The 1994–1995 Mexican Currency Crisis and U.S. Bank Stock Returns

We investigate the impact of the 1994–1995 Mexican currency crisis on U.S. bank stock returns. We use a jump-diffusion model rather than a pure diffusion model to describe daily stock returns, because the public release of unexpected information generally is associated with discrete jumps in prices. Traditional event study models pool both announcement effects and trading effects and may lead to inefficient estimators. The jump-diffusion model can separate the impact of informed trading from unanticipated public announcements. Our results indicate that the variance of the jumps is large and increases with bank size and portion of loans to Mexico.     

A Cross-Sectional Analysis of Costs of Farming Atlantic Salmon (Salmo Salar)

Commercial aquaculture, the cultivation of fish in managed systems, has received increasing attention in recent years as an alternative source of fish, employment and income. High value species particularly offer a better prospect of profitable farming. For example, Atlantic salmon, which is one of the more expensive species on the market, is now being farmed in Norway, Scotland, Canada, the United States, and several other countries. Norway has made rapid progress in Atlantic salmon aquaculture; farmed salmon have now replaced cod as her principal export species. In the opinion of some observers, Norway' s success in farming the Atlantic salmon is the most significant event in the history of European aquaculture (United States Department of Commerce, 1984).
Commercial aquaculture in Canada is still in its initial stage of development, but recently there has been increased interest in aquaculture as a means of generating incomes and jobs, and of acquiring technological expertise. The Science Council of Canada has urged a commitment towards commercial aquaculture; it cites Norwegian aquaculture that by the year 2000 could be producing fish worth U.S. $3 billion and be employing 50.000 people (Science Council of Canada 1985). In Canada, farming of Atlantic salmon is expanding rapidly on both east and west coasts. Canada' s output of farmed Atlantic salmon reached 174t in 1984 and is forecast to reach 1,200t by 1987, with a further immediate potential on the east coast of 2.000–3,000t. On the west coast, more than a million Atlantic salmon eggs have been imported for hatching and for cultivation in sea pens. The number of Atlantic salmon farms on the west coast is projected to more than double by the end of 1986.     

An empirical investigation of U.S. bank risk and the Mexican peso crisis

This paper examines two pairs of hypotheses about the effect of the Mexican Peso crisis on U.S. bank stock returns. We use a three-index market model as our empirical methodology because bank stocks are influenced more by both interest rate risk and foreign exchange risk than other non-banking stocks. The results show that the market reacted to each event promptly, supporting semi-strong market efficiency. To find out whether these effects created a domino effect in the U.S. banking system, a set of cross-sectional regressions were run. In general, the empirical results support the investor-contagion hypothesis, which indicates that the market penalized or rewarded banks without regard to their ecposure to the market for Mexican loans.     

Effects of financial innovations on the money demand function: a Canadian evidence

A money demand function for the Candian economy has been estimated to explore if recent financial innovations have caused any significant change in the structural relationship between the demand for money and its determinants. Two sets of estimation results have been analysed: the first set is obtained by estimating a standard money demand function for several overlapping sample periods and the other set is obtained by estimating a modified version which included a dummy or a ratchet variable to capture the effects of innovations. The estimated equations have been used to generate ex-post simulations and forecasts. The results suggest that innovations have displaced the money demand function in the early 1980s. It also appears that the incorporation of approriate innovation variables improves the predictive performance of the money demand function.     

The global financial crisis and Islamic finance

The conventional view holds that the current global financial crisis was caused by extraordinarily high liquidity, reckless lending practices, and the rapid pace of financial engineering, which created complex and opaque financial instruments used for risk transfer. There was a breakdown of the lender‐borrower relationship and informational problems caused by a lack of transparency in asset market prices, particularly in the market for structured credit instruments. There was outdated, lax, or absent regulatory‐supervisory oversight; faulty risk management and accounting models; and the emergence of an incentive structure that not only encouraged excessive risk taking but also created a complicit coalition of financial institutions, real estate developers and appraisers, insurance companies, and credit rating agencies whose actions led to a deliberate underpricing of risk. Such a crisis would not have occurred under an Islamic financial system—due to the fact that most, if not all, of the factors that have caused or contributed to the development and spread of the crisis are not allowed under the rules and guidance of Shariah. The current global financial crisis is largely seen as a real test of the resilience of the Islamic financial services industry and its ability to present itself as a more reliable alternative to the conventional financial system. © 2011 Wiley Periodicals, Inc.     

Evaluation of risk communication for rural water supply management: a case study of a coastal area of Bangladesh

Consumption of safe drinking water is an important public health issue. In this study, we considered the risk communication topic of human health concerns related to unsafe water consumption in rural coastal areas of Bangladesh, where potable water is scarce. Our objective was to investigate the level of knowledge that rural residents had concerning safe water consumption and to evaluate the effects of risk communication on knowledge and behavior changes. We considered four rural villages of southwest coastal areas of Bangladesh as sample. This study was based on the results of a questionnaire survey administered before and after risk communication. The pre- and post-survey were conducted during August 2009 and March 2010, respectively. Data were collected from 120 women aged 18–60 years. Two format presentations, with and without water quality information, were used to convey the risk messages. In the present study, indicator bacterial (Escherichia coli) contamination levels in drinking water sources were considered as water quality information since absence of E. coli is the safety margin for the detection of disease-causing organisms. Analysis of the survey data revealed that risk communication can be vital to changes in water consumption knowledge and behavior. Overall general knowledge scores were almost same in the pre-survey for without- (mean score 3.16) and with-information (mean score 3.10) villages. However, after risk communication, there were detectable increases in the mean scores (mean scores, 3.54 and 3.64, respectively, on a 4 point scale) for both groups. Furthermore, risk communication with water quality information appears to be a more effective method of risk communication. Dissemination of risk messages was also higher in with-information villages. Seventy four percent of the participants from with-information villages reported that they had discussed the risk messages with family members and neighbors, compared to 59% of those from without-information villages. The results of this study revealed that age, education, and distance of water sources influence changes in consumption and maintenance behavior. These findings suggest that, in addition to installation of water supply facilities, there is a need to address the low levels of knowledge about safe water consumption in rural coastal communities of Bangladesh. Location specific water quality information may be more useful to convey health risk messages concerning unsafe drinking water consumption.     

The Demand for Atlantic Salmon in Canada: Reply

In their comment on our paper, Bing-Hwan Lin and Nancy Williams have raised some interesting issues, but some of them are peripheral to the objective of our original study. The central objective of our original paper is to estimate income and price elasticities of demand for Atlantic salmon in Canada and then to use the parameter values to evaluate the market potential of farmed Atlantic salmon which are now being produced in Atlantic Canada. Accordingly, a demand equation has been estimated using annual data for the period 1955–1981. The inverted form has given a good fit and the results are reported in the paper.     

On Quantile‐based Asymmetric Family of Distributions: Properties and Inference

In this paper, we provide a detailed study of a general family of asymmetric densities. In the general framework, we establish expressions for important characteristics of the distributions and discuss estimation of the parameters via method‐of‐moments as well as maximum likelihood estimation. Asymptotic normality results for the estimators are provided. The results under the general framework are then applied to some specific examples of asymmetric densities. The use of the asymmetric densities is illustrated in a real‐data analysis.     

Technology Gap and Managerial Efficiency: A Comparison between Islamic and Conventional Banks in MENA

Journal of Productivity Analysis - In this paper, we compare the technology gap and managerial efficiency between Islamic banks and conventional banks in 15 MENA countries. Using unbalanced panel...