Séminaires de recherche


Remittances, Control of Corruption and Taxation in Developing Countries

Mercredi | 2020-10-22
12h00 en B103


AbstractThis paper examines the impact of remittances on the tax effort of 91 developing countriesduring 2002-2017 using Stochastic Frontier Analysis (SFA). SFA makes a distinction betweenthe concepts of tax capacity (the optimum tax revenue a country can collect given its structuralfeatures) and tax effort (the ratio of actual tax revenue to tax capacity). The results indicate thatremittances increase tax effort in receiving countries and the strength of this relationship isundermined in highly corrupt countries. First, remittances are generally used for consumptionpurposes and thus expand revenue base through sales/VAT tax increasing tax effort. Second,corruptible tax administrations not only cause deficits through increased evasion by taxpayers -having administrators who request bribes in exchange for understated sales/VAT tax – but alsodivert some of the collected revenues from reaching the governments’ treasuries. Moreover,corruption weakens the quality of bureaucracy and trust in administrative processes therebyencouraging larger informal sectors which in turn erode governments’ revenue base. Havingappropriate measures to curb corruption will increase the effectiveness of remittances therebybuilding the much needed fiscal space.

The Role of Budget Institutions in Promoting Optimal Public Finance in Africa

Mercredi | 2020-10-15
B103 – 12h00

Tobignaré YABRE

Abstract :This paper proposes a critical survey on the role of budget institutions in promoting optimal fiscal policy based onspecific experiences of African countries. The paper shows that the observed path of fiscal policy in Africa departsfrom the normative prescription of the optimal fiscal policy theory but finds consistent explanations in the politicaleconomy literature. We argue that relevant budget institutions are needed to promote optimal fiscal policy.Institutional reforms can be done at the budget formulation level by imposing fiscal rules that limit thegovernment’s power to run discretionary fiscal policy. These rules must be enforceable and flexible so that itallows smooth spending over the cycle. Moreover, because the risk to circumvent the rules is high in countrieswith poor track records, a well-designed fiscal rule may be accompanied by appropriate monitoring andenforcement mechanisms. At the budget procedure level, literature showed that hierarchical institutions that makea Prime Minister strong can reduce war of attrition than collegial institutions. Additionally, political rent may bereduced by delegating policymaking to an autonomous bureaucracy whose entry is conditioned by competitivenessand responsibility.

Foreign direct investment and domestic private investment in sub-Saharan Africa: crowding-in or out?

Mercredi | 2020-09-24
B103 – 11h30

Askandarou Cheik DIALLO – Isabelle RABAUD – Luc JACOLIN

Abstract : This paper investigates the relationship between foreign direct investment (FDI) and private investment in Sub-Saharan Africa, using a sample of SSA 40 countries over 1980-2013. To disentangle short term from long-term dynamics, and take into account possible endogeneity issues, our empirical analysis is based on Pooled Mean Group (PMG), Mean Group (MG) and Dynamic Full Effects (DFE). We find that FDI has little effect on private investment in the short run but significant crowding-in effects in the long-run. Our results also show that FDI interacts with public domestic to boost these positive long-term effects. Finally, we show that the impact of FDI on domestic private investment is stronger in non-natural resource exporting diversified countries as opposed to undiversified commodity exporters. These results may bring new light to sometimes conflicting results found in the current FDI literature and to how public investment leverages FDI to spur private sector growth, thereby providing useful insights on the design and sequencing of related public policy.

Exchange Rate Pass-Through: Does Central Bank Credibility matter ?

Mercredi | 2020-09-17
Salle des thèses – 12h00


Abstract :This paper studies in two stages the effects of central bank credibility on exchange rate pass-through (ERPT) on 20 inflation targeting (IT) countries. In the first stage, using 60 months rolling window regression of inflation on nominal effective exchange rate is obtained time-varying ERPT in during 1979m1-2020m5. In the second stage a credibility loss index is computed to measure the importance of central bank past performance and its deviation from its target over a period that spans 29 years (1991-2019). A panel threshold (PTR) model is used to capture the non-linear effects of credibility loss index on ERPT. The findings show the existence of a positive relation between exchange rate and inflation in most of the developing countries, the existence of a non-linear effect of credibility loss on deviation of past inflation from target, and finally the existence of non-linear effects of credibility loss on ERPT for developing countries as two thresholds are identified. These findings suggest the importance of the central bank’s credibility (the asymmetric impact of credibility loss) on the ERPT in developing countries.

 » Bank Branch Network and Consumer Cash Management Behavior: A Canadian Perspective »

Mardi | 2020-06-02
11H00 – Webinar

Marcel-Cristian VOIA

AbstractWe construct an unique microgeographic data to study the effects of Canadian bank branch network on consumer’ cash management. We create the average distance of consumer’s travelling to (affiliated) closest branch on the Forward Sortation Area (FSA) level, which avoids the attenutation bias and accounts for spatial bank branch network. By shrinking the difference of distances between general Financial Institution (FI) and specific FI branch, we are able to separate the effects of shoe-leather cost from withdrawal fee. We find the significantly threshold effect of consumer-branch distance on the typical month withdrawal frequency: the first kilometer plays the most important role, the coefficient around negative 50 percent. Moreover, the estimates are consistent with various model specifications and robust with respect to (a) consumer residential sorting; (b) indirect network effect of withdrawals on bank branch network; and (c) misclassification of branch withdrawals driven by the automated teller machine (ATM) network.

Cash in the Pocket, Cash in the Cloud: Cash Holdings of Bitcoin Owners

Mardi | 2020-05-20
11H00 – Webinar


This paper estimates the effect of Bitcoin ownership on the level of consumer cash holdings, showing that adoption is indeed strongly correlated with cash holdings even after controlling for other relevant factors. We further model Bitcoin ownership itself to control for selection effects. Finally, we compute quantile regressions which demonstrate a highly non-linear effect of Bitcoin ownership on cash holdings. Our results provide evidence against the narrative that certain new technologies such as Bitcoin will necessarily lead to a decline in cash usage. Further, there are implications regarding the extent to which Bitcoin fulfills the store-of-value versus transactional functions traditionally associated with a currency.

 » Trade, Border Effects, and the Potential for Cross-Border Integration: A Regional Perspective from China’s Northeast »

Mardi | 2020-03-10
Salle des thèses 16h-17h20


China’s rapid growth has masked the fact that some of its regions have failed to catch up with the modernization and efficiency drive during the market transition. China’s Northeast was once the most prosperous part of the country and a model for socialist industrialization efforts. But since the reforms and opening up, the region has struggled to turn its old industrial base into a vibrant economy. Trade represents a possible channel for stimulating economic growth, especially in border regions. Accordingly, this paper explores the trade patterns of Heilongjiang, a border province in the Northeast, and uses a gravity model to estimate the trade costs vis-à-vis its major trading partners, and Russia in particular, over the years 1978-2017. The results indicate a profound change over the sample period from a relatively isolated border region into a more open economy. Moreover, Heilongjiang exhibits a home bias, trading with the rest of China more intensively than with any other country. The border effects with Russia are substantial, although they have declined somewhat over the past two decades. Other trading partners in Northeast Asia record lower trade costs than Russia overall, but the barriers seem to have been on the rise since the early 2000s. The discussion of the potential factors contributing to the high border effects of Heilongjiang points to the lacking infrastructure, especially the cross-border infrastructure with Russia and the costly access to seaports, as the main culprit.

 » Do Negative Interest Rates Affect Bank Risk-Taking? »

Mardi | 2020-03-05
Salle B.103 12h15 16h45


We offer early evidence on the impact of negative interest rate policy (NIRP) on bank risk-taking. Our robust empirical evidence finds banks in NIRP-adopter countries reduce holdings of risky assets by around 10 percentage points compared to banks in non-adopter countries. This supports the “deleverage” hypothesis, which posits that banks opt to cleanse weakened balance sheets by investing in safer liquid assets, such as, sovereign bonds due to favourable, zero risk weight, regulatory treatment. We prove the NIRP-effect is heterogeneous; post-NIRP risk-taking increases at strongly capitalised banks and at banks operating in less competitive markets that exploit market power to insulate net interest margins and profitability. We base our evidence on a sample of 2,731 banks from 33 OECD countries between 2012 and 2016, and from models that employ a difference-in-differences framework.

 » Mitigating market uncertainty: predictive and non-predictive strategies »

Mardi | 2020-03-03
Salle des thèses 16h-17h20

Graciela KUECHLE

Entrepreneurs cope with uncertainty in different ways, from predictive approaches, based on the statistical assessment of contingencies, to non-predictive approaches based on judgment and oriented towards action. In this paper we develop a simple mathematical framework of the process by which entrepreneurs collect information about customers’ preferences under predictive and non-predictive strategies to assess the conditions under which they reduce uncertainty. Whereas predictive approaches offer a relatively economic way of reaching a large and representative base, non-predictive approaches require higher effort but may deliver a more effective reduction in uncertainty. An entrepreneur who manages to establish a fruitful exchange, may obtain a more reliable assessment if, by revealing information about the product, she facilitates the elicitation of preferences. These positive effects are constrained by the nature of the product and the entrepre