arXiv subjects

Tomoo Kikuchi

Publications and source records attributed to Tomoo Kikuchi.

8 recordsLinked to original sources

arXiv2026

The Effects of Innovation on Foreign Portfolio Investment: The Role of Institutions and Risk-Taking

We study whether and how innovation intensity attracts foreign portfolio investment (FPI) using a panel of 60 countries from 1996 to 2021. Using an instrumental variable strategy based on regional shift-share and global push instruments, we estimate the causal response of debt and equity inflows to innovation intensity in the host country. We find that innovation increases FPI, with larger effects for equity than debt inflow. Moreover, the effect of innovation on equity inflow increases with technological development and institutional quality, whereas the effect on debt inflow is positive and significant only at high levels of these factors. We also find that countries with a higher risk-taking environment attract more FPI and that equity inflow responses are immediate and persistent, whereas debt inflow responses are modest and dampen over time.

econ.GN↗

arXiv2025

How Innovation Shapes Financial Structure: The Moderating Role of Institutional Quality

This paper studies how the stock market---relative to the banking sector---responds to innovation by using a panel of 75 countries from 1982 to 2021. Our baseline result is that innovation has a positive effect on stock market activity, efficiency and size relative to the banking sector. In addition, we uncover alternative funding channels by studying how institutional quality moderates the effect of innovation on financial structure. While the moderating effect is positive for activity and efficiency, it is negative for size, suggesting a larger role of banks under high institutional quality. Furthermore, the moderating effect can be nonlinear for efficiency, suggesting alternative efficient funding channels under low institutional quality.

econ.GN↗

arXiv2025

Trade Networks and the Rise of a Dominant Currency

We develop a model where currency issuers provide liquidity, while users in a trade network choose currency usage for trade settlement. We identify a feedback mechanism where a user's currency preference spillovers to others and increases the issuer's commitment to liquidity provision, which in turn increases the adoption of the currency. Our findings highlight not only the advantage of the incumbent issuer in maintaining dominance, but also the conditions that lead to the rise and fall of dominant currencies. Our framework offers testable implications for the share of global settlement currencies, the network structure, and the strategy of issuers.

econ.TH↗

arXiv2023

Singapore's Role for ASEAN's Portfolio Investment

We investigate the elasticity of portfolio investment of ASEAN and OECD members to geographical distance in a gravity model utilizing a bilateral panel of 86 reporting and 241 counterparty countries/territories for 2007-2017. We find that the elasticity is more negative for ASEAN than OECD members. The difference is larger if we exclude Singapore. This indicates that Singapore's behavior is distinct from other ASEAN members. While Singapore tends to invest in distant OECD countries, other ASEAN members tend to invest in nearby countries. Our study sheds light on the role of a regional financial center in global finance.

econ.GN↗

arXiv2022

Does Foreign Debt Contribute to Economic Growth?

We study the relationship between foreign debt and GDP growth using a panel dataset of 50 countries from 1997 to 2015. We find that economic growth correlates positively with foreign debt and that the relationship is causal in nature by using the sovereign credit default swap spread as an instrumental variable. Furthermore, we find that foreign debt increases investment and then GDP growth in subsequent years. Our findings suggest that lower sovereign default risks lead to higher foreign debt contributing to GDP growth more in OECD than non-OECD countries.

econ.GN↗

arXiv2022

Pecuniary Externality, Ideology and Sphere of Influence

We build a game-theoretic model to formalize Kindleberger's (1996) idea of the public good of leadership. Two superpowers use ideology to compete for influence by forming clubs whose members benefit more when their orientations are closer to the club's. Pecuniary externalities create complementarity among non-superpowers. Their collective agency forces superpower to compromise by choosing an orientation not aligned with its own. We find that superpowers compromise most when expanding their clubs but less as members become more dependent. Moreover, increased member endowments do not always enlarge the club; disproportionate growth by a few can instead contract it.

econ.GN↗

arXiv2021

Transitional Dynamics of the Saving Rate and Economic Growth

We estimate the relationship between GDP per capita growth and the growth rate of the national savings rate using a panel of 130 countries over the period 1960-2017. We find that GDP per capita growth increases (decreases) the growth rate of the national savings rate in poor countries (rich countries), and a higher credit-to-GDP ratio decreases the national savings rate as well as the income elasticity of the national savings rate. We develop a model with a credit constraint to explain the growth-saving relationship by the saving behavior of entrepreneurs at both the intensive and extensive margins. We further present supporting evidence for our theoretical findings by utilizing cross-country time series data of the number of new businesses registered and the corporate savings rate.

econ.GN↗

arXiv2021

Coase Meets Bellman: Dynamic Programming for Production Networks

We show that competitive equilibria in a range of models related to production networks can be recovered as solutions to dynamic programs. Although these programs fail to be contractive, we prove that they are tractable. As an illustration, we treat Coase's theory of the firm, equilibria in production chains with transaction costs, and equilibria in production networks with multiple partners. We then show how the same techniques extend to other equilibrium and decision problems, such as the distribution of management layers within firms and the spatial distribution of cities.

econ.GN↗