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%.

6

Authors: Elham Darbandi, Sayed Saghaian

In a competitive market, a rise in output prices at the wholesale level is expected to be transferred to the consumers via retailers. We have an asymmetric price transmission when an increase in the producer price transfers faster and stronger to the consumers comparing to a reduction in the producer price. The research question here is how product heterogeneity and differentiation can affect the price transmission in the carrots markets. Carrots consumption in the U.S. has been increasing significantly over the past few decades. We investigate the price linkages of carrots at terminal and retail levels for two different qualities of this product, organic and conventional. According to the VECM model results, the speed of price adjustment in the conventional carrot market is 0.354 in absolute value, while for the organic carrot market it is 0.026. This result is an indication of asymmetric price transmission with respect to speed. It shows that the price adjustment in the organic carrot market is relatively slow, pointing to inefficiency in this market. These results have important policy implications, especially in case of price shocks, there could be differential welfare consequences for both consumers and producers.

7

Authors: Li Hui

The global financial crisis and the outbreak of the banking crisis in the Eurozone have had a great impact on the macro economy. The influence of macroeconomic uncertainty on monetary policy has become the focus of scholars' research. Based on data from 2011 to 2016, public information indices and macroeconomic variables were used to construct the SVAR model. The effects of quantitative monetary policy and price monetary policy on the achievement of output targets and price targets under uncertainty conditions are analyzed. The impact of the acquisition of public information on the effectiveness of monetary policy was explored, which indirectly confirmed the effect of uncertainty on policy under the influence of information.

9

Authors: Chuntao Wu, Mai Xianmin, Tingting Yuan, JingTing Yuan

This paper studies the effects of tourism development on innovation and diversification of ethnic handicrafts in a newly development natural disaster tourism site – Beichuan Qiang Tourism Area in Sichuan, China. Beichuan was one of the worst-affected regions during the Great Sichuan Earthquake of May 12, 2008. Fieldworks including site visit, participation and observation, semi-structure interview with the local elites and tourists’ questionnaire survey are methods used by this paper. The results indicate that tourism development has leaded to a diversity of the embroidery handicrafts and is re-shaping the embroidery industries now. It is argued that local Qiang embroidery enterprises should decrease the cost and tailor the products to increase the sales. The higher quality and authenticity of embroiders’ product should be emphasized so that tourists can see the reason for the higher price of the local hand-made products.

8

Authors: Xinyue Yu

In order to improve the competitiveness of China's international trade and alleviate the possible trade war with the United States, related data for 2000-2015 years are collected and collocated from the level of trade product structure of China and the United States. Based on the objective reality, and supported by the relevant theories of international trade, the current situation of trade structure of China and the United States is analyzed and summarized. Through the further accurate classification of trade goods, the changes and trends of three types of trade commodities, such as resource intensive, labor intensive and capital intensive types, are studied from various angles of change range of trade commodity structure, trade union degree, commodity coupling degree, and commodity - market coupling degree. This is not only of practical significance to the future trade relations between China and the United States, but also provides some new thinking for the future study of trade between the two countries.

17

Authors: Thanh Thi Nguyen, Dr. Ngoc Thi Bui

In 2013, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) provided a fairly comprehensive definition of internal control: “Internal control is a process affected by entity’s board of directors, management, and other personnel, it is designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance”. This definition indicates that internal control is indispensable to provide a reasonable guarantee for an organization's ability to achieve its goals and sustainable development. Currently, the internal control system in Vietnamese paper manufacturers has not met essential needs of the society. There are more than 500 paper manufacturing enterprises in the country, in which more than 90% are small enterprises, and in which internal controls are not effectively implemented. This paper examines reality of internal control in paper manufacturing enterprises in Northern Vietnam. Based on that, evaluation and measures are provided in order to improve internal control. Research results showed that there are five factors which directly affect internal control: control environment, risk assessment, control activities, information and communication, monitoring activities.