Bank Liquidity Creation, Regulations, and Credit Risk

Chien-Chiang Lee,Meng-Fen Hsieh 한국증권학회 2020 Asia-Pacific Journal of Financial Studies Vol.49 No.3

This study employs bank-level data covering 3007 individual banks (commercial, savings, and others) in 27 Asian countries to investigate the determinants of bank liquidity creation, considering four conditional factors over the period 1999–2013: credit risk, deposit insurance, financial market regulations, and bank reforms. Bank liquidity creation is shown to be statistically and economically significantly positively related to real economic output, as well as illiquid assets and core deposits. Larger banks increase their liquid assets ratio, but decrease their credit commitment. Countries implementing an explicit deposit insurance scheme may lead to moral hazard and excessive bank risk taking. If supervisory authorities can force a bank to change its internal organizational structure, or have more power to take legal action against external auditors for negligence, or increase capital requirements, then banks generally reduce their lending activities. Nevertheless, larger banks are able to increase liquid assets and lending to those countries with stricter financial regulations.

Social Security Expenditure and GDP in OECD Countries: a Cointegrated Panel Analysis

Lee, Chien-Chiang,Chang, Chun-Ping 한국국제경제학회 2006 International Economic Journal Vol.20 No.3

How Does Diversification Impact Bank Stability? The Role of Globalization, Regulations, and Governance Environments

CHIEN-CHIANG LEE,Meng-Fen Hsieh,Pei-Fen Chen,Shih-Jui Yang 한국증권학회 2013 Asia-Pacific Journal of Financial Studies Vol.42 No.5

This paper examines the impact of bank diversification on stability, using bank-level data for 22 Asian countries over the period from 1995 to 2009. We empirically investigate whether country characteristics, economic structure, regulatory and governance environments, and globalization have affected the degree of banking stability in Asia. This study takes on two measures for banking diversification - asset and income diversities - and adopts a broad set of variables as a proxy for bank stability. We apply dynamic panel data techniques and show different results from the U.S. and Europe. Our results first reveal that in Asia asset diversity is not sufficient enough to improve bank stability. However, bank stability can be enhanced through a strategy of income diversity. Second, a higher degree of globalization decreases bank stability through income diversity, but stability rises through asset diversity. Third, a country with a higher level of corporate governance reduces the agency problem, thus further increasing stability through diversity. Finally, a country with a higher level of economic development will support asset diversity so that banks can obtain higher profit accompanied by lower risk.

Globalization, Economic Growth and Institutional Development in China

Chien-Chiang Lee,Chi-Chuan Lee,Chun-Ping Chang 연세대학교 동서문제연구원 2015 Global economic review Vol.44 No.1

Unlike most previous works which commonly define globalization as a strict economic characteristic, using the overall globalization index and its three sub-dimensions – economic, social and political integrations to proxy openness, this paper examines the effect of globalization on economic growth associated with autocratic institutional in China, using the a two-step dynamic panel generalized method of moments technique in a panel of 30 provinces, municipalities and the autonomous regions over the period of 1970–2006. We find that different globalization indices have different impacts on regional economic growth. Also, autocracy may harm regional development, but these conclusions are very sensitive to different globalization variables specifications. Further, considering the interactive effects between globalization and economic growth, we show that in the period of higher global integration, the higher democracy (lower autocracy) may harm economic growth in the case of China. We emphasize that democracy is clearly not a necessary condition for the purpose of economic growth in China.

A Mn(iv)-peroxo complex in the reactions with proton donors

Lee, Chien-Ming,Sankaralingam, Muniyandi,Chuo, Chi-He,Tseng, Tzu-Hsien,Chen, Peter P.-Y.,Chiang, Ming-Hsi,Li, Xiao-Xi,Lee, Yong-Min,Nam, Wonwoo The Royal Society of Chemistry 2019 Dalton Transactions Vol.48 No.16

<P>Protons play an important role in promoting O-O or M-O bond cleavage of metal-peroxo complexes. Treatment of side-on O2-bound [PPN][Mn<SUP>IV</SUP>(<SUP>TMS</SUP>PS3)(O2)] (1, PPN = bis(triphenylphosphine)iminium and <SUP>TMS</SUP>PS3H3 = 2,2′,2′′-trimercapto-3,3′,3′′-tris(trimethylsilyl)triphenylphosphine) with perchloric acid (HClO4) in the presence of PR3 (R = phenyl or <I>p</I>-tolyl) results in the formation of neutral five-coordinate Mn<SUP>III</SUP>(OPR3)(<SUP>TMS</SUP>PS3) complexes (R = phenyl, 2a; <I>p</I>-tolyl, 2b), which are confirmed by X-ray crystallography. Isotope labelling experiments demonstrate that the oxygen atom in the phosphine oxide product derives from the peroxo ligand of 1. Reactions of 1 with weak proton donors, such as phenylthiol, phenol, substituted phenol and methanol, are also investigated to explore the reactivity of the Mn<SUP>IV</SUP>-peroxo complex, leading to the isolation of a series of five-coordinate [Mn<SUP>III</SUP>(L)(<SUP>TMS</SUP>PS3)]<SUP>−</SUP> complexes (L = phenylthiolate, phenolate or methoxide). Mechanistic aspects of the reactions of the Mn<SUP>IV</SUP>-peroxo complex with proton donors are discussed as well.</P>

Inflationary Threshold Effects in the Relationship between Financial Development and Economic Growth:Evidence from Taiwan and Japan

Chien-Chiang Lee,Swee Yoong Wong 중앙대학교 경제연구소 2005 Journal of Economic Development Vol.30 No.1

This paper employs a threshold regression model to investigate the existence of inflation threshold effects in the relationship between financial development and economic growth. A specific question that is addressed in this paper is what the threshold inflation rates are for Taiwan and Japan. Results indicate that there is one inflation threshold value in Taiwan, whereas there are two in Japan. Earlier studies support the view that financial development may promote economic growth. However, the conclusion drawn from the empirical findings suggests that it can only be achieved under low and moderate inflation. In addition, the threshold level of inflation below which financial development significantly promotes growth is estimated at 7.25% for Taiwan and 9.66% for Japan. The empirical findings from the threshold regression model indicate that inflationary threshold for both countries occurred in the high inflation period of the world energy crises in the 70s.

Bank Reforms and Competition: New Global Evidence

Meng-Fen Hsieh,Chien-Chiang Lee 한국증권학회 2014 Asia-Pacific Journal of Financial Studies Vol.43 No.5

This study investigates the relationships between bank reforms and competition and sets up alarge-scale sample covering 15 290 individual commercial banks from 90 countries. The empiri-cal results of the full sample indicate that bank reforms, except for interest rate controls, increasecompetition significantly. To examine whether country heterogeneities influence the effectsfrom bank reforms, we further divide countries into six groups: Advanced, Asia, Latin America,Middle East and North Africa (MENA), Sub-Saharan Africa (SSA), and Transition countries. Our results show that: (i) interest rate controls play an important role for Advanced countries;(ii) privatization is substantial for Transition countries, Asia, Latin America, and MENA; (iii)credit control is suitable for Asia; and (iv) removing entry barriers improves bank competitionin MENA and SSA. Empirical results thus offer evidence that country characteristics do matteron the reform–competition nexus. Moreover, we also reveal that bank competition is enhancedthrough bank reforms, as well as financial and economic development variables. Hence, the gov-ernment or authorities should take these influential factors into consideration when formulatingrelevant policies. These findings also provide important implications.

G7국가의 보험, 은행, 주식시장 간의 장단기 연관성 분석

( Guan-chun Liu ),( Chien-chiang Lee ) 보험연구원 2016 보험금융연구 Vol.27 No.4

본 연구는 G7국가들을 대상으로 보험, 은행, 주식시장 간의 장단기 연관성을 분석하였다. 단기적인 인과관계를 분석하기 위하여 Toda and Yamamoto(1995)가 제안한 그레인저 인과관계(Granger causality)를 적용하였다. 장기적인 연관성 분석을 위해서는 분수차(fractional) 재무모형에 기반한 Jumarie의 분수차 미분을 적용한 확장 비선형 계량경제모형을 도입하였다. 또한 최적회귀를 분석하기 위하여 다중 다단계 회귀(multiple stepwise regression) 기법을 사용하였다. 연구결과 보험, 은행, 주식시장 간에는 다양한 형태의 동태적 연관성이 존재함을 알 수 있었다. 특히 장단기 연관성에는 국가별 고유효과가 존재했으며, 장기적인 연관성은 단기적인 연관성에 비해 강한 것으로 나타났다. 한편 단기적인 인과관계에서는 보험과 은행 간의 인과관계가 가장 강하게 나타났고, 장기적으로는 주식시장과 은행의 연관성이 가장 강한 것으로 나타났다. 이러한 연구결과는 위험을 분산하고자 하는 투자자들뿐만 아니라 경제성장 과정에서 금융 시스템의 상호협력적인 발전을 실현하려는 정책당국에도 시사점을 제공할 것이다. This paper investigates the short-run and long-run linkages among insurance activity, banking development, and stock market for G-7 countries. To examine the short-run causal nexus, we adopt the Granger causality approach proposed by Toda and Yamamoto(1995). To explore the long-run relationships, we introduce an extended nonlinear econometric model with the Jumarie`s fractional derivative based on the fractional financial model for economic system, and the multiple stepwise regression technique is employed to explore the optimal regression. Our empirical results show that there exist various patterns of dynamic relationships among the three financial sectors. Specifically, their short-run and long-run relationships are country-specific, and the long-run linkage is stronger than the short-run linkage. Furthermore, the short-run causal relationship between insurance activity and banking credit is the strongest, whereas the long-run relationship between stock market and banking credit is the strongest. These findings offer some useful insights not only for investors to diversify their risk away, but also for policy makers to realize the synergistic development of the financial system in the process of economic growth.

A Re-examination of German Government Approval and Economic Performance: Is There a Stable Relationship between Them?

CHUN-PING CHANG,CHIEN-CHIANG LEE 한국국제경제학회 2010 International Economic Journal Vol.24 No.1

This paper studies the stability between the government approval and macroeconomic series for Germany during 1977-2004 allowing structural breaks. We first execute traditional cointegration tests without breaks, and the results reveal weak evidence of a link between the political and economic variables. However, using Hansen's (1992) tests for parameter instability suggest that such a relationship between politics and economy may be unstable. After allowing for the structural breaks in the series and conducting Gregory and Hansen's (1996) cointegration test, we find that a clear cointegrated relationship undoubtedly exists between approval rates and macroeconomics; we discover that some events indeed affect the government's popularity. Overall, once we locate structural breakpoints, such as when the West German government was succeeded by Helmut Kohl in 1982, then we begin to distinguish the actual cointegrated relationships between the approval rate of government and macroeconomics before and after the structural breakpoint.

Globalization and Economic Growth: A Political Economy Analysis for OECD Countries

CHUN-PING CHANG,CHIEN-CHIANG LEE 연세대학교 동서문제연구원 2010 Global economic review Vol.39 No.2

Globalization is commonly defined as a strict economic path by most previous works, but it is really a fuzzy concept with unrestrained dimensions. While the ideological location of an incumbent political party is a powerful predictor of its policy position, the role of a political party in the globalization-growth nexus has never been fully empirically investigated. By applying Pedroni’s panel cointegration technique instead of a time-series or traditional panel data approach, this paper aims to empirically re-examine the co-movement and the causal relationship among economic growth, the overall globalization index, and its three main dimensions* economic, social, as well as political integrations*by using panel data for 23 Organization for Economic Cooperation and Development (OECD) countries for 1970 to 2006. Certainly, the political party variable is taken into account as the advanced test is promoted, and we finally discover that all variables move together in the long run. Based on the results of the panel causality test, though the evidence of short-run causality is very weak, it does show long-run unidirectional causality running from the overall index of globalization, economic globalization, and social globalization to growth. Finally, the critical role of the political party is deeply discussed in relation with our results.