Effects of information and communication technology on total-factor carbon emission efficiency and the health co-benefits

Information and communication technology (ICT) has great potential to propel economic development toward a low-carbon direction. This study aims to investigate the effect of ICT development on total-factor carbon emission efficiency (TFCEE), as well as its public health co-benefits. We use dynamic (threshold) models and a panel of 30 Chinese provinces from 2008 to 2019. The results suggest that ICT significantly and positively impacts the TFCEE. Specifically, for every 10 per cent increase in the internet development index, the TFCEE increases by 0.11 per cent. Moreover, we find that ICT development indirectly improves the TFCEE by promoting green innovation and energy structure optimization. Furthermore, when green innovation (energy structure represented by the share of coal) switches from below to above (above to below) its threshold value, the promotion effect of ICT development on the TFCEE increases. Additionally, the results show that improving the TFCEE can lead to co-benefits in strengthening China's public health. This study delivers novel insights on promoting the TFCEE through the ICT channel and highlights its positive health-related externalities. Furthermore, we offer policy recommendations to Chinese decision-makers, which can apply to other emerging economies battling similar issues.

New trading strategy in investment and a new anomaly: A study of the hedge funds from emerging and developed markets

This paper introduces a new trading strategy in investment: including the asset (Asset A) with the highest mean, the asset (Asset B) that stochastically dominates many other assets, and the asset (Asset C) with the smallest standard deviation in their portfolio to form portfolios in the efficient frontier for emerging and developed markets that could get higher expected utility and/or expected arbitrage opportunities. To test whether our proposed new trading strategy performs better, we set a few conjectures including the conjectures that investors should include any one, two, or three of Assets A, B, and C from emerging and developed markets. We test whether the conjectures hold by employing both mean-variance and stochastic dominance (SD) approaches to examine the performance of the portfolio formed by using hedge funds from emerging and developed markets with and without Assets A, B, and C, the naïve 1/N portfolio, and all other assets studied in our paper. We find that most of the portfolios with assets A, B, and C++ stochastically dominate the corresponding portfolio without any one, two, or all three of the A, B, and C strategies and dominate most, if not all, of the individual assets and the naïve 1/N portfolio in the emerging and developed markets, implying the existence of expected arbitrage opportunities in either emerging or developed markets and the market is inefficient. In addition, in this paper, we set a conjecture that combinations of portfolios with no arbitrage opportunity could generate portfolios that could have expected arbitrage opportunity. Our findings conclude that the conjecture holds and we claim that this phenomenon is a new anomaly in the financial market and our paper discovers a new anomaly in the financial market that expected arbitrage opportunity could be generated. We also conduct an out-of-sample analysis to check whether our proposed approach will work well in the out-of-sample period. Our findings also confirm our proposed new trading strategy to include Assets A, B, and C in the portfolio is the best strategy among all the other strategies used in our paper and gets the highest expected wealth and the highest expected utility for the emerging and developed markets. Our findings contribute to the literature on the emerging and developed markets of hedge funds and the reliability of alternative risk frameworks in the evaluation. Our findings also provide practical experience to academics, fund managers, and investors on how to choose assets in their portfolio to get significantly higher expected utility in emerging and developed markets.

Does corporate carbon performance converge in the global market? Evidence from a distribution dynamic approach

Converging corporate carbon performance (CCP) to a higher level is necessary to achieve the global goal of controlling temperature rise. However, it remains uncertain whether all international firms endeavour to improve CCP. Using a panel of 19,913 public companies from 76 countries during the 2010-2019 period and two visual tools of the distribution dynamics approach, we conduct a nascent analysis of transitional dynamics and the long-run evolution of CCP. We find that regardless of investigated period (before and after Paris Agreement) and regional location, most firms converge towards the highest CCP of 10, thereby improving carbon performance over time. After Paris Agreement, the convergence to the top CCP is more significant, whereas more companies cluster around the mediocre CCP (a value of 6.7), thus evidencing an increased heterogeneity in convergence paths. Firms from East Asia & Pacific and the North American regions drive such heightened heterogeneity. Specifically, enterprises from East Asia & Pacific show the least convergence towards the highest CCP, probably because more manufacturing firms in the region primarily rely on fossil fuels and face loose environmental regulations. Therefore, further improving CCP may require substantial investments in equipment upgrades and would result in significantly higher costs. For North America, the results can be associated with Donald Trump's policy towards climate change and bid to withdraw from the Paris Agreement, reflecting firms taking a Republican stand, most likely diverging to mediocre CCP and experiencing a decline in future carbon management. The observed convergence towards the highest CCP is nearly twice as significant among firms from OECD than non-OECD countries, which aligns with global enterprises outsourcing emissions to developing countries. The study reveals the pattern of strong convergence to the highest CCP in the global firms as evidence of collective efforts in the transition to net zero. However, divergence and increased heterogeneity may occur in some regions due to politics, industrial structure and regulations.

Impact of COVID-19 on lifestyle and financial behaviour: The implications to research in financial vulnerability

The outbreak of coronavirus pandemic in late 2019 posted unprecedented social-economic challenges and disruptions to societies and individuals. The "new-normal" styles of living and working could intertwined with other determinants complicating the investigation of individual's financial vulnerability. The purpose of this paper is to conduct literature survey to review and consolidate the recent scattered literatures to identify some possible factors to be considered in the research related to financial vulnerability, including pandemic's impact of COVID-19 to different aspects of personal finance issues, pandemic-driven digitisation of the economy activities, changes in financial behaviour and addiction to digital technology.

Evaluating Global Inequality Using Decomposition Approach

Given that there is no recent research on decomposition for global inequality, the aim of this study is to fill the gap in the literature by investigating global inequality with decomposition technique. The data of this study were compiled from the World Bank and decomposition by subgroups was conducted to evaluate the driving forces behind the evolution of inequality. Almost all the countries in the world were included in this study, and the study period spans from 2000 to 2017. The analysis was carried out in several stages to evaluate the issue of North-South divide, as well as the impacts of regional and income subgroups. There are several salient findings derived from this study. First, the results show that there was a gradual decline of international inequality within the study period. Second, there was still a large disparity between the developed and developing countries, and the inequality within the developing countries has aggravated further. Third, geographical location has exerted great impacts on global inequality and East Asia contributed about 40% to the overall decline in international inequality. Fourth, decline in inequality amongst the upper-middle-income countries also contributed substantially to the fall in international inequality. The results derived from this paper can provide pertinent information for the formulation of a comprehensive and coherent strategy in coordinating international efforts and managing inequality while promoting human development under the framework of the newly established Sustainable Development Goals.

Global Inequality in Service Sector Development: Trend and Convergence

The COVID-19 pandemic has caused a huge impact on global service sector. In the pandemic background, to understand the disparity in service sector outputs at the global level is crucial for assessing the effectiveness of development policies in different countries. This study investigate the global service sector and it aims to investigate the transitional dynamics of the output from the service sector by adopting stochastic kernel analyses. Distribution dynamics analyses are carried out for all the countries in the world. The data are then divided into different regional and income groups to evaluate the impacts of geographical location and income on the development of the service sector. The results show that the Global North will continue to make greater strides, while the output capacity in many Global South countries struggles to reach the global average. Moreover, it is shown that countries with higher per capita income will perform better in the development of their service sector than those with low per capita income, thereby highlighting the persistence of global inequality. Finally, this study shows that the Sub-Saharan Africa region and the South Asia region both are very important in the alleviation of global inequality.

The Evolutionary Trend of Global Inequality: Analyzing the Impacts of Economic Structure

The aim of this study is to examine the evolution of inequality by focusing on the impacts of the economic structure. The technique of decomposition by income sources is employed to evaluate the contribution of the three major sectors, namely the agricultural, industrial, and service sectors to overall inequality. The data cover almost all the countries in the world from 2001 to 2017 for a total of 18 years. There are four stages of analysis in this study. The first stage of study is to provide an overall view of the evolutionary trend of global inequality, the second stage focuses on the North-South divide, the third stage determines the impacts of income groups, and the fourth stage investigates the impacts for each region. There are several salient findings: First, global inequality had declined in the study period. Second, the service sector is identified as the largest contributor to global inequality, followed by the industrial sector, while the contribution of the agricultural sector is negligible. For the North-South divide, disparity in the service sector was more marked in the North than in the South. The industrial sector played a major role in the South and contributed more than 40% to overall inequality. For the comparison amongst the income groups, our findings show that the higher the income, the higher the percentage contribution of the service sector (except for the low-income group). Finally, for the comparison across regions, although the contribution of the agricultural sector in most regions are below 1.5%; however, the contribution of the agricultural sector in both Sub-Saharan Africa and South Asia is more than 8%. It implies that a lot of people in these regions still rely on the agricultural sector for a living, and the development in the industrial and service sectors in these two regions lagged behind those of the other regions. Our analysis show that the evolution pattern is very different for each region, therefore, it is necessary to take the effects of income and geographical location into consideration in formulating development policies.

The Impacts of Globalization on Inequality in the Post-COVID-19 World: Evidence From China

Empirical studies suggest that globalization (FDI and international trade) has been greatly affected by the COVID-19 and related anti-pandemic measures imposed by governments worldwide. This paper investigates the impact of globalization on intra-provincial income inequality in China and the data is based on the county level. The findings reveal that FDI is negatively associated with intra-provincial inequality, intra-provincial inequality increases as the primary industry sector (agriculture) declines. The result also finds that the increase in inequality stems not from the development in the tertiary or secondary industry sectors per se, but the unevenness in the distribution of these sectors.

Global Industrial Development: Insights From the Distribution Dynamics Approach for the Post Covid Era

The spread of COVID-19 has significantly dampened global economic activity and has also wreaked havoc on the industrial sector. Understanding the disparity and convergence of global industrial outputs is important in assessing the effectiveness of concurrent development policies. This study investigates the spatial distribution of global industrial output to unveil the disparity in industrial development and the feasibility of achieving convergence over time. Stochastic kernel analyses are carried out for national regimes to study the overall pattern of industrialization for all the countries in the world. Countries are then classified into different groups to further analyse the geographical and income effects on industrial development. The results show that disparity between the Global North and the Global South will enlarge further in the future. Industrial development in the Global North will continue to prosper, while the industrial output in many countries in the Global South just cannot reach the global average.

COVID-19 and Global Supply Chain Configuration: Economic and Emissions Impacts of Australia-China Trade Disruptions

Economic shocks from COVID-19, coupled with ongoing US-China tensions, have raised debates around supply chain (or global value chain) organisation, with China at the centre of the storm. However, quantitative studies that consider the global and economy-wide impacts of rerouting supply chains are limited. This study examines the economic and emissions impacts of reorganising supply chains, using Australia-China trade as an example. It augments the Hypothetical Extraction Method by replacing traditional Input-Output analysis with a Computable General Equilibrium analysis. The estimation results demonstrate that in both exports and imports, a trade embargo between Australia and China – despite being compensated for by alternative supply chains—will cause gross domestic production losses and emissions increases for both countries and the world overall. Moreover, even though all other economies gain from the markets left by China, many of them incur overall gross domestic production losses and emission increases. The finding that the Association of Southeast Asian Nations and India may also suffer from an Australia-China trade embargo, despite a gain in trade volume, suggests that no country should add fuel to the fire. The results suggest that countries need to defend a rules-based trading regime and jointly address supply chain challenges.

COVID-19 and Regional Income Inequality in China

This study investigates the impact of COVID-19 and social distancing policies on regional income inequality. We base our study on a sample of 295 prefecture (and above) cities in 31 provinces in China. A distribution dynamics approach is employed to reveal the trend and movement of disposable income per capita in each city before the COVID-19 pandemic, during the COVID-19 pandemic, and in the period when the COVID-19 was under the control. The findings reveal significant negative economic consequences of the COVID-19 in the first quarter of 2020 and show that most cities will converge to a level of disposable income which is much less than the Pre-COVID level if the COVID pandemic persists. Regional income inequality has intensified in the cities that have a longer duration of stringent social distancing policies during the COVID-19 pandemic and disappeared in the cities with policies of short duration. Disposable income per capita for urban residents recovered quickly when the transmission of coronavirus was effectively contained; and yet the impact of the pandemic on rural residents remains unresolved, if not intensified. This study demonstrates a significant divergence of the trend of disposable income across cities with different durations of social distancing policies and between urban and rural residents. It also highlights the importance of stringent social distancing policies in containing the spread of virus in a short time and calls for special policy attention for rural regions in the recovery from the COVID-19.