Journal of International Commerce, Economics and Policy

Asymmetric information increases the credit rationing of micro-enterprises. Lender–borrower relationships help to provide this information, thereby increasing the availability of loans. This study aims to investigate the relationship between micro-lenders and micro clients. It is accomplished by describing how such relationships are developed, and analyzing these relationships’ impact on the availability and credit term using multivariate regression. The results showed that the strength of lender–borrower relationships positively impacted credit access, but it did not significantly impact the credit term. Furthermore, the amount of income and loan purpose, as the proxies of business characteristics, negatively impacted credit access. These results highlight the critical role of the lender–borrower relationship and business characteristics in the risk management strategy and the sustainability of microfinance institutions.

Free trade zone (FTZ) in China has been demonstrating remarkable achievements since its establishment, yet its effects on the environment in the zones cannot be ignored. However, there is still a lack of research on the impact of the quasi-natural experiment in the China pilot FTZ on China’s environment. Based on this, this paper uses panel data from 196 cities in China from 2010 to 2017 and uses the propensity score matching and difference in difference (PSM-DID) model to empirically test the environmental effects of the establishment of the FTZ. The result shows that there is an obvious causal relationship between the establishment of the FTZ and environmental quality. The establishment of the FTZ has exacerbated the environmental pollution problem in the pilot zone. Through a series of robustness tests, it is concluded that the estimated results of the benchmark model are robust. However, after a further study on whether the effect of the FTZ on environment is time varying, it was found that the effects of the FTZ on the environmental pollution in the test zones gradually weakened over time, which means that with the gradual maturity of China’s free trade pilot zone, the positive effect on environmental improvement will gradually highlight.

This paper investigates the nonlinear effect of institutional quality on the holding of international reserves by applying the two-step system generalized method of moments on data consisting of 67 countries from 1996 to 2016. The hypothesis is that the association between institutional quality and international reserves has an inverted U pattern. The coefficient sign of the institutional quality and its square term supports the hypothesis. Besides, the marginal effects suggest that the higher the institutional quality index, the lower the demand for reserves. The outputs indicate the importance of good institutional quality in reducing the overdependence on international reserves.

In this paper, we extend a new open economy macroeconomics (NOEM) model to examine the effects of a corporate tax reduction on home and foreign countries. The feature of this open economy model is that cross-border relocation of firms is allowed. We show that (i) a reduction in the home corporate tax rate induces an exchange rate appreciation (depreciation) when the degree of cross-border firm mobility is large (small) and (ii) when the degree of cross-border firm mobility is large (small), a reduction in corporate tax is beneficial (detrimental) to the domestic country but detrimental (beneficial) to the foreign country.

The paper investigates the dependence pattern of economic growth on external debt supply by accounting for the safety of debts, measured by the sovereign debt rating. The method of cross-section regression is based on a sample of 145 advanced and developing economies with averaged data over the 1990–2019 period. The pattern of economic growth follows a U-shaped curve, for which the growth rate is first decreasing and then increasing on the external debt supply. A possible explanation can rely on the sovereign debt rating. For low supply of external debts, more supply of debts reduces the debt rating, which, in turn, lowers the economic growth rate. But for high enough supply of debts, more debts raise their rating, improving the growth rate. These results are robust on controlling for various determinants of economic growth and on the fixed effect panel regression.