Journal of Advances in Economics and Finance

6

Authors: Ao Chen

In order to study the impact of international capital flow, monetary policy on commercial banks’ risk-taking, this paper uses the unbalanced panel data of 48 banks in China from 2004 to 2018 China as the research sample. The GMM estimation method is used in the empirical test, empirical results show that (1) Both quantitative-based and price-based monetary policy have a significant impact on the stability of commercial banks in China. Loose monetary policy weakens the ability of commercial banks to identify and assess risks, which increases their risk-taking level. (2) The international capital flow index has a significant impact on the stability of China's commercial banks. International capital flows will increase bank risk levels and significantly reduce the stability of commercial banks, and vice versa. (3) Under the combined effect of interest rates and international capital flows, the robustness of commercial banks has been significantly magnified.

8

Authors: Yaya KEHO

This study investigates the relationship between consumption and income from the Absolute Income Hypothesis perspective for the Economic Community of West African States (ECOWAS). As a modelling strategy, we use the Common Correlated Effect Mean Group (CCEMG) estimator that deals with both slope heterogeneity and cross-sectional dependence. The results show that consumption strongly depends upon current income in all the countries, thereby providing support for the Keynesian theory of consumption. The results also reveal heterogeneity in the elasticity of consumption with respect to income. Therefore, tax reductions may be a good instrument to stimulate household consumption in ECOWAS countries.

5

Authors: DING JiaJun, CHEN Sihang

Scientific and technological innovation, industrial upgrading and economic growth are the hotspots of current theoretical and practical research, and they are also important issues in a country's macroeconomic development. This paper takes the interactive mechanism of scientific and technological innovation, industrial upgrading and economic growth as the research content, and analyzes the connotation and interactive mechanism of scientific and technological innovation, industrial upgrading and economic growth from the theoretical and practical aspects, in order to clarify the endogenous driving force and mechanism of economic growth in the new era.

12

Authors: Ivivi Joseph Mwaniki

A search for a distribution which adequately describes the dynamics of log returns has been a subject of study for many years. Empirical evidence has resulted in stylized facts of returns. Arguably, in this study, the three components of returns, mean equation part, the changing variance part and the resulting residuals are determined and their corresponding parameters estimated within the proposed framework. Spectral density analysis is used to trace the seasonality component inherent in the standardized residuals. Empirical data sets from eight different indexes and common stock are applied to the model, and results tabulated in support of the resulting framework.

4

Authors: Shengquan Che

Around the globe the understanding and assessment of the sustainability of farming enterprises is among the most topical academic and practical issues. Despite its importance there are few profound studies on sustainability of different types of farming enterprises during European Union Common Agricultural Policy (EU CAP) implementation. This book review tries to present and assess a recently published book called “Sustainability of Farming Enterprises in Bulgaria” by one of the biggest academic publishers in the world and written by an internationally recognized expert in the area - Professor Hrabrin Bachev of the Institute of Agricultural Economics in Sofia, Bulgaria. In this book, the author suggests a practical and holistic approach for assessing the sustainability of farming enterprises in the conditions of EU CAP implementation in Bulgaria. He incorporates the later developments in the area and suggests an interdisciplinary, holistic and practical approach for assessing the sustainability of farming enterprises. Particularly, he successfully includes “new” important governance and institutional aspects in the overall sustainability assessment. The first of its kind evaluation is made on integral, governance, economic, social and environmental sustainability of farming enterprises of different juridical type, size, production specialization, and ecological and geographical location in the country. Critical components enhancing or compromising the aspects and overall sustainability of farming enterprises of diverse type are also identified and perspectives for farming development in Bulgaria envisaged. In conclusion directions for further research as well as for amelioration of farm management and public intervention in the sector are elaborated. The suggested approach could be easily adapted and used by farmers and other interested parties in the country and abroad. This work is a must read and further expands on the previous studies in this important and rapidly evolving area.

5

Authors: Zhuang Chen

In the new era, in China, urbanization is constantly making progress, and the boundaries between the urban and rural areas are increasingly blurred. From an economic perspective, the concept of rural ecotourism is currently emerging. In this paper, the issues in rural ecotourism development is taken as the starting point, and the purpose is to come up the with right solutions for the corresponding issues in order to implement the sustainable development and virtuous circle of rural ecotourism through measures including system improvement, local conditions, cultural integration, brand building, talent development, and the Internet, etc. thus achieving the major strategic goal of wellbeing of the people and the protection on the ecological environment.

9

Authors: Arshad Hayat, Philip Katz

The main aim of this paper was to estimate the exchange rate pass-through into import prices and the overall inflation rate in the Czech Republic in the light of the Czech National Bank exchange rate intervention policy. We used monthly data from 2000-2017 and used Markov Switching model, as developed by Hamilton (1989), in an attempt to capture the non-linear relationship of the exchange rate-pass through in different regimes of exchange rate intervention vs no intervention in the exchange rate by the CNB. The paper found the presence of two states in the economy and further found that although the exchange rate (ECzk/Eur) does not have a significant effect during state 1, the effect becomes significant in state 2 where the pass-through rate into Czech import prices is 42%. This pass-through did not follow into the overall inflation rate. Furthermore, we estimated an 86% probability of staying in state 2 when the economy is in state 2. This means that the Czech economy will spend considerably more time in state 2 where the pass-through into import prices is 42%.