Top three papers of WAIFC Young Academic Award 2024
The first paper is from Regean Mugume, a Research Analyst at the Economic Policy Research Centre, in Uganda, with the title: Delivering double wins: How can Africa’s finance deliver economic growth and renewable energy transition?
Summary of his Paper
As economies grow, they tend to prioritize industrializing with fossil fuels over protecting the environment, impeding efforts to combat climate change. Therefore, there is an urgent need to address the critical policy concern of financing a clean energy transition to ensure sustainable economic growth for current and future generations. This research examines the effect of financial development on clean energy transition in 20 low-income and middle-income countries in sub-Saharan Africa. The study employs fixed-effects and instrumental variable two-stage Least squares (IV-2SLS) models to examine the effect of financial development on the transition to renewable energy. Overall, the results show a positive effect of financial development on renewable energy transition. However, the financial development effect is only significant for financial institutions instead of financial markets – a signal of weak financial markets in the region. More importantly, the results show that this financial development effect on renewable energy transition is significant only in low-income countries, contrary to middle-income economies. We recommend that governments in the region further develop and promote innovative financial market products such as green bonds and digital finance that support private sector investments in renewable energy. Regarding trade, it is critical to subsidize environmentally friendly green energy imports while taxing non-renewable products that promote the use of fossil fuels.
You can download the whole paper here.
The second paper is from Adebodun Adebayo, Senior Strategic Analyst at the Nigerian Exchange Group, formerly known as the Nigerian Stock Exchange, with the title: Financial Centers as Drivers of Talent Development and Re-Skilling in Sustainability and FinTech
Summary of his Paper
In the dynamic landscape of modern finance, talent development and reskilling initiatives are pivotal, particularly in sustainable finance and financial technology (FinTech). This paper delves into the critical issues surrounding talent shortages in these specialized areas and underscores the role of financial centers in addressing them. With a focus on sustainability and FinTech, it explores how financial centers can act as hubs for talent cultivation, showcasing successful initiatives and emphasizing the need for reskilling programs. It highlights the integration of sustainability and FinTech, illustrating how advancements in technology can bolster sustainable finance efforts and the pivotal role financial centers play in fostering collaboration between sustainability experts and FinTech innovators. Thus, by examining the intersection of sustainability and FinTech within the context of talent development, this paper provides insights into the future trajectory of financial centers. It offers recommendations for policymakers, financial institutions, and educational establishments to enhance talent development initiatives and adapt to evolving industry needs. This study asserts that continuous investment in talent development is emphasized as vital for ensuring the long-term sustainability and competitiveness of financial centers, positioning them at the forefront of innovation and driving positive change in the global financial landscape. Moreover, by advocating for continuous investment in talent cultivation, the paper highlights the pivotal role of financial centers in not only sustaining but also enhancing their competitive edge in the global arena. The recommendations put forth emphasize the need for a holistic approach that integrates cutting-edge technological advancements with a deep commitment to sustainability.
You can download the whole paper here.
The third paper is authored by Dr. Tammaro Terracciano, Assistant Professor of Finance at IESE Business School, in Spain; and co-authored by Coralie Jaunin, PhD Candidate at the University of Lausanne, and Luciano Somoza, Assistant Professor of Finance at ESSEC Business School. The paper is titled: Are Green Funds for Real?
Summary of his Paper
This research investigate green funds’ reactions to firms addressing the climate transition during earnings calls. It documents that green funds invest significantly more in firms discussing the climate transition, even when controlling for the environmental score. Moreover, after addressing the topic for the first time, firms see their green fund ownership increase by twice as much as matched firms with similar characteristics. Crucially, such firms limit carbon emissions one year after discussing the climate transition. Overall, the results highlight an effective communication channel for firms to convey their climate stance to green investors.
You can download the whole paper here.
Our Chair will announce the winner of the best paper and award a prize of €3,000, the runners-up will be awarded prizes of €2,000 (2nd place) and €1,000 (3rd place) at WAIFC’s Annual General Meeting to be held in Tokyo, Japan on the 15th of October 2024.