Financialization and Manufacturing Firm Profitability under Uncertainty and Macroeconomic Volatility: Evidence from an Emerging Market

Using semi-annual data from 1993 to 2003 for all publicly traded manufacturing firms in Turkey, this paper explores the impacts of macroeconomic uncertainty and external shocks on profitability of real sector firms in the presence of multiple investment options in both real and financial sectors. The paper argues that increasing availability and accessibility of investment opportunities in the financial markets help real sector firms sustain profit margins despite market rigidities, increasing goods market competition, or higher levels of risks. The empirical results based on dynamic panel estimations show that increasing macroeconomic uncertainty and volatility have a significantly negative effect on firm profitability. In contrast, increasing the share of financial investments in total assets is found to be reducing such negative effects at a statistically and economically significant level.     

Ethnic externalities in education and second-generation immigrants

I analyse the role of ethnic and native human capital – defined, respectively, as the average years of schooling of ethnic groups and of natives within a specific region – and of ethnic concentrations in the educational attainment of second-generation immigrants in Germany. Compared to natives’ children, parents’ education has a small and insignificant effect on second-generation immigrants’ education. Ethnic concentrations have a negative effect, while ethnic capital is insignificant. The effect of native capital, too, is insignificant but much larger in magnitude than the effect of ethnic capital. For women, mother’s education is relatively more important. For men, ethnic concentrations constitute a stronger impediment to educational attainment than for women.     

Globalised management and local labour: the case of the white‐goods industry in Turkey

This paper is concerned with the situation where goods are produced by workers in underdeveloped countries, in this case, consumer durables, under the direction of managements which have access to modern management techniques. In particular, it considers the significance of new management methods, especially Total Quality Management, for workers employed in white‐goods manufacture in Turkey.     

Agro-Climatic Conditions and Regional Technical Inefficiencies in Agriculture

A survey of applications of the Technical Inefficiency Effects (TIE) model suggests that agro‐climatic and other environment variables are customarily omitted in the model specifications. The justification for such an omission is the assumption that these variables are beyond the control of the farmers and therefore should be treated as random variables. In this paper, we argue that in applications dealing with regional agricultural data, agro‐climatic variables should not be treated as pure random terms. Historical differences in agro‐climatic conditions are known with a reasonable degree of certainty across a larger region. Therefore, omission of such variables from the analysis may lead to inaccurate interregional technical inefficiency comparisons. In order to demonstrate the importance of agro‐climatic variables in such analyses, we estimate the TIE model for Turkey. A translog stochastic frontier production function with agro‐climatic variables such as rainfall and land quality is estimated, and it is shown not only that the agro‐climatic variables are statistically significant but also that their omission substantially affects mean output elasticities and relative technical efficiencies. Une étude sur les applications du modèle de l'effet d'inefficacité technique (EIT) laisse à supposer que les variables agro‐climatiques et les autres variables environnementales sont comme d'habitude omises dans les spécifications du modèle. Une telle omission est justifiée par l'hypothèse selon laquelle ces variables sont en dehors du contrôle des fermiers et devraient être considérées comme des variables aléatoires. Dans ce communiqué, nous affirmons que dans les applications concernant les données agricoles régionales, ces variables agro‐climatiques ne doivent pas être traitées comme de simples termes aléatoires. Les différences historiques dans les conditions agro‐climatiques sont connues avec un degré raisonnable de certitudes pour une grande région. Aussi l'omission de telles variables dans l'analyse peut‐elle donner lieu à de fausses comparaisons interrégionales d'inefficacité technique. Afin de démontrer l'importance des variables agro‐climatiques dans de telles analyses, nous considérons le modèle de l'effet d'inefficacité techniques de la Turquie. II s'agit d'une fonction de production frontalière translogue et stochastique avec des variables agro‐climatiques telles que la pluviosité, la qualité de sol et d'autres variables. Nous démontrons que les variables agro‐climatiques sont non seulement importantes statistiquement, mais que leur omission influence essentiellement les élasticités moyennes de production ainsi que les efficacités techniques relatives.     

Poverty Dynamics in Turkey

This paper examines poverty dynamics in Turkey using a nationally representative panel data covering the 2005–08 period. The aim is to understand mobility in and out of poverty and its correlates. We find that almost a quarter of the poor are persistently poor. The conditional and unconditional exit rates that we estimate are within the range of values reported for developed countries in the literature. That the income events—but not transfers—dominate both poverty entries and exits is indicative of the major role labor markets play in the lives of the poor. In particular, we argue that given the characteristics of the poor and modest levels of social assistance, the reason for mobility rates close to European averages must be sought in the informal economy.