Risk Sensitivity of Bank Stocks in Malaysia: Empirical Evidence Across the Asian Financial Crisis

The present study examines the sensitivity of commercial banks' stock excess returns to their volatility and financial risk factors, measured by interest rates and exchange rates, across the recent Asian financial crisis. In general, we found that there were no significant differences among Malaysian commercial banks in their risk exposure prior to and during the Asian financial crisis. The introduction of selective capital controls, a fixed exchange rate regime and a forced banking consolidation program, however, had increased the risk exposure of both large and small domestic banks. The effects of these risk factors were significantly detected in both large and small banks.     

The effect of tourism investment on tourism development and CO2 emissions: empirical evidence from the EU nations

Abstract

The objective of this study is to investigate the effect of tourism investment on tourism development and CO₂ emissions in a panel of 28 EU countries using annual data from 1990 to 2013. The empirical results from a panel cointegration test confirm the presence of long-run equilibrium relationship among the variables. The long-run elasticities indicate that tourism investment has a significant positive and negative impact on tourism development and CO₂ emissions, respectively. Finally, the short-run heterogeneous panel non-causality test results show the evidence of bidirectional causality between tourism investment and tourism revenue. These results therefore suggest that tourism investments not only increase tourism revenue but also reduce CO₂ emissions. Given these findings, we suggest the policy makers of the EU nations to initiate more effective policies to increase the tourism investments. The increasing tourism investments will allow the industry to grow further by ensuring sustainable tourism development across the EU member countries.     

Who drives whom ‐ sukuk or bond? A new evidence from granger causality and wavelet approach

Sukuk is a highly appealing alternative instrument of conventional bond in the financial market over the last two decades. To a certain extent, the market players assume sukuk as the same as bond. However, sukuk has its own fundamental asset backed principles, whereas bond is backed by debt. The objective of the study is to examine the Granger‐causality and lead–lag relationship between sukuk and bond by using the data of the Malaysian Government securities return for both conventional and Islamic instruments. The data for every working day of 7 years covering the period from January 31, 2007 to December 31, 2013 were collected from Bloomberg database. The yield returns of both securities have been plotted for each six months of a year. This study applied both Granger‐causality and dynamic co‐movement techniques such as, continuous wavelet transforms (CWT) coherence for analyzing the temporal evolution of the frequency content of both securities by decomposing each period into different time scales. The empirical findings of the paper reveal that with a bit of exception, there is a causal relationship between sukuk securities and conventional bonds for a given period of time. For robustness, this study applied the wavelet coherence approach and found that bond is led by sukuk in the long term investment horizon rather than in the short term. Our findings relating to the lead‐lag relationship between sukuk and bonds have important implications in terms of policy regulations and investment management. Future research and market practices could reinvestigate the differences between these two securities across different markets and types.     

Advances in the competitiveness of pan‐European rail freight services: findings from a case study

The European rail freight market is ostensibly a free market where, from 1 January 2007, both incumbent and new‐entrant operators are able to compete on every line and in every European Union country. The main objective of this research paper is to assess the advances in the competitiveness of the pan‐European rail freight services operated by a new‐entrant (private) operator. Its main focus is to assess and contribute to the understanding of the advances towards competitiveness and the future prospects in the open European rail freight market, including dealing with challenges (e.g. dormant and departure of partners, suspension of the project, indistinct roles and responsibilities of operating partners) at different phases of the research, development and service offerings, that will be an important contribution to the Research and Development (R&D) policy and management arena in the Europe rail freight transport sector. The current research applies a case study research approach. The assessment of the rail freight service is performed by conducting two phases: first, a comparison of the progress between first and second year of the REorganisation of Transport networks by advanced RAil freight Concepts (RETRACK) rail freight service, operated by a new entrant and conducted on the corridor between two hubs – Cologne, Germany, and Györ, Hungary, and secondly a comparison of the opinions of customers on the RETRACK service and its competitors. From the comparative study between the first and second years, the study finds that the new‐entrant operator was able to offer an increased number of services by consolidating cargo from satellite connections at both ends of the operational corridor by adopting a pragmatic and flexible approach. The customer satisfaction survey suggests that the new‐entrant operator offered better service in terms of price, transit time, reliability and information flow/management compared to its competitors' services (offered by incumbent rail operators) on the corridor. However, their service was inferior to that of its competitors, in terms of frequency and availability of service. These less‐well performed service factors have improved gradually over time. The study suggests that intra‐rail competition has improved, but that inter‐modal completion is yet to be achieved. The ups and downs of the project provide important lessons for R&D management, academia and policy makers. The study suggests that a pan‐European rail freight service can be efficiently and effectively run by new‐entrant operators, and this will lead to more intra‐modal competition. However, they have yet to achieve competitiveness that will result in a shift of cargo from road to rail by offering an improved service that at least matches the major attributes of road freight service, e.g. price, transit time, door‐to‐door service and working in a collaborative way with other actors.     

Earnings Gaps for Conspicuous Characteristics: Evidence from Indonesia

Recent research has begun to analyze the effects of height on earnings in Indonesia, a developing country with a large population. Little has been done on the potential effects of weight and general health status on earnings. Using a household production function, Grossman and Benham (1974) provide empirical evidence of the positive effect of good health on earnings. Carefully accounting for selection into the workforce and the potential endogeneity of our health variables, we use a sample of individuals between the ages of 25 and 55 from the Indonesian Family Longitudinal Survey (IFLS) to identify the effect of health on earnings and conduct Oaxaca-Blinder decompositions to identify possible discrimination. We compare these results to those using less conspicuous health measures such as blood pressure, cholesterol, and chest pain. Endogeneity of our health measures is subsequently addressed using several econometric methodologies. Results suggest that overweight males in Indonesia earn an income premium, while underweight females are subject to an income penalty.     

Wealth inequality,democracy and economic freedom

Using a novel panel data set from the Credit Suisse on the top wealth shares for 46 sample countries spanning 2000–2014, this paper empirically investigates to what extent wealth inequality influences economic freedom and whether this relationship is affected by the level of democracy. Economic freedom is measured by the Fraser Institute's economic freedom summary index as well as its five major sub-indices, such as government size, property rights, access to sound money, freedom to trade, and regulations. Wealth inequality is measured by the top wealth shares. Trade union density is used as an instrument for wealth inequality. Empirical results suggest that the rising wealth inequality significantly hampers overall economic freedom, property rights protection, freedom to trade, soundness of money and regulatory environment. Furthermore, this negative effect of wealth inequality is reinforced at a lower level of democracy. These findings are robust to alternative measures of wealth inequality, economic freedom, treatment for endogeneity, and model specification.     

Heterogeneity in male and female farmers’ preference for a profit-enhancing and labor-saving technology: The case of Direct-Seeded Rice (DSR) in India

Labor-saving and income-increasing technologies may affect women farmers differently from men. However, very few studies explicitly account for women's preferences for new technologies. We carried out a discrete choice experiment with 337 female and 329 male farmers in Maharashtra, India, to measure their willingness to pay (WTP) for direct-seeded rice (DSR) with drum seeder and to understand the gender differences in marginal valuations of key attributes. We used the Women's Empowerment in Agriculture Index (WEAI) to collect self-reported data on the role and say of women in different domains of decision making. The respective gender roles of women and men in the family and on the farm are aligned with their preferences. Men have a greater say over how the family spends the cash. Accordingly, men tend to have a higher WTP for attributes that increase income (increase in yield) or reduce cash costs (reduction in seed rate). Women contribute a large share of the labor for transplanting rice, much of which is unpaid work on family farms. Women, therefore, seem to value labor saving more. Women in our sample were more interested in the new technology and had a higher WTP for it.     

Is better banking performance associated with financial inclusion and mandated CSR expenditure in a developing country?

Motivated by legislation mandating CSR expenditure to improve social equality and economic development in India, we examine the association of CSR expenditure and financial inclusion with the performance of banking firms in the period after introduction of the legislation. We study whether mandated CSR expenditure and/or financial inclusion measures are associated with better financial performance, using both accounting and stock market measures of performance, for Indian banks during 2015–2017. Our results demonstrate that level of CSR expenditure and degree of financial inclusion is not associated with banks’ financial performance when performance is measured in accounting terms. However, a significant negative association is found when performance is measured by stock market return. These results suggest that the current design of the legislation is unlikely to achieve its purpose. This is the first study to present clear evidence on the associations of mandatory CSR spending and firm‐level financial inclusion with accounting‐based and market‐based bank performance.     

Seeing Borders Through the Lens of Structuration: A Theoretical Framework

Despite a growing body of work, scholars have rarely engaged with the classic divide of structure and agency in border studies. Drawing on theory of structuration by Anthony Giddens, this article proposes a theoretical approach and/or tool that views borders as the result of a continuous production and reproduction of structure(s) and agents. The framework offers an analysis of what makes each border distinct and of the performance of borderwork. The article briefly overviews major theoretical approaches in critical border studies, presents a brief summary of the theory of structuration, discusses the proposed theoretical framework for border studies, and presents a case study based on the recently exchanged Bangladesh-India border enclaves to demonstrate the application of this framework.