Economics - Research Publications
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ItemNo Preview AvailableInward foreign investment screening targets China: interdisciplinary perspectives*(Edward Elgar Publishing, 2023-06-28)Screening of inward foreign investment in numerous countries worldwide has heightened in recent years for a range of reasons, one of which is the volume of Chinese outward investment. Moulding screening policies around concerns about Chinese investment has been a common pattern, particularly among developed countries and allies of the United States. The application of screening measures to Chinese investments in particular is also seen in recent practice in numerous countries. These developments create potential inconsistencies with international investment law, at least for those countries with an international investment agreement with China. The 2020 arbitral award in Global Telecom v Canada shows that even a provision that explicitly excludes investment screening decisions from a bilateral investment treaty may not apply to prevent all related investment treaty claims. The increased use of screening as a policy tool, with respect to China and otherwise, also raises questions about economic rationale and impact. Put simply, blocking a foreign investment proposal may have negative effects on shareholders, jobs and the economy itself, while even the existence of a restrictive screening regime and the threat of the imposition of conditions on a deal may dampen the appeal for foreign investors.
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ItemNo Preview AvailableThe dragon Down Under: the regional labour market impact of growth in Chinese imports to Australia(ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD, 2023-11-02)
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ItemNo Preview AvailablePricing extreme mortality risk in the wake of the COVID-19 pandemic(ELSEVIER, 2023-01)In pricing extreme mortality risk, it is commonly assumed that interest rate and mortality rate are independent. However, the COVID-19 pandemic calls this assumption into question. In this paper, we employ a bivariate affine jump-diffusion model to describe the joint dynamics of interest rate and excess mortality, allowing for both correlated diffusions and joint jumps. Utilizing the latest U.S. mortality and interest rate data, we find a significant negative correlation between interest rate and excess mortality, and a much higher jump intensity when the pandemic experience is considered. Moreover, we construct a risk-neutral pricing measure that accounts for both diffusion and jump risk premia, and we solve for the market prices of risk based on mortality bond prices. Our results show that the pandemic experience can drastically change investors' perception of the mortality risk market in the post-pandemic era.
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ItemNo Preview AvailableAre Employment Protection Laws for Persons with Disabilities Effective in a Developing Country?(University of Chicago Press, 2023-04)This paper investigates the impact of a law protecting the employment rights of persons with disabilities in Cambodia. Similar to studies in high income countries, we find that Cambodia’s national disability law did not improve the employment situation of persons with disabilities, and may have worsened it, four years after implementation. The reduction in employment and hours worked of disabled persons following the law’s introduction is concentrated among employees, females, young persons, those with less than a primary school education, and in the industrial sector. We explore supply and demand side explanations for the disability law’s unintended effect. On balance, the most likely explanation for the reduced work activity of disabled workers is lower demand for their labor from employers facing workplace accommodation costs and in an environment where employment quotas for disabled workers appear to have been set at non-binding levels.
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ItemNo Preview AvailableINVESTMENT HOUSING TAX CONCESSIONS AND WELFARE: A QUANTITATIVE STUDY FOR AUSTRALIA(WILEY, 2023-01-01)Abstract This article builds a general equilibrium overlapping generations (OLG) model with heterogeneous agents to study the welfare implications of investment housing tax concessions in Australia. Removing these concessions substantially reduces the landlord rate and the use of debt. There is a steady‐state welfare gain equivalent to a 0.13% increase in lifetime consumption if the additional tax revenue from removing the concessions is used to finance a lump‐sum transfer to all households. That welfare gain rises to 1.45% if the extra tax revenue is used to provide a transfer to the housing‐poor in the form of rental assistance. Over the transition, around 70% of existing households experience a welfare gain and there are important distributional effects in both cases.
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ItemNo Preview AvailableThe Human Cost of Collusion: Health Effects of a Mexican Insulin Cartel(Oxford University Press (OUP), 2023-10-10)Abstract Despite recent attention to the role of competition in determining health outcomes in developed nations, little is known about how market power impedes access to quality care in lower-income countries. This paper studies the effects of policy changes that stopped collusion among firms supplying insulin to one of Mexico’s largest health care providers. I document increased insulin utilization and decreased diabetes complications and mortality following the sudden drop in insulin prices caused by the cartel’s collapse. These adverse health outcomes expand the assessment of damages caused by the cartel. The findings highlight the importance of market design policies in health markets, particularly for low- and middle-income countries.
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ItemRecent developments of the autoregressive distributed lag modelling framework(Wiley, 2023-02-01)We review the literature on the autoregressive distributed lag (ARDL) model, from its origins in the analysis of autocorrelated trend stationary processes to its subsequent applications in the analysis of cointegrated non-stationary time series. We then survey several recent extensions of the ARDL model, including asymmetric and non-linear generalisations of the ARDL model, the quantile ARDL model, the pooled mean group dynamic panel data model and the spatio-temporal ARDL model.
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ItemIntra-industry spill-over effect of default: Evidence from the Chinese bond market(WILEY, 2021-09)Abstract We investigate the intra‐industry spill‐over effect of defaults in the Chinese bond market by using a sample of public corporate debt securities for the period 2014–2018. We find that both industry portfolios and individual firms witness a strong contagion effect, which further spreads to the primary bond market, triggering a surge in the debt financing cost for default industries. Moreover, this contagion effect is stronger for low‐competition industries and regulated industries, as well as when a default happens to state‐owned enterprises. Better information access and higher bond liquidity alleviate the contagion effect, lending support to the information updates and liquidity dry‐up hypotheses.
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ItemThe asymmetric response of dividends to earnings news(Elsevier, 2023-06)We provide new evidence of sign asymmetry in dividend payout policy in the postwar period in the U.S. Using a nonlinear autoregressive distributed lag model, we show that managers: (i) smooth the time-path of dividends relative to earnings; (ii) target a higher long-run payout ratio when earnings increase than when they decrease; and (iii) cut dividends faster than they raise dividends. Our findings are consistent with existing research on the implications of agency problems and signaling effects for payout policy.
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ItemNo Preview AvailableAre working hours complements in production?(Elsevier BV, 2023-08-01)