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Economic Policy, Institutional Quality, and Sustainable Risk Management

A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".

Deadline for manuscript submissions: closed (31 January 2024) | Viewed by 9896

Special Issue Editor


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Guest Editor
Department of Financial Economics and Accounting, University of Valladolid – Duques de Soria Campus, ES42004 Soria, Spain
Interests: corporate finance; corporate governance; corporate risk taking; hospitality finance

Special Issue Information

Dear Colleagues,

The 2008 financial crisis, the COVID 19 pandemic and the recent geopolitical uncertainties have demonstrated that companies with adequate risk management systems are more likely to survive. Similarly, proactive risk management attitudes are effective hedging strategies in times of uncertainty. However, although risk management is a relevant topic in the financial economics literature, a stakeholder’s approach is still needed. In other words, risk management must be addressed from a sustainable perspective, which ultimately has a wider positive impact.

Aside from these unpredicted events, risk management is related to the environment, namely the economic policy and institutional quality of a country. On the one hand, uncertainty related to economic decisions is a challenging issue that innovative risk management strategies should consider. Moreover, in an increasingly connected world, economic policy decisions in one country influence others. The impact of this uncertainty affects all the economic players, and thus, sustainable risk management strategies must be implemented. On the other hand, when institutions are adequately, risk management policies are more sustainable, since they are used as a last resort. Accordingly, institutional quality plays a relevant complementary role with respect to risk management, especially in uncertain times.

This Special Issue is devoted to describing and analyzing the new challenges, trends, and strategies in sustainable risk management, with particular emphasis on the role of a country’s economic policy and institutional quality. We welcome quantitative or qualitative manuscripts related (but not limited) to the following topics:

  • Economic impacts of sustainable risk management;
  • Sustainable corporate risk-taking;
  • Hedging strategies used prevent risk;
  • Sustainable risk management and value creation for stakeholders;
  • Economic Policy Uncertainty and sustainable risk management;
  • Institutional quality and sustainable risk management;
  • National culture and sustainable risk management;
  • Corporate governance and sustainable risk management;
  • Corporate social responsibility and sustainable risk management;
  • Short-term management and sustainable risk management;
  • Diverse industries approach.

Prof. Dr. Conrado Diego García-Gómez
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 2400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • risk management
  • sustainability
  • uncertainty
  • economic policy
  • institutional quality
  • corporate finance
  • corporate governance
  • corporate social responsibility

Published Papers (7 papers)

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Research

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24 pages, 29346 KiB  
Article
Research on the Level of Synergistic Development of Supply and Demand in China’s Health Industry
by Lingxiang Jian, Xueqing Yin and Minglou Zhao
Sustainability 2024, 16(9), 3548; https://doi.org/10.3390/su16093548 - 24 Apr 2024
Abstract
This study combines the latest vague set similarity measurement method with the entropy weight TOPSIS method; furthermore, it applies the grey relational analysis method to establish a model for the synergistic development of supply and demand in the health industry, and it empirically [...] Read more.
This study combines the latest vague set similarity measurement method with the entropy weight TOPSIS method; furthermore, it applies the grey relational analysis method to establish a model for the synergistic development of supply and demand in the health industry, and it empirically analyzes the development status, synergy level, and synergistic development level of China’s health industry supply and demand from 2013 to 2021. The findings reveal that: (1) China’s health industry supply maintains steady growth, while demand grows rapidly. However, the overall level of supply and demand development is generally low, indicating significant potential for future development. Moreover, the development of the supply lags behind that of the demand, leading to an increasing gap year by year. (2) The level of synergy between supply and demand in China’s health industry is relatively high but is decreasing year by year. Although the degree of synergistic development between supply and demand continues to increase, it remains at a low level, indicating that high coordination between supply and demand comes at the cost of a low development level. (3) There exists a significant regional imbalance in the development of China’s health industry, with the overall difference showing a widening trend year by year. Regional disparities are the main source of the overall difference. Full article
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22 pages, 1116 KiB  
Article
Location-Oriented Policies in China: Establishment of State-Level Development Zones and Enterprise Innovation Behaviors
by Kai Zhao, Wanshu Wu, Shengxiang Xu, Jialin Liu and Weidong Sun
Sustainability 2024, 16(8), 3250; https://doi.org/10.3390/su16083250 - 13 Apr 2024
Viewed by 413
Abstract
The impact of state-level development zones on company innovation behaviors—specifically, innovation input, output, and quality—is examined in this research. This study utilizes the establishment of state-level development zones as a quasi-natural experiment and employs a Staggered Difference-In-Difference model to systematically evaluate the actual [...] Read more.
The impact of state-level development zones on company innovation behaviors—specifically, innovation input, output, and quality—is examined in this research. This study utilizes the establishment of state-level development zones as a quasi-natural experiment and employs a Staggered Difference-In-Difference model to systematically evaluate the actual effects. Furthermore, this research focuses on the heterogeneous effects of state-level development zones on enterprise innovation, taking into account different functional positionings, such as the Economic and Technological Development Zone (ETDZ), the High-Tech Industrial Development Zone (HIDZ), and the Special Customs Supervision Zone (SCSZ). The results of previous research indicate that the establishment of state-level development zones may effectively foster company innovation and have a noteworthy effect on the input, output, and quality of innovation. The establishment of ETDZs and HIDZs can significantly encourage enterprises to increase their investment in innovation. The innovation incentive effect of HIDZs is stronger than that of ETDZs. On the other hand, the establishment of SCSZs is more beneficial for improving the output and quality of innovation in enterprises. ETDZs can promote innovation output by adjusting industry agglomeration in the region. HIDZs can encourage enterprises to increase their innovation input by intensifying tax preferences and reducing the level of industry agglomeration. SCSZs can effectively promote the innovation input, innovation output, and innovation quality of enterprises by increasing government subsidies and the intensity of tax preferences. Full article
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22 pages, 364 KiB  
Article
Commercial Retirement FOFs in China: Investment and Persistence Performance Analysis
by Yundan Guo and Li Shen
Sustainability 2023, 15(18), 13442; https://doi.org/10.3390/su151813442 - 07 Sep 2023
Viewed by 1022
Abstract
The number and size of China’s commercial retirement Fund of Funds (FOFs) have exploded since 2018, reflecting a dearth of Chinese retirement products and widespread retirement anxiety among individual investors. Therefore, the performance of retirement FOFs continues to garner widespread interest from academia [...] Read more.
The number and size of China’s commercial retirement Fund of Funds (FOFs) have exploded since 2018, reflecting a dearth of Chinese retirement products and widespread retirement anxiety among individual investors. Therefore, the performance of retirement FOFs continues to garner widespread interest from academia and society. This study evaluates the performance and sustainability of the investment strategies employed by China’s retirement FOFs using standard relative and absolute measures. The Sharpe ratio, Treynor ratio, and Jensen’s alpha are used as performance measurement standards, and the sustainability of performance is evaluated using the performance dichotomy, cross-sectional regression, and Spearman rank correlation coefficient methods. Target-risk FOFs for retirement are categorized into four groups: conservative, stable, balanced, and aggressive, with each group assuming progressively greater levels of risk. In evaluating fund performance, it was determined that the aggressive and stable groups of funds generated greater excess returns (as indicated by the inflation-adjusted Sharpe ratio). Additionally, the stable group of funds generated greater investment returns than the other groups (as all statistically significant alpha values for Jensen were positive). When evaluating the sustainability of fund performance, it was determined that the stable and balanced group funds exhibited the least sustainable performance. During the economic recession caused by the COVID-19 pandemic between 2020 and 2021, there were multiple fund performance ranking reversals (with significantly negative cross-sectional regression coefficients and Spearman coefficients). In the second half of 2022, the fund’s performance exhibited signs of sustainability (as indicated by significant performance dichotomy test values and positively significant Spearman coefficients). Still, this trend did not persist into 2023. Summarizing the different performance indicator results reveals that the stable group is the most worthwhile fund group to purchase among the four groups. Also, given that the historical performance of a signal fund is not sustainable, the investors should diversify their investments in this group and try to obtain the average return of the stable strategy to achieve the goal of supplementing retirement. Full article
18 pages, 557 KiB  
Article
The Immediate Impacts of COVID-19 on Low-Income Households: Evidence from Malaysia
by Roza Hazli Zakaria, Mohamad Fazli Sabri, Nurulhuda Mohd Satar and Amirah Shazana Magli
Sustainability 2023, 15(10), 8396; https://doi.org/10.3390/su15108396 - 22 May 2023
Cited by 1 | Viewed by 1745
Abstract
This study unravelled the economic impacts of the coronavirus disease 2019 (COVID-19) on low-income households. The asymmetric economic impacts of the pandemic that are biased towards the poor, young, and women have been well established. However, micro evidence on the poor is limited, [...] Read more.
This study unravelled the economic impacts of the coronavirus disease 2019 (COVID-19) on low-income households. The asymmetric economic impacts of the pandemic that are biased towards the poor, young, and women have been well established. However, micro evidence on the poor is limited, thus demanding detailed understanding to design an effective targeted assistance. In this study, data were gathered from face-to-face interviews using a sampling frame provided by the Department of Statistics Malaysia (DOSM). Online data collection was dismissed to ensure all low-income households had the same chance to participate, as some might have no online access. Logistic regressions were estimated to identify the characteristics of households that suffered job loss and income reduction. The findings revealed that one in ten households experienced job loss during the pandemic, while one third survived with lower income. The extent of income reduction was rather severe, as the pandemic had reduced income generation by more than half among the affected households. The regression outcomes showed that the higher-income households among the low-income households had higher chances of experiencing income reduction. A similar scenario was noted for less-educated households. Notably, the adverse impacts were not biased toward female-headed households, as is widely perceived. There was no evidence that economic sectors explained job losses, but households involved in the agriculture, domestic, and transportation sectors had higher chances of suffering from income reduction. These results suggest that monetary government assistance should not rely on general indicators, such as female-headed households and below-poverty-line income (PLI). Instead, a more effective measure is to look at other characteristics, such as employment type, education level, and job sectors. Full article
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24 pages, 1577 KiB  
Article
Systemic Risk with Multi-Channel Risk Contagion in the Interbank Market
by Shanshan Jiang, Jie Wang, Ruiting Dong, Yutong Li and Min Xia
Sustainability 2023, 15(3), 2727; https://doi.org/10.3390/su15032727 - 02 Feb 2023
Cited by 1 | Viewed by 1730
Abstract
The systematicness of banks is an important driver of financial crisis. Overlapping portfolios and assets correlation of banks’ investment are important reasons for systemic risk contagion. The existing systemic risk models are all analyzed from one aspect and cannot reflect the real situation [...] Read more.
The systematicness of banks is an important driver of financial crisis. Overlapping portfolios and assets correlation of banks’ investment are important reasons for systemic risk contagion. The existing systemic risk models are all analyzed from one aspect and cannot reflect the real situation of the banking system. In the present paper, considering the overlapping portfolios and assets correlation, a contagion network model with multi-channel risk is proposed, which is with interbank lending (direct contagion channel), overlapping portfolios (indirect contagion channel), and assets correlation (indirect contagion channel). In addition, the model takes investment risk as an impact factor and learns the operation rules of the banking system to help banks compensate for liquidity through asset depreciation. Based on the proposed model, the effects of assets correlation, assets diversity, assets investment strategy, interbank network structure, and the impact of market density on risk contagion are studied and analyzed quantitatively. The method in this paper can more truly reflect the banking system risk than the existing model. This paper provides a solution for quantitative analysis of systemic risk, which provides powerful tools for macroprudential stress testing and a reference for regulatory authorities to prevent systemic risk. Full article
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20 pages, 690 KiB  
Article
The Impact Mechanism of Digital Transformation on the Risk-Taking Level of Chinese Listed Companies
by Debao Dai, Shengnan Han, Min Zhao and Jiaping Xie
Sustainability 2023, 15(3), 1938; https://doi.org/10.3390/su15031938 - 19 Jan 2023
Cited by 5 | Viewed by 2410
Abstract
As the core engine of the digital economy, the digital transformation can make modern enterprises survive and develop better now. By the sample data of listed companies in the years from 2015 to 2020, this paper identifies the degree of enterprise digital transformation [...] Read more.
As the core engine of the digital economy, the digital transformation can make modern enterprises survive and develop better now. By the sample data of listed companies in the years from 2015 to 2020, this paper identifies the degree of enterprise digital transformation through text analysis, empirically examines the impact mechanism of digital transformation on corporate risk-taking, and fully considers the heterogeneity problems. The findings are as follows: (1) Digital transformation can improve the level of enterprise risk taking, especially the improvement of enterprise financial stability and strategic risk taking; (2) in terms of enterprise attribute structure, digital transformation can significantly enhance the risk-taking level of non-state-owned enterprises and high-tech enterprises; (3) the mechanism identification test finds that innovation-driven and enterprise value enhancement play a strengthening role in the role of digital transformation in promoting enterprise risk-taking level, and resource allocation efficiency as a mediating path weakens the role of digital transformation on enterprise risk-taking level. This study provides a basis for promoting the improvement of enterprises risk-taking: digital transformation can help enterprises maintain financial stability, improve innovation output capacity, enterprise value level, enterprise risk-taking capacity and sustainable development. At the same time, the Chinese government should take measures to further stimulate the willingness of state-owned enterprises to digital transformation. Full article
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Review

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15 pages, 817 KiB  
Review
A Review of Research on Embodied Carbon in International Trade
by Haoran Wang and Toshiyuki Fujita
Sustainability 2023, 15(10), 7879; https://doi.org/10.3390/su15107879 - 11 May 2023
Viewed by 1547
Abstract
Nowadays, how to reduce carbon emissions is a hot issue in environmental economics research, and countries around the world are having extensive discussions on their respective carbon emission obligations. The embodied carbon contained in international trade plays a crucial role in controlling pollutant [...] Read more.
Nowadays, how to reduce carbon emissions is a hot issue in environmental economics research, and countries around the world are having extensive discussions on their respective carbon emission obligations. The embodied carbon contained in international trade plays a crucial role in controlling pollutant emissions but it is often overlooked, resulting in problems such as carbon displacement and avoidance of responsibility for pollutant emissions. Based on the Social Sciences Citation Index (SSCI) and Science Citation Index-Expanded (SCI-E) database, this paper adopts a bibliometric method to summarize 626 papers from 1994 to 2023 in six aspects, including the number of the literature, the literature citations, research region, journal, author, and research discipline. Meanwhile, the research method and model used in the collected papers are classified and reviewed. Then, this study briefly outlines the current status of embodied carbon emissions and the international pollutant identification laws and analyzes the shortcomings of existing research and the rationality of responsibility identification principles. Finally, we propose future research hotspots by combining carbon neutrality and carbon trading theory. Full article
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