Financial systems and mechanisms of growth in different conditions of country risk

This article uses panel data from 1976 to 2003 to investigate the ways in which banking and stock markets influence economic growth in situations of high and low country risk. The mean and Standard Deviation (SD) of country risk are adopted to classify 28 countries into Low Risk Low Volatility (LRLV) and High Risk High Volatility (HRHV) subgroups. Through the technique of error correction-based panel co-integration developed by Westerlund (2007), several results are obtained. First, LRLV countries can expand the capitalization of stock market to enhance long-term economic growth. Second, HRHV countries, on the other hand, use two distinct strategies to promote long-term economic growth. Initially they develop their equity markets, which promote economic growth directly. Strengthened equity markets, in turn, aid in the development of credit markets, which subsequently brings an economic boom. Finally, regardless of selected subgroups, the contribution of stock market capitalization to economic growth appears to be substantially larger than that of bank credit, highlighting the importance of stock markets.

Banking on ICT : how the Tuvalu financial services industry benefits from investment in ICT

Financial service industries in every country have made substantial investments in information and communication technologies (ICTs). What have been the benefits from this investment? This research extends the decades of research into the relationship between ICT investment and organisational performance in several ways. First the study uses the resource-based value framework to propose an ICT Investment Model to comprehensively describe the relationship between ICT investment and organisational performance. Second, the research identifies nine specific benefits the Tuvalu financial services industry (TFSI) has received from ICT investment. Third, the study does so with a qualitative research methodology in a specific industry in a developing country (most studies in this area are quantitative and have a national or multi-industry perspective in an economically developed country). Key benefits from ICT investment in the TFSI include improvements in collaboration, efficiency, data monitoring and communication.

Do financial reforms improve the performance of financial holding companies? The case of Taiwan

We examine the performance of financial holding companies (FHCs) in Taiwan after the financial reform that removes the separation of banking, securities, insurance, and other financial services. Using data envelopment analysis, we find that FHCs fail to improve technical efficiencies in the post-reform era. They also do not outperform independent commercial banks after the financial reform. Lower technical efficiency caused by excess operating expenses appears to be the primary source of inefficiency. While scale efficiency may improve as FHCs grow larger, the benefits are marginal and insufficient to offset the potential costs of organizational diseconomies. Our findings suggest that increasing the size and scope of financial activities alone do not necessarily improve the performance of financial firms.

Gender differences in financial barriers to primary health care in New Zealand

Gender differences in health status and use of health care services have been established in the developed world; less attention, however, has been paid to gender differences in financial barrier to primary health care. Such barrier, however, represent potentially avoidable mortality and morbidity. This paper aims to examine gender differences in financial barrier to primary health care in New Zealand.

Thai hedging practices post-Asian financial crisis

This paper provides survey evidence captured from a sample of 113 respondents to a 2008 questionnaire sent to 344 companies in Thailand. The study examines Thai hedging practices following the Asian Financial Crisis of 1997. Thai companies, like their international counterparts, rely predominantly on matching and forward contracts to hedge transaction exposure. Thai companies, however, appear to be less rigorous when it comes to internal control and supervision of derivative activity. It is recommended that Thai companies improve their risk management practices by putting into place a documented hedging policy, which includes a requirement that senior staff be actively engaged in the risk management activities of the firm.

The effect of financial constraints, investment policy, product market competition and corporate governance on the value of cash holdings

This study empirically investigates the value shareholders place on excess cash holdings and how shareholders’ valuation of cash holdings is associated with financial constraints, firm growth, cash-flow uncertainty and product market competition for Australian firms from 1990 to 2007. Our results indicate that the marginal value of cash holdings to shareholders declines with larger cash holdings and higher leverage. However, firms that are more financially constrained, that have higher growth rates and that face greater uncertainty exhibit a higher marginal value of cash holdings. These findings are consistent with the explanation that excess cash holdings are not necessarily detrimental to firm value. Firms with costly external financing and that also save more cash for current operating and future investing needs find that the market values these cash hoarding policies favourably. Finally, there is limited evidence of an association between various corporate governance measures and the value of cash holdings for a shorter sample period.

Financial inclusion and financial integrity: aligned incentives?

The Financial Action Task Force embraces financial inclusion as complementary to anti-money laundering and counterterrorist financing, as it enhances transparency. This support is based on the premise that the increased use of formal financial services leads to a reduction of usage of informal services. We present evidence on eight African countries that both are not negatively associated. Moreover, informal employment and cash preference reduce the inclination to use mobile financial services. If an increase in transparency acts as disincentive to use formal services, the alignment of financial inclusion and integrity will fail.

Out of the shadows: a discussion on law reform for the prevention of financial abuse of older people

Financial abuse of older people too often lives ‘in the shadows, hidden by fear and shame’. This and the protective love between family members can screen changes that are critical to an older person’s financial and living arrangements. Rather than a single event, it is usually a series of well-intentioned but ill-considered financial acts, which at some point tips over into abuse interwoven with an intricate web of family relationships. Was a transfer of title or a loan to an adult child really misappropriation? Has thoughtlessness become undue influence or even theft?