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.     

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.     

The impact of country risk ratings on U.S. firms in large cross-border acquisitions

This study investigates the impact of country risk ratings on the wealth gains to large U.S. bidders involved in cross-border acquisitions. The findings indicate that U.S. bidders experience positive wealth gains during the merger announcements, though this is concentrated in transactions involving European targets. There are also differences in wealth gains to bidders with respect to industry classification and location of foreign targets. The country risk factors including economic, political, and financial risk ratings all play a significant role in explaining the wealth gains to bidders. Furthermore, the wealth gains are higher for the firms with acquisitions in developed countries and are significantly related to GNP growth rate.     

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.     

Determining the requirements of families of children with special needs

This study aims to determine the requirements of parents of children with special needs and the factors that influence those requirements by using the “family needs survey” developed by Bailey and Simeonsson (The Journal of Special Education 22(1):117–127, 1988) adapted for Turkish researchers by Cavkaytar et al. (Ankara Üniversitesi Eğitim Bilimleri Fakültesi Özel Eğitim Dergisi 15(2):1–12, 2014). In the study the survey model was used to investigate the current requirements of parents. The population of the study consisted of families whose children are currently in one of five special education centres or one of four special education and rehabilitation centres which function under the Ministry of Education in the TRNC in the academic year 2015–2016. With the aim of reaching the whole of the population, no sampling methods were used in the research. The analysis was conducted with research evaluation instruments distributed to a total of 279 participants within the scope of the study and with the collection of 116 of the instruments. Welch’s t test, Welch/Anova and Gabriel and Hochber’s GT2 tests were used to analyse the data. The majority of the participants consisted of mothers and middle-aged parents. In general, the families’ response to the FNS scale was that were unsure of their requirements. However, they had a need for information.

     

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.     

International mergers and acquisitions: A jump diffusion model application

This paper empirically investigates international mergers and acquisitions (M&As) of foreign targets and bidders by analyzing the stock price behavior of the firms involved. The jump diffusion model is employed to study the effects of the M&A announcements on stock prices. The results indicate that acquisition announcements are perceived as a surprise by the market, but prices seem to adjust rather rapidly, supporting the semi-strong form of the market efficiency hypothesis. In addition, a comparison of the pure diffusion and jump diffusion models indicates that the jump diffusion model is statistically superior to the traditional event study methodology (pure diffusion model). (JEL G34)     

Optimal Investment and Consumption With Two Bonds and Transaction Costs1

An agent can invest in a high-yield bond and a low-yield bond, holding either long or short positions in either asset. Any movement of money between these two assets incurs a transaction cost proportional to the size of the transaction. the low-yield bond is liquid in the sense that wealth invested in this bond can be consumed directly without a transaction cost; wealth invested in the high-yield bond can be consumed only by first moving it into the low-yield bond. the problem of optimal consumption and investment on an infinite planning horizon is solved for a class of utility functions larger than the class of power functions.