Journal of Financial Economic Policy最新文献

{"title":"The monetary policy of the State Bank of Vietnam, households and income distribution: the evidence from DSGE model","authors":"Trung Duc Nguyen, Lanh Kim Trieu, Anh Hoang Le","doi":"10.1108/jfep-01-2023-0022","DOIUrl":"https://doi.org/10.1108/jfep-01-2023-0022","url":null,"abstract":"\u0000Purpose\u0000This paper aims to propose a dynamic stochastic general equilibrium (DSGE) model for the State Bank of Vietnam (SBV) to assess the response from the household sector to monetary policy shocks through the consumption function. Moreover, the transmission from monetary policy to household consumption and income distribution is experimented with through the vector autoregression (VAR) model.\u0000\u0000\u0000Design/methodology/approach\u0000In this study, the authors used the maximum likelihood estimation to estimate the DSGE and VAR models with the sample from 1996Q1 to the end of 2021Q4 (104 observations).\u0000\u0000\u0000Findings\u0000The DSGE model’s results show that the response of the household sector is as expected in the theory: a monetary policy shock occurs that increases the policy interest rate by 0.29%, leading to a decrease in consumer spending of about 0.041%, the shock fades after one year. Estimates from the VAR model give similar results: a monetary policy shock narrows income inequality after about 2–3 quarters and this process tends to slow down in the long run.\u0000\u0000\u0000Research limitations/implications\u0000Based on the research results, the authors propose policy implications for the SBV to achieve the goal of price stability, and stabilizing the macro-economic environment in Vietnam.\u0000\u0000\u0000Originality/value\u0000The findings of the study have theoretical contributions and empirical scientific evidence showing the effectiveness of the implementation of the SBV’s monetary policy in the context of macro-instability, namely: flexibility, caution and coordination of different measures promptly.\u0000","PeriodicalId":45556,"journal":{"name":"Journal of Financial Economic Policy","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2024-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141115839","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The effect of policy uncertainty on the volatility of bitcoin","authors":"Manel Mahjoubi, J. Henchiri","doi":"10.1108/jfep-08-2023-0222","DOIUrl":"https://doi.org/10.1108/jfep-08-2023-0222","url":null,"abstract":"Purpose\u0000This paper aims to investigate the effect of the economic policy uncertainty (EPU), geopolitical risk (GPR) and climate policy uncertainty (CPU) of USA on Bitcoin volatility from August 2010 to August 2022.\u0000\u0000Design/methodology/approach\u0000In this paper, the authors have adopted the empirical strategy of Yen and Cheng (2021), who modified volatility model of Wang and Yen (2019), and the authors use an OLS regression with Newey-West error term.\u0000\u0000Findings\u0000The results using OLS regression with Newey–West error term suggest that the cryptocurrency market could have hedge or safe-haven properties against EPU and geopolitical uncertainty. While the authors find that the CPU has a negative impact on the volatility of the bitcoin market. Hence, the authors expect climate and environmental changes, as well as indiscriminate energy consumption, to play a more important role in increasing Bitcoin price volatility, in the future.\u0000\u0000Originality/value\u0000This study has two implications. First, to the best of the authors’ knowledge, the study is the first to extend the discussion on the effect of dimensions of uncertainty on the volatility of Bitcoin. Second, in contrast to previous studies, this study can be considered as the first to examine the role of climate change in predicting the volatility of bitcoin. This paper contributes to the literature on volatility forecasting of cryptocurrency in two ways. First, the authors discuss volatility forecasting of Bitcoin using the effects of three dimensions of uncertainty of USA (EPU, GPR and CPU). Second, based on the empirical results, the authors show that cryptocurrency can be a good hedging tool against EPU and GPR risk. But the cryptocurrency cannot be a hedging tool against CPU risk, especially with the high risks and climatic changes that threaten the environment.\u0000","PeriodicalId":45556,"journal":{"name":"Journal of Financial Economic Policy","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2024-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141115929","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Attitudes of college seniors toward graduate student loan debt: the role of financial education","authors":"Manuel Salas-Velasco","doi":"10.1108/jfep-09-2023-0259","DOIUrl":"https://doi.org/10.1108/jfep-09-2023-0259","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This paper aims to examine prospective graduate students' attitudes toward educational loan borrowing in an experimental setting.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>Participants were randomly assigned to two treatment groups and one control group. Subjects in experimental group 1 received financial education: a short online course on the economic viability of getting a master's degree and how to finance it with a graduate student loan, while subjects in experimental group 2 received financial education along with information on the availability bias.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>Relying on a control group in the assessment of financial literacy education intervention impacts, this research finds positive causal treatment effects on individuals’ attitudes toward debt-financed graduate education. In comparison to the control group, experimental subjects perceived the possibility of going into debt with a graduate loan to complete a master’s degree as less stressful and worrying.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This study has important educational policy implications to prevent students from stopping investing in human capital by perceiving educational loan debt as something stressful or worrying. The results can help potential (and current) grad students develop a feasible financial plan for graduate school by encouraging higher education institutions to implement educational loan information and financial education into university seminar courses for better graduate student loan decision-making.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>Student attitudes toward debt have been analyzed in the context of higher education, but only a few researchers internationally have used an experimental design to study personal financial decision-making.</p><!--/ Abstract__block -->","PeriodicalId":45556,"journal":{"name":"Journal of Financial Economic Policy","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2024-05-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140841875","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Digitalization of corporate finance and firm performance: global evidence and analysis","authors":"Mohammed Sawkat Hossain, Maleka Sultana","doi":"10.1108/jfep-04-2023-0109","DOIUrl":"https://doi.org/10.1108/jfep-04-2023-0109","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>As of now, the digitization of corporate finance presents a paradigm shift in business strategy, innovation, financing and managerial capability around the globe. However, the prevailing finance scholarly works hardly document the impact of the digitalization of corporate finance on firm performance with global evidence and analysis. Hence, the contemporary debate on whether firm performance is genuinely stimulated because of the digitalization of corporate finance or not has been a pressing issue in the relevant literature. Therefore, the purpose of this study is to identify a data-driven, concise response to an unaddressed finance issue if the performance of high-digitalized firms (HDFs) outperforms that of their counterpart peers for wealth maximization.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The first stage test models examine the firm performance of relatively high-digitalized firms as opposed to low-digitalized firms based on the system GMM. The second stage test of the probabilistic (logit) model infers that the probability of being HDFs explores because of better performance. Then, the authors execute robust checks based on the different quantile regressions and <em>Z</em>-score-based system GMM. In addition, the authors recheck and present the test results of the fixed effect and random effect to capture time-invariant individual heterogeneity. Finally, the supplementary test findings of firms’ credit strength by using Altman five- and four-factor Z-score models are presented.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>By using cross-country panel analysis as 15 years’ test bed for HDFs and low digitalized firms (LDFs), the test results indicate that the overall firm performance of a digitalized firm is significantly better than that of a non-digitalized firm. The global evidence documents that HDFs are exposed to higher values and are financially more persistent as compared to their counterparts. The finding is remarkably concomitant across several possible subsample analysis, such as country–industry–size–period analysis.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This study can be remarkably effective in encouraging managers, policymakers and investors to acknowledge the need for adopting the required digitalization. Overall, this original study addresses a core research gap in the corporate finance literature and remarkably provides further direction to rethink the assumptions of firm digitalization on additive value and thereby identify optimal decisions for wealth maximization. The findings also imply that investors require an additional risk premium if they invest in relatively LDFs, which have relatively lower market value and weaker firm performance.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>From an investors point of view, the academic novelty contributes to an innovative and unsettled issue on the impact of digitization of corporate ","PeriodicalId":45556,"journal":{"name":"Journal of Financial Economic Policy","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2024-04-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140809380","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Heterogeneity effect of prudential regulation on the stability of banks: evidence from WAEMU banks using quantile regression with fixed effects","authors":"Emile Sègbégnon Sonehekpon","doi":"10.1108/jfep-11-2023-0343","DOIUrl":"https://doi.org/10.1108/jfep-11-2023-0343","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This paper aims to analyze the heterogeneous effect of prudential regulation on the stability of banks in the West African Economic and Monetary Union (WAEMU).</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The author uses in this study individual bank data from balance sheets, income statements of banks in the WAEMU space and annual reports of the banking commission formed into a three-year panel from the period 2017 to 2019. First, this study uses hierarchical clustering based on specific banking characteristics to determine whether the WAEMU region’s banking markets are heterogeneous or not. Second, this study uses quantile regression approach with fixed effects to explore how that prudential regulation affects the conditional distribution of WAEMU bank stability.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The analysis reveals heterogeneity resulting in two distinct groups. Using the quantile regression approach, this study demonstrates that prudential regulation has a significantly more substantial and positive effect on the upper quantiles than on the lower quantiles of the conditional distribution of WAEMU bank stability. Furthermore, the effect of banking regulation also varies among pan-African cross-border banks, national banks and foreign banks. Among these types of banks, pan-African cross-border banks remain the most stable by adopting prudential regulation. The results remain robust and vary across different WAEMU countries.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The contribution of this study to the literature is multifaceted. First, this study uses individual bank-level constituted in panel data from the WAEMU region to assess the effect of prudential regulation on the stability of the WAEMU’s banking sector. This approach allows for a more granular analysis as this study considers individual regional banks’ specific characteristics and behaviors. Second, this study considers the heterogeneous effect of regulation on the stability of banks within the WAEMU space. This means that this study acknowledges that not all banks are affected similarly by prudential regulations, and this research aims to identify and quantify these differences.</p><!--/ Abstract__block -->","PeriodicalId":45556,"journal":{"name":"Journal of Financial Economic Policy","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2024-04-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140809377","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The dynamics of the financial inclusion index for developing countries: lessons learned","authors":"Ayi Ayayi, Hamitande Dout","doi":"10.1108/jfep-01-2023-0029","DOIUrl":"https://doi.org/10.1108/jfep-01-2023-0029","url":null,"abstract":"Purpose\u0000The purpose of this paper is to calculate the financial inclusion index and analyze its dynamics in developing countries.\u0000\u0000Design/methodology/approach\u0000The authors use the two-stage principal component analysis (PCA) method and consider financial technology innovations to improve the accuracy of the financial inclusion index.\u0000\u0000Findings\u0000The authors found a downward trend in the financial inclusion index in most developing countries over the study period. The authors also found that a high financial inclusion index is linked to high scores in the Doing Business and high business climate regulation ranking. In addition, the authors observed that the rates of low financial inclusion in developing countries are due to low utilization of and unequal access to financial services.\u0000\u0000Practical implications\u0000The analysis suggests that policymakers in developing countries could invest in digital infrastructure to extend access to financial services in remote areas. They could also encourage financial innovation, particularly in financial technologies, by adopting flexible regulatory frameworks. Promoting the financial inclusion of marginalized groups through targeted initiatives tailored to their needs is another solution. They could also encourage the use of financial services by raising awareness and educating populations through training programs. Finally, to improve the business climate, governments could simplify administrative procedures and promote transparency and legal stability.\u0000\u0000Originality/value\u0000Unlike previous studies, the use of the two-stage PCA method and the consideration of financial technology (Fintech) innovations such as mobile money in the determinants of the financial inclusion index improve the accuracy of the index.\u0000","PeriodicalId":45556,"journal":{"name":"Journal of Financial Economic Policy","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2024-04-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140656021","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Nexus between good governance and financial sustainability: evidence from microfinance sector of India","authors":"Maeenuddin, Shaari Abdul Hamid, Annuar Md Nassir, Mochammad Fahlevi, Mohammed Aljuaid, Kittisak Jermsittiparsert","doi":"10.1108/jfep-03-2023-0071","DOIUrl":"https://doi.org/10.1108/jfep-03-2023-0071","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>Microfinance emerged as an essential catalyst for socio-economic development and financial inclusion to reduce poverty. Microfinance institutions cannot meet their primary objective of poverty reduction if they are not sustainable financially. With the theoretical support of profit incentive theory, this paper aims to investigate the impact of organizational structure (OS), growth outreach (average loan per borrower [ALPB] and number of active borrowers), women empowerment (percentage of women borrowers [PWB]), liquidity, leverage and cost efficiency (cost per borrower) on the financial sustainability of microfinance providers (MFPs) in India and explore the possible moderating effect of the national governance indicators (NGIs).</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>A financial sustainability index has been developed by using principal components analysis, including both conventional measures (return of assets and return on equity) and efficiency measures (operational self-sufficiency and financial self-sufficiency). Due to the existence of endogeneity and heteroskedasticity, this study uses two-step system generalized method of moments estimates to examine the relationships for a period of 2006 to 2018.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The finding reveals that there is a strong significant relationship between financial sustainability and its influential factors. Organizatioanl Structure, loan size, women borrowers, Gross Domestic Products and inflation enhance the financial sustainability of India’s microfinance sector. However, a number of borrowers, liquidity, leverage and operating costs negatively affect the financial sustainability of MFPs of India. The estimates demonstrate that NGIs significantly moderate the association between financial sustainability and its influential factors. The NGIs negatively affect the positive impact of Organizatioanl Structure on financial sustainability. National governance increases the positive effect of loan size (ALPB) and reduces the negative effect of a number of borrowers and leverage on the financial sustainability of MFPs of India. However, NGIs negatively affect the positive relationship between Percentage of Women Borrowers and Financial sustainability of Microfinance Providers of India.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>To the best of the authors’ knowledge, this study is the first of its kind that incorporates all of the six dimensions of the National Governance Indicators (NGIs) and uses as a moderator. Secondly, a financial sustainability index has been developed for measuring the financial sustainability of Microfinance Providers (MFPs).</p><!--/ Abstract__block -->","PeriodicalId":45556,"journal":{"name":"Journal of Financial Economic Policy","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2024-04-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140615779","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Role of financial openness in Ghana’s financial sector development episode","authors":"Eric Justice Eduboah","doi":"10.1108/jfep-07-2023-0189","DOIUrl":"https://doi.org/10.1108/jfep-07-2023-0189","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This paper aims to reexamine the relationship between financial openness and financial development in Ghana.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The study applied maximum likelihood estimation and autoregressive distributed lag approach and tested Granger causality using quarterly data from 1990:1 to 2020:4.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>This study revealed a long-run equilibrium relationship between financial openness and development, indicating that financial openness is a critical factor in Ghana’s financial development. Therefore, the study recommends with caution that policies aimed at promoting financial openness could be an effective way to encourage sustainable financial development in Ghana, as financial openness alone may not bring the desired outcome.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>The study contributes to the existing body of knowledge by providing empirical evidence of the link between financial openness and financial sector development in Ghana. Future research could delve deeper into the mechanisms through which financial openness affects financial development, exploring potential channels and transmission mechanisms.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The findings suggest that policymakers, particularly the Ministry of Finance and the Bank of Ghana, should prioritize policies aimed at promoting financial openness. This includes continued efforts toward financial liberalization and creating an environment conducive to domestic and international financial transactions. Moreover, policies aimed at increasing trade openness, boosting real GDP and maintaining moderate real interest rates are essential for fostering financial sector development.</p><!--/ Abstract__block -->\u0000<h3>Social implications</h3>\u0000<p>Enhancing financial sector development can have significant implications for society, including increased access to financial services, improved economic opportunities and enhanced overall economic stability. By promoting financial openness and development, policymakers would contribute to poverty reduction, job creation and overall socio-economic development. The study bridges the gap between theory and practice by providing empirical evidence supporting the theoretical proposition that financial openness stimulates financial sector development.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This study fills a crucial gap in the literature on the effects of financial openness on Ghana’s financial sector development. It focuses on Ghana, which liberalized its financial sector in 1988 as part of the overall economic reforms in 1983, and this justifies the starting point of this paper in 1990, as there are no adequate data before 1990. The study uses principal component analysis to construct an index that measures financial development. The study considers the recent financial crise","PeriodicalId":45556,"journal":{"name":"Journal of Financial Economic Policy","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2024-04-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140571451","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Economic freedom and foreign direct investment in Brazil: an empirical analysis of determinants and policy implications","authors":"Kamal Upadhyaya, Bruno BDeGóes","doi":"10.1108/jfep-02-2024-0045","DOIUrl":"https://doi.org/10.1108/jfep-02-2024-0045","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This paper aims to study the impact of economic freedom and some key macroeconomic variables on the foreign direct investment (FDI) inflow in Brazil.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>An econometric model is developed that includes FDI inflow as the dependent variable and macroeconomic variables such as the output, current account balance, the real exchange rate, openness and economic freedom as explanatory variables. Annual time series data from 1995 to 2022 is used. Before carrying out the estimation, the time series properties of the data are diagnosed using unit root tests and cointegration tests. Since the data series were found to be stationary in the first difference form and the variables in the model were cointegrated, an error correction model is developed and estimated.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The findings demonstrate that the size of the market (gross domestic product), current account balance and the economic freedom index significantly influence FDI inflow to Brazil. Although the signs of openness and the real exchange rate align with theoretical expectations, they do not attain statistical significance.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>To the best of the authors’ knowledge, this is the first formal study on the impact of economic freedom on the FDI inflow in Brazil. The finding of this study adds value to the understanding of FDI dynamics in Brazil, highlighting the critical role of economic freedom and market size in attracting foreign investment.</p><!--/ Abstract__block -->","PeriodicalId":45556,"journal":{"name":"Journal of Financial Economic Policy","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2024-04-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140603161","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Examining payday loan utilization among households with mainstream credit access","authors":"Laura Lamb","doi":"10.1108/jfep-08-2023-0242","DOIUrl":"https://doi.org/10.1108/jfep-08-2023-0242","url":null,"abstract":"\u0000Purpose\u0000This study aims to gain insight into the motivations behind the decision to use high-cost payday loans by households who possess mainstream credit and to determine whether this behavior has changed over time.\u0000\u0000\u0000Design/methodology/approach\u0000Using data from Statistics Canada’s Surveys of Financial Security, probit models are used to examine the sociodemographic and financial indicators associated with payday loan use.\u0000\u0000\u0000Findings\u0000The analysis uncovers the sociodemographic and financial characteristics of payday loan-user households with access to lower-cost short-term loans. The findings indicate that the likelihood of payday loan use has risen over time. Additional analysis reveals that indicators of financial instability are positively associated with payday loan use among this group.\u0000\u0000\u0000Research limitations/implications\u0000This research highlights the dichotomy of payday loan users and recommends policymakers tailor solutions to the specific needs of different types of payday loan users.\u0000\u0000\u0000Practical implications\u0000This research highlights the distinguishing sociodemographic and financial characteristics of payday loan user households and recommends policymakers tailor solutions to the specific needs of different types of payday loan users.\u0000\u0000\u0000Originality/value\u0000This is the first study, to our knowledge, to focus analysis on payday loan use of those with access to lower-cost short-term credit alternatives in Canada and to include measures of financial instability in the analysis. This research is timely given the current economic environment of high interest rates and high levels of household debt.\u0000","PeriodicalId":45556,"journal":{"name":"Journal of Financial Economic Policy","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2024-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140353690","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}