|
控股企业和确保公司控制权essay
本章在此基础上取得了对金融业的发展和对经济增长影响的理论以及实证回顾相关文献。首先，评审会，制定有关经济增长，然后将后面的......。
经济增长是长期扩张经济的生产潜力。它是指上升的经济生产商品和服务的能力，也就是一个上升的生产能力，记录为一个周期，以期依据百分比（库兹涅茨1968年）。应该注意的是，经济增长不仅包括上述也考虑到了改善生活质量，人口和特殊经济技术进步的知识水平，从而创造更好的社会福利，这是一个政府的主要目标（克莱顿和拉德克利夫1996年）。
经济增长通常是衡量采取的增加/减少连续2年的实际国内生产总值（GDP）。取实际GDP，因为在当时盛行的经济，它占的通货膨胀。不过，最好是用人均实际GDP，也被称为经济的人均GDP，因为后者不仅是调整通胀，也反映了经济体之间的人口差异。
Controlling Firms And Ensuring Corporate Control Economics Essay
This chapter will review the literature based on theoretical and empirical review which has been made on the impact of the financial sector development on economic growth. First, the review will be made on economic growth and then it will be followed by the …….
Economic growth is the long-term expansion of an economy’s productive potential. It refers to the rise in the ability of an economy to produce goods and services, that is, a rise in its productive capacity, recorded as a percentage on a period to period basis (Kuznets 1968). It should be noted that economic growth does not only include the aforementioned but also takes into account the improvement in the quality of life, level of literacy of the population and the technological advancement of that particular economy, thus leading to a better social welfare, which is a one of the main aims of government (Clayton and Radcliffe 1996).
Economic growth is usually measured taking the increase/decrease in the real Gross domestic product (GDP) between 2 consecutive years. The real GDP is taken because it accounts for the inflation prevailing in the economy at that time. However, it is better to use real GDP per head, also known as per capita GDP of the economy as the latter is not only inflation adjusted but it also reflects the population differences between economies.
It has been a matter of concern for many economists to identify the different factors which cause different countries to evolve differently in relation to economic growth. It is mainly seen that most East Asian countries have achieved very rapid rates of economic growth joining the rich countries whereas in the Sub Saharan Africa, a relatively low percentage of growth is usually recorded.
Cherery (1986) states that despite the fact that neoclassical economic theory plays a major role in economic analysis, economists with another school of thought, namely, the development economists are denying its approval for the purpose of developing countries as the latter is believed to predict stable growth irrespective of the policy decisions. Recently, though, there has been the development of new economic growth models which deals with issues such as trade policy, the operation of financial markets, taxation and government expenditure, namely the Neoclassical Growth Model, also known as, Solow-Swan growth model. This has been developed following the Harrod-Domar growth model, where there was the presence of steady-state growth. It is only after the above that Robert M. Solow (1956), Nobel prize winner in economics and Trevor Swan (1956) rejected Harrod-Domar growth model’s deduction. According to them, the capital-output ratio was a variable which should not be treated as exogenous but rather should be used as an adjusting variable to lead an economy back to its steady-state growth path. According to their model, capital stock (quantity of machine and equipment), total employment (in terms of hours or number of employees) and technology (which is assumed to be free) were included to analyse the long run economic growth.
Taking a look now at the determinants of economic growth, it has been shown that apart from labour force growth, in order to record an economic growth, the presence of low inflation, open trade policies, research and development spillovers, economies of scale, together with both physical and human capital is necessary. On top of that, it is also imperative to adapt to the technological changes which have the role of increasing efficiency .
It was also found in African countries that compared to capital accumulation which amounted to approximately 64.5% of growth, productivity approximately did only 4.5% (Montiel 1999) and this was supported by Jorgensen (2005) who, while doing his research concluded that physical capital accumulation did not account for long run economic growth.
There are many other factors which affect economic growth which can be broken down to culture, government power to intervene, the extent of competition, geographical position of the economy and other macroeconomic factors. Brenner (1998) worked on the question of whether changes in corporate strategies, government policies or financial innovation can be used as the ladder to reach economic growth. This paper will take into consideration the role that the financial sector has in boosting the level of economic growth.
FINANCIAL SECTOR DEVELOPMENT
Having seen the literatures on Economic growth, now, before having a look at the finance-growth nexus, the financial sector will be reviewed. It will consist of the main functions of the financial sector and how the latter’s development benefits the society.
A financial sector is one which provides services which includes a vast range of money managing organisations to retail and commercial customers. These organisations include credit unions, banking institutions, credit card companies, insurance companies, consumer finance companies, stock brokerages, investment funds and some government sponsored enterprises, money markets, real estate, commodity and stock market exchanges.
The financial sector is the interaction of markets within a regulatory framework. It is a relationship which consists of lending and borrowing. It is the financial intermediaries which take the responsibility of achieving these functions. The ‘lenders’ will consist of categories of individuals such as households, firms, governments and savers while that of ‘borrowers’ will consist of again households, firms, governments, mortgagers, and so on.
In order for an economy to be financially smooth and proper, it is good for the latter to be having the following features:
A functioning banking system with an effective central bank
Efficient public finance and public debt management
Stable money through low inflation and stable exchange rates
Securities markets improving access of finance capital to governments and firms
Organisations which issue securities (stocks, bonds, etc.) to pool capital
Creane et al. (2003) further stated that a modern and efficient financial system involves improvements in mobilising savings, in promoting investment by screening business to end up financing only businesses with good future prospects, in monitoring firm by looking at managers’ performance, in enabling hedging, trading and risk diversification and in easing the exchange of the commodities. These aforementioned will be further discussed later in this paper.
According to modern growth theory, there are two ways that have been identified related to the question of ‘how the financial sector might affect the long run growth of an economy’. Firstly, it is through the impact of the financial sector on both human and physical capital accumulation. And secondly, it is through its impact on the rate of technological improvement in the economy.
Levine (1997) has found out five functions of financial intermediaries which give rise to the effects mentioned above, namely savings mobilization, risk management, acquiring information about investment opportunities, monitoring borrowers and exerting corporate control and facilitating the exchange of goods and services.
The Policy Division of the Department for International Development described its approach to stimulate growth in one of its article published on the … (http://www.ruralfinance.org/fileadmin/templates/rflc/documents/1143190906272_DFID_finsecworkingpaper.pdf) as having the following framework.
To build up strong investment incentives which will have the effect of increasing productivity
To encourage trade and business amalgamations to facilitate the transfer of technology and to improve the resources available that are being used.
To give access to the population to assets and markets to reduce poverty and also to increase the returns on those assets.
To reduce the risk element and allowing the poor also to participate in the evolvement of the financial sector to promote growth.#p#分页标题#e#
The financial sector helps to achieve the above as follows:
1. By mobilising savings for productive investment, and by facilitating capital inflows and remittances from abroad, the financial sector has a crucial role to play in stimulating investment in both physical and human capital, and hence increasing productivity.
2. By reducing transactions costs, facilitating inward investment, and making capital available for investment in better technologies, the financial sector can promote technological progress, thus increasing productivity, and improving resource use.
3. By enabling the poor to draw down accumulated savings and / or borrow to invest in income-enhancing assets (including human assets e.g. through health and education) and start micro-enterprises, wider access to financial services generates employment, increases incomes and reduces poverty.
4. By enabling the poor to save in a secure place, the provision of bank accounts (or other savings facilities) and insurance allows the poor to establish a buffer against shocks, thus reducing vulnerability and minimising the need for other coping strategies such as asset sales that may damage long-term income prospects.
It should be noted that the development of the financial sector may be reached in different ways, namely:
When the efficiency and competitiveness of the sector improves
When the range of financial services that are available increases
When the diversity of institutions which operate in the financial sector increases;
When the amount of money that passes through the financial sector increases
When the regulation and stability of the financial sector improves
When more of the population may gain access to financial services
These functions and ways of encountering economic growth by an economy will be used for further analysis in this paper.
GETTING INFORMATION ABOUT INVESTMENT AND ALLOCATION OF CAPITAL
Ramakrishnan and Thakor (1984), whose work were based on acquiring information related to the financial system. According to them, this should allow for resources to be allocated efficiently and as such devised a theory that financial intermediaries usually encourage the provision of information which are themselves sold to savers.
Due to the fact that it is very costly and takes a lot of time for individual to collect, process and compare information related to different enterprises before getting an idea about where to invest, it is obvious that without financial intermediaries who will be collecting the information, sharing the cost of doing the aforementioned, the flow of capital would be restricted and therefor that would adversely affect economic growth as individual investors will not be too keen to invest in project about which they have little knowledge of.
As stated by Greenwood & Jovanovic (1990), these intermediaries make it easier to select projects having higher expected returns reliably, thus eliminating those which will not be benefiting that much towards growth. King and Levine (1993) further stated that through these intermediaries, there can be an increase in the technological progress as the latter will be taking the responsibility to identify and allocate the capital they have towards technological innovations which are most likely to prove to be successful.
Grossman and Stiglitz (1980) stated that despite existing theories have not yet found a possible link between the stock market liquidity, information acquisition and long run economic growth, it is deemed that as markets become more liquid and bigger, there are higher inducement for spending to go into researching firms and this thus again contribute towards growth through technological innovation. This was further taken into consideration an analysed by Aghion and Howitt (1999).
To conclude the reduced information costs leads to improved resource allocation, which in turn accelerates the growth process.
CONTROLLING FIRMS AND ENSURING CORPORATE CONTROL
Among the functions of financial intermediaries also lies one that relates to controlling firms and ensuring corporate control. Individual investors usually do not have the necessary resources to monitor firm’s performance and as such, it becomes difficult for them to ensure corporate control or deal with frauds on part of the investment firms’ managers related to returns that they should receive. To counter all the negative aspects mentioned above, Bencivenga and Smith (1991) showed that financial intermediaries undertake that role as they have in their possession the information which individual savers do not have access and thus, creates removes the possibility for managers of the borrowing companies to take advantage on the loan they take in terms of interest and all. This, simultaneously forces the firm to perform well, benefiting the economy as a whole, thus contributing to economic growth.
RISK MANAGEMENT AND DIVERSIFICATION
Management of risk refers to the practice of identifying the risks of a company and trying to reduce the latter as much as possible using different techniques. The fact that financial intermediaries including banks, insurance companies and so on allows their customer to get access to their investment (Money) at any specific point in time provides for the element of risk reduction and sometimes risk diversification too. This account for a return that the customer will get with certainty and though, maybe relatively less than that compared to a more risky plan, savings will be encouraged, thus leading to an expansion of the economy in terms of growth. The risks will be analysed in two parts, firstly the liquidity risks and then, the risk diversification.
The reason for the presence of liquidity risk is because of the uncertainties that exist in relation to the conversion of assets into a medium of exchange. Levine (1991) saw that firms opting for a loan usually ask for one which is a medium to long term capital commitment. But the problem is that savers prefer to save in a way where they can be allowed to withdraw their money on demand, that is, they prefer some level of liquidity. This is where the problem of maturity mismatch arises but financial institutions are there to counter that mismatch, thus providing medium to long term capital commitment to borrowers and liquidity to savers. Bencivenga & Smith (1991) further added that through the matching of maturity, financial institutions makes sure that, even if some projects require a long term commitment, they can borrow the money they want. This allows capital to be allocated to projects with higher returns, irrespective of maturity period of the loan.
Now, as far as the Risk diversification is concerned, it can be broken down to two different categories namely, Cross-sectional Risk Diversification and Inter-temporal Risk Sharing. Investing in a single project is considered to be riskier that investing in a wide range of projects whose expected returns are not correlated. This is a function that financial intermediaries such as stock exchanges and banks provide. They allow for the investment in riskier projects having higher expected returns which goes in line with what savers want but cannot do on their own because of the maturity mismatch and the size of the loan that firms usually want to borrow which is relatively bigger. This way of improving capital allocation was propounded by Saint-Paul (1992) and Obstfeld (1994).
Risk diversification is also deemed to improve technological change. As brought forward by King & Levine (1993), technological innovation is considered to be risky as there is a high probability that it may fail. As such, the ability of financial intermediaries to diversify the risk allows investment in some enterprises, which would otherwise be impossible to finance, to take place. This is possible by the process of diversification, which is, investing in different innovation-based organisations.
Cross-sectional Risk Diversification
Greenwood and Jovanovic (1990) worked on the link between risk sharing, capital accumulation and growth and found out that information being processed efficiently and effectively induces higher growth. They also worked on the relationship between finance and growth which resulted in the conclusion that the financial intermediaries are mediums that improves resource allocation and thus contribute to growth.
Compared to Greenwood and Jovanovic (1990), Acemoglu and Zilibotti (1997) worked on the link between risk diversification, capital accumulation and growth, where the emphasis was made more on the endogenous risk emergence related to growth. They also put forward that financial systems allowed the holding of diversified portfolios which led to the increased investment in high-return projects, thus again leading to higher economic growth.
Inter-temporal Risk Sharing
As far as the inter-temporal risk sharing is concerned, it refers to the risks that cannot be diversified at a specific point in time such as the occurrence of macro-economic shocks, but rather across generations. Allen and Gale (1997) stated that it is the intermediaries which have had a long life cycle which can invest facilitate the inter-generational risk sharing by investing with a long-run perspective and also by offering returns which are relatively low in times of economic boom and relatively high in times of slump.#p#分页标题#e#
MOBILISING SAVINGS
Savings mobilization is also a very significant function of the financial sector. This facility allows households to store their money benefiting from the security element that these institutions provide. Not only household benefit from the pooling of savings, firms who need capital may then borrow this money to use it in a more productive manner. It is the costly process that involves taking money from individual savers, pooling them together and finally distributing them to lenders. During that process, the parties involved must make sure that they are overcoming the transaction costs of collecting savings from so many individuals and also that they are overcoming the information asymmetries related to inducing savers to part with their money (to become less liquid). This is mainly done by banks and other financial institutions and therefore leads to capital accumulation investment by the process of credit creation.
It is the faith that people have in the financial system that induces them to save their money into the financial sector. If the latter was not reliable, fair or secure, people would prefer to save in terms of physical assets such as jewelry or plot of lands or even store their money at home itself, and this would negatively affect economic growth. It should also be noted that the returns on investors may be a side-benefit to the savers in terms of higher return that they in turn will expect to get.
McKinnon (1973) explained through his studies that, by mobilising savings which in turn increases the level of credit available to lend, the acquiring and even the development of better technologies may be undertaken by borrowers. This process facilitates investment in an economy and thus contributes positively towards the overall productivity of the country.
It was further stated by De Gregorio (1996) that the credit available may be used to finance the investment in health or education which, here, improves the accumulation of human capital.
Jalilian & Kirkpatrick (2001) propounded that allowing the access of the financial services to the poor, through savings facilities, will further increase the country’s growth as it reduces risks of the poor, thus implying that poverty reduction will have a direct positive effect on the economic growth of a country.
Levine (2005) found that the management of risks, the acquiring of information and the monitoring borrowers also adds to the mobilisation of savings as they make the risks attached with savings fade and on top of that, they also allow for an increase in the expected return of savings. These will be discussed further later in this paper.
To summarise, the pooling of savings will have an important effect on the economic growth of a country in terms of increased investment, increased productivity and increased human capital that the latter will be producing.
|
 |
|||
| 网站地图 |
