The financial and prudential performance of Chinese banks and Fintech lenders in the era of digitalization

The years 2013 to 2019 marked an explosion in Fintech in China. We analyze the financial and prudential performance of 40 exchange-traded banks and 25 listed Fintech lenders in China during this watershed period. Among other things, traditional banks experienced rising operating costs, declining profit margins and softening loan quality. Consistent with a process of adaptation, traditional bank performance stabilized in the latter part of the study period (2018-19) after an initial period of decline. Study findings also highlight rising business and regulatory costs for Fintech providers over the course of the study frame. A marked deterioration in online lenders’ Special Mention and Non-Performing Loan (SML & NPL) positions arose during the period. Within the traditional bank group, smaller entities with fewer growth options and greater foreign ownership fared worst in prudential terms. Traditional banks’ financial and prudential performance also declines with time since IPO. Relative to joint stock commercial, city and rural banks, state-owned lenders registered more resilient performance, especially in relation to asset quality. In a final area, we construct a categorical Fintech proficiency variable for China's established banks. Our preliminary evidence suggests such proficiencies help stabilize SML and NPL rates and support financial returns. Overall, we offer major contribution to the banking literature by analyzing the financial and prudential performance of both incumbent and emerging lenders in one of the world’s most dynamic Fintech settings.

Factors Affecting Construction Sector Safety Performance: Exploratory Factor Analysis Evidence from China

Construction industry is a significant contributor to the Chinese economy. The industry has more than 12 million employers with over 250 million employees and creates almost $1.9 trillion worth of structures yearly. Civil construction remains the main driver of growth in China. Basically, a task is developed to meet market demands or demands in a timely fashion. Different possibilities may be thought about in the conceptual drawing board, and also the technical and also financial feasibility of each alternative will be assessed and compared in order to select the very best feasible job. The construction industry in China is forecast to grow by 7.7% in 2021, driven by strong Y-o-Y growth in the first quarter, reflecting the comparison to the previous year's period when construction work was halted across most of the country. Thereafter, the construction industry is expected to record an average annual growth of 4.2% between 2022 and 2025. The industry's growth over the forecast period is expected to be driven by investments on new infrastructure, including investment in the areas of 5G networks, Artificial Intelligence, the Internet of Things, and data centers. According to the government-backed think tank, the China Electronic Information Industry Development, the country is expected to spend CNY10 trillion (US$1.4 trillion) on new infrastructure projects between 2020 and 2025. This study evaluated factors affecting construction sector performance: explanatory factor analysis evidence from China. From the literature reviewed, it was established that entering the Chinese construction market is still seen as exciting but difficult by many foreign contractors and consultants. The study found out that rising material and labor costs, labor woes, increased competition and shrinking profit margins were some of the challenges construction firms in Chin face. The study concludes that the implementation of construction safety laws and the rate of subcontracting are relevant factors affecting construction sector in China, while neither the extent of using temporary workers, nor the availability of resources, nor the level of per capita GDP has any effects. Keywords. Construction sector, safety performance, construction sector, labor costs, increased competition, shrinking profit margins

Front-of-Pack Labeling in Chile: Effects on Employment, Real Wages, and Firms’ Profits after Three Years of Its Implementation

This study evaluates the impact of Chile’s innovative law on Food Labeling and Advertising, enacted in June 2016, on employment and real wages and profit margins for the food and beverage manufacturing sectors in the 2016–2019 period, using unique company-specific monthly data from Chile’s tax collection agency (measuring aggregate employment, real wages, average size of firms, and gross profit margins of the food and beverage manufacturing sector). Interrupted-time series analyses (ITSA) on administrative data from tax-paying firms was used and compared to synthetic control groups of sectors not affected by the regulations. ITSA results show no effect on aggregate employment nor on the average size of the firms, while they show negligible effects on real wages and gross margin of profits (as proportion of total sales), after the first two stages of the implementation (36 months), despite significant decreases in consumption in certain categories (sugar-sweetened beverages, breakfast cereals, etc.). Despite the large declines found in purchases of unhealthy foods, employment did not change and impacts on other economic outcomes were small. Though Chile’s law, is peculiar there is no reason to believe that if similar regulations were adopted elsewhere, they would have different results.

Commercial fishing, Inuit rights, and internal colonialism in Nunavut

This paper considers the degree to which the concept of ‘internal colonialism’ accurately describes the political economy of Nunavut’s commercial fisheries. Offshore fisheries adjacent to Nunavut were initially dominated by institutions based in southern Canada, and most economic benefits were captured by southern jurisdictions. Decades of political struggle have resulted in Nunavut establishing a role for itself in both the management of offshore resources and the operation of the offshore fishing industry. However, key decisions about fishery management are made by the federal government, and many benefits from Nunavut’s offshore fisheries continue to accrue to southern jurisdictions. The concept of internal colonialism is therefore a useful concept for understanding the historical development and contemporary conflicts over offshore fisheries. By contrast, Nunavut’s inshore fisheries were established as community development initiatives intended to promote economic well-being and stability. While inshore fisheries primarily benefit Inuit community economies, the growth of inshore fisheries has been hampered by small profit margins, inadequate marine infrastructure, and a dearth of baseline data. The federal government’s failure to support the expansion of inshore fisheries is a manifestation of internal colonialism, insofar as it reflects an unequal distribution of public infrastructure and research.

Leveraging Parrondo's paradox for sustainable agriculture

Rotating crops is a sustainable agricultural technique that has been at the disposal of humanity since time immemorial. Switching between cover crops and cash crops allows the fields avoids overexploitation due to intensive farming. How often the respite is to be provided and what is the optimum cash cover rotation in terms of maximising yield schedule is a long-standing question tackled on multiple fronts by agricultural scientists, economists, biologists and computer scientists, to name a few. Dealing with the uncertainty in the field due to diseases, pests, droughts, floods, and impending effects of climate change, is important to consider when designing the cropping strategy. Analysing this time-tested technique of crop rotations with a new lens of Parrondo's paradox allows us to improve upon the technique and use it in synchronisation with the burning questions of contemporary times. By calculating optimum switching probabilities in a randomised cropping sequence, suggesting the optimum deterministic sequences and judicious use of fertilisers, we propose methods for improving crop yield and the eventual profit margins for farmers. Overall we also extend the domain of applicability of the seemingly unintuitive paradox by Parrondo, where two losing situations can be combined eventually into a winning scenario.

Audience Study as Catalyst in Sustainable Nollywood Yoruba Film Industry

Nollywood is the representation of the socio-cultural apparatus of Nigeria in the world cinema. Tis paper evaluates generally, film audience’s perspective in Nollywood films, and in particular non-native actors in native films. Most often, stakeholders in the film industry do not access, or are flagrantly ignorant of viewer’s feedback on the state of their production in all media of communication. Some determine this with the profit margins. Tis paper therefore evaluates the audience’s perception of non-native actors in Nollywood Yoruba native films. The area of concentration is on the quality of audience reception on native films by non-native actors. Cluster sample method is the tool of research for this paper, in which questionnaire samples were distributed among film viewers in the Yoruba speaking area in Nigeria. This is done in order to determine the performance ratings of non-Yoruba native actor’s skill of character interpretation in cultured films. Theoretical framework is anchored on Bandura’s Social Learning theory, which concentrates on impact of artistic models on the audience’s psyche. Findings reveal that audience ratings of non-native actors in Yoruba cultured films is poor, compared with their characterization in non-native setting, and this is due to wrong casting by directors who cast them against all odds in order to improve their profit margin. Findings also reveal the importance of audience study as a necessity in pre-production considerations of film shooting.

Covid-19 and school closure: Examining the impact on private mid-range and low-fee private basic schools in Ghana

The Covid-19 lockdown implemented globally to prevent the spread of the virus has led to the closure of schools. However, insight into the impact of the lockdown on private schools and the responses it has elicited is limited, especially across the African continent. This article examines the impact of the lockdown on private basic schools in Ghana and how they responded to the closure. Following “organizational ambidexterity” and qualitative interviews with nine proprietors of private schools in Ghana, the study found that the schools’ closure had a negative impact on private basic schools in five crucial ways: disruption to teaching and learning, difficulty in retrieving unpaid teaching fees, inability to pay staff salaries and statutory payments, underutilization of existing assets, and the cost of storing unused stock. The article offers suggestions to the government to support private schools that are broadening educational access at thin profit margins.

Postfundamentals Price Drift in Capital Markets: A Regression Regularization Perspective

Regression regularization techniques show that deviations of accounting fundamentals from their preceding moving averages forecast drifts in equity market prices. Deviations-based predictability survives a comprehensive set of prominent anomalies. The profitability applies strongly to the long leg and survives value weighting and excluding microcaps. We provide evidence that the predictability arises because investors anchor to recent means of fundamentals. A factor based on our fundamentals-based index yields economically significant intercepts after controlling for a comprehensive set of other factors, including those based on profit margins and earnings drift. This paper was accepted by Gustavo Manso, finance.

Measuring the Economic Impact of COVID-19 on the UK’s Leisure and Sport during the 2020 Lockdown

This research evaluates the effect of the SARS-CoV2 pandemic on sport Gross Domestic Product (GDP) and consumer expenditure in the leisure sector in the United Kingdom (UK). The leisure sector is divided into leisure at home and away from home, examining in this way the different patterns that emerged because of the national lockdown in 2020. The effect on sport GDP is examined using the Office for National Statistics (ONS) surveys and the UK Sport Satellite Account (SSA). The study found that, because of its reliance on human contact, sport GDP is likely to decline by more than twice the rate of the overall economy. Furthermore, this finding is consistent with the 2020 consumer expenditure on leisure that shows increases in spending on home leisure but also a huge decline in spending on out-of-home entertainment. The decline in GDP is extremely likely to put pressure on profit margins and hence threaten the survival of private enterprises, raising issues of sustainability under conditions of a pandemic. Increases in long-term public funding for reducing sport inequalities should be considered along with short-term relief packages for the sport sector. Additional policy suggestions are offered to address these issues.