The evolution of syndicated loan markets

This paper provides a historical perspective on the development of the global syndicated loan market, where $2.6 trillion worth of funds were raised in 2004. The emergence of the Eurodollar market in the 1960s, the balance of payments problems of non-oil-exporting emerging countries in the 1970s, the Latin American financial crises and the US merger wave of the 1980s, and finally the competitive financial environment and the emergence of the secondary loan market during the 1990s are reviewed. These have been the most influential financial developments that shaped the syndicated loan markets in the last few decades.     

Financial liberalization,private investment and portfolio choice: Financialization of real sectors in emerging markets

Using firm level panel data, we analyze the impacts of rates of return gap between financial and fixed investments under uncertainty on real investment performance in three emerging markets, Argentina, Mexico and Turkey. Employing a portfolio choice model to explain the low fixed investment rates in developing countries during the 1990s, we suggest that rather than investing in irreversible long-term fixed investments, firms may choose to invest in reversible short-term financial investments depending on respective rates of returns and the overall uncertainty in the economy. The empirical results show that increasing rates of return gap and uncertainty have an economically and statistically significant fixed investment reducing effect while the opposite is true with respect to financial investments.     

Political economy of eastern enlargement of the European Union: Budgetary costs and reforms in voting rules

Eastern European countries are likely to be major recipients of European Union (EU) funds after membership, which has created serious concern among incumbent members. The EU has devised reforms of budgetary rules to limit the funds that will flow to the East. Using a political economy model and drawing on the experience of previous enlargements, this paper argues that such pre-accession reforms will be ineffective because they can be reversed by a coalition of Eastern European countries after membership. The paper then estimates budgetary costs of eastern enlargement. A better way to resolve budgetary concerns is to reform voting rules rather than budgetary rules, before eastern enlargement.     

A comparison of the effect of retail purchase and direct marketing on the endowment effect

This article reports on a study comparing the effect of the retail and direct marketing channels of delivery on the endowment effect. The results demonstrated the endowment effect for both retail and direct marketing channels of product delivery. In addition, in the direct marketing channel, the endowment effect was strengthened by the physical, tangible possession of products at the point of product receipt compared to its virtual possession value at the point of purchase. In the retail channel of delivery, confirming consumer expectation with the possession of the product at the point of purchase resulted in the strengthening of the endowment effect compared to the unexpected out‐of‐stock retail situation. Contrary to expectations, the duration of the product possession did not affect product valuation. Managerial implications are discussed. © 2006 Wiley Periodicals, Inc.     

Effects of cultural institutes on bilateral trade and FDI flows: Cultural diplomacy or economic altruism?

The number of cultural institutes from major developed and developing countries increased significantly in the last twenty years. In this paper, using cross-sectional and panel data analysis on bilateral trade in goods and services, and FDI inflows and outflows, we examine the economic effects of 1,266 cultural institutes from China, France, Germany, Japan, Portugal, Spain, Turkey and UK for the period of 1990–2015. The empirical results suggest that cultural institutes have significantly positive trade and FDI enhancing effects, which are persistent over time. However, these effects are most robust only with goods exports and FDI outflows. Furthermore, the economic effects of cultural institutes are not homogenous across destinations and are the strongest for developed rather than developing host countries. There is also significant heterogeneity among cultural institutes with significant differences in their economic effects on different types of bilateral trade and FDI flows.     

Using macro cross‐border trade data to better understand micro‐level country of origin effects

The article adapts an estimation methodology from the border effects literature to reveal consumer ethnocentrism versus cosmopolitanism in each country, and animosity versus nostalgia between country pairs. The measurements rely on actual macro cross‐border trade data rather than individual purchase intentions typically used in the international marketing literature. The results from early 2010s suggest that purchasing intentions against imports found in this literature do not necessarily translate into actual consumption behavior in international trade. It is quite possible that the consumers are unable to assess country of origin of production despite growing ethnocentrism, and base their actual purchases on perceived origin of product brands. Specifically, it is found that most countries are cosmopolitan rather than ethnocentric, particularly developed countries, favoring any foreign product over domestic products. Most countries also have nostalgic purchasing behavior from specific trade partners with historical linkages. Outside the specific traditional animosities between a country pair, a developed country is relatively less open to imports from another developed trade partner, while an emerging country welcomes it more especially from another emerging trade partner.     

The impact of economic policy uncertainty on stock returns of Turkish tourism companies

Economic policy uncertainty (EPU) has various implications for financial markets. This study examines the effects of EPU on stock prices of listed tourism companies in Turkey for the time period of 2002–2013. We show that EPU in Europe and Turkey has significant negative effects on tourism index returns. The finding reflects that stock returns of the Turkish tourism companies apparently depend on domestic and international economic uncertainty. Among the included macroeconomic variables, consumer confidence index is the only factor which has an impact on stock returns.     

The determinants of Turkey's exports to Islamic countries: The impact of political risks

Using the traditional gravity model, this paper aims to analyze the determinants of Turkish exports to 43 Islamic Development Bank member countries for the period from 1996 to 2015. The paper specifically investigates the effects of 12 political risk measures (bureaucracy quality, corruption, democratic accountability, government stability, internal and external conflict, investment profile, law and order, military in politics, religious and ethnic tensions, and socioeconomic conditions) in the importing countries on the total volume of exports of Turkey. After implementing various robustness checks, the paper finds that the government instability in the importing countries is negatively associated with the Turkish exports.     

Falling walls and lifting curtains: analysis of border effects in transition countries

Since McCallum's (1995 McCallum, J. 1995. National borders matter: Canada-US regional trade patterns. American Economic Review, 85(3): 615–23. [Web of Science ®] , [Google Scholar]) finding of surprisingly high border effects on trade between the US and Canada, there have been a number of studies on other parts of the world, and improvements made to the gravity model to measure this effect accurately. This paper suggests some other modifications to the model, and applies it to a region of the world that presents a distinctly interesting case. Changes in border effects of formerly socialist countries in Central and East Europe, and countries in the former Soviet Union are analyzed during 1976–2002 at country and sectoral levels, and also with respect to blocs of countries. A discussion on cross-country variations in border effects follows the computations.