Globalization, transparency and economic growth: The vulnerability of Chinese firms to macroeconomic shocks
AbstractThe 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.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Asian Economics.
Volume (Year): 21 (2010)
Issue (Month): 1 (February)
Contact details of provider:
Web page: http://www.elsevier.com/locate/asieco
International Financial Reporting Standards Transparency Economic growth Macroeconomic impact Globalization;
Other versions of this item:
- Oxelheim, Lars, 2008. "Globalization, Transparency and Economic Growth: The Vulnerability of Chinese Firms to Macroeconomic Shocks," Working Paper Series 768, Research Institute of Industrial Economics.
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; 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
- G - Financial Economics
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