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With the guidance of a framework of new institutional economics, the theoretical modelling establishes the necessary and sufficient conditions for institutional change to occur in authoritarian regimes: first, external shocks must be strong, much stronger than in a democratic regime; second, the shocks must be of such a kind that gives rise to factional competition within the ruling group. It predicts that involvement by the ruled group brings about more extensive institutional change than that merely driven by the ruling group. The theory is then applied to explain rural China’s market transition. As institutional change defines payoff structure, the extent of this change is approximated by the income advantage of cadre households relative to noncadre households. Econometric tests based on a Chinese rural household panel data of 21 years confirm the theoretical prediction.

Keywords: Institutional change, authoritarian regime, political returns, market transition, new institutional economics, Chinese rural cadre.

JEL Classification: B52, P2,R2.

Gender based occupational segregation in the Chinese economy was substantial in the 1990s as the shift towards a marketbased economic system intensified. Many argued that women were relatedly disadvantaged as they were routinely shifted from more to less lucrative industries. However, little work has been done of late to analyze the current level of occupational segregation by gender in the Chinese economy and its relationship to industries’ averages wages. Theory suggests that as the Chinese economy shifts towards greater market integration, with the associated decreasing role of the state, that the intensity of occupational segregation by gender would intensify initially and decrease in intensity over time. Furthermore, it has been found in capitalist economies that women’s increased concentration in an industry is often associated with declining relative wages in said industry. Using multiple approaches to measuring the extent of occupation segregation and its relation to wages, this contribution examines the current trends in urban China from 2004 to 2014 to test these theories. The data utilized herein is published in China Labour Statistical Yearbooks (CLSY) by the National Bureau of Statistics of China and includes data from all 31 provinces. The findings herein indicate that there exists a strong negative correlation between the growth rate of women’s employment in an industry and the average wage in several industries and a correlation, though weak, on average for the Chinese economy as a whole in support of the previous findings in capitalist economies. However, in opposition to the aforementioned theory, genderbased occupational segregation is still increasing in China, rather than decreasing in intensity. The combination of these findings implies that women’s relative wages in the Chinese economy are actually falling more rapidly than theory would suggest. Finally, this work concludes with a discussion of policy reforms which may help alleviate the potential underlying causes of the negative relationship between the average wage and the concentration of women in an industry.

Keywords: gender; China; employment; occupational segregation.

This paper analyses how firms’ leverage and corporate dividend policies affect the market value of Chinese listed firms depending on the availability of growth opportunities and the presence of financial constraints. We find that dividends play a dual role: while they are positively related to the value of firms with low growth opportunities or fewer financial constraints, they have a negative effect on the value of firms with high growth opportunities or more financial constraints. Conversely, leverage has a positive impact on firm value in all scenarios, which can be explained by the tighter financial constraints in Chinese capital markets.

Keywords: Corporate Finance, Financial Constraints, Growth Opportunities, China.

JEL codes: G32, G35.

The coronavirus has taken both health systems and the global economy by storm. Countries are scrabbling for solutions to ease the disruptive effects of the pandemic on their economies and health systems. In South Africa the Covid19 pandemic was declared a national disaster in terms of the National Disaster Management Act, 2002 followed by several urgent and drastic measures taken to manage the spread of the virus and to protect the people of South Africa from the impact of the virus. These measures included the nationwide lockdown, which commenced on 26 March 2020 and whose conditions forced many small businesses to close down due to loss of income while on the other hand created new opportunities for other businesses, a direct response on what Weiner (1976) wrote in the article for the Journal of Medical Economics entitled “Don’t Waste a Crisis”. The purpose of this paper is to systematically review the primary literature, policy papers, legislations and media reports on Covid19’ s impact on small businesses. It further provides lessons learnt from the pandemic and opens doors for more investigation on this subject to enable small businesses to reimagine their enterprises and allow government to reevaluate the type and nature of support provided to small businesses.

Keywords: Covid19; Coronavirus; Small Business; Government Support and SMMEs.

Using data from 286 Chinese cities over the period 2007-2014,this paper investigates the impact of financial development on economic growth at the city level in China. Our results from traditional cross-sectional regressions suggest the financial development negatively influenced China’s city level growth, while results from GMM estimators for dynamic panel data suggest that indictors of financial development have no significant effect on economic growth over this period. This result is consistent with many existing arguments that a state ruled banking sector, such as that in China, hinders economic growth because of the distorting nature of the government. To examine the sensitivity of our results, different sets of control variables sets are experimented with. Our results are shown to be robust. Our finding shows that to let the financial sector play a more efficient and effective role in promoting real economic growth, China has to further reform its financial sectors.

Key words: China, economic growth, financial development, GMM estimators.

JEL codes: N2, O1, O43.

Research on the time series momentum for the Real Estate Investment Trust (REIT) is rare in the existing literature. This paper aims to contribute to the literature by examining whether time series momentum works for the United States REIT market. We also compare profitability with the standard price momentum for REITs, especially with more recent data during the zero-interest-rate period from 2008 to 2015. It is found that taking long positions by employing momentum strategies can generate an average monthly return of about 0% to 5% for the REITs in the United States. The momentum profits do fluctuate across the sample period but do not diminish over time.

Keywords: Momentum Strategies; Time Series Momentum; REITs.

This article examines the economic effects of epidemics and COVID-19 on four East Asian nations: China, Mongolia, South Korea, and Japan. Three types of disasters’ losses used in this research comprise numbers of fatalities, numbers of people affected, and total damage in U.S. dollars. Epidemic and pandemic data from 1989 to 2018 are from The Emergency Events Database (EMDAT) website. Data on the macroeconomic variables are available from the World Bank website. We estimate a system of two equations to account for the feedback effects between disasters and the economy. The results show that the epidemics’ effects on the primary and secondary sectors are mostly adverse and statistically significant. The impact on the tertiary sector is mostly not statistically significant. We also find that country specific effects differ for different nations. We then provide a projection of real GDP per capita for each country.

Keywords: epidemics, disasters, COVID-19, East Asia.

JEL classification: O40, Q54.

The aim of the present study is to investigate the impact of religiosity on audit fees and tax avoidance behavior among the companies listed on the Tehran Stock Exchange (TSE) in a country that has struggled with economic sanctions. The study population consists of 720 observations and 90 listed companies on TSE during the years 2011-2018; moreover, the statistical model used is an OLS regression model. Our approach for measuring religiosity is the most comprehensive measure at the county level because we employed various variables for evaluating religious adherence. We actually by conducting a principal component analysis (PCA) to construct an index of religiosity for each county. The prior literature suggests that religiosity can reduce acceptance of unethical business practices. In line with our expectation, there is a negative association between religiosity and audit costs. In fact, in spite of the serious financial problems that companies had been struggled with, religious values were able to induce managers to behave more honestly when they provide financial statements. The results also witnessed a negative relationship between religious adherence and corporate tax avoidance. To put it another way, the firms headquartered in regions of high religious adherence are less likely to engage in tax avoidance behavior. This research will make aware investors and stakeholders of this fact that religiosity might be effective in reducing unethical corporate behavior in emerging markets, particularly those markets facing financial sanctions.

Keywords: Religiosity, Audit Fees, Corporate Tax Avoidance, Economic sanction, Unethical business practices, Tehran Stock Exchange.

This study investigates the impact of inflation on growth and income of the poorest section of the society in South Asian five major economies for the period 1986-2014. Using 28 years of time series data of five major South Asian countries – India, Pakistan, Sri Lanka, Bangladesh, and Nepal – this study concludes that inflation has negative but insignificant impact on growth. Trade openness is still not supportive to the pro poor growth because the poor are not well integrated to the supply chain in the global market. The population growth has immediate impact on food prices; therefore, the latter also has some positive effect on the income of the poorest who basically draw their livelihood from agriculture. Overall consumption expenditure and gross investment in the economy are also not supportive to raise the income of the poor because the effects of consumption and investment expenditure basically benefit to middle and higher income groups. However, population growth rate and debt servicing do have positive impact; the former due to overall rise in the prices of food items that farmers produce and the latter due to the public sector borrowing which often spent on public infrastructure.

Key words: Inflation; Growth; Poverty; Income Distribution; South Asia.

JEL Classifications: E31; O47; I32; D31; O53

The paper delivers a multistate, continuous, nonhomogeneous Markov chain to present a COVID-19 stressed probability of default (PD) model for banks. First it analyzes the theoretical and methodological considerations of bank failure. Then it provides a comprehensive review of earlier empirical bank failure models published in literature. It makes the case for a multistate model design, which has numerous advantages over the conventional binary classification techniques. A formal description of Markov chain modeling is followed by the detailed presentation of empirical model development. Eventually it estimates PDs for a five-year forecast horizon with the developed model reflecting COVID-19 crisis impacts.

Keywords: bank failure prediction, credit risk modeling, Markov chain, stress testing

JEL classification codes: C53, G17, G32