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on Investment |
| By: | Brochu, Pierre (University of Ottawa); Green, David A. (University of British Columbia, Vancouver); Lemieux, Thomas (University of British Columbia, Vancouver); Townsend, James (University of Winnipeg, Manitoba) |
| Abstract: | This paper proposes an empirical approach to decompose the distributional effects of minimum wages into effects for workers moving out of employment, workers moving into employment, and workers continuing in employment. We estimate the effects of the minimum wage on the hazard rate for wages, which provides a convenient way of re-scaling the wage distribution to control for possible employment effects. We find that minimum wage increases do not result in an abnormal concentration of Job Leavers below the new minimum wage, which is inconsistent with employment effects predicted by a neoclassical model. We also find that, for Job Stayers, the spike and spillover effects of the minimum wage are simply shifted right to the new minimum wage. Our findings are consistent with a model where entry wages are set according to a job ladder, and where firms preserve their internal wage structure due to fairness or internal incentives issues. |
| Keywords: | minimum wages, wage distribution |
| JEL: | J32 J38 J42 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16514&r=inv |
| By: | Justin Quinton (Department of Economics, Queens University, Kingston, Ontario, Canada); Glenn P. Jenkins (Department of Economics, Queens University, Kingston, Ontario, Canada and Cyprus International University, North Cyprus); Godwin Olasehinde-Williams (Department of Management Information Systems Istanbul Ticaret University, Turkey) |
| Abstract: | In this paper, the determinants of household food insecurity and the impact of the 2015 oil price shock in Nigeria are investigated using panel data from three waves (2012, 2015 and 2018) of the General Household Survey. This survey is a nationally representative sample of approximately 5, 000 households that have been surveyed six times across the three waves. It is found that despite the decline in real food prices globally, Nigeria experienced a marked rise in food insecurity, from approximately 26% of households in 2012/2015 to 43.7% in 2018. The precipitous decline in oil prices in 2015 led to a devaluation of the Nigerian naira which in turn increased the price of imported goods. Nigeria had become more reliant on imported food between 2004 and 2015 as foreign exchange became readily available and the appreciated naira at that time made imported food relatively cheap. Although oil prices crashed in 2015, the full effect was not felt until 2018. Had the Nigerian government been prepared to act quickly, a substantial amount of the effect of the food crisis could have been avoided. The total value of food imports is found to decline overall. From the regression analysis on food insecurity status, a novel result emerges concerning the impact of gender of the head of the household. Previous studies report that female head of household is a key determinant of household food insecurity; however, once single parent status, household size and the proportion of children in the household are accounted for, the gender of the head of the household becomes inconsequential. Thus, it is the composition of the household that is relevant for food insecurity rather than just the gender of the head of the household. |
| Keywords: | Food insecurity, GHS-P, Nigeria, Oil price shock, Policy. |
| JEL: | D10 E2 Q17 |
| Date: | 2023–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:qed:dpaper:4611&r=inv |
| By: | Uzun, Vasily (Узун, Василий) (The Russian Presidential Academy of National Economy and Public Administration); Shagaida, Natalia (Шагайда, Наталья) (The Russian Presidential Academy of National Economy and Public Administration); Ternovskiy, Denis (Терновский, Денис) (The Russian Presidential Academy of National Economy and Public Administration); Potapova, Alexandra (Потапова, Александра) (The Russian Presidential Academy of National Economy and Public Administration); Shishkina, Ekaterina (Шишкина, Екатерина) (The Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | The relevance of the topic - assessing the level of economic access to food - remains poorly developed in Russia. This study aims to fill this gap within the framework of the main ideas of the Food Security Doctrine of the Russian Federation. The purpose of this work is to develop approaches for assessing the level of food security among household members and highlight the main characteristics of households with different levels of food insecurity. The statistical basis for this study is the microdata from budget surveys conducted by Rosstat. The main content and results of this study are as follows: The concept of "food insecurity of the household" and its members is introduced. An overview of approaches used in different countries to identify individuals experiencing food insecurity is provided. The focus of the assessment shifts from evaluating the level of economic affordability of food based on decile groups and available resources to assessing the level of economic affordability of food for each household member. This analysis highlights the main characteristics of households or their members with varying levels of food insecurity. |
| Keywords: | Food security, food insecurity, households, economic affordability of food, balanced food assortment, vulnerable population groups based on economic affordability of food, Rosstat budget surveys |
| JEL: | Q18 Q11 R00 |
| Date: | 2023–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:w20220256&r=inv |
| By: | Fisnik Bajrami (Charles University, Institute of Economic Studies, Faculty of Social Sciences, Prague, Czech Republic) |
| Abstract: | Dollarisation has been extensively debated and is often promoted as a viable monetary and exchange rate policy alternative for emerging economies. While most arguments for and against dollarisation are grounded in theory, there is a recognized scarcity of empirical evidence on the topic. This study evaluates over two decades of dollarisation experience in emerging economies. Our results suggest that dollarisation is associated with similar economic growth levels as other exchange rate regimes. However, it comes with the cost of more negative current account balance growth rates and heightened growth volatility, especially in the past decade. Nevertheless, dollarised countries benefit from higher levels of investment and trade. Contrary to a significant part of the existing literature, our findings challenge the perceived benefits of dollarisation in terms of economic growth. Additionally, we demonstrate that dollarised countries differ in various macroeconomic indicators when compared to individual exchange rate regimes, even against other fixed exchange rate regimes - which are often assumed to be homogenous. |
| Keywords: | dollarisation, GDP growth, growth volatility, trade, investment, exchange rate, empirical evaluation |
| JEL: | E42 E52 F31 F45 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2023_27&r=inv |
| By: | Jakub Michańków (Cracow University of Economics, Department of Informatics; University of Warsaw, Faculty of Economic Sciences, Quantitative Finance Research Group, Department of Quantitative Finance); Paweł Sakowski (University of Warsaw, Faculty of Economic Sciences, Quantitative Finance Research Group, Department of Quantitative Finance); Robert Ślepaczuk (University of Warsaw, Faculty of Economic Sciences, Quantitative Finance Research Group, Department of Quantitative Finance) |
| Abstract: | This paper proposes a novel approach to hedging portfolios of risky assets when financial markets are affected by financial turmoils. We introduce a completely novel approach to diversification activity not on the level of single assets but on the level of ensemble algorithmic investment strategies (AIS) built based on the prices of these assets. We employ four types of diverse theoretical models (LSTM - Long Short-Term Memory, ARIMA-GARCH - Autoregressive Integrated Moving Average - Generalized Autoregressive Conditional Heteroskedasticity, momentum, and contrarian) to generate price forecasts, which are then used to produce investment signals in single and complex AIS. In such a way, we are able to verify the diversification potential of different types of investment strategies consisting of various assets (energy commodities, precious metals, cryptocurrencies, or soft commodities) in hedging ensemble AIS built for equity indices (S&P 500 index). Empirical data used in this study cover the period between 2004 and 2022. Our main conclusion is that LSTM-based strategies outperform the other models and that the best diversifier for the AIS built for the S&P 500 index is the AIS built for Bitcoin. Finally, we test the LSTM model for a higher frequency of data (1 hour). We conclude that it outperforms the results obtained using daily data. |
| Keywords: | machine learning, recurrent neural networks, long short-term memory, algorithmic investment strategies, testing architecture, loss function, walk-forward optimization, over-optimization |
| JEL: | C4 C14 C45 C53 C58 G13 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2023-25&r=inv |
| By: | Peter Haan; Daniel Kemptner; Victoria Prowse; Maximilian Schaller |
| Abstract: | Individuals vary considerably in how much they earn during their lifetimes. This study examines the role of the tax-and-transfer system in mitigating such inequalities, which could otherwise lead to disparities in living standards. Utilizing a life-cycle model, we determine that taxes and transfers offset 45% of lifetime earnings inequality attributed to dierences in productive abilities and education. Additionally, the system insures against 48% of lifetime earnings risk. Implementing a lifetime tax reform linking annual taxes to previous employment could improve the system’s insurance capabilities, albeit at the cost of a lower employment rate. |
| Keywords: | Lifetime earnings, lifetime income, tax-and-transfer system, taxation, unemployment insurance, disability benefts, social assistance, inequality, redistribution, insurance, education, productive ability, risk, dynamic life-cycle models. |
| JEL: | D63 H23 I24 I38 J22 J31 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1335&r=inv |
| By: | Agnes Medinaceli (SDSN Bolivia); Lykke E. Andersen (SDSN Bolivia); Marcelo Delajara (Anker Research Institute); Richard Anker (Anker Research Institute); Martha Anker (Anker Research Institute) |
| Abstract: | This report provides updated estimates of family living expenses and living wages for rural Cibao Norte, the northern region of the Dominican Republic. The update for 2023 takes into account inflation and changes in payroll deductions since the original Anker living wage study carried out in March 2022 (Voorend, Alvarado, Anker & Anker, 2022). |
| Keywords: | Living costs, living wages, Anker Methodology, Dominican Republic |
| JEL: | J30 J50 J80 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:iad:glliwa:230426&r=inv |
| By: | Pakhomov, Alexander (Пахомов, Александр) (The Russian Presidential Academy of National Economy and Public Administration); Bagdasaryan, Kniaz (Багдасарян, Княз) (The Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | Due to the changes in the geo-economic situation at the beginning of 2022, the focus of this research is shifted from the general analysis of foreign trade strategies of foreign countries to the study of trade policies of key countries against Russia (including common approaches and sanctions), as well as the response of the Russian side. This approach determines the novelty and relevance of this study. The significance of the work is determined by the research in scientific and applied aspects of the problems of forming common priorities and tools in trade policy of the leading countries of the world, which depend on the global scientific and technological development. Trade policy is a purposeful activity of the state to promote and protect the interests of national business in global markets. The results of the study indicate attempts to create and consolidate new rules of the world economy based on the concept of energy transition and technological breakthrough, which has a negative impact on the established rules of the world economy and international trade. |
| Keywords: | global economy, trade policy, foreign economic strategy, Russian Federation |
| JEL: | F02 F13 |
| Date: | 2022–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:w20220225&r=inv |
| By: | Mendieta-Aragón, Adrián; Rodríguez-Fernández, Laura; Navío-Marco, Julio |
| Abstract: | This research analyses how tourists using digital sharing economy platforms have behaved in the European Union, whether there are differences between European regions and how they have evolved with the pandemic. Using spatial econometric techniques, this study provides a comparative analysis, in space and time, that identifies regional inequalities in terms of the intensity of demand for accommodation offered on digital sharing economy platforms. In particular, different clusters of high intensity of collaborative tourism have been detected, and spatial spillover effects and interdependencies of European regions in collaborative tourism have been recognised, finding a positive spatial autocorrelation in the intensity rate of collaborative tourism. An effect of tourist destination saturation on the use of accommodation offered on digital sharing economy platforms has also been observed. Several digital public policy implications have been discussed, promoting regulatory coordination at the interregional and pan-European levels to avoid inequalities and imbalances across Europe. |
| Keywords: | Digital tourism, platforms' economy, digital policies, European regions, sharing, ESDA, spatial models |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse23:278002&r=inv |
| By: | Parui, Pintu |
| Abstract: | We construct a broad R&D-based endogenous growth model that incorporates the importance of children's health on human capital accumulation and publicly-funded basic research investments required to produce new goods. Although an increment in the number of healthcare professionals creates a shortage of workers for final goods production, the novelty of this paper is to demonstrate the significance of healthcare workers in enhancing the productivity of inputs of various sectors, along with its long-run consequences. |
| Keywords: | R&D-based growth, Basic science, Children’s Health, Education, Fertility |
| JEL: | H41 J24 O31 O32 O41 |
| Date: | 2023–10–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118854&r=inv |
| By: | Santiago Ferro Moreno (Universidad Nacional de La Pampa); Santiago Agustin Pérez (Universidad Nacional de La Pampa/CONICET) |
| Abstract: | The objective of this work is to measure and analyze the management of resources and strategic capacities of the agro-industrial organizations of the first transformation of the province of La Pampa, Argentina. The strategic management of the network, measured in aggregate terms, can be classified as intermediate. The aspects most positive are the maintaining image of the company, the importance of price and the strategic value that know-how has for businesses. As factors with performance to improve, there are the lack of conventions and agreements with scientific and technical organizations that promote innovation processes and the non-use of a command board for the strategic and operational management of the business. The flour, dairy and balanced food complexes were the ones that presented the best strategic management performance. The strategic management of first transformation agro-industries is directly related to capacities (management training and seniority in the business) and resources (scale). |
| Keywords: | competitive performance, territorial development, resources and capabilities, added value |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:aoz:wpaper:278&r=inv |
| By: | Valéry Ridde (CEPED - UMR_D 196 - Centre population et développement - IRD - Institut de Recherche pour le Développement - UPCité - Université Paris Cité); Ibrahima Gaye (ISED - ISED - UCAD - Université Cheikh Anta Diop [Dakar, Sénégal] - AGRISAN - Centre d’Excellence Africain en Agriculture pour la Sécurité Alimentaire et Nutritionnelle); Bruno Ventelou (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Elisabeth Paul (ULB - Université libre de Bruxelles); Adama Faye (ISED - ISED - UCAD - Université Cheikh Anta Diop [Dakar, Sénégal] - AGRISAN - Centre d’Excellence Africain en Agriculture pour la Sécurité Alimentaire et Nutritionnelle) |
| Abstract: | With the low adherence to voluntary mutual health insurance, Senegal's policymakers have sought to understand the feasibility of compulsory health insurance membership. This study aims to measure the acceptability of mandatory membership in community-based mutual health insurance (CBHI) and to understand its possible administrative modalities. The study consists of a national survey among a representative population sample selected by marginal quotas. The survey was conducted in 2022 over the phone, with a random composition method involving 914 people. The questionnaire measured the socio-economic characteristics of households, their level of acceptability concerning voluntary and compulsory membership, and their level of confidence in CBHIs and the health system. Respondents preferred voluntary (86%) over mandatory (70%) membership of a CBHI. The gap between voluntary and compulsory membership scores was smaller among women (p = 0.040), people under 35 (p = 0.033), and people with no health coverage (p = 0.011). Voluntary or compulsory membership was correlated (p = 0.000) to trust in current CBHIs and health systems. Lack of trust in the CBHI management has been more disadvantageous for acceptance of the mandatory than the voluntary membership. No particular preference emerged as the preferred administrative channel (e.g. death certificate, identity card, etc.) to enforce the mandatory option. The results confirmed the well-known challenges of building universal health coverage based on CBHIs—a poorly appreciated model whose low performance reduces the acceptability of populations to adhere to it, whether voluntary or mandatory. Suppose Senegal persists in its health insurance approach. In that case, it will be essential to strengthen the performance and funding of CBHIs, and to gain population trust to enable a mandatory or more systemic membership. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04222420&r=inv |
| By: | Potashnikov, Vladimir (Поташников, Владимир) (The Russian Presidential Academy of National Economy and Public Administration); Levakov, Pavel (Леваков, Павел) (The Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | Currently many sectors of the Russian economy, including the fuel and energy sector, are undergoing structural changes. This is due both to the energy transformation (a significant change in the structure of the energy balance) and the recent events of 2022. The article analyzes how these changes will affect the Russian energy sector. Firstly, the risks of reducing natural gas exports to the EU countries are assessed. Gas supplies to the EU are a significant part of Russia's export earnings, and the supplies themselves are difficult to redirect to other directions. Secondly, it is analyzed how recent changes will affect the development of the energy sector using the example of two scenarios for the development of the energy industry before and after 2022. Finally, it is assessed how the changes that have taken place will affect the effectiveness of an active climate policy in Russia. The possibility of a reduction in domestic demand for gas in the EU or an increase in production is unlikely. However, an increase in LNG (liquefied natural gas) imports is possible, which may allow the EU to abandon natural gas imports from Russia in the coming years. EU nominal regasification capacity allows for a potential increase in EU LNG imports by 110 billion cubic meters per year. This can be done both by redirecting supplies from other countries to the EU, and by increasing production and liquefaction of LNG. As a result of an increased sanctions pressure, with a high degree of probability, without an active climate policy, the level of greenhouse gas emissions will increase significantly. In addition to climate effects and associated negative environmental impact, this also negatively affects the prospects for economic development. Thus, greater consumption of fossil fuels makes the economy more dependent on their prices and reduces the potential for an increase in the volume of export. An analysis of decarbonization scenarios has shown that because of the recent events, an active climate policy will cost more, with more modest results. |
| Keywords: | natural gas, climate policy, international trade, energy, decarbonization, RUTIMES, LNG, Representative Energy System |
| JEL: | F1 O13 Q4 |
| Date: | 2022–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:w20220267&r=inv |
| By: | Zoemarie Baluarte (Iligan Medical Center College); Cielo Vincent Tocmo (Iligan Medical Center College); Ma Lynflora Pendang (Iligan Medical Center College); Michael Jere Abiol (Iligan Medical Center College); George Hamoy (Iligan Medical Center College); Ruben Lee (Iligan Medical Center College) |
| Abstract: | Motivated employees are the cornerstone of organizational success, with their performance directly influencing productivity and competitiveness. This study investigated the interplay between intrinsic and extrinsic motivation factors and their effects on employee productivity within the appliance retail industry in Iligan City. The research employed a cross-sectional survey design, encompassing 50 firstlevel managers and rank-and-file employees selected randomly from five prominent appliance stores. The study leveraged a well-validated questionnaire and statistical tools, including correlation analysis and multiple linear regression, to explore the relationships between motivation factors and employee productivity. The findings underscored the significance of both intrinsic and extrinsic motivation in fostering workplace engagement and performance. Key results revealed a strong positive correlation between intrinsic and extrinsic motivation factors and employee productivity, indicating that employees who experience higher levels of motivation tend to be more productive. The multiple linear regression analysis further substantiated these findings, explaining approximately 36.1% of the variance in employee productivity. In conclusion, this research illuminated the pivotal role of motivation in shaping workplace productivity, offering actionable insights for organizations seeking to optimize their workforce's potential. By understanding and harnessing the power of motivation, businesses in the appliance retail sector can create environments that drive employee engagement, elevate job performance, and ultimately secure a competitive edge in their respective markets. |
| Keywords: | Extrinsic motivation, Iligan, Intrinsic motivation, Productivity |
| Date: | 2023–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04222195&r=inv |
| By: | Ron S. Jarmin; John M. Abowd; Robert Ashmead; Ryan Cumings-Menon; Nathan Goldschlag; Michael B. Hawes; Sallie Ann Keller; Daniel Kifer; Philip Leclerc; Jerome P. Reiter; Rolando A. Rodríguez; Ian Schmutte; Victoria A. Velkoff; Pavel Zhuravlev |
| Abstract: | The use of formal privacy to protect the confidentiality of responses in the 2020 Decennial Census of Population and Housing has triggered renewed interest and debate over how to measure the disclosure risks and societal benefits of the published data products. Following long-established precedent in economics and statistics, we argue that any proposal for quantifying disclosure risk should be based on pre-specified, objective criteria. Such criteria should be used to compare methodologies to identify those with the most desirable properties. We illustrate this approach, using simple desiderata, to evaluate the absolute disclosure risk framework, the counterfactual framework underlying differential privacy, and prior-to-posterior comparisons. We conclude that satisfying all the desiderata is impossible, but counterfactual comparisons satisfy the most while absolute disclosure risk satisfies the fewest. Furthermore, we explain that many of the criticisms levied against differential privacy would be levied against any technology that is not equivalent to direct, unrestricted access to confidential data. Thus, more research is needed, but in the near-term, the counterfactual approach appears best-suited for privacy-utility analysis. |
| Keywords: | federal statistical system, data disclosure risk, data access |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:23-49&r=inv |
| By: | Cecilia Aubrun (LadHyX - Laboratoire d'hydrodynamique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique); Michael Benzaquen; Jean-Philippe Bouchaud |
| Abstract: | The stability condition for Hawkes processes and their non-linear extensions usually relies on the condition that the mean intensity is a finite constant. It follows that the total endogeneity ratio needs to be strictly smaller than unity. In the present note we argue that it is possible to have a total endogeneity ratio greater than unity without rendering the process unstable. In particular, we show that, provided the endogeneity ratio of the linear Hawkes component is smaller than unity, Quadratic Hawkes processes are always stationary, although with infinite mean intensity when the total endogenity ratio exceeds one. This results from a subtle compensation between the inhibiting realisations (mean-reversion) and their exciting counterparts (trends). |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03518579&r=inv |
| By: | maas, harro |
| Abstract: | This paper provides a personal reflection on the development, over 50 years, of the History of Economics Society. The (perhaps obvious) punchline is that history writing is not neutral, but entails stances about power and politics. These stances are all the more relevant in today's context, in which money buys history. |
| Date: | 2023–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:5r8ad&r=inv |
| By: | Boza-Núñez, Efraín; Vargas-Montoya, Luis; Robalino, Juan |
| Abstract: | Information and communications Technologies (ICT) are crucial in people's daily activities, including the job-related ones. Previous literature has acknowledged the potential of ICT to enhance labor market outcomes. However, empirical evidence is scarce and concentrated in developed countries. By using a rich longitudinal dataset, we apply a novel Differences and Differences (DiD) method to estimate the effect of the access to computers and internet over the labor market participation, employment and earnings. We further test whether there are complementarity effects of having access to the internet and computers simultaneously on the labor market outcomes and the likely differential effect by having access to broadband instead of lower speed connections. We found that the access to computers and the internet positively affects labor market participation, employment and earning. We further found that the simultaneous access to the internet and computers enhances their effect on employment and earnings. Policy makers should be aware that, in the digital era, the access to ICT is crucial to enhance the labor market outcomes. Particularly for developing countries, which along with poorer labor markets outcomes face higher digital divides. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse23:278020&r=inv |
| By: | Pies, Ingo |
| Abstract: | Dieses Kurzinterview zum Thema Freiheit antwortet auf neun Fragen, die vom Online-Magazin 'Der Freydenker' gestellt wurden. |
| Keywords: | Freiheit, Aufklärung, Autonomie, Innovation, Toleranz |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:mlucee:202311&r=inv |
| By: | Ibáñez, Ana María; Quigua, Juliana; Romero, Jimena; Velásquez, Andrea |
| Abstract: | By 2017, one-quarter of people born in El Salvador were estimated to be living in the U.S. We show that extreme temperatures have negatively affected agricultural production and increased international migration from El Salvador. We find that labor markets act as a transmission mechanism of the negative effects of weather shocks on agricultural workers, who react by migrating internationally or reallocating within local labor markets. However, these responses differ by landownership status and access to risk-coping mechanisms. Our results suggest that, despite the current anti-immigrant political climate, there should be a global responsibility relative to the consequences of climate change. |
| Keywords: | Migration;Temperature Shocks;El Salvador |
| JEL: | Q54 O15 J43 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:12201&r=inv |
| By: | Li, Shasha; Yang, Biao |
| Abstract: | We investigate how optimal attention allocation of green-motivated investors changes information asymmetry in financial markets and thus affects firms' financing costs. To guide our empirical analysis, we propose a model where investors with heterogeneous green preferences endogenously allocate limited attention to learn market-level or firm-specific fundamental shocks. We find that a higher fraction of green investors in the market leads to higher aggregate attention to green firms. This reduces the information asymmetry of green firms, leading to higher price informativeness and lower leverage. Moreover, the information asymmetry of brown firms and the market increases with the share of green investors. Therefore, greater green attention is associated with less market efficiency. We provide empirical evidence to support our model predictions using U.S. data. Our paper shows how the growing demand for sustainable investing shifts investors' attention and benefits eco-friendly firms. |
| Keywords: | capital structure, climate finance, information asymmetry, rational in-attention |
| JEL: | D82 G11 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:202023&r=inv |