Narrow Results

Using the China Household Finance Survey data in 2011, the estimation results of structural equation modeling demonstrate that the respondents with higher time preference rate have a significant higher probability of investing in stocks, which implies that the short-term households will prefer stock investment. The social insurance programs and insurance policies held by the family will have a significantly direct positive effect in promoting stock investment and also a significantly direct positive effect on the respondent’s time preference, which could further indirectly increase the family’s stock investment. These results show that the safety-net built by the Chinese government, including the social security and commercial insurance, is very likely to attract more short-term investors into the stock market. These empirical results provide new evidences to explain the extreme volatility of Chinese stock market and also testify the policy effect of building an environment for people to possess property income in China.

This paper reviews empirical studies with a particular interest in Islamic finance literature and highlights future research directions. The earlier literature on Islamic finance was built on the Islamic economic foundation of social justice and fairness, which was formed theoretically from the primary sources of Sharia coupled with some analytical frameworks. Subsequent studies emphasized the empirical investigations without including far-reaching analytical and theoretical postulations in the area. Although empirical studies on Islamic banking are plenty, there is a new body of emerging empirical literature on Islamic finance focusing on corporate finance and Takaful, whereas Islamic accounting studies are mostly qualitative. The literature provides a mixed picture of Islamic financial markets and instruments, showing that the Islamic ones perform better most of the time but also perform worse at times than their conventional counterparts. This paper discusses issues that are relevant to Islamic finance and identifies avenues for future research and policy implications.

Smart contract risk can be defined as a financial risk of loss due to cyber attacks on or contagious failures of smart contracts. Its quantification is of paramount importance to technology platform providers as well as companies and individuals when considering the deployment of this new technology. That is why, as our primary contribution, we propose a structural framework of aggregate loss distribution for smart contract risk under the assumption of a tree-stars graph topology representing the network of interactions among smart contracts and their users. To our knowledge, there exist no theoretical frameworks or models of an aggregate loss distribution for smart contracts in this setting. To achieve our goal, we contextualize the problem in the probabilistic graph-theoretical framework using bond percolation models. We assume that the smart contract network topology is represented by a random tree graph of finite size, and that each smart contract is the center of a random star graph whose leaves represent the users of the smart contract. We allow for heterogeneous loss topology superimposed on this smart contract and user topology and provide analytical results and instructive numerical examples.

In this paper, we develop an expected utility maximization model for Chinese rural residents who make their health care and health insurance decisions in two stages, choosing among no insurance, the New Rural Cooperative Medical System (NRCMS), and a commercial health insurance. It is found that although not everyone benefits from the NRCMS, it does improve the welfare of a large number of rural residents and help them seek a higher level of medical care service. The results suggest that additional aid to the extremely poor is still needed during catastrophic medical loss, and detailed provisions that can differentiate the support level to rural residents based on income are needed. It is also found that commercial health insurance can still play a role in protecting rural residents from financial losses caused by health risks.