Is ‘oil and gas’ industry of ASEAN5 countries integrated with the US counterpart?

ABSTRACT

This paper employs the VARMA-MGARCH-ABEKK model and Granger causality on 15 years’ daily time series data to examine investment opportunities in the oil and gas industries for ASEAN5 countries relative to the US counterpart. It shows that the latter leads the former in decomposing integration into cross-country effects on returns and conditional return volatilities. The empirical results show that investors can gain an international intra-industry diversification benefit in Malaysia, the Philippines, Singapore and Vietnam by holding US oil and gas assets in their portfolios whereas Asian oil and gas assets may result in negative shocks due to the increase in return volatilities for Malaysia, Singapore and Vietnam. However, Thailand are insensitive to the cross-country intra-industry diversification. While making trading decisions, investors should be aware of the impulse responses of ASEAN oil and gas markets from the shocks in the US and the Asian markets and their asymmetric spill over effects.     

Economic policy uncertainty and firm tax avoidance

We find strong evidence that firms reduce cash effective tax rate when economic policy uncertainty heightens. Firms also engage in more aggressive forms of tax avoidance including long-term tax planning or shelters. Cash holdings attenuate the negative effect of policy uncertainty on cash effective tax rate, especially for financially constrained firms. The cash tax savings are retained for reinvestments rather than dividend payouts. Our findings suggest that policy uncertainty exacerbates external financing frictions, which in turn induces precautionary motives of tax avoidance.     

Progressive Tax and Inequality in a Unionized Economy*

In this paper, we develop a heterogeneous-agent, endogenous growth model of a unionized economy with distinct progressive tax schedules on labor and capital income. With time preference heterogeneity, the effective labor force, balanced growth, and income inequality are endogenously determined, and these interact with each other. A reduction in the degree of progressive labor tax yields a “double-dividend” in terms of reducing income inequality and boosting economic growth, while capital income progressivity displays the usual growth–inequality trade-off. Particularly, the double-dividend effect becomes more pronounced when unionization is declined or trade unions become more wage-oriented, leading to the so-called “Cheshire cat” phenomenon.     

Corporate decision making in the presence of political uncertainty: The case of corporate cash holdings

Using a quarterly panel of U.S. corporations over the period 1985–2014, we show that corporate managers respond to political uncertainty and economic policy uncertainty shocks in different ways. We proxy for political uncertainty using the Partisan Conflict Index and employ a prevalent empirical macroeconomic methodology to construct structural shocks that are orthogonal to shocks captured by the Economic Policy Uncertainty Index. Following a political uncertainty shock, corporations increase cash but do not adjust investment. Alternatively, following an economic policy uncertainty shock, firms appear to draw on cash and reduce capital spending to increase research and development spending.     

Government Expenditures and Economic Growth: The Supply and Demand Sides*

This paper uses a new approach to estimate how government expenditures affect the growth rate of real GDP. They affect the growth rate through three channels ‐ total factor productivity, investment and aggregate demand. We find that apart from government investment, all government expenditures have negative marginal effects on productivity and GDP growth. In particular, a 1 percentage point increase in the share of government consumption in GDP reduces the equilibrium GDP growth rate by 0.216 percentage points, while the same increase in government investment raises the growth rate by 0.167 percentage points. This suggests that a reallocation of 1 percentage point of government consumption to government investment can raise the growth rate by 0.38 percentage points.     

Effect of Cross-Border E-Business Policy on the Export Trade of an Emerging Market: A Dynamic Study of Institutional Support to Cross-Border E-Business at Chinese Pilot Cities

Policies to offer institutional support to cross-border E-business are processed in the development of export at emerging markets. This research estimates the effect of institutional support to cross-border E-business on export trade in an emerging market by a difference-in-difference model. It is found that the institutional support to cross-border E-business at the pilot cities had a positive effect on export trade. Further, a decision tree of predictions to export is developed, based on the cross-border E-business policy and regional economic factors shown to have effect on export, and the complex network of interconnections across the cities in different conditions is revealed. The estimation of probability for export increase based on the effect of cross-border E-business policy is further performed by Bayesian model. This research can be helpful to policy makers and business administrators in understanding the effect of cross-border E-business policies on export at emerging markets.     

INDUSTRIAL CLUSTER,NETWORK AND PRODUCTION VALUE CHAIN: A NEW FRAMEWORK FOR INDUSTRIAL DEVELOPMENT BASED ON SPECIALIZATION AND DIVISION OF LABOUR

This paper develops a general equilibrium model with endogenous clusters and an endogenous network of division of labour to formalize and explore the interrelationship and rules of industrial clusters, the network of division of labour, and the economies of specialization and agglomeration in the new era of globalization and regionalization. The model suggests that institutional efficiency and competition among countries and industries will facilitate important circular effects, propelling and shaping the arrangement and allocation of industrial clusters, establishing their position in the value chain, and, consequently, determining the status of economic growth. In particular, the improvements in institutional efficiency of economic and technology systems will expand the demand for transactions and network size, which, in turn, will determine the development of cluster and network scope, as well as the position in the production value chain.     

The China–US Trade War: Deep‐Rooted Causes,Shifting Focus and Uncertain Prospects

The USA has waged a trade war against China, whose rapid rise has come to be seen as a threat to US hegemony. Besides imposing additional tariffs on imported Chinese products, the USA is also tightening restrictions on the transfer of technology to China and the business activities of some Chinese high‐tech companies, notably Huawei. The escalation of the trade war into a tech war could lead to a decoupling between the US and Chinese economies, if not a world economy divided into two economic blocs that centered on them.     

A multidimensional scale of activity attachment for leisure tourists

Although the concept of activity attachment has been studied previously, the existing scales of activity attachment used only a single dimension or did not embody the discussion on behavioral domain. Furthermore, no previous studies have followed rigorous scale development procedures to explore the nature of activity attachment. In an effort to address this gap, this study aims to develop and validate a multidimensional scale of activity attachment for leisure tourists based on attachment theory. First, initial questionnaire items were generated from literature reviews and expert discussions. Second, exploratory factor analysis was conducted and four underlying dimensions were identified: emotion-symbol attachment, functional attachment, word-of-mouth intention attachment, and actual behavior attachment. Third, confirmatory factor analysis was employed and the result showed that the multidimensional activity attachment scale with four dimensions and 18 items has good fit, reliability, and validity. Implications of these findings for practical applications and future research are also provided.