The Role of State‐Owned Enterprises in an Artificial Monopoly Market: The Case of Turkey

State‐owned enterprises (SOEs) benefit from many privileges based on their unique structure, their substantial capital, and their position in the economic system. Like all business corporations, they have no fixed duration, which makes them effectively immortal. In addition, they are adjuncts of the state, which enables them to survive in noncompetitive markets with little effort. Therefore, under today's ruthless global market conditions, SOEs engage in unfair competition with privately financed businesses. By relying on their identity as state operations, they do not follow the rules of the market—they define those rules. In addition to SOEs, which are direct arms of the state, some privately financed businesses dominate markets in which the state allows them to develop an artificial monopoly and thus increase their power day by day. These artificial monopolies distort market processes and create conditions that frequently give rise to corruption. This study examines the problems associated with monopolies, with a special emphasis on establishing more efficient market structures for SOEs in Turkey. The original mission of SOEs was to balance markets through regulation and to be transparent and accountable to the public. Simply striving to meet those criteria would go a long way toward preventing the abuse of power and unfair competition. In addition, SOEs and artificial monopoly markets distort public institutions by promoting rent‐seeking behavior that corrupts politics and blocks innovation from potential competitors. Privatization has been employed by international financial institutions in recent decades, but it has mostly transferred monopolies from the public sector to private owners, which has made the problem worse and done little to enhance competition. Establishing genuinely competitive economies will require a new political culture around the world.     

Public housing units vs. housing vouchers: Accessibility,local public goods,and welfare

We develop a general equilibrium model of residential choice and study the effects of two housing aid policies, public housing units and housing vouchers. Land is differentiated by both residential accessibility and local public goods, and the provision levels of local public goods are determined by property tax revenues and neighborhood compositions. Households differ in their incomes and preferences for local public goods. Housing aid policies are financed by general income taxes. We discuss how the location of public housing units is a fundamental policy variable, in addition to the numbers and sizes of units, and argue that vouchers not only cause less distortion for social welfare compared to public housing, but may also improve overall welfare.     

The Determinants of Debt Maturity Structure: Evidence from France,Germany and the UK

We examine the determinants of the debt maturity structure of French, German and British firms. These countries represent different financial and legal traditions that may have implications on corporate debt maturity structure. Our model incorporates the factors representing three major theories (tax considerations, liquidity and signalling, and contracting costs) of debt maturity. It also controls for capital market conditions. The results confirm the applicability of most theories of debt maturity structure for the UK firms. However, the evidence from France and Germany are mixed. Overall the findings suggest that the debt maturity structure of a firm is determined by firm‐specific factors and the country's financial systems and institutional traditions in which it operates.     

Imported Machinery for Export Competitiveness

This article analyzes the relationship between export competitivenessand investment in machinery, allowing for imperfect substitutionbetween domestically produced and imported machinery. A translogexport price function is estimated for developed, exportorienteddeveloping, and import-substituting developing economies ina panel data setting. Between 1967 and 1990 imported machineryhelped lower export prices for export-oriented developing economies.Moreover, throughout the period imported machinery was not asubstitute for domestic machinery. Import-substituting developingeconomies were unable to harness imported machinery to reducecosts early in the period, but from about the early 1980s, withthe opening of their trade regimes, they were able to benefitfrom the cost-reducing effect. The results imply that innovativeeffort based on imported technologies can be a precursor tothe development of domestic innovation capabilities.     

Redistribution through education and other transfer mechanisms

Educational subsidies are frequently justified as a method of altering the income distribution. It is thus natural to compare education to other tax-transfer schemes designed to achieve distributional objectives. While equity-efficiency trade-offs are frequently discussed, they are rarely explicitly treated. This paper creates a general equilibrium model of school attendance, labor supply, wage determination, and aggregate production, which is used to compare alternative redistribution devices in terms of both deadweight loss and distributional outcomes. A wage subsidy generally dominates tuition subsidies across a wide range of fundamental parameters for the economy. Both are generally superior to a negative income tax. With externalities in production, however, there is an unambiguous role for governmental subsidy of education, because it both raises GDP and creates a more equal income distribution.     

Cognitive and affective constituents of the consumption experience in retail service settings: effects on store loyalty

Based largely on the recently growing experiential marketing stream, this study explores the joint effects of cognitive assessments of and emotional responses to service experiences on store loyalty in a retail service setting. Experience-related cognitions and store-related cognitions based on evaluations of the service experience, as well as the subsequent positive and negative emotional responses on the part of the customers, are modeled and investigated in terms of effects on store loyalty. Empirical data were collected through a survey of 518 consumers in four coffee shops of two major chains. The results suggest that consumer evaluations of the service experience and store environment may influence store loyalty, both directly and indirectly, through both negative and positive emotional arousals. The relative effects of each construct through different mechanisms are the primary research questions investigated in this study. Managerial implications and future research directions are also discussed.     

A momentum trading strategy based on the low frequency component of the exchange rate

In this paper, we develop a momentum trading strategy based on the low frequency trend component of the spot exchange rate. Using kernel regression and the high-pass filter of Hodrick and Prescott [Hodrick, R., Prescott, E., 1997. Post-war US business cycles: An empirical investigation. Journal of Money, Credit and Banking 29, 1–16], we recover the non-linear trend in the monthly exchange rate and use short-term momentum in this to generate buy and sell signals. The low frequency momentum trading strategy offers greater directional accuracy, higher returns and Sharpe ratios, lower maximum drawdown and less frequent trading than traditional moving average rules. Moreover, unlike traditional moving average rules, the performance of the low frequency momentum trading strategy is relatively robust across different time periods. The low frequency momentum trading strategy is also robust to the choice of smoothing parameter (in the case of the HP filter) and the distribution and bandwidth parameter (in the case of kernel regression) over a wide range of values.     

Income distribution and exchange in a dynamic search model

This paper studies the link between income distribution and trade mechanisms in a dynamic search model with two-sided asymmetric information. Buyers and sellers have imperfect information about the income levels of the other group. Furthermore, asymmetry of information about incomes is the source of price dispersion. In such a frictional environment, we capture the effects of a change in inter- and intra-class income distribution on the trade mechanism, which is represented by the expected trade volume and the flux of buyers and sellers in the market.