[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/asieco/v21y2010i1p66-75.html
   My bibliography  Save this article

Globalization, transparency and economic growth: The vulnerability of Chinese firms to macroeconomic shocks

Author

Listed:
  • Oxelheim, Lars
Abstract
The process of globalization encompasses economic and financial integration. The abolition of capital controls and the dismantling of barriers of different kinds will expose previously sheltered companies to shocks originating in the global economic arena. Policy-makers in already globalized countries have learned that market participants should be prepared in due time to meet the new exposure to fluctuating rates of exchange, interest and inflation. China has recently adopted a version of the International Financial Reporting Standards (IFRS) in an effort to improve the quality of information available for risk management and for pricing of risk. This paper analyzes the gains in transparency from the implementation of IFRS in Europe as of January 2005 and reports no improvements in regard to the macroeconomic impact on firms. Based on this experience, improvements for Chinese adoption are suggested. The paper presents a framework for how to understand and measure the impact of different scenarios on corporate performance. It also elaborates on how to communicate the macroeconomic effects to external stakeholders of the firm in a way that should foster further economic growth in China.

Suggested Citation

  • Oxelheim, Lars, 2010. "Globalization, transparency and economic growth: The vulnerability of Chinese firms to macroeconomic shocks," Journal of Asian Economics, Elsevier, vol. 21(1), pages 66-75, February.
    • Handle: RePEc:eee:asieco:v:21:y:2010:i:1:p:66-75
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1049-0078(09)00055-4
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Oxelheim, Lars, 2001. "Routes to equity market integration -- the interplay between politicians, investors and managers," Journal of Multinational Financial Management, Elsevier, vol. 11(2), pages 183-211, April.
    2. Robert M. Bushman & Joseph D. Piotroski & Abbie J. Smith, 2004. "What Determines Corporate Transparency?," Journal of Accounting Research, Wiley Blackwell, vol. 42(2), pages 207-252, May.
    3. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
    4. Oxelheim, Lars & Wihlborg, Clas, 2008. "Corporate Decision-Making with Macroeconomic Uncertainty: Performance and Risk Management," OUP Catalogue, Oxford University Press, number 9780195335743.
    5. Oxelheim, Lars & Randoy, Trond, 2003. "The impact of foreign board membership on firm value," Journal of Banking & Finance, Elsevier, vol. 27(12), pages 2369-2392, December.
    6. Oxelheim, Lars & Ghauri, Pervez, 2008. "EU-China and the non-transparent race for inward FDI," Journal of Asian Economics, Elsevier, vol. 19(4), pages 358-370, August.
    7. Jensen, Michael C & Murphy, Kevin J, 1990. "Performance Pay and Top-Management Incentives," Journal of Political Economy, University of Chicago Press, vol. 98(2), pages 225-264, April.
    8. Stephen Morris & Hyun Song Shin, 2002. "Social Value of Public Information," American Economic Review, American Economic Association, vol. 92(5), pages 1521-1534, December.
    9. Rugman, Alan M. & Brewer, Thomas L. (ed.), 2001. "The Oxford Handbook of International Business," OUP Catalogue, Oxford University Press, number 9780199241828.
    10. Verrecchia, Robert E., 2001. "Essays on disclosure," Journal of Accounting and Economics, Elsevier, vol. 32(1-3), pages 97-180, December.
    11. Reese, William Jr. & Weisbach, Michael S., 2002. "Protection of minority shareholder interests, cross-listings in the United States, and subsequent equity offerings," Journal of Financial Economics, Elsevier, vol. 66(1), pages 65-104, October.
    12. Raymond Fisman, 2001. "Estimating the Value of Political Connections," American Economic Review, American Economic Association, vol. 91(4), pages 1095-1102, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christopher Andrew Hartwell, 2014. "Capital Controls and the Determinants of Entrepreneurship," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 64(6), pages 434-456, December.
    2. Hartwell, Christopher A., 2011. "All That’s Old is New Again: Capital Controls and the Macroeconomic Determinants of Entrepreneurship in Emerging Markets," MPRA Paper 40257, University Library of Munich, Germany.
    3. Tillaguango, Brayan & Hossain, Mohammad Razib & Cuesta, Lizeth & Ahmad, Munir & Alvarado, Rafael & Murshed, Muntasir & Rehman, Abdul & Işık, Cem, 2024. "Impact of oil price, economic globalization, and inflation on economic output: Evidence from Latin American oil-producing countries using the quantile-on-quantile approach," Energy, Elsevier, vol. 302(C).
    4. Nabamita Dutta & Deepraj Mukherjee, 2018. "Can financial development enhance transparency?," Economic Change and Restructuring, Springer, vol. 51(4), pages 279-302, November.
    5. Huang, Yi-Chun & Chen, Chih Ta, 2022. "Exploring institutional pressures, firm green slack, green product innovation and green new product success: Evidence from Taiwan's high-tech industries," Technological Forecasting and Social Change, Elsevier, vol. 174(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christian Leuz & Peter D. Wysocki, 2016. "The Economics of Disclosure and Financial Reporting Regulation: Evidence and Suggestions for Future Research," Journal of Accounting Research, Wiley Blackwell, vol. 54(2), pages 525-622, May.
    2. Robert M. Bushman & Joseph D. Piotroski & Abbie J. Smith, 2004. "What Determines Corporate Transparency?," Journal of Accounting Research, Wiley Blackwell, vol. 42(2), pages 207-252, May.
    3. Sapovadia, Vrajlal & Madhani, Pankaj, 2015. "Corporate Governance and Disclosure Practices in India: MNC Subsidiaries versus Domestic Cross-Listed Firms," MPRA Paper 96043, University Library of Munich, Germany.
    4. Bushman, Robert M. & Smith, Abbie J., 2001. "Financial accounting information and corporate governance," Journal of Accounting and Economics, Elsevier, vol. 32(1-3), pages 237-333, December.
    5. Alvaro CUERVO-CAZURRA & Luis Alfonso DAU, 2008. "Structural Reform And Firm Profitability In Developing Countries," William Davidson Institute Working Papers Series wp940, William Davidson Institute at the University of Michigan.
    6. Oxelheim, Lars, 2019. "Optimal vs satisfactory transparency: The impact of global macroeconomic fluctuations on corporate competitiveness," International Business Review, Elsevier, vol. 28(1), pages 190-206.
    7. Art Durnev & Sergei Guriev, 2007. "The Resource Curse: A Corporate Transparency Channel," Working Papers w0108, Center for Economic and Financial Research (CEFIR).
    8. Armstrong, Christopher S. & Guay, Wayne R. & Weber, Joseph P., 2010. "The role of information and financial reporting in corporate governance and debt contracting," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 179-234, December.
    9. Lars Oxelheim & Trond Randøy & Arthur Stonehill, 2012. "What can international finance add to international strategy?," Chapters, in: Handbook of Research on International Strategic Management, chapter 12, pages 238-253, Edward Elgar Publishing.
    10. Beyer, Anne & Cohen, Daniel A. & Lys, Thomas Z. & Walther, Beverly R., 2010. "The financial reporting environment: Review of the recent literature," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 296-343, December.
    11. Goldstein, Itay & Yang, Liyan, 2019. "Good disclosure, bad disclosure," Journal of Financial Economics, Elsevier, vol. 131(1), pages 118-138.
    12. Doidge, Craig & Andrew Karolyi, G. & Stulz, Rene M., 2007. "Why do countries matter so much for corporate governance?," Journal of Financial Economics, Elsevier, vol. 86(1), pages 1-39, October.
    13. Oxelheim, Lars & Randoy, Trond, 2003. "The impact of foreign board membership on firm value," Journal of Banking & Finance, Elsevier, vol. 27(12), pages 2369-2392, December.
    14. Nurul Nazlia Jamil, 2020. "The Power of Political Connections: Review on the Impacts of Audit Committee and Corporate Governance," Journal of Public Administration and Governance, Macrothink Institute, vol. 10(1), pages 333347-3333, December.
    15. Sin-Yu Ho & N.M. Odhiambo, 2018. "Analysing the macroeconomic drivers of stock market development in the Philippines," Cogent Economics & Finance, Taylor & Francis Journals, vol. 6(1), pages 1451265-145, January.
    16. Anderson, Anne & Gupta, Parveen P., 2009. "A cross-country comparison of corporate governance and firm performance: Do financial structure and the legal system matter?," Journal of Contemporary Accounting and Economics, Elsevier, vol. 5(2), pages 61-79.
    17. Bond, Philip & Newman, Andrew F., 2009. "Prohibitions on punishments in private contracts," Journal of Financial Intermediation, Elsevier, vol. 18(4), pages 526-540, October.
    18. Akisik, Orhan & Gal, Graham, 2023. "IFRS, financial development and income inequality: An empirical study using mediation analysis," Economic Systems, Elsevier, vol. 47(2).
    19. Parmendra Sharma & Eduardo Roca, 2011. "Reâ Designing Financial Systems: A Review of the Role of Stock Markets in Developing Economies," Discussion Papers in Finance finance:201120, Griffith University, Department of Accounting, Finance and Economics.
    20. Axel H. Boersch-Supan & Joachim K. Winter, 2001. "Population Aging, Savings Behavior and Capital Markets," NBER Working Papers 8561, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    International Financial Reporting Standards Transparency Economic growth Macroeconomic impact Globalization;

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:asieco:v:21:y:2010:i:1:p:66-75. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/asieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.