Abstract:Highlights
Volatility spillover effects are examined in "The B&R" currency market.
"The B&R" system spillover index reflects some sudden regional crises.
COVID-19 has affected systemic stability and the influence of RMB.
“…This implies that the spillover effect of China's economic growth in the long-term is relatively weak. Regarding economic spillover effects, the RMB spillover effects between participating countries of the “The Belt and Road” initiative have been identified ( Wei et al, 2020 ). Fig.…”
China is the first major economy to show a recovery after a slowdown induced by the COVID-19 pandemic. This work aims to explore what the China’s economic recovery after the COVID-19 pandemic means for the economic growth and energy consumption of the other countries using the global VAR quarterly data. In the long term, spillover effects of China's economic growth have the most obvious impact on upper-middle-income countries’ economic growth (0.17%), followed by the economic growth of lower-middle-income countries (0.16%) and high-income countries (0.15%). However, the spillover effect of China’s economic growth has the most significant impact on energy consumption in high-income countries (0.11%∼0.45%), followed by energy consumption in upper-middle-income countries (0.08%∼0.33%) and in lower-middle-income countries (-0.02%∼0.05%). Our results indicate upper-middle-income countries will benefit the most from China’s economic recovery post-COVID-19, followed by lower-middle-income countries and high-income countries. The spillover effect of China’s economic recovery post-COVID-19 brings the most obvious impact on the increase in energy consumption in high-income countries, followed by middle-income countries. It also should be noted that the spillover effect of China's economic growth does not necessarily lead to an increase in energy consumption lower-middle-income countries. Generally, the spillover effect of China’s economic recovery on other countries’ economic growth is much more than other countries’ energy consumption.
“…This implies that the spillover effect of China's economic growth in the long-term is relatively weak. Regarding economic spillover effects, the RMB spillover effects between participating countries of the “The Belt and Road” initiative have been identified ( Wei et al, 2020 ). Fig.…”
China is the first major economy to show a recovery after a slowdown induced by the COVID-19 pandemic. This work aims to explore what the China’s economic recovery after the COVID-19 pandemic means for the economic growth and energy consumption of the other countries using the global VAR quarterly data. In the long term, spillover effects of China's economic growth have the most obvious impact on upper-middle-income countries’ economic growth (0.17%), followed by the economic growth of lower-middle-income countries (0.16%) and high-income countries (0.15%). However, the spillover effect of China’s economic growth has the most significant impact on energy consumption in high-income countries (0.11%∼0.45%), followed by energy consumption in upper-middle-income countries (0.08%∼0.33%) and in lower-middle-income countries (-0.02%∼0.05%). Our results indicate upper-middle-income countries will benefit the most from China’s economic recovery post-COVID-19, followed by lower-middle-income countries and high-income countries. The spillover effect of China’s economic recovery post-COVID-19 brings the most obvious impact on the increase in energy consumption in high-income countries, followed by middle-income countries. It also should be noted that the spillover effect of China's economic growth does not necessarily lead to an increase in energy consumption lower-middle-income countries. Generally, the spillover effect of China’s economic recovery on other countries’ economic growth is much more than other countries’ energy consumption.
“…The striking finding of Belaid et al (2021) indicates that the COVID-19 pandemic increased crisis spillovers between advanced and emerging stock markets with further evidence that the European stock markets are the primary transmitter of shock to other regional stock markets. On the foreign exchange market, 2 findings from Wei et al (2020) suggest increased uncertainty risks in the global forex markets in the aftermath of the pandemic with particular rise in spillover of shocks among the Renminbi and the regional Belt and Road (“B&R”) currencies.…”
“…Furthermore, the authors of this paper have noticed that the studies on cross-border knowledge management mainly remain focused on the micro level, such as knowledge sharing, knowledge creation and knowledge application, etc., among enterprises and individuals (Del Giudice and Maggioni, 2014; Nonaka and von Krogh, 2009;Orlando et al, 2020;Scuotto et al, 2017a;Santoro et al, 2020a). On the other hand, while RMB internationalization has been increasingly explored by scholars in the finance field in recent years, but most of their scholarly efforts centered on the macro levels, such as macroeconomic analysis on aspects including exchange rates and international currency selection (He et al, 2016;Ito, 2017;Wan et al, 2020;Wei et al, 2020). To the best knowledge of the authors of this paper, the efforts on integrating the micro-level knowledge management with the macro-level RMB internationalization is scarcely reported.…”
Section: Introductionmentioning
confidence: 99%
“…Particularly, since the beginning of 2020, COVID-19 has severely hampered the global economic development, the international trade and the global financial markets. The severity of COVID-19 pandemic itself, on the other hand, has been largely attributed to the different values of people in different countries and regions (Wei et al, 2020), which determined the vast differences in responsive and control measures implemented by different countries when face major global public health events such as COVID-19. More importantly, the coexistence of different cultural interpretations and the emergence of knowledge icebergs in cross-cultural knowledge management (Chin et al, 2020a;Del Giudice et al, 2011) have resulted in newly emerged hidden dangers such as political risk, financial risk and business risk in countries and regions around the world.…”
Section: Introductionmentioning
confidence: 99%
“…The internationalization of a country's currency is largely dependent on its trade volume and its relative status in global trade. Generally, the bigger the trade volume is, the higher the currency's degree of internationalization can be expected (Wei et al, 2020). The trade volume comparison of major "Belt and Road" countries with China and the USA is shown in Figure 4.…”
Purpose
In the process of Renminbi (RMB) internationalization, the heterogeneity and complexity in knowledge under the multicultural contexts have been considered as important factors that can have profound impacts on the cross-border flow of the RMB currency. Moreover, COVID-19, an exogenous shock, also triggers more in-depth reflection on the relationship between cross-border knowledge management and the financial risk governance. In addition, the needs to effectively respond to global risks and crises prompt the necessity in systematically establishing an effective cross-border knowledge management mechanism and innovatively solidifying the knowledge bases needed for the further internationalization of the RMB.
Design/methodology/approach
Based on the analysis on the current status of the RMB internationalization, this paper qualitatively explores some major challenges and difficulties encountered in the process of RMB internationalization from the perspectives of knowledge management and cross-cultural theories. To effectively mitigate these challenges and difficulties, discussions and recommendations centered on three main aspects: cross-cultural management; cognition; and innovation for the further development of the RMB internationalization are also presented in this paper.
Findings
Based on the analysis on the cross-border knowledge management and cross-cultural perspectives, this paper identifies three major challenges and difficulties that the RMB internationalization is encountering, including: cultural heterogeneity and its adverse impacts on the communication amongst economic entities; the existence of knowledge iceberg; and the difficulty it presents to cognition and financial innovation. Meanwhile, the authors also present recommendations on the development of the cross-border knowledge management mechanism for furthering the progress of internationalizing the RMB currency.
Research limitations/implications
From the perspective of cross-border knowledge management, this study not only elaborates on the recommendations aimed at further promoting the RMB internationalization but also provides reference and guidance for the state, central banks and commercial banks to play better roles in furthering the RMB internationalization.
Originality/value
This paper creatively integrates the micro knowledge management into the macro process of RMB internationalization, thoroughly discusses two main challenges and difficulties encountered in the process of RMB internationalization from the unique perspective of cross-border knowledge management under the multicultural contexts and provides relevant recommendations for RMB’s further internationalization. This study also enriches the exploration of knowledge management outcome variables and further expands the research field of knowledge management.
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