Financial expert CEOs, political intervention, and corporate investment decisions: evidence from the anti-corruption campaign

PurposeEmploying the anti-corruption campaign as an exogenous political shock, this paper examines how political intervention shapes the impact of financial expert CEOs on firm investment decisions.Design/methodology/approachThis paper uses a sample of 2,808 Chinese firms listed in the Shanghai and Shenzhen Stock Exchanges from 2003 to 2016. Panel data is used for conducting the analysis controlling for firm, industry, and year fixed effects.FindingsThe authors found that CEOs with financial expertise are sensitive to political intervention when making investment decisions. First, financial expert CEOs spend more on R&D expenditure in private-owned companies and they are associated with less R&D expenditure in state-owned enterprises (SOEs). Second, financial expert CEOs are associated with higher investment expenditure in general, but they become less likely to invest more in the post-anti-corruption period. The reduction in investment expenditure due to the anti-corruption campaign is more pronounced in SOEs than in private-owned companies. Third, the anti-corruption campaign promotes R&D investment in general, but in SOEs, expert CEOs tend to be less likely to invest more on R&D after the anti-corruption shock.Originality/valueThis paper enriches the growing literature on the impact of political intervention and the role of the anti-corruption campaign on corporate behaviour.

Public Expenditure and Economic Growth: A Test of Wagner’s and Keynes Hypotheses in Nigeria and Angola Economies

This study verifies the validation of Wagner’s theory and Keynes's hypothesis between three main government expenditure components (Health expenditure, education expenditure, and capital investment expenditure) and economic growth in Nigeria and Angola. The study employs Johansen cointegration and pairwise granger causality as the estimation techniques. Findings revealed no evidence of long-run relationships with government expenditure components of health, education, and capital investment and economic growth. The study equally reveals the validation of Wagner’s theory between growth and expenditure on health in both Nigeria and Angola. Evidence that confirms both Wagner’s theory and Keynes's hypothesis between growth and expenditure on education in Angola and validation of only Keynes hypothesis in Nigeria was found. Also, the study confirms the validation of Keynes's hypothesis between government expenditure on capital investment in both Nigeria and Angola

Time preference and investment expenditure

This paper offers a critique of the Austrian theory according to which social time preference determines the proportion between aggregate consumption and aggregate saving, and therefore also the volume of total investment expenditure. We argue that there is no such necessary relationship between the (pure) interest rate and the volume of aggregate investment. Then we discuss the implications of our thesis for growth theory and business-cycle theory, stressing in particular the need to distinguish between two types of growth and two corresponding types of inter-temporal misallocation. Key words: Time Preference, Time Market, Investment Expenditure, Growth Types, Inter-Temporal Mis-allocation, Austrian Business-Cycle Theory, Austrian Macroeconomics. JEL classification: B53, D01, D40, D92, E22, E32, E43. The purpose of this paper is to offer a critique of the theory according to which social time preference determines the proportion between aggregate consumption and aggregate saving, and therefore also the volume of total investment expenditure. This theory is held by virtually all Austrian economists past and present. We will first present it based on Rothbard’s Man, Economy, and State, where it is stated in the clearest and most detailed form. Then we will examine its shortcomings and discuss some implications of our findings.

«Time preference and investment expenditure»: comment on Hülsmann

Hülsmann (2008) argues that the neglect of time preference changes on the demand side of the time market renders Rothbard’s (1993) analysis incomplete in that it unduly portrays a rise in the volume of investment as a necessary counterpart to a fall in the pure interest rate. Focusing on the determinants of the demand for present goods, this paper shows that though Hülsmann’s strictures are essentially valid, Rothbard has actually explained why the direct impact of time preference changes should display themselves mostly on the supply side. However, the implications have been neglected both by Hülsmann and Rothbard. We explore these implications, demonstrating that the present demand schedule and the volume of investment should be considered as mostly independent from present time preferences and determined instead by past production decisions. We show how this approach allows for a more «dynamic» understanding of the time market and growth processes. Key words: Time Preference, Investment Expenditure, Time Market, Structure of Production, Interest Rate, Growth Types, Austrian Macroeconomics. JEL Classification: B53, E22, E23, E43, O11, O16, O40. Resumen: Hülsmann (2008) argumenta que pasar por alto los cambios en la preferencia temporal del lado de la demanda en el mercado de tiempo hace incompleto el análisis de Rothbard (1993) al representar indebidamente un incremento en el volumen de inversión como contrapartida necesaria a una caída en la tasa de interés pura. Centrándose en los determinantes de la demanda para bienes presentes, este paper muestra que, siendo las críticas de Hülsmann esencialmente válidas, Rothbard realmente explicó por qué el impacto directo de los cambios en la preferencia temporal debería reflejarse fundamentalmente en el lado de la oferta. Sin embargo, las implicaciones derivadas de ello fueron ignoradas por Hülsmann y Rothbard. Las exploraremos, demostrando que la curva de demanda presente y el volumen de inversión deberían considerarse esencialmente independientes de las preferencias temporales presentes, estando determinadas realmente por decisiones pro-ductivas pasadas. Esta aproximación permite una comprensión más «diná-mica» del mercado de tiempo y los procesos de crecimiento. Palabras clave: Preferencia temporal, gasto de inversión, mercado del tiempo, estructura de la producción, tipo de interés, tipos de crecimiento, macroeconomía austriaca. Clasificación JEL: B53, E22, E23, E43, O11, O16, O40.

Monetary policy effectiveness in the liquidity trap: a switching regimes approach

Liquidity trap economics seems to have fared particularly well on all counts of its predictions, in the aftermath of the 2008 global financial crisis. Therefore, in this paper we evaluate formally the effectiveness of unconventional monetary policy in a liquidity trap, based on data from Japan, the USA, and the eurozone over periods of liquidity trap conditions (1994–2018 for Japan and 2009–2018 for the USA and the eurozone). Under effective unconventional policies, changes in the base money-growth regime should be associated with similar regime changes in either inflation or investment expenditure growth and the estimation of a switching regimes model allows us to test whether significant joint regime shifts occur in the data. Also, a test of liquidity trap conditions is based on a discrepancy of regime shifts between growth rates of base money and broad money, since this implies a collapse of the money multiplier. Our findings show that drastic shifts in the growth rate of the monetary base do not produce similar behavior for the inflation rate, investment expenditure growth, and broad money growth, thus pointing to liquidity trap conditions and unconventional monetary policy ineffectiveness.

The impact of firms’ inflation perceptions on investment: Evidence from listed manufacturing enterprises in China

This article investigates the extent to which inflation perceptions affect firms’ innovation input and investment expenditure. We adopt dummy variables data to quantify the firm inflation perceptions of China’s listed manufacturing companies from corporate annual reports during the period from 2008–2018. Results reveal that inflation perceptions have a positive Tobin effect on investment spending decisions of the firms whose inflation perceive risen, vice versa. Besides, the investment expenditure of large manufacturing/ SOEs enterprises are more sensitive than small/non-SOEs firms when inflation perceptions have risen, and small/non-SOEs companies tend to reduce much more investment spending when inflation perceptions decline. Our results have significant implications for policymakers and firm managers.

Dampak Covid-19 Terhadap Perekonomian Indonesia Dari Sisi Pendapatan Nasional Pendekatan Pengeluaran

This study aims to determine the extent of the impact of Covid-19 on the Indonesian economy in terms of national income, which is calculated based on the expenditure method with components of household consumption, gross investment, expenditure and net exports, and future predictions, if the Covid-19 pandemic will continue in the future. long time. From the expenditure side, economic growth in quarter II-2020 compared to quarter II-2019 (y-on-y) contracted in all components. The deepest contraction occurred in the Export of Goods and Services Component of 11.66 percent, followed by the Gross Fixed Capital Formation Component with a contraction of 8.61 percent. The growth in the component of the LNPRT Consumption Expenditure contracted by 7.76 percent, and the growth in the Government Consumption Expenditure component contracted by 6.90 percent. When compared with the previous quarter (q-to-q), economic growth from the expenditure side contracted in all components except for the Government Consumption Component, which grew by 22.32 percent. This is due to an increase in spending on social assistance, especially for the response to the Covid-19 pandemic. The component that experienced the deepest contraction occurred in exports of goods and services amounting to 12.81 percent. Meanwhile, imports of goods and services as a subtracting component decreased by 14.16 percent.

Analisis Pembiayaan pada Program Kesehatan Ibu dan Anak Melalui Metode Health Account di Kabupaten Jember

AbstrakKesehatan Ibu dan Anak (KIA) merupakan permasalahan kesehatan yang belum tuntas di Indonesia. Ibu dan anak adalah anggota keluarga yang perlu mendapatkan perhatian serta prioritas dalam usaha penyelenggaran kesehatan. Tahun 2012 terdapat enam provinsi yang menjadi fokus pemerintah dalam mengatasi permasalahan kematian ibu yang salah satunya Jawa Timur. Kabupaten Jember menjadi salah satu Kabupaten di Jawa Timur yang masih mengalami permasalahan KIA. Penambahan anggaran dalam upaya peningkatan kesehatan ibu dan anak belum berjalan secara optimal di Kabupaten Jember. Oleh karena itu, perlu dilakukan penelitian dengan pendekatan Health Account terkait KIA di Kabupaten Jember. Jenis penelitian yang digunakan adalah penelitian deskriptif. Unit analisis pada penelitian ini adalah intitusi yang melakukan kegiatan langsung maupun tidak langsung terhadap program KIA pada tahun 2018 dengan fokus anggaran yang berada pada tingkat daerah. Hasil penelitian menunjukkan pola belanja pada setiap program kesehatan banyak digunakan untuk belanja investasi dan anggaran banyak diprioritaskan untuk belanja investasi pada kegiatan tidak langsung. Saran yang diberikan adalah pemerintah Kabupaten Jember menyusun kebijakan yang diarahkan pada pembangunan berparadigma sehat dan membangun sistem informasi manajemen keuangan daerah yang terintegrasi, dan juga harus membuat payung hukum untuk melembagakan pelaksanaan Health Account ditingkat daerah.Abstract Maternal and Child Health (MCH) is unresolved health problems in Indonesia. Mother and child are family members who need attention and priority in delivery of health. In 2012, there were six provinces that were focus of government in resolve problems of maternal mortality, one of them was East Java. Jember District is one of district in East Java that is still having problems with MCH. The addition of the budget in increasing maternal and child health has not been running optimally in Jember. Therefore, it is necessary to research with Health Account approach related to MCH in Jember District. This type of research was descriptive research. The unit of analysis in this research was the institution that carried out direct or indirect activities on the MCH program in 2018 with an appropriate budget focus at the regional level. The results of research showed that expenditure patterns on every program were widely used for investment expenditure and the budget was prioritized for investment expenditure in indirect activities. The advice given is that Jember District Government develops policies directed at healthy paradigm development and builds an integrated financial management information system, and must also create a legal protection to institutionalize implementation of Health Accounts at distrcit level.

Gabon

The development of infrastructure is one of the pillars of the Emerging Gabon Strategic Plan (PSGE). Implemented as of 2012, the PSGE has been establishing priority strategic guidelines to transform Gabon into an emerging economy by 2025. Its primary aims are to ensure and expedite the country’s sustainable development and growth by focusing on potential growth sectors. Public investment grew continuously from 2009 to 2013, when it peaked at 15.2 percent of GDP; it averaged 5.7 percent growth from 1990 to 2018. At the same time, private investment declined, as did growth and public capital stock. These outcomes indicate that public investment in Gabon does not drive growth and that investment expenditure does not automatically translate into actual accumulation of assets, which raises questions about the efficiency of those outlays.