Asian Economic and Financial Review

Asian Economic and Financial Review

Basic info

  • Publisher: Aess
  • Country of publisher: pakistan
  • Date added to EuroPub: 2017/May/11

Subject and more

  • LCC Subject Category: Finance and Financial Services, Economics
  • Publisher's keywords: Economic, Financial
  • Language of fulltext: english
  • Time from submission to publication: 8 weeks

Publication charges

  • Article Processing Charges (APCs): No
  • Submission charges: No
  • Waiver policy for charges? No

Open access & licensing

  • Type of License: CC BY
  • License terms
  • Open Access Statement: Yes
  • Year open access content began: 2011
  • Does the author retain unrestricted copyright? False
  • Does the author retain publishing rights? False

Best practice polices

  • Permanent article identifier: DOI
  • Content digitally archived in: LOCKSS, CLOCKSS
  • Deposit policy registered in: None

This journal has '574' articles

DETERMINANTS OF INWARD FDI IN MONGOLIA: AN APPLICATION OF THE ARDL BOUNDS TESTING APPROACH TO COINTEGRATION

DETERMINANTS OF INWARD FDI IN MONGOLIA: AN APPLICATION OF THE ARDL BOUNDS TESTING APPROACH TO COINTEGRATION

Authors: Maralgua Och*| Graduate Institute of National Development, National Taiwan University, Taiwan (ROC), Christian Baerbig| Procurement - Global Business...
Year: 2017, Volume: 7, Number: 3
(47 downloads)
Abstract

The study at hand is the first of its kind that aimed to provide a comprehensive analysis of the determinants of foreign direct investment (FDI) in Mongolia by analyzing their short-run, long-run, and Granger causal relationships. In doing so, we methodically used a series of econometric methods to ensure reliable and robust estimation results that included the augmented Dickey-Fuller and Phillips-Perron unit root tests, the most recently advanced autoregressive distributed lag (ARDL) bounds testing approach to cointegration, fully modified ordinary least squares, and the Granger causality test within the vector error-correction model (VECM) framework. Our findings revealed domestic market size and human capital to have a U-shaped relationship with FDI inflows, with an initial positive impact on FDI in the short-run, which then turns negative in the long-run. Macroeconomic instability was found to deter FDI inflows in the long-run. In terms of the impact of trade on FDI, imports were found to have a complementary relationship with FDI; while exports and FDI were found to be substitutes in the short-run. Financial development was also found to induce a deterring effect on FDI inflows in both the short- and long-run; thereby also revealing a substitutive relationship between the two. Infrastructure level was not found to have a significant impact on FDI on any conventional level, in either the short- or long-run. Furthermore, the results have exhibited significant Granger causal relationships between the variables; thereby, ultimately stressing the significance of policy choice in not only attracting FDI inflows, but also in translating their positive spill-over benefits into long-run economic growth.

Keywords: Mongolia, FDI determinants; macroeconomic determinants, ARDL bounds, VECM, Equilibrium relationships, Granger causality
ECONOMETRIC ANALYSIS OF EXCHANGE RATE AND EXPORT PERFORMANCE IN A DEVELOPING ECONOMY

ECONOMETRIC ANALYSIS OF EXCHANGE RATE AND EXPORT PERFORMANCE IN A DEVELOPING ECONOMY

Authors: Stephen ARO-GORDON| Adjunct Faculty, SDMIMD, Mysuru, India, Department of Accounting, Banking and Finance, Baze University Abuja, Nigeria
Year: 2017, Volume: 7, Number: 4
(45 downloads)
Abstract

The study investigated the causal relationship between currency exchange rate (EXR) and export growth (EXP) in Nigeria, Africa?s largest economy and most populous nation. The study used econometric tools for the analysis based on statutory annual data over the period 1970s-2014. It is shown that EXR and EXP are not co-integrated and, hence, a long-run equilibrium relationship may not exist between them. The Granger causality test shows significant absence of short-run nexus between EXR and EXP, but there is a unidirectional causality running from EXR to EXP with no feedback. It is inferred that while the EXR may have significant impact on EXP, EXP in a single commodity (crude oil)-dependent economy like Nigeria, may have very little impact on EXR. Thus, the long-held thesis that if you devalue the currency, you will export more is not empirically supported in the Nigerian case. The implications of these findings for sustainable fiscal policy development and some suggestions for future research are discussed.

Keywords: Export drive, Financial econometrics, Foreign exchange management, Nigeria, Public finance
EFFECT OF DISAGREEMENT ON CORPORATE FINANCING POLICY AND INVESTMENT LEVEL

EFFECT OF DISAGREEMENT ON CORPORATE FINANCING POLICY AND INVESTMENT LEVEL

Authors: Niu Weining| International School of Business, Beijing International Studies University, Beijing, China
Year: 2017, Volume: 7, Number: 4
(38 downloads)
Abstract

This study models firm?s financing policy and investment level when manager and outside investors has disagreement. It shows that the firm is more likely to over invest when the level of disagreement is high, and prefers debt financing; while under invests with lower disagreement level and tends to equity financing. Compared with self-financing, investment at firm level decreases, the over (under) investment level also declines and the threshold of disagreement rises when the firm chooses external financing. The numerical simulation also verifies the theoretical findings.

Keywords: Disagreement, Heterogeneous beliefs, Debt financing, Share issuance, Over investment, Under investment
THE CAUSAL RELATIONSHIPS BETWEEN COMPONENTS OF CUSTOMER-BASED BRAND EQUITY FOR A DESTINATION: EVIDENCE FROM SOUTH KOREAN TOURISTS IN DANANG CITY, VIETNAM

THE CAUSAL RELATIONSHIPS BETWEEN COMPONENTS OF CUSTOMER-BASED BRAND EQUITY FOR A DESTINATION: EVIDENCE FROM SOUTH KOREAN TOURISTS IN DANANG CITY, VIETNAM

Authors: Tran Trung Vinh*| University of Economics, The University of Danang, Danang City, Vietnam, Vo Thi Quynh Nga| University of Economics, The University o...
Year: 2017, Volume: 7, Number: 4
(42 downloads)
Abstract

The main purpose of this study is to examine the causal relationships between components of customer-based brand equity for a tourist destination. We have collected data from 252 South Korean tourists in Danang City and tested some hypotheses by applying structural equation modeling (SEM). Results show that: (1) destination brand awareness has a significant and positive effect on destination brand image, but not on destination perceived quality and destination brand loyalty; (2) destination brand image has positive and direct influences on destination perceived quality and destination brand loyalty; and (3) destination perceived quality has significant positive impacts on destination brand loyalty. Lastly, these findings have managerial implications for decision makers.

Keywords: Customer-based brand equity, Destination, South Korean tourist, Danang
THE EFFECT OF EXCHANGE RATE VOLATILITY ON STOCK RETURN IN TAIWAN AROUND ABENOMICS

THE EFFECT OF EXCHANGE RATE VOLATILITY ON STOCK RETURN IN TAIWAN AROUND ABENOMICS

Authors: Chien-Chung, Nieh| Professor, Department of Banking and Finance, Tamkang University, Taiwan, Hsun-Fang, Cho*| Ph.D. Student, Department of Banking and...
Year: 2017, Volume: 7, Number: 4
(40 downloads)
Abstract

The purpose of this study is to investigate the relationship between stock returns, exchange rates and financial ratios in the automotive and integrated circuit industries in Taiwan around the introduction of Abenomics. We employ panel data from 34 listed companies on the Taiwan Security Exchange over the period 2011-2014. The Panel Smooth Transition Regression (PSTR) model is utilized to estimate the threshold of exchange rates and its effect on stock returns. The main finding of this paper shows that there exists an efficient hedge regime. When the Abenomics applied a policy of quantitative easing to instigate a sharp depreciation of the yen, the effects of the policies absolutely bring out benefit and competitive advantage of Japanese export industries. The depreciation of the exchange rate against other currencies would affect a country?s international competitive advantage or exports. If Taiwan exchange rate does not follow the depreciation of the yen and the levels of the exchange rate volatility in the automotive and integrated circuits industries in Taiwan are over 2.30% and 2.72% appreciation, respectively, the both industries will generate exchange losses and further influence the profit of the companies. Therefore, the main contribution of this paper is to provide a means for CEOs of companies in the two industries to exercise hedge options and evade the risk of exchange rate for their firms when the appreciation of currency are over 2.3% and 2.72% for automotive and integrated circuits industries, respectively.

Keywords: Panel smooth transition regression model, Exchange rate, Abenomics, Financial ratios, Stock returns, Automotive and integrated circuits industries
MODERATING EFFECT OF INTERNAL CONTROL SYSTEM ON THE RELATIONSHIP BETWEEN GOVERNMENT REVENUE AND EXPENDITURE

MODERATING EFFECT OF INTERNAL CONTROL SYSTEM ON THE RELATIONSHIP BETWEEN GOVERNMENT REVENUE AND EXPENDITURE

Authors: Mohammed ABBA*| Department of Accountancy, ModibboAdama University of Technology Yola, Yola, Adamawa State, Nigeria, Mohammed Mahmud KAKANDA| Departme...
Year: 2017, Volume: 7, Number: 4
(43 downloads)
Abstract

The study aims at examining the moderating effect of internal control system on the relationship between government revenue (statutory allocation and internally generated revenue) and expenditure. All the sixteen (16) local governments in Taraba state of Nigeria were considered the population and were as well maintained as the sample size of the study. Secondary data was gathered from the official websites of Federal Ministry of Finance and office of the Accountant General of the Federation, and others from annual accounts and reports of the population of this study. The study utilizes ex-post facto research design to examine the relationship between the study variables. Descriptive statistics, correlation, and hierarchical multiple regression analyses were carried out to answer the research questions raised in this study. The study finds that statutory allocation and internally generated revenue are positively related to government expenditure, which may cause more government spending that may leads to fiscal imbalances. When further analysis was conducted, the result reveals that internal control system moderates both statutory allocation and internally generated revenue towards government expenditure, but internal control system is not effectively applied in the local governments. Therefore, this study suggests that government should strategize ways to improve revenue generation on one hand, and control expenditure excesses on the other hand so as meet its objectives.

Keywords: Government revenue, Statutory allocation, Internally generated revenue, Government expenditure, Internal control system, Local government
TRANSMISSION OF INTERNATIONAL ENERGY PRICE SHOCKS TO AUSTRALIAN STOCK MARKET AND ITS IMPLICATIONS FOR PORTFOLIO FORMATION

TRANSMISSION OF INTERNATIONAL ENERGY PRICE SHOCKS TO AUSTRALIAN STOCK MARKET AND ITS IMPLICATIONS FOR PORTFOLIO FORMATION

Authors: Mohammad Z Hasan| School of Business, University of Notre Dame Australia, Sydney Campus, Australia
Year: 2017, Volume: 7, Number: 4
(39 downloads)
Abstract

This paper studies transmission of international energy price shocks to various sectors in the Australian stock market. We take the multivariate generalized autoregressive conditional heteroscedasticity (MGARCH) approach to modeling volatility and gather evidence that energy price shocks transmit to the price indices of various sectors classified by the global industry classification standard (GICS). We observe statistically significant dynamic movement of volatility in price returns of crude oil, coal and natural gas and different GICS sector indices on the Australian Stock Exchange. Finally, using the observed conditional covariance matrix, we compute optimal weights and hedge ratios for portfolios consisting of stocks from energy and other GICS sectors.

Keywords: Energy price, Stock market, Oil, Volatility transmission, Conditional variance, MGARCH
DEVELOPING AN EARLY WARNING SYSTEM FOR FINANCIAL CRISES IN VIETNAM

DEVELOPING AN EARLY WARNING SYSTEM FOR FINANCIAL CRISES IN VIETNAM

Authors: Tristan Nguyen*| Fresenius University, Munich/Germany, Nguyen Ngoc Duy| Berlin School of Economics and Law, Berlin/Germany
Year: 2017, Volume: 7, Number: 4
(42 downloads)
Abstract

In this paper, we develop an applicable early warning model that can predict financial crises for Vietnam. To achieve this goal, we analyze and extend the existing early warning models which have been developed by Kaminsky et al. (1998); Goldstein et al. (2000) and Edison (2003) by using the signal approach. The model observes several indicators (signals) that tend to have an unusual behavior in the periods preceding a financial crisis. When an indicator exceeds or falls below a given threshold, then it sends a ?signal? that a financial crisis might occur within a certain period (12 or 24 months). We use 14 most relevant indicators to predict potential crises in Vietnam?s economy. In terms of practice, policy makers should have better insights about the vulnerability of the economy in order to recognize financial crises at an earlier stage. Therefore, the authors offer some recommendations for policy makers how to achieve the highest efficiency in warning and preventing future financial crises in Vietnam.

Keywords: Early warning system, Financial crisis, Emerging markets, Vietnam‟s economy, Signal approach model, Crisis prediction
TICK SIZE AND COMMONALITY IN LIQUIDITY

TICK SIZE AND COMMONALITY IN LIQUIDITY

Authors: Su-Wen Kuo| Ling Tung University of Science and Technology, Taiwan, Chia-Cheng Chen*| Ling Tung University of Science and Technology, Taiwan, Chun-Fan...
Year: 2017, Volume: 7, Number: 4
(37 downloads)
Abstract

This study suggests that the change of tick size, particularly in a step-function tick system, accounts for cross-sectional variation in market liquidity. We explored the relative significance of commonality in liquidity in a limit order book during the period of tick-size conversion, and empirically examined the interactions of inventory risk and asymmetric information on liquidity co-movements. We observed that market-wide and within-industry commonality in liquidity is ubiquitous before and after tick-size conversion. Moreover, the small spreads and thin limit order book introduced by the narrowed minimum price variation further strengthened liquidity co-movements. We also observed that trade size and trading frequency exhibited significantly negative influences on spread measures before and after tick-size conversion, whereas significantly positive effects persisted for depth constructs. Finally, we documented affluent industry-wide liquidity co-movements before and after tick-size conversion, after accounting for marginal influences of potent idiosyncratic liquidity determinants including volatility, market price, and trade volume. Our empirical evidence reveals that a narrow tick size might generate considerable market-wide liquidity risk and produce adverse effects on market quality.

Keywords: Tick size, Liquidity commonality, Limit order book dynamics, Inventory risk, Asymmetric information, Co-movement
THE IMPACT OF TRADE OPENNESS ON PER CAPITA INCOME IN KUWAIT

THE IMPACT OF TRADE OPENNESS ON PER CAPITA INCOME IN KUWAIT

Authors: Saif Sallam Alhakimi| Associate Professor of International Economics Bisha University, KSA, (Currently), and Hodeida University, Yemen Republic
Year: 2017, Volume: 7, Number: 5
(38 downloads)
Abstract

This research paper seeks to investigate the impact of trade openness on the per capita income of Kuwait. Its findings suggest that in Kuwait, trade openness has a negative impact on the per capita income. The results also suggest the existence of variables other than trade openness that may also affect the per capita income, such as income distribution, the structure of exports, and trade restrictions.

Keywords: Trade openness, Income, Cointegration, Error-correction, Kuwait
DO QUALIFIED FOREIGN INSTITUTIONAL INVESTORS IMPROVE INFORMATION EFFICIENCY: A TEST OF STOCK PRICE SYNCHRONICITY IN CHINA?

DO QUALIFIED FOREIGN INSTITUTIONAL INVESTORS IMPROVE INFORMATION EFFICIENCY: A TEST OF STOCK PRICE SYNCHRONICITY IN CHINA?

Authors: Liping Zou*| Massey University, Auckland, New Zealand, North Shore Mail Centre, Auckland, New Zealand, William Wilson| Massey University, Auckland, Ne...
Year: 2017, Volume: 7, Number: 5
(38 downloads)
Abstract

Stock price synchronicity at a country level has been the subject of many previous studies, but for most investors it is more relevant at a firm level. Working from the perspective of a foreign investor stock price synchronicity is analyzed at the firm-level in the hot Chinese stock market. The impact of foreign ownership, institutional ownership, the concentration of large shareholders, and audit quality are all considered as factors which impact on firm-specific information and thus moderate stock price. Using data of Chinese-listed firms in the Chinese A-shares capital market from 2004-2014 stock price synchronicity is measured. Empirical results suggest stocks invested by Qualified Foreign Institutional Investor (QFII) investors and institutional investors stocks have a significantly lower price synchronicity than stocks without institutional investment. This was found to increase as share concentration increased, until a relatively high concentration percentage was reached when synchronicity starts to fall again. Government ownership was shown to be a factor with high synchronicity but results for the use of a Big 4 Auditor was weaker.

Keywords: Stock price synchronicity, QFII Investors, China, Information efficiency, Institutional investors, Ownership
COASIAN THEOREM, PUBLIC DOMAIN, AND PROPERTY RIGHTS PROTECTION

COASIAN THEOREM, PUBLIC DOMAIN, AND PROPERTY RIGHTS PROTECTION

Authors: Yiming He| Division of Resource Management, West Virginia University, Morgantown, WV 26506, USA; College of Economics & Management, South China Agricu...
Year: 2017, Volume: 7, Number: 5
(39 downloads)
Abstract

In this paper, the expressions of Coasian Theorem and the concept of public domain are discussed at the beginning. Based on it, this paper derived a mathematic logic about Coasian Theorem. At last, it proves that if the number of owners who protect the public property is more than one, and then rent dissipation will occur. In addition, the enthusiasm for property rights protector in the information symmetry is greater than in the case of asymmetric information. Therefore, in order to protect the property rights more effective, we need to give the property rights to only man, so that asymmetric information structure can be transformed into the symmetric information structure. At this point, the public domain has become the private domain, so rent dissipation disappears.

Keywords: Coasian theorem, Public domain, Property rights protection, Rent dissipation, Non-cooperative game, Information structure
DYNAMICS OF URBANIZATION AND TEMPERATURE INCREASE IN MIDDLE EAST-AN EMPIRICAL INVESTIGATION

DYNAMICS OF URBANIZATION AND TEMPERATURE INCREASE IN MIDDLE EAST-AN EMPIRICAL INVESTIGATION

Authors: Devi Prasad Dash*| Research Scholar, Department of Humanities and Social Sciences, Indian Institute of Technology, Ropar, Rupnagar, Punjab, Lingaraj M...
Year: 2017, Volume: 7, Number: 5
(42 downloads)
Abstract

Growth patterns are the important channels, through which the society and economy interact. Climate change could lead to such disruption, if unsystematic growth has not been controlled to a limit. Recent scientific evidences have shown that Middle East region is in the midst of climate change vulnerability by endangering its oil cashed growth strategy. But economic research has given very scant attention towards such incident by correlating with urbanization. In this context, we argue that the upscale energy demand, industrialization and unbalanced urbanization strategies could potentially impact the region in long run in forms of climate change. We further argue that the behavioral changes in terms of percapita urbanization growth and increasing import have impacted the region unlike never before. Even our cross-sectional dependency test has shown that the region?s heat wave problem is worth of deep concerns. From a policy perspective, we suggest that the region as whole should be proactive in terms of starting effective implementation of green energy plan, clean energy investment and production of bio-fuel. In order to counter the negative cost of heat wave as predicted, the region must combinedly put forward and ratify a climate change strategy to monitor the development on an annual basis.

Keywords: Economic development, Climate change, Urbanization, Trade, Middle East, Energy consumption
INVESTIGATING THE ROLE OF OIL PRICES IN THE CONVENTIONAL EKC MODEL: EVIDENCE FROM TURKEY

INVESTIGATING THE ROLE OF OIL PRICES IN THE CONVENTIONAL EKC MODEL: EVIDENCE FROM TURKEY

Authors: Setareh KATIRCIOGLU| Faculty of Economics & Administrative Sciences, University of Kyrenia, Kyrenia, Northern Cyprus, Via Mersin 10, Turkey
Year: 2017, Volume: 7, Number: 5
(39 downloads)
Abstract

Being a developing country E-banking opened up tremendous opportunity to the financial sector and economic development of Bangladesh. This paper studies prospects of e-banking in Bangladesh, considering the performance of Dutch Bangla Bank Ltd. (DBBL) and BRAC Bank Ltd. To evaluate the performance of DBBL and BRAC bank seven trend equations have been tested for different activities of DBBL and BRAC Bank. Among them trend value of number of ATM, recoveries from clients, number of branches, charges from services, income from IT service, card expenses, depreciation on computer equipment and software, other operating expenses, cash carrying charges, net income and EPS are positive in case of both banks during the period of 2008-2015. The square of correlation coefficient (r2) of number of ATM, recoveries from clients, number of branches, income from IT service, card expenses, depreciation on computer equipment and software, other operating expenses, cash carrying charges, net income and EPS is more than 0.5. It indicates the prospect of E-banking in Bangladesh is very bright.

Keywords: Oil, Environment, Kuznets‟s Curve, EKC Multiple structural breaks, ECM, Turkey
PROSPECT OF E-BANKING IN BANGLADESH: NEW WAY TO MAKE BANKING ELECTRONIC

PROSPECT OF E-BANKING IN BANGLADESH: NEW WAY TO MAKE BANKING ELECTRONIC

Authors: Farzana Huda*| Senior Lecturer, Department of Business Administration East West University, A/2 Jahirul Islam City, Aftabnagar Dhaka, Bangladesh, Tanb...
Year: 2017, Volume: 7, Number: 5
(79 downloads)
Abstract

Being a developing country E-banking opened up tremendous opportunity to the financial sector and economic development of Bangladesh. This paper studies prospects of e-banking in Bangladesh, considering the performance of Dutch Bangla Bank Ltd. (DBBL) and BRAC Bank Ltd. To evaluate the performance of DBBL and BRAC bank seven trend equations have been tested for different activities of DBBL and BRAC Bank. Among them trend value of number of ATM, recoveries from clients, number of branches, charges from services, income from IT service, card expenses, depreciation on computer equipment and software, other operating expenses, cash carrying charges, net income and EPS are positive in case of both banks during the period of 2008-2015. The square of correlation coefficient (r2) of number of ATM, recoveries from clients, number of branches, income from IT service, card expenses, depreciation on computer equipment and software, other operating expenses, cash carrying charges, net income and EPS is more than 0.5. It indicates the prospect of E-banking in Bangladesh is very bright.

Keywords: Electronic banking, Cash carrying charge, ATM, Credit card

About Europub

EuroPub is a comprehensive, multipurpose database covering scholarly literature, with indexed records from active, authoritative journals, and indexes articles from journals all over the world. The result is an exhaustive database that assists research in every field. Easy access to a vast database at one place, reduces searching and data reviewing time considerably and helps authors in preparing new articles to a great extent. EuroPub aims at increasing the visibility of open access scholarly journals, thereby promoting their increased usage and impact.