Testing the theory of PPP for emerging market economies that practice flexible exchange rate regimes

This study aims to test the long-run validity of purchasing power parity by using Fourier quantile unit root and Fourier cointegration analyses for 12 emerging market economies that practice a flexible exchange rate regime. With the Fourier approach, structural breaks are modelled as a gradual and smooth process. Fourier quantile unit root test results show that real exchange rate series are stationary for Colombia, India, Philippines, Poland, South Africa, and Turkey. On the other hand, Fourier cointegration test results reveal that purchasing power parity is valid for Brazil, Colombia, India, Mexico, South Africa, Thailand, and Turkey.     

Partisan politics and election failure with ignorant voters

We analyze candidate competition when some voters do not observe a candidate's policy choice. Voters have a personality preference when both candidates offer the same policy. In equilibrium, the candidate with a personality advantage may get elected with a partisan policy even though his opponent's policy is preferred by all voters. The departure from the Downsian prediction is most pronounced when candidates have a weak policy preference and care mostly about winning the election. In that case, uninformed voters choose the candidate with the preferred personality even if electing this candidate implies a lower payoff on average.     

Spillover effects on the sectoral returns for australian and New Zealand equity markets

In this paper, we examine the return and volatility spillovers, together with the trend spillovers on the sectoral equity returns for Australian and New Zealand markets. We find that the return spillovers of industrial, local and global shocks have a limited effect on Australian and New Zealand sector returns, whereas the volatility spillovers play a significant role on explaining the volatility of sector equity indices. Furthermore, we discover that the volatility spillover effects of the global and industrial shocks are greater in magnitude for explaining the volatility of the Australian sectors than those of New Zealand, particularly basic materials, oil and gas, technology and telecom sectors. By employing the trend spillover model, we find that the volatility spillover effects of global sector indices have been increasing over the volatility of the Australian sectoral returns until now. This finding proposes that Australian sector equity market is more integrated with the world than the New Zealand counterpart.     

Systematic Risk in Conventional and Islamic Equity Markets

We aim to compare the systematic risk in conventional and Islamic equity markets by introducing two dynamic risk measures. Accordingly, the level of the systematic risk in conventional markets is slightly higher than the risk in Islamic markets for most of the time. However, this difference is significant in less than 3% of the sample period. More importantly, there is no significant difference in the levels of systematic risk during the global financial crisis of 2008, suggesting that Islamic equities are not able to provide a lower market risk compared with their conventional counterparts in financial turbulent times.     

How the poor in a developing country view business' contribution to quality-of-life 5 years after a national economic crisis

This study proposes and tests a three-step model of business' contribution to quality of life 5 years after a devastating national economic crisis in a developing country. The model incorporates both a beneficent dimension of the marketplace (represented by consumer attitude toward marketing — CATM) and a non-maleficent dimension (represented by consumer trust for market-related institutions — CTMRI). This study compares how the poor and the non-poor draw differently on these two dimensions in forming their perceptions about how business contributes to their quality of life. Beginning with the exogenous construct attitude toward changes in marketing practices since the last economic crisis (5 years ago), this study 1) proposes a causal model that introduces a first-order construct — Business' Contribution to My Quality of Life (BCM-QOL), and 2) explains how BCM-QOL serves as a mediator between marketplace perceptions of both beneficence and non-maleficence and quality of life. Results reveal differences between how the poor and the non-poor in a developing country think about the effects of market changes after an economic crisis. Consumers living below the Turkish poverty line, although not within the UN-defined ranks of the global poor (e.g., $2 per-day earnings) tend to see their place in the market in a manner similar to subsistence consumers.