urbanization openness emissions and energy intensity a study of increasingly urbanized emerging economies this paper analyses the impact of urbanization and trade openness on emissions and energy intensity in twenty two increasingly urbanized emerging economies we employ three second generation heterogeneous linear panel models as well as recently developed nonlinear panel estimation techniques allowing for cross sectional dependence the empirical results show that population density and affluence increase emissions and energy intensity while renewable energy seems to be dormant in these emerging economies but non renewable energy increases both co2 emissions and energy intensity in addition openness significantly reduces both pollutant emissions and energy intensity whereas urbanization significantly increases energy intensity but it is insignificant in increasing emissions this may be in part due to the recent increasing trend in adopting cleaner technologies in these increasingly urbanized developing economies

nonstationary term premia and cointegration of the term structure this paper proposes a model of the term structure with nonstationary term premia which exhibit a factor structure this explains the common empirical finding of a cointegrating rank smaller than the one predicted by the rational expectations hypothesis of the term structure an application to german interest rate data yields easily interpretable results

why is bank debt senior a theory of asymmetry and claim priority based on influence costs this theory can explain why bank debt is universally senior consistent with the presence of conflict lawyers and absolute priority violations in financial distress better organized banks would more strongly contest priority in financial distress if they were junior because deterrence can reduce creditors total expenses in a priority contest the ex post stronger lobbyist litigant should be senior ex ante for equivalent reasons the theory can advise when public debt should be senior to trade credit and or implicit contracts and can even suggest one rationale for the absolute priority rule apr this article further shows that chapter hi creditor reimbursement procedures can lower overall costs article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

relationship banking fragility and the asset liability matching problem we address a fundamental question in relationship banking why do banks that make relationship loans finance themselves primarily with core deposits and when would it be optimal to finance such loans with purchased money we show that not only are relationship loans informationally opaque and illiquid but they also require the relationship between the bank and the borrower to endure in order for the bank to add value however the informational opacity of relationship loans gives rise to endogenous withdrawal risk that makes the bank fragile core deposits are an attractive funding source for such loans because the bank provides liquidity services to core depositors and this diminishes the likelihood of premature deposit withdrawal thereby facilitating the continuity of relationship loans that is we show that banks will wish to match the highest value added liabilities with the highest value added loans and that doing so simultaneously minimizes the bank s fragility owing to withdrawal risk and maximizes the value the bank adds in relationship lending we also examine the impact of interbank competition on the bank s asset liability matching and extract numerous testable predictions

bank mergers and small firm financing in this study the effect of bank mergers on the most recent attempt to obtain financing from a sample u s small firms in the mid 1990s is examined banking mergers which affected about 25 of the firms responding to the survey had no significant effect on the ability of small firms to obtain a loan or the contract loan rate on the most recent loan from a commercial bank however the incidence of mergers does appear to increase nonprice loan terms increase the incidence of related fees for services raise the frequency of searching for a new bank and result in deterioration of service quality little evidence is found that the most informationally opaque firms e g the smallest firms bear a higher cost from mergers than do less informationally opaque firms

the incidence of secured debt evidence from the small business community critics claim that theories of secured debt fail to explain the widespread use of collateral because they incorrectly predict when a loan will be secured this paper provides the first rigorous statistical test of the transaction cost models of secured debt data from two samples of over 1 000 small business loans generally support the common set of predictions of these theories the incidence of secured debt is positively related to probability of default loan size loan maturity and marketability of assets changes in the legal and economic environment also alter firms decisions regarding the pledging of collateral

assessing the energy saving effect of urbanization in china based on stochastic impacts by regression on population affluence and technology stirpat model abstract the rapid urbanization process has posed great challenges to china s energy system this paper uses the stochastic impacts by regression on population affluence and technology stirpat model to evaluate the energy saving effect of china s urbanization based on provincial panel data the results suggest that 1 the urbanization induces the energy consumption with a notable negative energy saving effect 2 the heterogeneity of urbanization impact on energy consumption is analyzed in different stages of urbanization showing that the energy saving effect of urbanization follows a u shaped path 3 considering the heterogeneity of the energy saving effect of urbanization at different income levels the energy saving effect increases with income level the outcome may draw a causation picture on the relationship between energy consumption and urbanization in addition an in depth causation analysis on energy inefficiency of china s urbanization is carried out and policy recommendations are put forward accordingly

the effect of new type urbanization on energy consumption in china a spatial econometric analysis abstract china s urbanization is rapidly proceeding while bringing marked impact on the energy consumption this paper contributes to current literature by using an improved spatial econometric model stochastic impacts by regression on population affluence and technology stirpat to investigate the effect of urbanization on energy consumption for china s regions the impact of urbanization is further disaggregated into direct and indirect impacts from the perspective of spatial econometrics results show that if the urbanization level increases by 1 0 energy consumption levels will correspondingly decrease by 0 089 the spatial spillover effect on adjacent areas is positive a 1 0 increase in one specific area s urbanization level leads to a 0 136 increase in an adjacent area s energy consumption it is suggested that it is essential to devote major efforts to energy conservation in the process of improving the new type urbanization in particular disaggregating china s targets for controlling energy consumption into smaller targets for different regions will contribute to controlling the growth of energy consumption

the influential factors of china s regional energy intensity and its spatial linkages 1988 2007 abstract a large amount of literature on china s energy intensity seldom considers the regional differences of energy intensity inside china and the spatial effects based on spatial statistics methods this paper explores the regional imbalance of china s provincial energy intensity and the spatially correlation of energy intensity among provinces using spatial panel data models this paper finds that gdp per capita transportation infrastructure the level of marketization and scientific and technological input significantly reduce the energy intensity the ratio of heavy industries to total industries and the ratio of coal consumption to total energy consumption significantly expand the energy intensity meanwhile the coefficient of the ratio of export to gdp is not significant then the spillover and convergence of china s regional energy intensity have been tested the results indicate that the spillover effect between the eastern and western china is remarkable and there exist absolute convergence of provincial energy intensity moreover gdp per capita transportation infrastructure the level of marketization and scientific technological input are conducive to conditional convergence after the spatial effects are controlled according to the empirical results this paper proposes some policy suggestions on reducing china s energy intensity

dynamic strategies for fixed income investment the last 30 years have witnessed an enormous growth in fixed income markets how long term fixed income strategies should be implemented for the welfare of investors has become a major concern of bond managers this study makes use of stochastic optimal control to formulate a multi period portfolio selection model and implements it using backward recursion algorithm to find numerically the optimal allocation of wealth between long and short term bonds for an investor with power utility and an investment horizon of 10 years by way of a technical manipulation this study uses the fact that the long rate and the spread difference between long rate and short rate are uncorrelated to simplify model formulation and parameter estimation the results show that an investor would increase his her holding of short term bond if his her investment horizon becomes shorter or if he she is more risk averse or both

treasury yield curves and cointegration previous studies find that there is only one common stochastic trend in a set of interest rate series the result is interpreted as the evidence for supporting the expectations hypothesis cf hall et al 1992 this study finds that there are three common stochastic trends when whole spectrum stucture is analysed the three common stochastic trends can be interpreted as the shift the slope and the curvature of the term structure

r d and internal finance a panel study of small firms in high tech industries since joseph schumpeter economists have argued that internal finance should be an important determinant of r d expenditures yet almost without exception previous empirical studies have not found evidence of such a relation using newly available data the authors investigate this puzzle with a panel of 179 small firms in high tech industries under each estimation strategy they employ the authors find an economically large and statistically significant relationship between r d investment and internal finance their results are consistent with the view that because of capital market imperfections the flow of internal finance is the principal determinant of the rate at which small high tech firms acquire technology through r d copyright 1994 by mit press

reputation and discretion in financial contracting the authors explain the use of legally unenforceable discretionary financial contracts in circumstances where legally enforceable contracts are feasible a discretionary contract allows a contracting party to choose whether or not to honor the contract it is shown that such a contract liquefies reputational capital by permitting it to be depreciated in exchange for the preservation of financial capital and information reusability in financially impaired states in addition discretionary contracts foster the development of reputation this explains discretion among highly confident letters holding company relationships mutual fund contracts bank loan commitments and other financial and nonfinancial contracts copyright 1993 by american economic association

how urbanization affects china s energy efficiency a spatial econometric analysis abstract this paper investigates the impact of urbanization on provincial energy efficiency in china using panel data of 30 chinese provinces between 2003 and 2014 we adopt a stochastic frontier model to estimate energy efficiency in china and apply a series of spatial panel data models to tackle spatial dependence of energy efficiency between provinces our results show that the overall impact of urbanization on energy efficiency is negative in china these results are established after controlling for spatial correlation and other confounding factors and are also robust to various model specifications we also document that the impact of urbanization on provincial energy efficiency manifests through both a direct negative impact induced by the focal province s urbanization process and an indirect positive spillover effect caused by urbanization in adjacent areas

moral hazard and secured lending in an infinitely repeated credit market game we analyze repeated moral hazard with discounting in a competitive credit market with risk neutrality even without learning or risk aversion long term bank borrower relationships are welfare enhancing the main result is that the borrower obtains an infinite sequence of unsecured loans at below spot market cost following the first good project realization this contract produces first best action choices prior to this stage the borrower gets secured loans with above market borrowing cost the optimal contract thus displays a selective memory feature taking only one of two forms at any given point in time depending on prior history we consider an infinitely repeated bank borrower relationship with moral hazard and universal risk neutrality and explore the ramifications of credit contract duration when the two well known benefits of long term contracting learning and improved risk sharing are absent our objectives are twofold the first is to analyze an infinitely repeated game with discounting in a credit market context we thus relate the theory of repeated games to financial intermediation theory particularly to issues of moral hazard and collateral related distortions the second objective is to understand noteworthy stylized facts of credit markets such as durability in credit relationships lower borrowing costs for established borrowers and unsecured loans for established borrowers versus secured loans for newer borrowers while these practices may be partly due to learning we show that learning is not essential to rationalize them even if information decays rapidly and banks learn nothing about borrowers through time these aspects of credit contracting arise in a repeated game context our main results are as follows first despite universal risk neutrality and the absence of learning a durable bank relationship benefits the borrower 2 the intuition is that the long term contracting permitted by a durable relationship enables the bank to efficiently tax and subsidize the borrower through time to reduce the use of costly collateral second the average welfare loss due to moral hazard per period is positive even as the time horizon goes to infinity third the optimal infinite horizon contract has the striking property that following the period

near unit roots cointegration and the term structure of interest rates the term structure of interest rates is often modelled as a cointegrated system with the yield spreads forming the cointegrating vectors testing whether the yield spreads span the cointegration space is problematic because conventional tests on the cointegration vectors tend to overreject when the largest autoregressive roots deviate from unity as is likely to be the case with interest rates a new test that is robust w r t deviations from the exact unit root assumption is developed and applied to monthly us interest rate data from 1952 1 1991 2 taking into account the regime shift in 1979 the hypothesis of the yield spreads being the cointegrating vectors cannot be rejected using the robust test copyright 2000 john wiley sons ltd

an analysis of the implications of china s urbanization policy for economic growth and energy consumption abstract china intends to rely on urbanization policies to increase its economic growth even against the backdrop of new constraints on energy consumption this paper investigates the impact of urbanization on economic growth and energy consumption using data from china s 266 prefecture level cities over the 2000 2010 period and examines the heterogeneity of this impact across income and urbanization groups the main results of our empirical estimation indicate that 1 the effect of urbanization on economic growth is positive and significant for the entire sample although it is positive and significant only for high and middle income groups and not the low income group 2 the impact of urbanization on energy consumption is positive and significant for all groups when the sample is divided into three urbanization groups based on the northam curve indicating that urbanization will lead to large increases in energy consumption in summary our empirical results show that urbanization targets will be difficult to achieve in terms of increasing gdp per capita under energy consumption constraints

the impact of urbanization on residential energy consumption in china an aggregated and disaggregated analysis abstract although the relationship among urbanization energy consumption and co2 emissions has been extensively studied in recent years little attention has been paid to the effect of urbanization on residential energy consumption china as the largest developing country still has tremendous potential for urbanization in the future and this paper thus explores the effect of urbanization on the changes of residential energy consumption during 1996 2012 for china both from aggregated and disaggregated perspectives using the divisia decomposition method the findings on aggregated energy show that the urbanization contributes 15 4 to the increase of residential energy consumption during 1996 2012 but with a diminishing trend over time meanwhile from the disaggregated perspective the urbanization process contributes to an improvement of residential energy consumption structure specifically 1 of increase in urbanization rate may result in a decrease of 420 thousand million tonnes of residential coal consumption and an increase of 301 thousand tonnes of oil consumption

effects of urbanization on energy efficiency in china new evidence from short run and long run efficiency models abstract energy efficiency in china has been the cause for increasing concern for national and local sustainable development due to rapid economic development and large scale energy consumption using panel data of 30 provinces between 1997 and 2016 in china the measurement of energy efficiency is disentangled and the effects of urbanization on different types of energy efficiency are explored first the measurement of energy efficiency is disentangled with long run and short run efficiencies derived results of energy efficiency scores highlight the predominant status of long run inefficiency is low and that disparate energy efficiency is present between provinces second the effects of urbanization were found to be significantly negative on short run long run and overall energy efficiency comparatively the effect of urbanization on long run efficiency was shown to have recently grown implying an urgent call for energy conservation during rapid urbanization finally this study outlines broader implications and suggests policies to improve energy efficiency here application of energy conservation technology industrial structure upgrading and efficiency information disclosure to urban residents are thought to be smart ways to improve energy efficiency

structural change and energy efficiency in industry the change in the ratio of energy consumed to industrial production is examined over the years 1968 1980 changes in the composition of industry are analysed creating a better picture of movements in physical efficiency of energy use the medium term trends show the significance of the 1973 oil crisis the effects being contrary to those of intuition the implications of the two recessions for efficiency and industrial structure are described in detail the role of demand often relegated to an incidental consideration is brought to the fore in the years following 1973 it appears more important than ex post substitution in production and with this comes a particular implication for the use of aggregate production functions

a critical reexamination of the empirical evidence on the arbitrage pricing theory this paper demonstrates that the roll and ross rr and other previously published tests of the apt are subject to several basic limitations there is a general nonequivalence of factor analyzing small groups of securities and factor analyzing a group of securities sufficiently large for the apt model to hold it is found that as one increases the number of securities the number of factors determined increases this increase in the number of factors with larger groups of securities cannot readily be explained by a distinction between priced and nonpriced risk factors as it is impermissible to carry out tests on whether a given risk factor is priced using factor analytic procedures the apt model as exposited by ross 17 18 and extended by huberman 9 has provided the basis of an extensive literature as for example brown and weinstein 1 chen 3 hughes 10 ingersoll 11 jobson 12 reinganum 15 roll and ross rr 16 and shanken 17 to mention but a few it has also been treated in a more general context by chamberlain and rothschild 2 our purpose here is not to comment on this collection of papers many of which are unpublished but to reexamine the evidence presented by rr and point out major pitfalls involved in the empirical methodology employed by them and others who have followed their lead rr claim that on theoretical and more importantly on empirical grounds arbitrage pricing theory apt is an attractive alternative to the capital asset pricing model capm the apt it is argued requires less stringent and presumably more plausible assumptions is more readily testable since it does not require the measurement of the market portfolio and may be better able to explain the anomalies found in the application of the capm to asset returns the acceptability of the apt like that of the capm or any other theory ultimately depends on its ability to explain the relevant empirical evidence our subsequent discussion will show that many of the prqblems associated with the capm are also present in the apt context and that its ability to explain the relevant empirical evidence is not markedly superior moreover it raises questions not only about the rr and related empirical investigations of the apt but also about the testability of that theory in the present state of the art a major part of the problem results from the necessity to break down the universe being analyzed through the apt model this is forced upon the investigator by the fact

capital market imperfections high tech investment and new equity financing highly variable returns asymmetric information and a lack of collateral should cause small high tech firms to have poor access to debt new equity financing has several advantages over debt but may be costly compared to internal finance we examine an unbalanced panel of over 2 400 publicly traded us high tech companies over the period 1981 98 most small high tech firms obtain little debt financing new equity financing in the form of the initial public offering is very important and permits a major increase in firm size after going public comparatively few firms make heavy use of external finacing

short term loans and long term relationships relationship lending in early america recent banking theory holds that durable firm bank relationships are valuable to both parties this paper uses the contract specific loan records of a 19th century u s bank and shows that firms with extended relationships received three principal benefits first firmswith extended relationships had lower credit costs second long term customers provided fewer personal guarantees which were an alternative to collateral third long term customers were more likely to have loan terms renegotiated during a credit crunch these findings support theories that banks realize cost advantages through the use of proprietary information

total factor energy efficiency of regions in china abstract this paper analyzes energy efficiencies of 29 administrative regions in china for the period 1995 2002 with a newly introduced index most existing studies of regional productivity and efficiency neglect energy inputs we use the data envelopment analysis dea to find the target energy input of each region in china at each particular year the index of total factor energy efficiency tfee then divides the target energy input by the actual energy input in our dea model labor capital stock energy consumption and total sown area of farm crops used as a proxy of biomass energy are the four inputs and real gdp is the single output the conventional energy productivity ratio regarded as a partial factor energy efficiency index is computed for comparison in contrast to tfee our index is found fitting better to the real case according to the tfee index rankings the central area of china has the worst energy efficiency and its total adjustmentof energy consumption amount is over half of china s total regional tfee in china generally improved during the research period except for the western area a u shape relation between the area s tfee and per capita income in the areas of china is found confirming the scenario that energy efficiency eventually improves with economic growth

relationship lending and sme financing in the continental european bank based system this paper analyzes the relationship between banks and smes in the continental european bank based system we find that smes with longer bank relationships have enhanced access to loans but at the same time they bear a higher cost for their debt we also find that firms maintaining two bank relationships get the cheapest debt which establishes a limit for the degree of concentration of bank relationships our results also show that the existence of trust between firm and bank improves access to financing and reduces the borrowing costs whereas it increases the likelihood that guarantees will have to be provided as a consequence it seems that a relationship based on trust is a better strategy to improve smes access to finance than the establishment of longer or more concentrated relationships

energy use and economic development a comparative analysis of useful work supply in austria japan the united kingdom and the us during 100 years of economic growth this paper presents a societal level exergy analysis approach developed to analyse transitions in the way that energy is supplied and contributes to economic growth in the uk the us austria and japan throughout the last century we assess changes in exergy and useful work consumption energy efficiency and related gdp intensity measures of each economy the novel data provided elucidate certain characteristics of divergence and commonality in the energy transitions studied the results indicate that in each country the processes of industrialization urbanisation and electrification are characterised by a marked increase in exergy and useful work supplies and per capita intensities there is a common and continuous decrease in the exergy intensity of gdp moreover for each country studied the trend of increasing useful work intensity of gdp reversed in the early 1970s coincident with the first oil crisis

distance and private information in lending we study the effects of physical distance on the acquisition and use of private information in informationally opaque credit markets using a unique data set of all loan applications by small firms to a large bank we show that borrower proximity facilitates the collection of soft information leading to a trade off in the availability and pricing of credit which is more readily accessible to nearby firms albeit at higher interest rates ceteris paribus analyzing loan rates and firms decision to switch lenders provides further evidence for banks strategic use of private information however distance erodes our lender s ability to collect proprietary intelligence and to carve out local captive markets suggesting that the requisite soft information is primarily local the author 2010 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oxfordjournals org oxford university press

bank interest rates and credit relationships in italy abstract when evaluating the performance of a financial system in supporting the investment activity of the corporate sector a distinction is usually drawn between banking economies and market economies the former being characterized by long term relations between banks and the industrial sector although theoretical studies and empirical results seem to agree that lending relationships increase the available quantity of capital to firms they have little to say on the cost of bank credit it is not clear whether a close relationship with a main bank would allow the borrower to pay a lower interest rate or expose him to a monopolistic rent using a unique data set reporting detailed information on the evolution over time of individual bank borrower relationships in italy we show evidence that a main bank provides credit at a lower cost and that some competition helps to reinforce the commitment between the borrower and the bank

is relationship lending still a mixed blessing a review of advantages and disadvantages for lenders and borrowers relationship lending is a common lending technology that is assumed to bring several benefits to small medium enterprises smes and to financial institutions that adopt it notably it could reduce information asymmetries permitting banks to offer better credit terms to the borrower however it also entails some costs for both sides the empirical evidence so far has not been conclusive in determining under what conditions relationship lending can be beneficial or harmful most of the studies suggest that smes that engage in relationship lending benefit from more credit availability especially during a financial crisis and lower interest rates this occurs when they are served by small banks are geographically close to the lender when the bank is adequately decentralized and when it is the dominant creditor of the firm however under certain circumstances banks can extract rents from the borrower or be captured by him in addition the consequences and the future of relationship lending will be remarkably affected by the level of competition among banks their ownership structure the regulatory framework and the business model that banks will have to adopt accordingly

do urbanization and industrialization affect energy intensity in developing countries abstract against a backdrop of concerns about climate change peak oil and energy security issues reducing energy intensity is often advocated as a way to at least partially mitigate these impacts this study uses recently developed heterogeneous panel regression techniques like mean group estimators and common correlated effects estimators to model the impact that income urbanization and industrialization has on energy intensity for a panel of 76 developing countries in the long run a 1 increase in income reduces energy intensity by 0 45 to 0 35 long run industrialization elasticities are in the range 0 07 to 0 12 the impact of urbanization on energy intensity is mixed in specifications where the estimated coefficient on urbanization is statistically significant it is slightly larger than unity the implications of these results for energy policy are discussed

impacts of urbanization on national transport and road energy use evidence from low middle and high income countries abstract few attempts have been made to investigate quantitatively and systematically the impact of urbanization on transport energy use for countries of different stages of economic development this paper examines the influence of urbanization on national transport and road energy use for low middle and high income countries during 1975 2005 using the stochastic impacts by regression on population affluence and technology stirpat model after controlling for population size income per capita and the share of services in the economy the main results suggest that urbanization influences national transport and road energy use positively however the magnitude of its influence varies among the three income groups changes in urbanization appear to have a greater impact on transport and road energy use in the high income group than in the other groups surprisingly the urbanization elasticities of transport and road energy use in the middle income group are smaller than those of the low income group this study not only sheds further light on the existing literature but also provides policy makers with insightful information on the link between urbanization and transport energy use at the three different stages of development

on the number of common unit roots in the term structure of interest rates 1994 on the number of common unit roots in the term structure of interest rates applied economics vol 26 no 8 pp 815 820

does urbanization affect energy intensities across provinces in china long run elasticities estimation using dynamic panels with heterogeneous slopes abstract although there has been extensive debate in the literature that addresses the impact of urbanization on total energy use the relative magnitude of each impact channel has not been empirically examined and urbanization s effects on energy transition dynamics in china remains unknown using panel datasets at the provincial level from 1986 to 2011 this paper employs dynamic models to investigate both the long run and short run elasticities of urbanization on energy intensities and the most significant impact channel is identified coal intensity and electricity intensity are also modeled to reveal energy transition dynamics driven by urbanization a set of newly developed regression techniques namely well performed common correlated effects mean group ccemg and augmented mean group amg estimators are used to treat residual cross sectional dependence nonstationary residuals and unlikely to hold homogeneous slope assumptions the results obtained verify that the net effects of urbanization on overall energy intensity and electricity intensity are statistically positive with long run elasticities of 0 14 to 0 37 and 0 23 to 0 29 respectively whereas china s urbanization does not significantly increase coal intensity the fact that short run elasticities account for a majority of corresponding long run values indicates that the short run effect that is indirect energy use induced by urban infrastructures is the most significant impact channel of urbanization on energy use in china an energy transition from high pollution coal to clean electricity is also present in china although the fundamental transition to renewable energy is still in its infancy from a regional perspective urbanization exerts asymmetric impacts on provincial energy use so that energy policies associated with urbanization should be province specific the findings also illustrate that for a panel dataset on regional dimension within large and fast growing economies such as china error cross sectional dependence and residual nonstationarity must be tested and properly treated to avoid size distortion and biased estimators

the role of demographics in small business loan pricing demographic change influences the structure of the entrepreneurially active population which may affect credit risk and financing conditions of small firms using bank internal data of small business loans in germany we find that the lending relationship plays a larger role for loan prices than demographics loan rates decrease with soft information gained through longer loan processing time and a larger number of accounts at the same bank they increase with hard information about repayment arrears and reminders late payments have the largest influence on loan prices older entrepreneurs do not seem to be discriminated rather the younger have to pay more because their loans and businesses are smaller and they lack liquidity to pay in time marital status and population density of the business district do not matter this is good news for aging economies with a rising share of elderly and singles and growing disparities between peripheral and agglomerated regions

the relation between religiosity and private bank outcomes abstract we examine the effect of headquarters local religiosity on private bank outcomes religiosity is associated with lower risk taking for public banks but the unique features of private banks may result in a different effect for private banks we find religiosity is associated with greater asset risk taking at the same time however religiosity is negatively associated with solvency risk and return on asset roa volatility and is associated with higher roas and fewer failures we reconcile these results by finding banks in areas with higher religiosity recognize larger fees from providing additional banking services likely due to relationships formed from more risky lending as a result these banks are more less likely to realize extreme positive negative performance we also find religiosity is associated with lower earnings management and increased conservatism collectively our results confirm private banks are unique and religiosity can have a significant and nuanced effect on bank outcomes

the relationship between u k banks and their small business customers much emphasis is placed upon the benefits to both parties of a good relationship between banks and their small business customers having explained the significance of smes in the u k economy the papers goes on to consider briefly some of the arguments which underpin the rationale for these relationships the roles of information and communication are discussed and the poor co ordination between banks smes and their accountants is highlighted evidence from over 6 000 small businesses in response to the forum of private business survey in 1994 is then presented this demonstrates the strong positive association between more participative relationships and more positive perceptions of their banks by firms finally it is suggested that a virtuous circle of information and communication could be established if the parties cooperate in a systematic process of risk assessment

testing the expectations hypothesis when interest rates are near integrated nominal interest rates are unlikely to be generated by unit root processes using data on short and long interest rates from eight developed and six emerging economies we test the expectations hypothesis using cointegration methods under the assumption that interest rates are near integrated if the null hypothesis of no cointegration is rejected we then test whether the estimated cointegrating vector is consistent with that suggested by the expectations hypothesis the results show support for cointegration in 10 of the 14 countries we consider and the cointegrating vector is similar across countries however the parameters differ from those suggested by theory we relate our findings to existing literature on the failure of the expectations hypothesis and to the role of term premia

are business startups debt rationed using a large random sample of u k start ups and a rich data set the paper demonstrates that human capital is the true determinant of survival and that the correlation between financial capital and survival is spurious provision of finance is demand driven with banks supplying funds elastically and business requests governing take up firms self select for funds on the basis of the human capital endowments of the proprietors with better businesses more likely to borrow a reason why others have seemingly identified start up debt gaps may be the failure to test a sufficiently rich empirical model copyright 1996 by royal economic society

relationship banking and escalating commitments to bad loans the relationship banking literature suggests that business relationships play an important role in the loan decisions of small banks we test one aspect of this hypothesis using a cross sectional panel dataset of small banks located in texas from 1994 to 2002 our results suggest that small banks located in smaller counties escalate their commitment to bad loans when compared with those located in larger counties even after controlling for psychological and social factors that influence escalation tendencies these results highlight the need for small banks to trade off the positive benefits of adopting a relationship banking strategy against its unintended negative consequence we provide some suggestions on how small banks may lessen their escalation tendencies despite adopting a relationship banking strategy the results of this study also suggest that small and medium sized enterprises smes that develop strong relational bonds with small banks may benefit from continued access to credit facilities especially during periods when they experience financial distress

the benefits of lending relationships evidence from small business data this paper empirically examines how ties between a firm and its creditors affect the availability and cost of funds to the firm we analyze data collected in a survey of small firms by the small business administration the primary benefit of building close ties with an institutional creditor is that the availability of financing increases we find smaller effects on the price of credit attempts to widen the circle of relationships by borrowing from multiple lenders increases the price and reduces the availability of credit in sum relationships are valuable and appear to operate more through quantities rather than prices

what does the term structure tell us about future inflation abstract this empirical analysis indicates that for maturities of six months or less the term structure of nominal interest rates provides almost no information about the future path of inflation but does provide information about the term structure of real interest rates however as maturities lengthen to nine and twelve months the nominal term structure begins to contain information about future inflation but ceases to provide information about the real term structure these results are explained by differences in the relative variability of expected future inflation changes and real term structure slopes at different points in the term structure

the expectation hypothesis in emerging financial markets the case of malaysia this article deals with the expectation hypothesis of the term structure of interest rates it is argued that the rapid progress and financial market liberalization that is occurring in emerging financial markets could provide additional evidence for testing the expectation hypothesis this article employs data from the malaysian government securities market which represents one of the examples of an emerging financial market cointegration and error correction analyses show significant empirical validity for the expectation hypothesis the long and short term interest rates are shown to be cointegrated and subject to a long run equilibrium path in addition to shedding some light on the experience of emerging financial market this article explicitly identifies the process of adjustment towards the long run equilibrium for the long run the results are in favour of the long to short version of expectation hypothesis with longer term interest rates playing a greater role as equilibrium attractor howeve

how urbanization affects energy use in developing countries abstract this paper identifies mechanisms whereby urbanization affects energy consumption industrialization and urbanization accompany each other during economic development but urbanization exerts a number of independent influences on energy use it permits economies of scale in production but requires more transportation food must be transported to urbanized populations and relatively smaller agricultural populations must modernize entailing considerable increases in agricultural energy use in cities a number of production activities which were domestically provided in rural areas using human or animal energy shift to sources outside the household using modern energy sources the largest single source of change in energy use is personal transportation passenger transport in cities is heavily weighted towards fuel using modes particularly as incomes increase to assess the overall impact a regression analysis of 59 developing countries for 1980 is conducted holding constant per capita income and the extent of industrialization the elasticity of energy consumption per capita and per dollar of gdp is between 0 35 and 0 48

banking on commitment intended and unintended consequences of an organization s attempt to attenuate escalation of commitment examining commercial lending decisions we found that increased monitoring of decision makers and changing decision makers attenuated escalation of commitment but also produced unintended effects