This paper analyzes the influence of exchange rate regimes on fiscal performance, focusing on the difference between fixed and flexible exchange rates. For these ends, a sample of 83 countries for the 1974-1998 period, the GMM methodology for dynamic proposal panel models proposed by Arellano and Bond (1991) and diverse exchange rate classifications are used. In relation to the latter, this paper discusses recent regimes classifications and proposes a new one that permits to cover possible inconsistencies between the commitment of the central bank and its observed behavior. The results suggest that regimes’ influence on fiscal performance depend on the international context, specifically the possibility of indebtedness and of the characteristics of the international finance system –integration, volatility and dominant financial structure-. In other words, it depends on credit availability as well as on the conditions or potential sanctioning of the finance system. It is found that in contexts where there is no original fiscal discipline and the authorities have the possibility of financing with debt of relatively low cost, fixed regimes do not purvey per se greater fiscal discipline than the flexible ones. On the contrary, flexible ones generate more discipline. In contexts with strong financing restrictions, the discipline’s effects of both regimes are not substantially different. While in situations with abundance of capitals but where they are highly integrated, volatile and possibly subject to contagion effect, the same functioning of the international finance system can, through their potential sanction, achieve greater discipline in economies with fixed regimes that wish to remain as such.

Most financial institutions have not been successful at internationalisation, with some being remarkably unsuccessful. There are fewer occurrences of cross-border mergers and acquisitions than in most other industries. Foreign financial institutions tend to underperform relative to domestic financial institutions. Rugman and others have argued that their internationalisation primarily occurs at the regional rather than global level. Existing theories identify some barriers to firms? internationalisation, but these theories, were developed for manufacturing firms, and were rarely applied to financial services firms. This research seeks to identify barriers to financial institutions' internationalisation and contribute to the under-researched area of services internationalisation. To better understand the barriers to internationalisation, qualitative research techniques were used for an in-depth case-study analysis of one firm and its attempts at internationalisation, followed by detailed interviews of internationally experienced financial institutions executives from other firms. Finally, the apparent preference for regional over global expansion was investigated, through a quantitative analysis of over 12,000 cross-border, financial-services merger and acquisition transactions from 1990 to mid-2005. The research identified thirty-eight barriers to internationalisation, consistent with Rugman's findings on regional expansion, but also with the effects of similarity variables such as language, culture and legal system. The quantitative analysis tested these effects and found that the region effect was high, and was stronger than language and cultural effects individually, but about the same as their combined effect. The legal system similarity is not statistically significant when all effects are combined. This research contributes to this under-researched field. Given that internationalisation supports economic growth in the host and home countries, an improved understanding of these barriers may assist policy makers and enable managers to make better international investment decisions. The findings on the effect of geography versus other factors, such as language and culture, may inform managers' choice of target countries.

This dissertation examines three distinctive issues that concern the regulators and policy makers in the development of financial markets. It contains three stand-alone research projects within the context of law, finance and economic growth. Chapter 2 examines the dynamic relationship between banks and economic growth from the points of view of market efficiency and asset pricing theory. Publicly traded banks are broadly representative of a country???s banking sector, so that banking industry stock prices will broadly reflect the performance of a country???s banking sector. Because previous research has established that the institutional framework, as well as the aggregate size, of the banking sector can significantly affect economic growth, this chapter investigates whether the stock returns on a country???s banking sector contain information about future economic growth, and whether the specific country and institutional characteristics that affect the functioning of the banking system and market efficiency also influence this relationship. Using the data from 18 developed and 18 emerging markets, the chapter finds a significant and positive relationship between bank excess return and future economic growth in both the time-series and panel analyses. The chapter also finds that this positive relationship is significantly strengthened by the enforcement of insider trading law, by banking crises, by bank disclosure regulations and financial development, but is weakened by government ownership of banks. Chapter 3 investigates the role of bank idiosyncratic volatility in economic growth and systemic banking crises. Using the same dataset from Chapter 2, this chapter finds an ambiguous relationship between bank volatility and economic growth in the time-series studies, which suggests that the effect of bank volatility on economic growth is more country-specific. In the panel analyses, the chapter finds a negative but very weak relationship between bank volatility and future economic growth. This negative relationship is magnified by banking crises and bank disclosure standards, but is alleviated by the government ownership of banks, the enforcement of insider trading law and financial development. The chapter goes further to examine whether bank volatility leads to the occurrence of systemic banking crises, and finds that the marginal effect of bank volatility on the probability of banking crises is very weak for the sample of all markets, and this result is mainly driven by the data from the emerging markets. However, bank volatility is a significant predictor of banking crises even after being controlled for macroeconomic indicators, which implies that market forces are more powerful in promoting the soundness of the banking system in developed markets. We also find that those macroeconomic and banking risk management indicators have different impacts on the probability of banking crises for the emerging and developed markets. Therefore, caution needs to be taken in interpreting the cross-country results of the studies on banking crises. Chapter 4 studies the corporate governance issues in China, a significant developing country that has been neglected by the current law and finance literature. Incorporated with the legal environment and ownership structure of China???s listed companies, the chapter develops a simple game model to study a neglected aspect of current corporate governance literature: the expropriation arising from the mixture of weak investor protection, ownership concentration coexisting with ownership dispersion, and the absence of a controlling shareholder. The last two chapters find that government ownership undermines the positive link between bank excess return and economic growth, but alleviates the negative impact of bank volatility on growth as well. This chapter shows that government ownership is also a two-edged sword in corporate governance in China: it leads to a double-agency problem; however, the strong legal protection of State assets also increases the cost of expropriation. Using the data from 1996 to 2003, the chapter finds the empirical evidence consistent with the model. By analysing the puzzles in China???s stock market, the chapter suggests that improving the legal protection of investors is the key issue in the future development of the financial market.

"A Ph. D. dissertation ... Columbia University 1960 and 1961 ... completely revised and brought up to date as of the end of 1963." / Includes bibliographical references and index.

Diss. Univ. Duisburg. / with 37 figures and 8 tables.

The study investigates the financial sector development threshold levels that would influence FDI inflows. The threshold levels identified are 41.27% of stock market capitalisation for stock market turnover, 53.55% of GDP for stock market value traded, 121.53% of GDP for stock market capitalisation, 114.43% of GDP for domestic credit to private sector by banks, 144.06% of GDP for domestic credit provided by financial sector, 0.22% of GDP for outstanding domestic private debt securities and 41.26% of GDP for outstanding domestic public debt securities. The results show that higher stock market and banking sector development above the threshold level positively and significantly influence FDI inflows whilst the influence of lower stock market and banking sector development on FDI inflows was weak and less significant. Levels of private bond market development equal to or greater than the threshold level are found to have a positive but non-significant impact on FDI inflows whereas private bond market development levels less than the threshold has a weaker positive and non-significant influence on FDI inflows. On the contrary, public bond market development levels equal to or greater than the threshold level negatively influenced FDI inflows whilst levels of public bond market development less than the threshold positively but non-significantly attracted FDI inflows into emerging markets. / Business Management / Ph. D. (Management Studies)

International bond market linkages are examined using monthly bond yield data and total return indices on government bonds with ten years to maturity. The bond yield data covers a nineteen-year period from January 1990 to July 2008, while the bond total return index data covers a nine-year period from August 2000 to July 2008. The international bond markets included in the study are Australia, Canada, Germany, Japan, the United Kingdom, and the United States. The examination of international bond market linkages across these markets has important implications for the formulation of effective portfolio diversification strategies. The empirical analysis is carried out in three phases: the preliminary analysis, the principal component analysis (PCA), and the cointegration analysis. For each analysis and for each set of data the full sample period is first analysed and subsequently a five-year rolling window approach is implemented. Accordingly, this makes it possible to capture the time-varying nature of international bond market linkages. The preliminary analysis examines the bond market trends over the sample period, provides descriptive statistics, and reports the correlation coefficients between the selected bond markets. The PCA investigates the interrelationships among the bond markets according to their common sources of movement and identifies which markets tend to move together. The cointegration analysis is carried out using the Johansen cointegration procedure and investigates whether there is long-run comovement between South Africa and the selected bond markets. Where cointegration is found, Vector Error-Correction Models (VECMs) are estimated in order to examine the long-run equilibrium relationships in addition to their short-run adjustments over time. The empirical analysis results were robust, and overall integration between SA and the selected major bond markets remained weak and sporadic. In addition, the results showed that even after accounting for exchange rate differentials, international bond market diversification remained beneficial for a South African investor; and since international bond market linkages remained weak with no observable trend, international bond market diversification will remain beneficial for some time to come for a South African investor.

The process of globalisation has had a large impact on the world economy over the past three decades. Economic globalisation has manifested itself in the increasing integration of goods and services through international trade and the integration of financial markets. As a consequence the existence of co-movements in economic variables of different countries has become more evident. The extent to which globalisation causes a country’s economy to move together with the rest of the world concerns policy-makers. When such co-movement is significant, the influence of policy-makers on their respective domestic economies is significantly reduced. South Africa re-entered the international economy in the early 1990s when the forces of globalisation, especially for developing countries, seemed to gain momentum. Empirical research such as Kabundi and Loots (2005) found strong evidence of international co-movement between the world business cycle and the South African business cycle, particularly following South Africa’s integration into the global economy. This study examines the relationship and interdependence between South Africa and four of its major developed trading partners. More particularly, the study examines the question of whether business cycles are transmitted from Germany, Japan, US and UK to South Africa, and/or from South Africa to Germany, Japan, the US and UK. The study employs structural vector autoregressive (SVARs) models to analyse monthly data from 1980:01–2008:04 on industrial production, producer prices, short-term interest rates and real effective exchange rates. The results show that South Africa benefits from economic growth in both the UK and US. They also indicate significant price transmission from Germany and Japan to South Africa, with transmission in the opposite direction being statistically insignificant. The impulse response graphs show that a positive one standard deviation shock to both German and Japanese producer prices has a negative impact on South African output (industrial production) growth. Furthermore, South African monetary policy is relatively unresponsive to international monetary policy stances. The findings of this study indicate that South African policymakers need to take into consideration economic performance of the country’s major trading partners, with particular emphasis on the UK and US economies.

O financiamento por meio de títulos negociáveis vem ganhando importância no cenário internacional e concorrendo com meios tradicionais de financiamento, como os empréstimos bancários. No entanto, existem poucos estudos científicos no Brasil que abordam o financiamento das empresas por meio da emissão de títulos de dívida, em especial, os títulos de dívida de médio e longo prazos emitidos no exterior, os eurobonds e euronotes. Dessa forma, este trabalho tem por objetivo analisar e descrever o mercado de eurobonds e euronotes, sua história, características, ferramentas e técnicas, com especial atenção aos títulos brasileiros. Este objetivo será atingido por meio de uma análise descritivo-exploratória e o estabelecimento de relações entre variáveis, revisão de literatura, apresentação e exposição de dados históricos de mercado, análise de volumes de emissões e desenvolvimento intertemporal. Também é objetivo deste trabalho analisar empiricamente, de forma descritiva e exploratória, o perfil das empresas brasileiras que captam no exterior e a utilização de bonds em sua estrutura de financiamento, com suporte das teorias de estrutura de capital do trade-off estático e de peking order. Para isso, foram feitas análises estatísticas de indicadores contábeis e financeiros organizados em forma de painel (painel data analysis). Os resultados empíricos demonstram que, em geral, as empresas que emitem bonds possuem maior alavancagem com capital de terceiros, perfil de dívida com prazo mais alongado, maiores índices de imobilização, maior taxa de rentabilidade derivada do elevado faturamento, o que demonstra também a diferença do tamanho médio das empresas com emissão de bonds com as demais, confirmando a afirmação de Valle (2001) de que apenas as grandes empresas brasileiras possuem atuação ativa na captação no mercado de eurobonds e bonds estrangeiros. Também foi verificado que o comportamento dos indicadores financeiros em relação ao endividamento por bonds está em acordo com as teorias da estrutura de capital, em especial com a teoria do trade-off estático que preconiza que quanto maior a alavancagem da empresa, maior a rentabilidade para os acionistas. O estudo não possui o objetivo de generalização dos resultados, ficando as conclusões restritas à amostra e ao período analisado. / The financing by negotiable securities has been gaining importance in the international scene and competing with traditional ways of financing such as the banking loans. However, there are not many scientific studies in Brazil that approach the financing of companies through debt securities, especially medium and long-run debts issued in international market, the eurobonds and euronotes. Therefore, the objective of this study is to analyze and describe the market of eurobonds and euronotes, its history, characteristics, tools and techniques, with special attention to the Brazilian securities. In order to do that, a descriptive-exploratory analysis and the establishment of relations between variables will be done through an ample revision of literature, presentation and exposition of historical market data, non-statistical analysis of emissions volumes and development. It is also the objective of this study to analyze empirically, through a descriptive and exploratory form, the profile of companies that issued bonds in the international market, and the utilization of bonds in the financing structure of Brazilian companies, supported by the theories of capital structure of the static trade-off and peking order. In order to do that, statistical analysis of panel data was used. Empirical results indicated that, in general, Brazilian companies that issue bonds in the international market show higher leverage, longer term, higher fixed assets / equity ratio, higher profitability derived from high level of sales, which also demonstrates the difference between the average size of companies with emission of bonds and others, confirming the verification of Valle (2001) that only large Brazilian companies issue in the eurobonds and foreign bonds markets. It was also verified that financial indicators and leverage level are related, in accordance with the theories of capital structure and especially with the theory of static trade-off which praises that the higher the company´s leverage, the higher the profitability for the shareholders. It is not an objective of the present study to generalize the results, being the conclusions restricted to the analyzed sample.

Since the 1970s, the international economic system has become prone to the volatility and undue effects associated with booms and busts. This forty year period spanning the present has exhibited restrained growth and repressive economic development. Critical changes to the system are presented by the transition from "Fordism" to the post 1970s neoliberal regime and the globalization of world markets. Underpinning this transformation is an ideological shift towards free market capitalism and the adoption of "reduced form" market models. These "reduced form" models appear to hinder economic sustainability as their grounding in economics fails to account for real economic activity. This thesis aims to provide a more holistic perception of sustainability, one that provides a sound basis on which to develop sustainable economic policy. The Regulationist Approach presents the requisite understanding of economic sustainability required within this research. The inclusion of economic, historical and socio-political fields of research proposes a wider understanding of the political economy and sustainability. The application of the Regulation Approach to the South African economy illustrates many problem areas that require attention. The examination found that firstly, aggregate demand in the South African economy was unsustainable due to the debt driven nature of demand under the asset price bubble of the mid to late 2000s. Secondly, aggregate supply also proved unsustainable as government is failing to provide any substantive growth within important sectors of the economy such as education and the provision of general services. Furthermore, the adoption of inflation targeting in South Africa poses a barrier to sustained economic growth as it focuses singularly on price inflation. The "reduced form" model of inflation targeting fails to account for market failures and a number of vital indicators of sustainability most notably, debt levels and asset prices. The inclusion of these indicators, and financial stability more generally, are found to provide a more holistic and sustainable approach to macroeconomic policymaking.