Developing a circular economy through waste recycling has emerged as a paradigm for conserving nonrenewable resources. But what does implementing a circular economy mean in the context of globalised economies? Waste generated by consumption, including imports, often misaligns with national production and export material needs. This material mismatch, termed “material imbalance,” along with variations in waste disutility, costs, and access to virgin resources across countries, shapes local and international trade strategies related to waste. This paper offers a new perspective on recycling policies, emphasizing international trade and national material imbalances. We theoretically characterize the existence of a waste market for recycling and demonstrate that local recycling incentive policies can drive or reduce waste exports depending on their design. Additionally, we show both theoretically and empirically that relative material imbalances between countries are a key determinant of waste trade for recycling.
This study revisits the finance–growth nexus using panel data from 171 countries spanning 1980–2019. Its main contribution lies in applying a dynamic threshold GMM approach to five-year averages of financial development indicators, including the IMF Financial Development Indexes, credit, M2, market capitalization ratios, and standard covariates. Significant threshold effects are identified for the credit-to-GDP ratio, which is consistent with prior evidence. A novel finding is the identification of nonlinearities in the financial institutions’ depth and financial markets access sub-indexes. The findings challenge the “too much finance” hypothesis by showing that, although the marginal effect of finance on growth diminishes beyond these thresholds, it remains positive. Robustness checks across different country subgroups confirm these findings and highlight that the dynamics observed in emerging and developed economies are central to the emergence of full threshold effects. Overall, the findings have important policy implications, suggesting that optimal financial development strategies should be tailored to countries’ respective stages of economic development.
Financial supply-side structural reform (FSSR) enhances the capital conversion efficiency of innovative factors effectively by advancing the fintech ecosystem and bolstering risk-sharing mechanisms. With annual panel data on China’s A-share listed enterprises spanning 2007–2022, a staggered difference-in-differences (DID) approach is implemented to examine the causal effects and underlying mechanisms of FSSR on enterprise innovation. The results demonstrate that FSSR significantly enhances enterprise innovation. The mechanism analysis provides evidence consistent with three possible channels: enterprise financial stability, enterprise investment level, and fiscal subsidies. Heterogeneity analyses highlight that the innovation-driving effect is relatively greater for non-state-owned enterprises, capital-intensive enterprises, and enterprises in western regions, while it is relatively smaller for technology-intensive enterprises and enterprises in eastern regions. Findings from our empirical analysis corroborate the case for deepening financial system reform and offer actionable guidance for policymaking aimed at fostering innovation-driven growth.
As climate change continues to alter global ecological systems, it is also imposing significant pressure on corporate operations. This study empirically examines the theoretical mechanisms and transmission channels through which climate risk influences corporate resilience, focusing on China's A-share listed companies between 2011 and 2023. Additionally, the moderating effects of green finance and digital finance are explored. The findings reveal that climate risks significantly reduce corporate resilience. However, their impacts exhibit notable heterogeneity across regional distributions and ownership structures. The study identifies financing constraints and operational costs as partial mediators, suggesting that climate risks weaken corporate resilience by exacerbating financing difficulties and increasing operational expenses. Furthermore, the analysis demonstrates that both green finance and digital finance alleviate the negative effects of climate risk on corporate resilience. Based on these findings, some suggestions for mitigating the impact of climate risk and improving enterprise development resilience are given from many aspects.
Understanding fertility in emerging economies is central to demographic policy. Drawing on aggregate panel data from 10 BRICS+ countries (2000–2023), this study examines how maternity leave policy volatility, household demographic and economic context, and female labor market conditions are associated with fertility. Three findings emerge. First, policy volatility shows a stronger negative association with fertility in high-income countries (Q4 interaction: β = −0.030, P < 0.001), suggesting that institutional predictability matters more as economies develop. Second, the household responsibility index is positively associated with fertility (β = 0.339, P = 0.005), with a negative interaction with LFPR but a positive interaction with the employment-to-population ratio, indicating that household context moderates labor-market associations. Third, nonlinearities are more evident in employment absorption, female tertiary enrollment, and the household context than in the LFPR. The findings imply that fertility-policy evaluation should be context-specific. The study extends time-allocation theory by incorporating policy uncertainty.
This study examines the impact of monetary policy on the financial performance of listed private commercial banks in Bangladesh. Using panel data from 19 banks over 2013–2021, it investigates the effects of the Cash Reserve Ratio (CRR), Money Supply Growth (MSG), and Treasury Bill Rate (TBR) on Return on Total Assets (ROTA), Return on Capital Employed (ROCE), and the Log of Operating Profitability (LOOP). Panel regression models with robustness checks are employed. The results show that CRR improves ROTA but reduces ROCE, indicating a trade-off between liquidity requirements and capital efficiency. MSG positively affects ROCE, whereas both MSG and TBR significantly reduce operating profitability. These findings provide new evidence on the relationship between monetary policy and bank performance in Bangladesh and offer policy implications for designing balanced monetary strategies that support both banking sector profitability and financial stability.
This study examines the simultaneous and interactive effects of geopolitical risk and climate change risk on foreign direct investment inflows across 43 economies during the period 2002-2023. Methodologically, we employ the Bayesian estimation technique, providing a robust, nuanced quantification of uncertainty compared to traditional frequentist approaches. Results reveal a significant negative impact of climate change risks on inward FDI, while GPR exhibits a positive "safe haven" effect. Furthermore, institutional quality, labor force size, and trade openness are identified as primary drivers, whereas import tariffs act as a deterrent. Our findings suggest that because FDI involves long-term, sunk-cost investments, host countries must move beyond evaluating risks in isolation. We argue that institutional reforms not only safeguard investor rights but also enhance climate resilience for multinational corporations. This research offers a refined risk assessment framework for navigating dual geopolitical and environmental challenges.
Modeling the complex behavioral tendencies of bank managers presents significant difficulties. To address this, we utilize a flexible functional form based on a managerial preference framework, capable of accommodating both linear and nonlinear behaviors. This approach effectively captures managerial decision-making, whether their preferences are balanced or skewed. Applying this method to EU banks, we analyze managerial inclinations regarding technical and allocative efficiency, while also examining how these preferences differ among commercial, savings, and cooperative banking models. The results indicate a noticeable asymmetry, with a stronger emphasis on allocative efficiency. Additionally, we investigate the factors influencing these preferences, including market structure indicators like the Herfindahl Index, interest rate spreads, and the z-score.
This study examines the impact of China’s reform of environmental fiscal authority and expenditure responsibilities on air pollution. Using city-level panel data and a difference-in-differences approach, we find that the reform significantly improved urban air quality. Mechanism analysis shows that this improvement stems from improved provincial coordination, stronger local enforcement, and targeted reductions in industrial emissions. The effects are more pronounced in major river basins and in non-resource-based cities. Overall, the study demonstrates that the clarity and division of fiscal responsibilities play a decisive role in shaping environmental outcomes, thereby extending the understanding of environmental federalism and offering theoretically grounded and policy-relevant insights for China’s ongoing new round of fiscal and taxation system reforms.
Unemployment insurance benefits can influence corporate investment behavior. We investigate the impact of unemployment insurance benefits on the precautionary and profit-seeking motives underlying corporate financial investment by reference to monthly county-level unemployment insurance benefits data and data obtained from listed firms in China. Our results show that unemployment insurance benefits significantly promote non-state-owned enterprises' (non-SOEs') long-term financial investment, driven by the profit-seeking motive rather than the precautionary motive. A mechanism analysis indicates that unemployment insurance benefits weaken employees' monitoring of non-SOEs. Heterogeneity tests reveal that these effects are more pronounced for labor-intensive non-SOEs and for non-SOEs with a greater share of skilled employees. Moreover, the promotional effect of unemployment insurance benefits on profit-seeking motives can be counteracted by external monitoring mechanisms. Overall, our paper contributes to the literature on labor markets and corporate finance.
This study investigates the relationship between green technologies, green innovation, and GDP growth across 85 countries over the periods 1990-2019 and 2009-2019. We employ a novel Granger non-causality test that accounts for cross-sectional dependence and heteroskedasticity. Our findings indicate that green technologies significantly contribute to GDP growth, particularly in emerging economies. However, regional heterogeneity exists, with developed economies showing more complex interactions between green innovation and GDP. These results suggest that tailored green growth policies are essential to maximise the economic benefits of green technologies. This study provides policymakers with insights into the role of green innovation in fostering sustainable economic growth.
Sustainable agriculture requires reducing reliance on polluting chemicals while maintaining farmers' economic viability. This study examines whether land rental improves the joint economic and environmental performance of Chinese crop farmers within an agrochemical-based eco-efficiency framework. We focus on four major agrochemicals—chemical fertilizers, insecticides, herbicides, and plastic mulch films. Using nationally representative farm-level data from 2015 and 2017 (n = 10,357 observations across 29 provinces) and a flexible treatment-effect model addressing endogeneity, we find that land rental significantly reduced eco-efficiency, with the strongest negative impacts in central provinces. The results are robust across alternative econometric specifications. This decline is associated with insufficient scale expansion, land fragmentation, and short-term rental contracts. These findings provide scientific evidence for redirecting subsidies toward long-term, large-scale, and contiguous land transfers to enhance market functioning and promote greener agricultural growth.
This paper estimates the cost of producing health human capital in Afghanistan using administrative and financial data from Kabul Medical University for the 2019 to 2020 academic year. I combine a hybrid step-down cost allocation method with an econometric cost function and Data Envelopment Analysis to estimate program-level and year-level training costs, identify cost drivers, and assess relative efficiency. Per-student costs vary substantially across programs and rise in clinically intensive years, reflecting greater reliance on supervision, laboratory resources, hospital-based instruction, and institutional support services. The cost function estimates show meaningful economies of scale: a one percent increase in enrollment is associated with a 0.24 percent reduction in per-student cost. Efficiency scores range from 0.74 to 1.00, indicating variation in resource use across programs. Sensitivity analysis shows that excluding female students raises per-student costs by reducing scale efficiency, highlighting the fiscal and workforce consequences of restricting women’s access to medical education.
Using data from Chinese manufacturing firms (2015-2024), this study examines the association between ESG performance and investor confidence. It finds a clear hierarchy of materiality: governance (G) has a significantly stronger positive influence than environmental (E) and social (S) performance. This finding reveals that in an institutional environment characterized by the development of investor protections and markets more susceptible to sentiment-driven fluctuations, investors prioritize verifiable signals of corporate integrity embedded in governance structures over abstract commitments of environmental and social initiatives. This effect is mediated by enhanced corporate reputation and reduced information asymmetry. Furthermore, in contexts of low marketization or high economic policy uncertainty, G becomes the dominant anchor of investor confidence while the influence of E and S diminishes. The research concludes that in emerging markets, strong governance is more visible and more easily valued, serving as the key anchor for investor confidence over E or S commitments.
This study examines the impact of improved non-wage benefits and working conditions on household production of formal-sector workers in Ghana, with a focus on gender and geographical disparities—areas often overlooked in labour studies on developing countries. Using data from the 6th Ghana Living Standards Survey and instrumental variable estimation, we find that better working conditions reduce weekly paid work hours, increasing household production time, particularly among men and rural households in paid or formal employment. Enhanced benefits encourage these employees to prioritize household tasks, leisure, and self-care, fostering a healthier work-life balance. Our findings underscore the potential for improved working conditions to increase male participation in unpaid household labour. We recommend that Ghana’s Ministry of Employment and Labour Relations expand the limited five-day paternity leave across more sectors to support male household contributions. Additionally, strengthening labour protections for informal workers is crucial to addressing household labour disparities and enhancing worker welfare.
This paper identifies the effect of technological diversification in M&A networks on corporate ESG (Environmental, Social, and Governance) performance. Using hand-collected IPC patent data, we construct firm-level M&A network measures within a five-year rolling window. We document a robust inverted U-shaped relationship, implying that moderate diversification enhances ESG performance while excessive diversification is detrimental. To address endogeneity, we implement industry-year interaction effects, replace dependent variable, alteration of sample rolling period, and a heckman two-stage model. From the dual perspectives of internal governance and external responsibility, we uncover the intrinsic mechanisms involving agency costs and corporate social responsibility (CSR). Further analysis demonstrates that the ESG-driven effect of technological diversification in M&A networks is more pronounced in firms with high growth potential and superior internal control quality, and this effect is particularly significant in manufacturing industry. Our findings contribute to the applied M&A and innovation literature and providing actionable implications for optimizing M&A strategies.
This study examines the response of the real effective exchange rate (REER) to monetary and output shocks in Pakistan using quarterly data from 1980 to 2022 and employs the vector autoregressive (VAR) model. The impulse response shows that positive shocks appreciate the home currency, while negative shocks depreciate it, except for the money supply, where positive shocks depreciate it. Variance decomposition emphasizes that monetary policy variables, specifically the supply of money and interest rates, are the key contributors to exchange rates. VECM findings show that the money supply and inflation depreciate the currency, interest rates appreciate it, and output is negatively linked to REER due to high imports. The results of the structural vector autoregressive (SVAR) model support the robustness of the empirical findings. This study suggests that sound monetary policy and other tools are essential for economic stability.
This study aims to enhance the accuracy of volatility estimation in imperfect financial markets, particularly during the COVID-19 pandemic and non-pandemic periods. It also examines the dynamic behavior of volatility, focusing on how market imperfections influence volatility, particularly during periods of crisis like COVID-19. The study investigates the extent to which COVID-19 triggers changes in information content, which, in turn, affects volatility. The research proposes a GARCH-X framework that incorporates various market imperfections as exogenous variables (Model 1), the interaction between COVID-19 and asymmetric information (Model 2), and the degree of imperfection as an exogenous variable (Model 3). A refined contribution of this study is the use of entropy to measure market imperfections and the degree of imperfection. All models yield significant results, signifying that market imperfections influence volatility behavior. An empirical finding nominating that the proposed model is superior to conventional GARCH models in both in-sample and out-of-sample periods.
Environmental taxes have emerged as a key policy tool for internalizing environmental costs and promoting sustainable development. This study investigates the effects of eco-innovations and various types of environmental taxes on Australia's load capacity factor (LCF) from 1995Q1 to 2022Q4. Employing advanced econometric techniques, including quantile-on-quantile and cross-quantile correlation approaches, this study explores long-term cointegration among eco-innovations, environmental tax categories, and the LCF in Australia. The results indicate that eco-innovations significantly enhance LCF, reflecting their role in strengthening environmental resilience. Moreover, disaggregated environmental taxes positively influence the LCF, especially those targeting pollution, energy, transport, and resources. The findings support the integration of environmental and fiscal policies to address environmental challenges and achieve long-term sustainability goals.
Sustainable development is critical for the long-term growth of cities. Achieving harmonious development between the economy and the environment is an important goal pursued jointly by nations and cities. Environmental policies serve as a key driving force supporting cities in accomplishing low-carbon and green transitions. However, existing literature has insufficiently explored the impact of non-mandatory environmental policies on regional Surface Black Carbon Concentrations (SBC), and no consensus has been reached. SBC refers to the monthly data of black carbon mass concentration in Chinese cities, derived from NASA's M2TMNXAER_5.12.4 satellite retrieval data, specifically the natural logarithm of surface black carbon mass concentration (mu g/dm & sup3;). Therefore, this study uses city-level panel data from China spanning 2000-2021 to examine the logical relationship between non-mandatory Low-Carbon City Pilot (LCCP) policies and SBC in cities. The findings demonstrate that low-carbon policies can generate an SBC reduction effect. A series of robustness tests provide evidence of the negative causal impact of LCCP policies on SBC. Mechanism analysis reveals that green innovation and industrial upgrading serve as two primary transmission channels.
