The moderating role of market uncertainty in the effectiveness of government policies and R&D activities promoting innovation in manufacturing firms

PurposeThe purpose of this study is to examine the impact of government support policies and research and development (R&D) activities on product innovation under market uncertainty.Design/methodology/approachThis study applies logistic regression analysis to a sample of 4,000 South Korean manufacturing firms in order to investigate the impact of government policies and R&D activities of the firm on firm innovation performance, with particular interest in the moderating role of the firm's perceived market uncertainty (PMU).FindingsPolicies supporting industry/university/institute/local collaboration are found to have greater benefit under high PMU. Surprisingly, support for a consortium among different-sized firms has a negative effect on product innovation, although this negative effect disappears under high PMU. Both support for the protection of intellectual property (IP) and support for the resolution of manpower shortages have strong positive effects on the propensity to innovate products, but in both cases the moderating effects of uncertainty are negative. Finally, all types of R&D activities have positive effects on the propensity to innovate, more so for new product innovation than for improved product innovation.Originality/valueTo the best of the authors' knowledge, this is the first study to examine analytically the moderating effect of PMU in the effectiveness of government policies promoting innovation in the manufacturing sector. The study is potentially useful both for policymakers in deciding which policies to implement under prevailing market conditions;and for entrepreneurs choosing between different forms of government support, particularly given the abnormal levels of market uncertainty prevailing in the Covid-19 era.

Labour market uncertainty after the irruption of COVID-19.

This paper examines the evolution of labour market uncertainty after the irruption of the COVID-19 pandemic in European countries. Since uncertainty is not directly observable, we use two alternative methods to directly approximate it. Both approaches are based on qualitative expectations elicited form the consumer survey conducted by the European Commission. On the one hand, following (Dibiasi and Iselin in Empir Econ 61:2113-2141, 2021), we use the share of consumers unable to formalise expectations about unemployment (Knightian-type uncertainty). On the other, we use the geometric discrepancy indicator proposed by (Claveria in Empirica 48:483-505, 2021) to quantify the proportion of disagreement in business and consumer expectations. We find that both uncertainty measures covary across the 22 European countries analysed. Although we observe differences in the evolution across countries, in most cases the perception of labour market uncertainty peaked before the outbreak of the crisis, plummeted during the first months of the lockdown, and started rising again. When testing for cointegration with the unemployment rate, we find that both indicators exhibit a long-term relationship with unemployment in most countries. The impact of both indicators on unemployment is characterised by considerable asymmetries, showing a more intense reaction to decreases in the level of labour market uncertainty. While this finding may seem counterintuitive at first sight, it somehow reflects the fact that during recessive periods, the level of disagreement in consumer unemployment expectations drops considerably.

Connectedness of green investments and uncertainties: new evidence from emerging markets

Purpose>This study aims to investigate the response of green investments of emerging countries to own-market uncertainty, oil-market uncertainty and COVID-19 effect/geo-political risks (GPRs), using the tail risks of corresponding markets as measures of uncertainty.Design/methodology/approach>This study employs Westerlund and Narayan (2015) (WN)-type distributed lag model that simultaneously accounts for persistence, endogeneity and conditional heteroscedasticity, within a single model framework. The tail risks are obtained using conditional standard deviation of the residuals from an asymmetric autoregressive moving average – ARMA(1,1) – generalized autoregressive conditional heteroscedasticity – GARCH(1,1) model framework with Gaussian innovation. For out-of-sample forecast evaluation, the study employs root mean square error (RMSE), and Clark and West (2007) (CW) test for pairwise comparison of nested models, under three forecast horizons;providing statistical justification for incorporating oil tail risks and COVID-19 effects or GPRs in the predictive model.Findings>Green returns responds significantly to own-market uncertainty (mostly positively), oil-market uncertainty (mostly positively) as well as the COVID-19 effect (mostly negatively), with some evidence of hedging potential against uncertainties that are external to the green investments market. Also, incorporating external uncertainties improves the in-sample predictability and out-of-sample forecasts, and yields some economic gains.Originality/value>This study contributes originally to the green market-uncertainty literature in four ways. First, it generates daily tail risks (a more realistic measure of uncertainty) for emerging countries' green returns and global oil prices. Second, it employs WN-type distributed lag model that is well suited to account for conditional heteroscedasticity, endogeneity and persistence effects;which characterizes financial series. Third, it presents both in-sample predictability and out-of-sample forecast performances. Fourth, it provides the economic gains of incorporating own-market, oil-market and COVID-19 uncertainty.

An uncertainty measure based on Pearson correlation as well as a multiscale generalized Shannon-based entropy with financial market applications

In this research, we intended to employ the Pearson correlation and a multiscale generalized Shannon-based entropy to trace the transition and type of inherent mutual information as well as correlation structures simultaneously. An optimal value for scale is found to prevent over smoothing, which leads to the removal of useful information. The lowest Singular Value Decomposition Multiscale Generalized Cumulative Residual Entropy (SVDMWGCRE), or SVD Entropy (SVDE), is obtained for periodic–chaotic series, generated by logistic map;hence, the different dynamic, correlation structures, and intrinsic mutual information have been characterized correctly. It is found out that the mutual information between emerging markets entails higher sensitivity, and moreover emerging markets have demonstrated the highest uncertainty among investigated markets. Additionally, the fractional order has synergistic effects on the enhancement of sensitivity with the multiscale feature. According to the logistic map and financial time series results, it can be inferred that the logistic map can be utilized as a financial time series. Further investigations can be performed in other fields through this financial simulation. The temporal evolutions of financial markets are also investigated. Although the results demonstrated higher noisy information for emerging markets, it was illustrated that emerging markets are getting more efficient over time. Additionally, the temporal investigations have demonstrated long-term lag and synchronous phases between developed and emerging markets. We also focused on the COVID-19 pandemic and compared the reactions of developing and emerging markets. It is ascertained that emerging markets have demonstrated higher uncertainty and overreaction to this pandemic. [ FROM AUTHOR] Copyright of International Journal of Nonlinear Sciences & Numerical Simulation is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full . (Copyright applies to all s.)

THE IMPACT OF GLOBAL ECONOMIC POLICY UNCERTAINTY AND VOLATILITY ON STOCK MARKETS: EVIDENCE FROM ISLAMIC COUNTRIES

This study investigates the impact of uncertainty and volatility on ten Islamic stock returns using monthly data for from 2011:M5 to 2021:M5. We rely on the continuous wavelet transform and wavelet coherence ratios, which allows decomposition of time series across time scales to investigate the causal relationship between stock market returns, economic policy uncertainty and volatility. Our results provide some interesting insights. First, economic policy uncertainty, in general, has a negative effect on the majority of Islamic stock returns, except for the Dow Jones Islamic Market (DJIM). Second, volatility has a significant positive impact on most of the Islamic stock returns in various countries. Third, both economic policy uncertainty and volatility have a greater impact on the Islamic stock returns post-COVID-19 outbreak. These results should assist investors to re-evaluate their portfolios to fully maximize the potentials of these Islamic stock markets. Policymakers could use these results to design policies to reduce economic policy uncertainty as well as to cushion the impact of externally generated uncertainties. © 2022 AESS Publications.

Infectious disease (COVID-19)-related uncertainty and the safe-haven features of bonds markets

Purpose: This study aims to examine the hedge, diversifier and safe-haven properties of bonds against infectious disease-related equity market volatility (IDEMV), like COVID-19. Design/methodology/approach: The authors apply wavelet coherence methodology on the daily data of IDEMV and bond market (US, UK, Japan, Switzerland, Canada, Australia, Sweden, China and Europe) indices from 1 January 2000 to 14 February 2021. Findings: The results show no significant co-movement between these bond indices and IDEMV, thus confirming that they serve as a hedge against IDEMV. However, during the turbulent period like COVID-19, the authors find that the US, UK, Japan, Switzerland, Canada, Australia, Sweden, China and European bond markets act as safe-haven against IDEMV, whereas the UK, US, Japan and Canadian bond markets demonstrate an in-phase and positive co-movement with IDEMV during COVID-19, suggesting their role as a diversifier. Research limitations/implications: The study findings are important for investors and portfolio managers regarding risk management, portfolio diversification and investment strategies. Originality/value: The authors contribute to the fast growing body of work on the financial impacts of COVID-19 as well as to ongoing consideration of whether a bond is a safe-haven investment. © 2022, Emerald Publishing Limited.

Relevance of supplementary fair value disclosures under market uncertainty: effects on audit fees and investors’ pricing

Purpose: Concerns relating to the representational faithfulness and, consequently, the relevance of fair value (FV) estimates are likely to be heightened in the wake of market uncertainty caused by the COVID pandemic. Therefore, this paper aims to study the relevance of supplementary disclosures intended to improve the representational faithfulness of FV estimates by examining their impacts on audit fees and investors’ valuation of FV adjustments in the uncertain market condition of 2020. Design/methodology/approach: The sample is comprising Australian real estate firms. The authors develop both weighted and unweighted disclosure indices based on supplementary disclosures related to Level 3 FVs under IFRS 13 Fair Value Measurement. The authors measure the levels of disclosure by the sample firms based on these indices from 2018 to 2020 and ascertain their effects on audit fees and the market value of FV adjustments on investment properties. Findings: The authors find that real estate firms increased supplementary FV disclosures during 2020. The authors document a negative association between supplementary disclosures and audit fees, although the authors find no incremental impact of disclosures on audit fees during the pandemic. Additionally, the authors find that investors’ pricing of FV adjustments increased with the increase in disclosures during the market uncertainty of 2020, while in the pre-uncertainty period, their pricing influence was not significant. Originality/value: The findings extend the understanding of the role of supplementary disclosures on Level 3 investment properties in mitigating the perceived audit risk for auditors and the faithful representation concerns for investors in a distressed market environment. © 2022, Emerald Publishing Limited.

How to calm down the markets? The effects of COVID-19 economic policy responses on financial market uncertainty.

Financial markets during the COVID-19 pandemic are characterized by a prolonged period of increased uncertainty. In this paper, we analyse how the announcements of policy interventions and responses, to buffer short-term economic impact of the pandemic and offset financial turmoil, have affected the level of realized volatility in 23 countries. Under the augmented heterogeneous autoregressive model framework, we show that the international calming effect of COVID-19 economic policy actions originates from the US macroprudential policy announcements.

Stay Home and Stay Safe with the Budgeting Tool a One-Stop Finance Tracker

COVID-19 has devastated people's lives across the globe. Declining economy, job losses and market uncertainty have created restlessness in public. These unprecedented times have led to concerns about the future and fear of restricted income. To overcome these strenuous and tough times, individuals and families need to take certain vital steps in order to manage and monitor their budgets judiciously. Though COVID-19 will continue to have its adverse consequences globally, a few smart decisions may help common people maintain healthy and stable finances. So it's essential that we keep a track of the transactions every day. To do so, we’ve proposed a web application with the help of HTML and CSS to make it visually appealing. It is capable of tracking the minute transactions that we make. The main objective of this application is for the user to monitor their expenses. The user can store his income and expenses based on the transaction, date of the income or expense and the category of items. This could be achieved by linking the database (MySql) with the PHP script. We have developed a web based application which is used to manage a users daily expense in a more structured and organized manner. Thus, we can minimize the hand-operated computations which would’ve been involved otherwise and also track expenditure. This application asks the user to provide his income which is further split across various categories in order to calculate his total expenses per day, and these results will be stored for each user separately. We also included a feature to scan and store the images of the bill in the database which could be downloaded at any given point of time. In addition to this, we have integrated a calculator which is an optional feature for the user to do the extra calculations within the website rather than going for an external calculator. © 2022, The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.