China’s stimulus spree may crowd out private activity

2019 ◽  
Keyword(s):  
Content Type ◽  
Private Activity ◽  
Crowd Out

Headline CHINA: Stimulus spree may crowd out private activity

Capital flows and domestic investment: new evidence from OPEC countries

2019 ◽  
Vol 11 (4) ◽  
pp. 505-532
Author(s):  
Oyakhilome Ibhagui ◽  
Kolawole Olawole
Keyword(s):  
Emerging Markets ◽  
Capital Flows ◽  
Economic Benefits ◽  
Sub Saharan Africa ◽  
Domestic Investment ◽  
Content Type ◽  
Distributed Lag ◽  
Crowd Out ◽  
Economic Bloc ◽  
The Impact

Purpose In the past few decades, there have been phenomenal increases in capital flows to developing and emerging markets. However, a key question that has largely remained unanswered is whether the expected economic benefits have materialized. Existing studies have concentrated on the impact of capital flows on domestic investment in developing countries, emerging markets, transition economies, ECOWAS and sub-Saharan Africa, leaving an important economic bloc, OPEC. This paper aims to assess the impact of capital flows on domestic investment in OPEC countries – with a view to determining whether capital flows crowd in or crowd out domestic investment. Design/methodology/approach For the empirical analysis, the authors used the autoregressive distributed lag (ARDL) technique. Findings The empirical results provide evidence that capital flows crowd out domestic investment in all the OPEC countries considered, except for Angola and Kuwait. The authors further extended the analysis to disaggregated capital flows (FDI, portfolio investment). Evidence from the different capital flows components revealed that, for most countries, the different capital flows components also crowd out domestic investment. Originality/value To the best of the author’s knowledge, no study has empirically addressed the effect of capital flows on domestic investment in OPEC countries. This study, therefore, constitutes an interesting empirical contribution and a novel idea in the literature.

Do government subsidies crowd out technological capabilities?

2020 ◽  
Vol 14 (4) ◽  
pp. 895-913
Author(s):  
Shuangying Chen ◽  
Feng Fu ◽  
Tingting Xiang ◽  
Junli Zeng
Keyword(s):  
Fixed Effects ◽  
Transitional Economy ◽  
Future Research ◽  
High Tech ◽  
Crowding Out ◽  
Technological Capabilities ◽  
Firm Innovation ◽  
Content Type ◽  
Government Subsidies ◽  
Crowd Out

Purpose Extant research on the crowding-out effects of government subsidies on the positive role of firm innovation resources or activity remains limited. This paper aims to investigate the crowding-out effects of subsidies on the utilization of technological capabilities and also the contingency mechanisms of market-oriented economy based on the resource-based view (RBV), given the co-existence of the subsidies and technological capabilities for firm innovation in transitional economy. Design/methodology/approach This paper used panel data of 115 Chinese high-tech firms from 2002 to 2010. Fixed-effects model was used to test several hypotheses. Findings This paper empirically demonstrates that the subsidies crowd out the utilization of firms’ technological capabilities for invention outcomes in the near-term. Furthermore, this paper finds that the crowding-out effects are weaker when firms have high export intensity or are located in provinces with high market-oriented systems. Research limitations/implications The findings of this paper apply to Chinese firms. Future research could test their generalizability to different samples and other transitional economies. Practical implications This paper highlights the crowding-out effects of the subsidies, revealing that high-tech firms should balance the direct effects and crowding-out effects of the subsidies. Originality/value This paper highlights the neglected interactions between the subsidies and technological capabilities based on RBV and provides a more nuanced understanding of the crowding-out effects of the subsidies in transitional economy.

Does FDI crowd out domestic firms? Micro-level evidence from the Republic of Korea

2018 ◽  
Vol 22 (4) ◽  
pp. 405-416
Author(s):  
Hyelin Choi
Keyword(s):  
Foreign Investment ◽  
Small Firms ◽  
Advanced Technology ◽  
Foreign Firms ◽  
Crowding Out ◽  
Firm Level ◽  
Content Type ◽  
Domestic Firms ◽  
Crowd Out ◽  
The Impact

PurposeThe purpose of this paper is to investigate the impact of the foreign investment on the exit and sales of the domestic firms. Furthermore, it studies whether domestic firms undergo different influences by foreign firms according to the size of domestic firms.Design/methodology/approachKorean firm-level data for the period of 2006 through 2013 provided by Statistics Korea are used to study the impact of the foreign investment on the exit and sales of the domestic firms.FindingsThe result shows that foreign firms crowd out small firms from the market and take their shares in the domestic market. On the other hand, larger firms rather enjoy positive spillover effect from foreign firms, reducing its exit probability and increasing sales. It may be that large firms have enough competitiveness and ability to learn and apply the advanced technology of the foreign firms.Practical implicationsDespite the strong belief on the positive impacts of the foreign firms such as knowledge spillovers or job creation, there might be crowding-out or market-stealing effect from the presence of foreign firms. If the latter effect is larger than positive effect, the incentives provided by host country government to the multinational firms cannot be justified. In this regard, the question addressed in this paper is very important.Originality/valueWhile most of previous papers have focused on the impacts of the foreign firms on productivity of the domestic firms, this paper deals with their impacts on the exit and sales of the domestic firms in order to examine more direct crowding-out and market-stealing effect of foreign firms.

Kazakhstan eyes multiple gains from Chinese investment

2017 ◽  
Keyword(s):  
South Korea ◽  
East Asian ◽  
Local Production ◽  
Investment Activity ◽  
Content Type ◽  
Chinese Investment ◽  
Limited Success ◽  
Crowd Out ◽  
The Government

Subject Kazakhstan's eastward tilt. Significance Kazakhstan has been adept at building ties with Western and East Asian states without upsetting traditional ally Russia. Economic links to China have grown disproportionately in recent years, thanks to Kazakhstan's search for investors, and the opportunities Beijing sees in Central Asia's largest and most advanced state. Efforts to expand trade with Japan and South Korea and attract investment there have had limited success. Impacts Chinese investment activity in Kazakhstan threatens to crowd out other Asian investors. Steep increases in Chinese imports into Kazakhstan will undercut local production. The government will have to manage grassroots fears of Chinese encroachment.

Further Chinese stimulus will target private activity

2019 ◽  
Keyword(s):  
Content Type ◽  
Private Activity

Headline CHINA: Further stimulus will target private activity

The sibling crowd-in effect of time and cash assistance to elderly parents

2020 ◽  
Vol 47 (1) ◽  
pp. 51-63
Author(s):  
Luis J. Gonzalez ◽  
Carlos Lopes
Keyword(s):  
Unobserved Heterogeneity ◽  
Content Type ◽  
Elderly Parents ◽  
Cash Assistance ◽  
Public Transfers ◽  
Crowd Out ◽  
The Individual ◽  
Practical Implications ◽  
Retirement Study ◽  
Private Transfers

PurposeThe purpose of the current study is to analyze how the assistance that one's siblings provide to their parents impacts one's own contributions. Siblings' assistance is measured as the total combined number of hours and the total combined cash that one's siblings provide, excluding one's own level of contributions.Design/methodology/approachWe use first differences and instrumental variables approaches to address unobserved heterogeneity and endogeneity of assistance provided to one's parents.FindingsA 10 percent increase in siblings' time and cash assistance is associated with an increase in the individual levels of adult children's time contributions by about 6.72 percent and cash contributions by 7.43 percent.Practical implicationsCrowd-in is meaningful from a policy perspective as it suggests that upstream transfers are unlikely to crowd-out similar transfers from siblings. Private transfers are unlikely to decrease in response to public transfers.Social implicationsPolicy that incentivizes private transfers from one individual may lead to increased levels of transfers from their siblings. Policies such as tax incentives that encourage contributions from adult children are likely to have a magnified effect.Originality/valueOur approach is novel in that we utilize data on full sibling sets using the children of the Health and Retirement Study respondents. This allows the consideration of crowding effects that transfers from siblings have. Other authors perform tests to determine whether or not altruistic transfer motives are present. With altruistic motives, public transfers are expected to crowd-out private transfers. Our approach focuses on crowding behavior regardless of the underlying motives.

Representative bubbles and deleveraging

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Francesco Strati
Keyword(s):  
Simple Model ◽  
Theoretical Approach ◽  
Design Methodology ◽  
Sufficient Conditions ◽  
Sufficient Condition ◽  
Demand Side ◽  
Content Type ◽  
Real Effects ◽  
Crowd Out ◽  
Practical Implications

PurposeThe causes for the formation of a bubble in the collateral market when agents are provided with homogeneous expectations are explored. This bubbly dynamics will define a sufficient condition for deleveraging.Design/methodology/approachTheoretical approach with neutral deleveraging.FindingsFindings of the study are defined sufficient conditions for a behavioral rational bubble's formation in a market of collateral and the subsequent deleveraging. The crowd-in effect of the representative bubble is caused by errors in extrapolating information and thus by representativeness, while the crowd-out effect of deleveraging is set off by reverting to a rational heuristic.Research limitations/implicationsThe limit is that it is a homogeneous expectations approach, the implication is that cannot be rational speculation.Practical implicationsEven in a simple model of homogeneous expectations a bubble may arise with serious effect on the demand side: models that detect just rational mispricings cannot account for behavioral components that have financial and real effects.Originality/valueThe paper defines how deleveraging may occur even in case of homogeneous expectations. The latter should not be seen just as a limit but also as a signal of the importance of being aware of behavioral components.

A study of incentives in charitable fundraising

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ernan Haruvy ◽  
Peter Popkowski Leszczyc
Keyword(s):  
Latent Variable ◽  
Field Experiments ◽  
Monetary Incentives ◽  
Content Type ◽  
Lack Of Control ◽  
Short Run ◽  
Extrinsic Motivators ◽  
Crowd Out ◽  
Intrinsic Motivators ◽  
Practical Implications

Purpose The purpose of this study is to determine how self-driven (intrinsic motivators) and monetary incentives (extrinsic motivators) are mediated by an effort to affect fundraising outcomes. This integration sheds light on crowding out between the two types of incentives as well the drivers of fundraising outcomes, specifically effort and donations. Design/methodology/approach A field experiment is conducted over a two-month period, involving an online fundraising campaign with over 300 volunteers assigned to one of five different incentive conditions. A special website was created to monitor fundraiser efforts. Fundraisers filled out pre- and post-study surveys. Findings While high monetary incentives result in the greatest immediate increase in funds raised, they crowd out future intentions to volunteer once incentives are withdrawn. Mediation analyzes show that fundraiser effort fully mediates the effect of intrinsic motivators and partially mediates the direct effect of extrinsic motivators on funds raised. Research limitations/implications A major limitation of field experiments is the lack of control, resulting in higher variation. However, while a more controlled experiment will reduce this variation, this goes at the expense of lower external validity. Practical implications Results indicate that – at least in the short run – monetary incentives can result in higher fundraising outcomes. However, this goes at the expense of a reduction in future volunteering once the incentives are withdrawn. Originality/value This study examines whether extrinsic or intrinsic motivators have a greater impact on funds raised and whether extrinsic motivators crowd out future intentions to volunteer. Different from previous research in which effort is a latent variable, the effort is directly observed over time.

Electoral loss will fatally weaken South Korea's Park

2016 ◽  
Keyword(s):  
Presidential Election ◽  
Foreign Affairs ◽  
Election Campaign ◽  
Content Type ◽  
National Assembly ◽  
Crowd Out ◽  
Sound Policy ◽  
Presidential Election Campaign

Significance Having controlled the outgoing 19th National Assembly with 157 of its 300 seats until recently, Saenuri is now reduced to 122. Impacts Parliamentary gridlock and party in-fighting, already damaging, will worsen. Long-delayed economic bills, especially contentious labour reforms, now stand scant chance of enactment. The presidential election campaign starts now; factional and populist politics will crowd out sound policy. Provided they can unite (which will be challenging), liberals are now better placed to regain the presidency in December 2017. Park's weakness will extend to foreign affairs; even Seoul's allies know her authority is diminished and her days numbered.

Does the New Rural Pension Scheme crowd out private transfers from children to parents? Empirical evidence from China

2019 ◽  
Vol 11 (2) ◽  
pp. 411-430
Author(s):  
Manxiu Ning ◽  
Weiping Liu ◽  
Jinquan Gong ◽  
Xudong Liu
Keyword(s):  
Adult Children ◽  
Low Income ◽  
Rural China ◽  
The Elderly ◽  
Pension Scheme ◽  
Content Type ◽  
Heterogeneous Effects ◽  
Crowd Out ◽  
Pension Payment ◽  
Private Transfers

Purpose The purpose of this paper is to examine the effect of New Rural Pension Scheme (NRPS) on the private transfer behavior of the non-co-resident adult children to their elderly parents in rural China, and hence address the income redistribution effectiveness of public program for the elderly in rural China. Design/methodology/approach Pooled data from two waves of the China Health and Retirement Longitudinal Study and the combination of regression discontinuity design and difference in difference method are used to perform the analysis. Findings No evidence is found that pension payment from NRPS program does significantly crowd out the economic support from the adult children to their elder parents. The heterogeneous effects at different income percentile indicate that pension payment significantly increases the probability of receiving gross transfers and likelihood of the net transfer being positive for those elderly individuals with low income; in particular, the distinctive “family binding” arrangement may dramatically contribute to increasing the probability of receiving private transfers for the pension recipients. Originality/value The empirical findings would have far-reaching implications for the efficacy of public transfer or re-distributive programs such as NRPS; for the rural elderly, in particular, the unique “family binding” mechanism under the NRPS program may have positive welfare effects on the intended beneficiaries. Furthermore, an understanding of the inter-linkage between informal arrangements of elderly support and social re-distributive program provides further insight into the design of social security systems targeted to the vulnerable group in developing countries.

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