Financial sector foreign aid and financial intermediation

Agapova, Anna; Vishwasrao, Sharmila

doi:10.1016/j.irfa.2020.101589

Cited by 10 publications

(6 citation statements)

References 36 publications

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“…Specially, Maruta (2019) has obtained empirically that aid for the nancial sector promotes nancial development in recipient-countries. Agapova and Vishwasrao (2020) have uncovered empirically that while foreign aid to the nancial sector increases public sector borrowing, it has not generated bene ts for nancial intermediation in the private sector. While aid to the nancial sector may positively in uence nancial development in recipient-countries, it remains to determine whether other parts of total AfT ows (that is, the non-nancial sector aid) exerts a direct positive or negative in uence on nancial development.…”

Section: Theoretical Discussionmentioning

confidence: 99%

Effect of Aid for Trade on Financial Development: Exploring the Channel of Manufactured Exports

Gnangnon

2021

Preprint

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Many studies have considered the macroeconomic effects of Aid for Trade (AfT) flows, that is, the part of official development assistance allocated for the development of the trade sector. The present paper aims to expand this literature by investigating the effect AfT flows on financial development notably through channel of manufactured exports. The analysis has covered a set of 120 countries over the period 2002–2017, and relied primarily on the two-step system Generalized Methods of Moments (GMM). Results show that total AfT flows, notably its components AfT for economic infrastructure and AfT for productive capacity promote financial development, and the magnitude of these positive effects rises as countries' share of manufactured exports increases. Additionally, total AfT flows influence positively financial development in countries that diversify their export product basket towards manufactured exports. These findings highlight the key role of AfT flows in promoting financial development in recipient-countries, and therefore call on donor-countries to scale up AfT flows in favour of developing countries, given the importance of financial development for economic development.

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Section: Theoretical Discussionmentioning

confidence: 99%

Effect of Aid for Trade on Financial Development: Exploring the Channel of Manufactured Exports

Gnangnon

2021

Preprint

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“…Seim et al, (2020) mention that aid can be in the form of political, educational development, and underprivileged family aids. In general, foreign grant aid does not affect interest rates and liquids in the banking sector, trade openness, and the rule of law (Agapova & Vishwasrao, 2020).…”

Section: Literature Reviewmentioning

confidence: 93%

The Influence of Decision-Making Quality on Perceptions of Foreign Grant Accountability

Izzah¹,

Artha

2021

Journal of Business and Management Review

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The Indonesian government and several other non-profit organizations have received many foreign grants, one of which is the Global Fund AIDS Tuberculosis and Malaria (GFATM) grant. As an institution that receives a Sub Recipient TB Care of ‘Aisyiyah East Java grant, it has an absolute obligation to account for the funds received, one of which is an accountable financial report. However, achieving accountability is not easy, you have to go through a long process with strict terms and conditions from donors. Because this sometimes makes institutions and even providers of financial reports such as accountants feel bored and accountability is increasingly difficult to realize. Factors of human resources, tasks and the environment are the benchmarks for an accountant of foreign grants to have a strong view of the perception of accountability. The purpose of this study is to determine the perception of accountants in assessing financial statement accountability as an expense or an asset. This study uses a qualitative method with an emphasis on interviews. The results of the study show that the accountability of financial statements is considered an intangible asset because apart from the benefits of funds for the beneficiaries of the grant, there are also non-financial benefits for the implementers of the grant, including the financial staff. The finance staff not only benefited from intangible wealth in improving the quality of the accounting field, but also gained a general understanding of TB health and extensive networking with various sectors.

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“…The comparative advantage theory suggests that trade openness promotes product expansions and consumption leading to economic growth (Agapova and Vishwasrao, 2020;Das, 2019). In the sense of endogenous growth literature, Fan et al (2018); Ibrahim and Tanimu (2016); Iheanacho (2016Iheanacho ( , 2017 and Fu et al (2020) emphasized the trade-crop relationship and concluded that economic growth is accelerated by commercial transparency through economies of scale and dissemination of information between trading partners.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

The impact of trade openness on the cost of financial intermediation and bank performance: evidence from BRICS countries

Rahman

et al. 2021

IJOEM

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PurposeThe purpose of this paper is to examine the impact of trade openness on the cost of financial intermediation and bank performance. Developed and developing countries are currently pursuing trade openness to achieve higher bank performance with less intermediation costs.Design/methodology/approachIn attaining the study's objectives, several regression methodologies were employed (i.e. system generalized method of moments (GMM), fixed effect, pooled ordinary least squares (OLS) and vector error correction model (VECM)). The authors tested the hypothesis on data of 885 banks from BRICS countries, which span 18 years (2000–2017).FindingsThe results from this robust study showed that embedding higher trade openness reduces financial intermediation costs and improves banks' performance. The results remain robust following the use of different estimation methods and alternative variables as proxies. In addition, results were still valid upon considering bank level, industry level and country level as control variables. It was also observed that the relation pattern holds its rigidity during “good” and “bad” times (i.e. the global financial crisis).Originality/valueThe results provide better references for bank regulators, academics and policymakers to take advantage of the low financial intermediation costs resulting from trade openness.

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Financial sector foreign aid and financial intermediation

Cited by 10 publications

References 36 publications

Effect of Aid for Trade on Financial Development: Exploring the Channel of Manufactured Exports

Effect of Aid for Trade on Financial Development: Exploring the Channel of Manufactured Exports

The Influence of Decision-Making Quality on Perceptions of Foreign Grant Accountability

The impact of trade openness on the cost of financial intermediation and bank performance: evidence from BRICS countries

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