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By incorporating both the fire sales contagion mechanism and the bankruptcy contagion mechanism into a bank network model, this paper examines how risks are generated under dynamic shocks. In particular, this paper constructs systemic risk indicators suitable for analyzing multiple rounds of contagion under different shocks (time dimension) and from institutions and assets (spatial dimension). Indicators that measure the indirect relevance between institutions and between assets are also innovatively built. It is found that due to deleveraging or bankruptcy among a large number of banks, the systemic risk exhibits an upward trend marked by intermittent jumps under varying intensities of shocks. Risks are generated mainly through the fire sales contagion mechanism of deleveraging under small shocks, and through the bankruptcy contagion mechanism under large shocks. In terms of influencing factors, a stronger indirect relevance, a lower leverage skewness and a higher leverage level in the banking system lead to higher risks. In particular, the influence of leverage skewness on systemic risk is stronger than that of leverage level.

This study reviews the extant methodologies in research focusing on the nexus between external shocks and monetary policy effectiveness. It is premised on the argument that the adopted methodology to examine the empirical validity and plausibility of estimated models is fundamental in monetary policy effectiveness in the light of external shocks. Hence, the choice of the methodological approach translates the effectiveness of corresponding monetary policy rules and institutions. It is established in the review that the extant literature converges on a set of methodological underpinnings that are relevant in assessing the effects of external shocks on monetary policy effectiveness. Such convergence is documented in this study by assessing country-specific and panel-oriented studies focusing on non-WAEMU (West African Economic and Monetary Union) countries, especially in terms of information criteria motivating the choice of extant methodologies. KCI Citation Count: 0

Grain supply is the lifeblood of a country, and the stability of the supply chain is a crucial prerequisite for ensuring national grain security. This paper draws on the definition of resilience in physics and economics. It takes supply chain fracture resilience, impact resilience, and synergy resilience as the secondary indicators. It constructs a comprehensive evaluation indicator system of the grain supply chain resilience, measures the resilience indicator of China’s grain supply chain from 1996 to 2021, and analyzes the role of supply, cost, exchange rate, and other external shocks in influencing the resilience of China’s grain supply chain on this basis. The study found that the overall level of China’s total grain supply chain resilience has been growing year by year and can be divided into three stages: low-level stabilization stage, continuous growth stage, and high-level stabilization stage. Grain supply chain fracture resilience has been growing steadily, grain supply chain impact resilience fluctuation is more obvious, and grain supply chain synergy resilience has been changing more gently. In the inquiry of the impact of external shocks on the resilience of China’s grain supply chain, it was found that world grain exports and the RMB exchange rate have a significant positive impact on China’s grain supply chain resilience level, while the international oil price has a significant negative impact. Based on this, the paper puts forward suggestions for ensuring stable production and supply in the grain market, improving the structure of foreign trade in grain, and actively coping with international commodity price shocks.

International tourism of today is considered one of the main levers of job creation, generating income and foreign currency and foreign investment. Over the past few years, international tourism has been growing steadily, but at the same time this same growth is threatened by challenges in the form of various external shocks affecting the volatility of tourism. Volatility is described, according to many authors, as an unpredictable measure of the intensity of variations. These variations are associated with unpredictable crisis situations or events commonly referred to as ‘new shocks’ (e.g. terrorism, epidemics, natural disasters, exchange rate volatility, oil price, political (in)stability, wars, and various forms of criminal activities). Such global events have a profound impact on a wide range of political, legal and social dimensions. Tourism is extremely vulnerable to various external and internal shock e. The appearance of exogenous events in destinations changes the characteristics of tourism at the destination level, affecting the tourist demand, but also on the economic situation of the country.

This research investigates the spillover effect of the US interest rate and oil prices on renewable energy utilization in Turkey. By employing a novel bootstrap autoregressive distributed lag approach on annual data from 1985 to 2016, the empirical findings and discussions represent the first contribution to the energy economics literature. The findings of this research confirm that the US interest rate has a significant spillover effect on the use of renewable energy in Turkey through the channels of income and local interest rate. Due to limited foreign exchange reserves, high foreign debt, low international reserves, and devaluation of the local currency, the Turkish economy is highly intertwined with the US economy through international investment and trade. All these factors reinforce the spillover influence of the US interest rate on energy consumption in Turkey. Moreover, this study affirms that the price of oil has a negative impact on renewable energy use through the real income channel. In order for Turkey to realize its investments in renewable energy resources more reliably and sustainably, the study suggests that policymakers should revise the current economic growth model by making it more resilient to external shocks such as the US interest rate, exchange rate, and oil prices.

Frequent extreme events and evolving domestic market conditions have intensified price risk transmission within China’s agricultural food system. Using high-frequency price data for 26 major agricultural commodities, this study constructs a time-frequency volatility spillover network based on the LASSO-VAR framework, and further employs quantile Granger causality tests and a factor-augmented vector autoregression model to examine cross-commodity risk transmission and its driving forces. The results show that agricultural commodity markets in China exhibit substantial systemic connectedness, with an average total spillover index of 47.29%. Risk spillovers are mainly concentrated in the short term, where homogeneous commodities tend to form clustered transmission structures. Sugar, oil-related products, and live hogs play prominent roles in risk transmission, while pork and beef are more likely to act as risk receivers over longer horizons. Major shocks, including extreme weather events, African Swine Fever, COVID-19, and Sino-US trade frictions, significantly reshape spillover intensity, but their effects differ across time horizons. Short-term spillovers are more sensitive to consumer sentiment and pandemic-related shocks, medium-term spillovers respond more strongly to trade frictions, and long-term spillovers are mainly associated with major animal epidemics. These findings provide evidence on the formation of systemic price risk in China’s agricultural markets and offer implications for horizon-specific and commodity-specific risk monitoring and policy intervention.

This paper estimates factors affecting demand for Fund financing by Low-Income Countries (LICs) in response to policy and exogenous shocks. Various economic variables including reserve coverage, current account balance to GDP, real GDP growth, macroeconomic stability, and terms of trade shocks are found to be significant determinants of Fund financing. Moreover, global conditions, including changes in real oil and non-oil commodity prices and world trade, are also significant. Therefore, the demand for Fund financing by LICs is likely to be cyclical in response to common shocks with its intensity depending on the severity and persistence of adverse shocks.

The Structural Determinants of External Vulnerability Norman V. Loayza and Claudio Raddatz This article examines empirically how domestic structural characteristics related to openness and product- and factor-market flexibility influence the impact of terms of trade shocks on aggregate output. Applying semistructural vector autoregressions to a panel of 88 countries with annual observations for the period 1974 2000, the analysis isolates and standardizes the shocks, estimates their impact on GDP, and examines how this impact depends on the domestic conditions outlined above. This article takes a different approach and directly estimates the output impact of external shocks using semistructural vector autoregression analysis, as applied to panel data (cross-country, time-series) of aggregate variables. Controlling for the size of the shock, the analysis accounts for its interaction with the set of country characteristics under analysis and estimates its conditional output impact. The Chinn Ito index corresponds to the first principal components of the following four binary variables reported in the International Monetary Fund's Annual Report on Exchange Arrangements and Exchange Restrictions (various issues): existence of multiple exchange rates, restrictions on current account, capital account transactions, and the existence of requirements to surrender export proceedings. Robustness This section examines the robustness of the basic results to changes in measurement of the terms of trade shock, in the sample of countries, the application of a longer lag structure in the estimated vector autoregressions, the inclusion of the exchange rate regime as a country characteristic, and implementation of an alternative method of estimating the effects of structural characteristics. This result is only tentative, however, as a complete analysis of the role of the exchange rate regime requires treatment of measurement issues that is outside the scope of this article. In contrast to the basic case, the interactions model indicates a relevant though nuanced role for financial depth in affecting the impact of external shocks: deepening domestic financial markets can reduce the impact of external shocks when international trade and financial markets are open. These results are robust to checking for mechanical interpretations of the trade-related results, placing stricter restrictions to guarantee shock exogeneity, concentrating exclusively on developing countries, using a longer lag structure for the vector autoregressions, controlling in addition for the exchange rate regime and allowing full heterogeneity in the estimation of country impulse responses. Similarly, the findings indicate that greater financial openness in an environment of underdeveloped local financial markets may result in an increase in the impact of external shocks.

PurposeSurvivability capital is a unique resource resulting from the “familiness” constituting an inherent feature of family firms. Familiness represents the ability of family members to reinforce the financial and non-financial resources of businesses facing threats to their economic existence. This work proposes and examines various dimensions of the survivability capital construct, verifying whether family firms expecting deterioration of their economic situation or problems with survival due to the COVID-19 crisis can mobilise sufficient capital to survive.Design/methodology/approachThis article provides empirical evidence based on a cross-sectional online survey of 167 Polish family firms, conducted at the beginning of the COVID-19 pandemic. The method (scale) of survivability capital measurement was elaborated and validated using principal component analysis (PCA) and confirmatory factor analyses (CFA). Next, the mobilisation of the different dimensions of survivability capital was examined using PLS-SEM modelling.FindingsThe survivability capital of family firms is composed of two dimensions: internal (based on directly involved family members) and external (based on not directly involved family members). Family firms facing crisis-induced deterioration of the economic situation engage its internal component. Subsequently, family firms forecasting decreasing probability of survival during a crisis try to engage both the internal and the external components of survivability capital. Such behaviour is in line with the resource-based view as well as with the sustainable family business theory.Originality/valueTo the best of the authors' knowledge, this is one of the first studies to examine analytically the survivability capital construct. While previous studies mentioned the existence of survivability capital, this study attempts to introduce its various dimensions and test the mobilisation of survivability capital during the COVID-19 crisis.