effects from financial markets to the real sector; a positive role of credit creation within a non-crisis regime; exchange rate appreciation affects purchasing power; and potential points of linkage between sovereign debt activity and general price levels. Research limitations/implications – The findings should be considered in the context of a concept of the economy as fundamentally dynamic and subject to complex cumulative processes. Practical implications – The findings indicate there is a role for state oversight and intervention within a non-crisis regime based on the complexity of possible interactions that may undermine financial and price stability, with consequences for their association with economic growth. Originality/value – The study provides a new perspective for considering issues of financial stability and instability.

scholarly journals Ownership feature and firm performance via corporate innovation performance

2018 ◽  
Vol 25 (2) ◽  
pp. 239-250 ◽  
Author(s):  
Dung Nguyen ◽  
Hoai Nguyen ◽  
Kien S. Nguyen
Keyword(s):  
Firm Performance ◽  
Positive Impact ◽  
Policy Implications ◽  
Ownership Concentration ◽  
Likelihood Method ◽  
Sales Growth ◽  
Reverse Causality ◽  
Data Set ◽  
Content Type ◽  
Cmp Model

Purpose The purpose of this paper is to investigate the simultaneous relationship among ownership concentration, innovation and firm performance of the small- and medium-sized enterprises (SMEs) in Vietnam during the 2011–2015. By employing a Conditional Mixed Process (CMP) model, the findings show that: there is no impact of ownership concentration on innovation, but it has a positive impact on sales growth; innovation positively affects firm performance; and there exists a positively reverse causality from sales growth to innovation. Design/methodology/approach In this study, the authors propose the adaption of CMP model (Roodman, 2011). The nature of the first stage dependent variable – Innovation – is a binary one while the dependent variable Performance is continuous. Therefore, a model that can adapt the binary nature of the dependent variable and perform the estimation of a system of equations such as CMP model is preferred. The CMP framework is substantially that of seemingly unrelated regression, but with application in a larger scope. This approach is based on a “simulated maximum likelihood method” suggested by Geweke–Hajivassiliou–Keane algorithm. Findings By applying CMP method, this study examines the simultaneous relationship among ownership concentration, innovation and firm performance of the SMEs in Vietnam from 2011 to 2015. The findings indicate that: there is no impact of ownership concentration on innovation, but it has a positive impact on sales growth; innovation positively affects firm performance; and there exists a positively reverse causality from sales growth to innovation. Research limitations/implications In spite of the efforts to explore the simultaneous relationship among ownership concentration, innovation and firm performance of the SMEs in Vietnam, the study still has some limitations which are promising further research directions. First, the SME surveys by Central Institute for Economic Management do not have much information about other types of ownership including state-owned and foreign ownership. Therefore, possible further studies with richer data sets may explore the impacts of different types of ownership on firm innovation and performance. Second, other types of innovation such as organizational innovation, marketing innovation can also be investigated in further studies in a richer data set for the case of Vietnam SMEs. Originality/value The findings show that: there is no impact of ownership concentration on innovation, but it has a positive impact on sales growth; innovation positively affects firm performance; and there exists a positively reverse causality from sales growth to innovation. The policy implications insist on facilitating SMEs with easier access to capital via loans with preferred interest or trust loans without collateral, training programs for the labor force and SME leaders, and reduction of unnecessary administrative procedure.

scholarly journals Impact of the volatility of resource revenue on non-resource revenue volatility

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
Empirical Analysis ◽  
Economic Diversification ◽  
Data Set ◽  
Content Type ◽  
Generalized Methods Of Moments ◽  
Public Revenue ◽  
Revenue Volatility ◽  
The Stability ◽  
Methods Of Moments ◽  
The Empirical Analysis

PurposeThis paper investigates the effect of the volatility of resource revenue on the volatility of non-resource revenue.Design/methodology/approachThe empirical analysis has utilized an unbalanced panel data set comprising 54 countries over the period 1980–2015. The two-step system generalized methods of moments (GMM) is the main economic approach used to carry out the empirical analysis.FindingsResults show that resource revenue volatility generates lower non-resource revenue volatility only when the share of resource revenue in total public revenue is lower than 18%. Otherwise, higher resource revenue volatility would result in a rise in non-resource revenue volatility.Research limitations/implicationsIn light of the adverse effect of volatility of non-resource revenue on public spending, and hence on economic growth and development prospects, countries whose total public revenue is highly dependent on resource revenue should adopt appropriate policies to ensure the rise in non-resource revenue, as well as the stability of the latter.Practical implicationsEconomic diversification in resource-rich countries (particularly in developing countries among them) could contribute to reducing the dependence of economies on natural resources, and hence the dependence of public revenue on resource revenue. Therefore, policies in favour of economic diversification would contribute to stabilizing non-resource revenue, which is essential for financing development needs.Originality/valueTo the best of our knowledge, this topic has not been addressed in the literature.

scholarly journals Panel modeling of z-score: evidence from Islamic and conventional Saudi banks

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hassan Belkacem Ghassan ◽  
Abdelkrim Ahmed Guendouz
Keyword(s):  
Financial Stability ◽  
Banking Sector ◽  
Stability Index ◽  
Z Score ◽  
Strong Concentration ◽  
Content Type ◽  
Quarterly Data ◽  
Annual Frequency ◽  
Conventional Banks ◽  
The Stability

Purpose This paper aims to measure the stability extent of the banking sector in Saudi Arabia, including Islamic and conventional banks (CBs), using quarterly data. Design/methodology/approach The paper uses seemingly unrelated regressions to estimate the determinants of the z-score. Findings The panel data model shows that Islamic banks (IBs) reduce the financial stability index relatively; meanwhile, they contribute efficiently to enhance the financial stability through the diversification of their assets. The Saudi banking sector exhibits strong concentration affecting the financial stability negatively. Research limitations/implications The paper’s topic can be extended to cover the recent period. Practical implications The limited presence of IBs in the Saudi banking sector jeopardizes any effort to improve the financial stability. Social implications By attracting more clients, IBs would contribute more to the financial stability in the Saudi economy. Also, the monetary authority has to expand the share of IBs in the financial system at least 50-50 compared to CBs. Originality/value The z-score is mostly analyzed with yearly data; in this paper we use quarterly data to describe at infra-annual frequency the variability of the z-score index. Also, we consider in detail the statistical properties of the banks’ data.

An assessment of forerunners for customer loyalty in the selected financial sector by SEM approach toward their effect on business

2019 ◽  
Vol 53 (4) ◽  
pp. 546-561 ◽  
Author(s):  
Subhankar Das ◽  
Anand Nayyar ◽  
Inderpal Singh
Keyword(s):  
Customer Loyalty ◽  
Empirical Support ◽  
Financial Sector ◽  
Process Models ◽  
Customer Relationship ◽  
Equation Modeling ◽  
Content Type ◽  
Usability Tests ◽  
Insurance Firms ◽  
The Impact

Purpose The purpose of this paper is to identify and describe the relationship between the precursors and consequences of customer loyalty (CL) in the Indian financial sector, specially banking and insurance context, taking a sample of individual customers as respondents from the Indian State of Punjab. Design/methodology/approach The collected data have been analyzed using univariate, bivariate and multivariate analysis techniques. Specifically, descriptive statistics have been assessed to examine the basic characteristics of the sample data. Confirmatory factor analysis with maximum likelihood criteria has been adopted for the measurement and validation of various constructs. Independent samples t-test has been used to compare the CL of public and private firms, banks and insurance firms, and for some of the demographic variables like gender, marital status, etc. One-way ANOVA has been used to compare the CL for variables having more than two groups. Structural equation modeling (SEM) has been used to measure the impact of CL on the BP of financial services firms. Findings The result shows that BP is a higher-order construct measured in terms of word-of-mouth, repurchase intention, price premium and share of wallet. Though each of the four measures of CL is special and unique in nature, yet a high level of positive correlation has been seen among these dimensions. The study reveals that CL is not significantly different for the banking firms and insurance firms in Punjab. Research limitations/implications The authors consider this work as one of the foundational elements that will enable further advances toward the governance of multi-layer business impact modeling systems. Extensive usability tests would enable to further confirm the findings of the paper. This study contributes to the customer relationship management and services marketing literature by providing empirical support for CL and BP relationship in the Indian context. Practical implications The approach described here should improve the maintainability, reuse and clarity of business process models and in extension improve data for CL in large banking and insurance organizations. The approaches described here should improve the maintainability, reuse and clarity of loyalty and relationship of the customer with that of organizations. This can improve data for customer relationship and loyalty in banking and insurance sector. Originality/value This paper fulfills an identified gap to enabling SEM enabled models for data regarding customer relationship and loyalty. Loyalty revolves around the concept of relationship. CL is not a new concept, but recent years have demonstrated a developing interest to fabricate CL because of customer-oriented techniques or strategies. Over the previous era, CL has been broadly inspected inside marketing, trades and transactions. It can be concluded that the CL significantly influences BP.

Insights into European interbank network contagion

2015 ◽  
Vol 41 (8) ◽  
pp. 754-772 ◽  
Author(s):  
Dionisis Philippas ◽  
Yiannis Koutelidakis ◽  
Alexandros Leontitsis
Keyword(s):  
Financial Stability ◽  
Preferential Attachment ◽  
Policy Implications ◽  
Contagion Effect ◽  
Iterative Proportional Fitting ◽  
Content Type ◽  
Scale Free ◽  
Banking Systems ◽  
Fitting Procedure ◽  
Capital Ratios

Purpose – The purpose of this paper is to analyse the importance of interbank connections and shocks on banks’ capital ratios to financial stability by looking at a network comprising a large number of European and UK banks. Design/methodology/approach – The authors model interbank contagion using insights from the Susceptible Infected Recovered model. The authors construct scale-free networks with preferential attachment and growth, applying simulated interbank data to capture the size and scale of connections in the network. The authors proceed to shock these networks per country and perform Monte Carlo simulations to calculate mean total losses and duration of infection. Finally, the authors examine the effects of contagion in terms of Core Tier 1 Capital Ratios for the affected banking systems. Findings – The authors find that shocks in smaller banking systems may cause smaller overall losses but tend to persist longer, leading to important policy implications for crisis containment. Originality/value – The authors infer the interbank domestic and cross-border exposures of banks employing an iterative proportional fitting procedure, called the RAS algorithm. The authors use an extend sample of 169 European banks, that also captures effects on the UK as well as the Eurozone interbank markets. Finally, the authors provide evidence of the contagion effect on each bank by allowing heterogeneity. The authors compare the bank’s relative financial strength with the contagion effect which is modelled by the number and the volume of bilateral connections.

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