Growth Effects of Fiscal Decentralization: Empirical Evidence from China's Provinces

In this paper, we revisit the fiscal decentralization-economic growth nexus in the case of China's provinces using autoregressive distributed lag bounds tests and pooled mean group estimators with time series data from the period 1979-2009. Using principal component analysis, we build a novel composite fiscal decentralization indicator consisting of five different fiscal decentralization measures and use it in the models in addition to conventional fiscal decentralization variables. The results suggest that there is a strong, positive, and statistically significant relationship between fiscal decentralization and economic growth in most provinces in China in both the short run and the long run.     

Creating institutional meaning: Accounting and taxation law perspectives of carbon permits

Emissions trading schemes based on the idea that markets are an efficient means to allocate resources have created the need for a tradeable right, the carbon permit. The measurement and recognition of this right has the potential to significantly affect the financial reports and cash flows of entities and is therefore of interest to market participants. The purpose of this paper is to analyse the different meanings attached to the term, carbon permit, from two institutional frameworks, accounting and taxation, using discourse analysis of identified key documents available during the design and public discussion of the proposed Carbon Pollution Reduction Scheme in Australia.     

Finance-growth nexus in China revisited: New evidence from principal components and ARDL bounds tests

This article re-examines the finance-growth nexus in China using principal components analysis and ARDL bounds testing approach to cointegration. The results suggest that principal components have an effective role in examining the links between growth and financial development and, that financial development fosters economic growth.     

Robust hedging with proportional transaction costs

A duality for robust hedging with proportional transaction costs of path-dependent European options is obtained in a discrete-time financial market with one risky asset. The investor’s portfolio consists of a dynamically traded stock and a static position in vanilla options, which can be exercised at maturity. Trading of both options and stock is subject to proportional transaction costs. The main theorem is a duality between hedging and a Monge–Kantorovich-type optimization problem. In this dual transport problem, the optimization is over all probability measures that satisfy an approximate martingale condition related to consistent price systems, in addition to an approximate marginal constraint.     

Duality and convergence for binomial markets with friction

We prove limit theorems for the super-replication cost of European options in a binomial model with friction. Examples covered are markets with proportional transaction costs and illiquid markets. A dual representation for the super-replication cost in these models is obtained and used to prove the limit theorems. In particular, the existence of a liquidity premium for the continuous-time limit of the model proposed in Çetin et al. (Finance Stoch. 8:311–341, 2004) is proved. Hence, this paper extends the previous convergence result of Gökay and Soner (Math Finance 22:250–276, 2012) to the general non-Markovian case. Moreover, the special case of small transaction costs yields, in the continuous limit, the G-expectation of Peng as earlier proved by Kusuoka (Ann. Appl. Probab. 5:198–221, 1995).     

Prediction of bank financial strength ratings: The case of Turkey

Bank financial strength ratings have gained widespread popularity especially after the recent financial turmoil. Rating agencies were criticized because of their ratings and failure to predict the bankruptcy of the banks. Based on this observation, we investigate whether the forecast of the rating of bank's financial strength using publicly available data is consistent with those of the credit rating agency. We use the data of Turkish banks for this investigation. We take a country-specific approach because previous studies found that proxies used for environmental factors (political, economic, and financial risk of the country) did not have any explanatory power and it is hard to find international data for other important factors such as franchise value, concentration, and efficiency. We use two popular multivariate statistical techniques (multiple discriminant analysis and ordered logistic regression) to estimate a suitable model and we compare their performances with those of two mostly used data mining techniques (Support Vector Machine and Artificial Neural Network). Our results suggest that our predictions are consistent with those of Moody's financial strength rating in general.. The important factors in rating are found to be profitability (measured by return on equity), efficient use of resources, and funding the businesses and the households instead of the government that shows efficient placement of the funds.     

Macroeconomic performance index: a new approach to calculation of economic wellbeing

Since the rise of the global financial crisis, there has been revival of interest in performance indexes that measure the overall stance of the economy and the wellbeing of households. Such indexes typically consist of inflation, growth, employment and long-term interest rates. We develop such an index by appending exchange rate and weighting each variable by the inverse of its variance in order to prevent the more volatile variable to dominate the index. We call this macroeconomic performance index (MPI) and argue that such an index better explains the overall economic stance especially in emerging economies. We generate the index using data from three emerging economies, namely Turkey, Brazil and Poland. Our analysis indicates that the index has a nonlinear structure and hence we analyse its behaviour using threshold autoregressive (TAR) model. It is observed that MPI captures the economic stance and main economic incidents quite successfully in each subject country. To further see the relevance of the MPI, we run TAR cointegration analysis with consumer confidence indexes (CCIs) for the subject countries with TAR cointegration test. The results indicate long-term relationship between the MPI and CCI in all three countries.     

Historical development of the school for deaf children which was opened in Cyprus under the British Administration

In this paper, the School for Deaf Children that was opened under the rule of the British Administration in Cyprus is examined. The school was opened in the 1953–1954 academic year and became the second private education institution on the island. Additionally, it was a mixed school that served both the Greek and Turkish communities. Although the school was initially opened with contributions from the Rotary Club, it continued to provide educational services with funds from the British Administration, students’ parents and voluntary contributions. During the period of mixed education, the school could not adopt a fully settled structure in terms of the building in which it was locate and was moved to different areas during that period. In the period when the British government transferred responsibility for the education on the island to the Greek and Turkish communities, the school continued to provide services on a mixed basis. However, after the events of 1963, the Turkish teachers and students began to leave the school. Today, it continues its activities in southern Nicosia, whereas in the northern part of the island, the Lapta School for People with Hearing and Speaking Disabilities was opened in 1975 in order for Turkish students to continue their education. The present study is supported with information obtained from Education reports and Cyprus Gazette resources as well as national and international works and verbal resources.