The Core,Periphery, and Beyond: Stock Market Comovements among EU and Non‐EU Countries

Using linear and nonlinear correlations, copulas, quantile dependence and lower tail dependence, we find that (1) equity markets of the advanced European Union (EU) countries comove more closely with each other than with the peripheral economies, (2) comovements with non‐EU countries are lower, (3) relative comovement structure before, during, and after the global financial crisis has been very stable, and (4) the level of comovements remained virtually the same between the crisis and post‐crisis periods. Our results are robust to controlling for Fama‐French, U.S. and global risk factors, as well as monetary policy, market interest rates, exchange rates, and uncertainty.     

When do investors reward acquisitions and divestitures? The contrasting implications of normative and behavioral economic theories

We evaluate whether a contingency theory that combines a signaling hypothesis with behavioral economic theory can elucidate the discrepancy between positive expected returns to acquisitions and divestitures and the mixed‐to‐negative investor reactions observed in practice. We argue that, because of bounded rationality, uncertainty avoidance, and inertia, major organizational change is generally motivated by the detection of problems in an organization. Accordingly, although investors may view acquisitions and divestitures as positive corrective measures for low performers, such initiatives by high performers often signal problems that were heretofore unknown to the market. We contrast our results with predictions based on normative theories.     

Non-equivalent pass-through of anti-dumping duties,countervailing duties and import tariffs

We directly compare the short-run pass-through of tariffs, anti-dumping (AD) duties and countervailing (CV) duties into US import prices. Consistent with the theoretical predictions, we find clear pattern of non-equivalence in import price reaction to the three duty types, with the most notable difference detected between AD duties and tariffs. According to our estimates, a tariff rate would have to be approximately two times higher than an AD duty rate in order to have the same effect on the delivered import price.     

Tolerance of Cheating: An Analysis Across Countries

Cheating is a serious problem in many countries. The cheater gets higher marks than deserved, thus reducing the efficiency of a country's educational system. In this study, the authors did not ask if and how often the student had cheated, but rather what the student's opinion was about a cheating situation. They investigated whether attitudes differ among students in Russia, the Netherlands, Israel, and the United States and conclude that attitudes toward cheating differ considerably between these countries. They offer various explanations of this phenomenon. In addition, they find that the student's attitude toward cheating depends on the student's educational level (high school, undergraduate, postgraduate). Finally, they show that the data from the sample can be aggregated in a natural and elegant way, and they suggest a tolerance-of-cheating index for each country.     

Financial sector structure and financial crisis burden

We consider an overlapping generations model in the presence of financial intermediation. The paper focuses on the analysis of the consequences of a sudden negative repayments shock on financial intermediation capacity and consequently on the economy as a whole. The model exhibits a property of the ‘chain reaction’ when a single macroeconomic shock can lead to the exhaustion of credit resources and subsequently to the collapse of the banking system. To maintain the capability of the system to recover, a regulatory intervention is needed even in presence of the state guarantees on agents’ deposits in the banks. We compare the results for an intermediated economy with those derived for the market economy and draw some broad conclusions regarding the crisis consequences depending on the financial sector structure. We also compare the model predictions with the stylised facts about the Russian financial crisis of 1998.     

Macroeconomic Policies for Slovenia in the “Great Recession”

The paper analyzes the effects of different reactions of fiscal (and to some extent monetary) policies to the Great Recession in Slovenia. We use the model SLOPOL8.1, an econometric model of the Slovenian economy, to simulate the effects of the global crisis under the assumption of no-policy reactions, i.e. assuming that macroeconomic policies are conducted without attempting to deal with the effects of the recession. Moreover, we investigate whether (and if so, how) fiscal policy can reduce or even annihilate the macroeconomic effects of the recession. It turns out that in order to achieve reasonable rates of growth and of unemployment, a highly expansionary design of fiscal policies is required, which is neither realistic nor sustainable. There are strong trade-offs between countercyclical fiscal policies and the requirements of fiscal solvency. Acceptable fiscal policies are mildly countercyclical and are not able to shelter the Slovenian economy from the negative effects of a slump like that occurring during the Great Recession.     

Institutional background as a determinant of boards of directors’ internal and external roles: The case of Russia

This conceptual paper analyses why some companies in Russia give strong weight to the external roles and some to the internal roles of the boards of directors. The institutional background of Russian corporate governance is reviewed, concentrating on the contextual variables of time of founding, ownership type and governmental dependency, which are seen to explain the varying weight given to internal and external board roles. After arriving at several propositions, the paper finishes with suggestions for an empirical evaluation of the proposed relationships and addresses several managerial implications that stem from the discussion. This paper addresses the under-researched field of contingencies in board roles, focusing on Russia and emphasizing the importance of the prevailing institutional framework in transition economies.