Would information on consumer confidence have helped to predict UK household expenditure during the recent economic crisis?

The objective is to investigate whether access to data on consumer confidence would have aided forecasts of the growth of UK household consumption expenditure over the recent period of economic crisis. A disaggregated study is performed on the basis that consideration is given not only to household spending in total but also to expenditure on each of durable goods, semi-durable goods, nondurable goods and services. The empirical analysis demonstrates how modifications which are made to the harmonized indicator of the European Commission are able to enhance predictive accuracy. However, the benefit which is derived from consulting consumer survey data does not extend to an earlier interval over which the behaviour of consumer sentiment was far less volatile.     

Does credit composition matter for current account dynamics? Evidence from Turkey

Based on a dynamic approach using the Kalman filter we depict effects of time-varying interactions between different components of credit stock on the current account in the Turkish Economy for the period 2002Q3–2014Q3. We decompose the credit stock into consumer and non-financial corporate sector credit and show empirically that both types of credit stock have negative effects on the current account dynamics.     

Institutional development and stock price synchronicity: Evidence from China

Better developed legal and political institutions result in greater availability of reliable firm-specific information. When stock prices reflect more firm-specific information there will be less stock price synchronicity. This paper traces the experience of China, an economy undergoing dramatic institutional change in the last 20 years with rich variation in experiences across provinces. We show that stock price synchronicity is lower when there is institutional development in terms of property rights protection and rule of law. Furthermore, we investigate the influence of political pluralism on synchronicity. A more pluralistic regime reduces uncertainty and opaqueness regarding government interventions and therefore increases the value of firm-specific information that reduces synchronicity.     

Quality of Education,Economic Performance and Institutional Environment

This paper addresses two questions. First, how does the quality, rather than the quantity, of education impact economic performance? Second, does the quality of education have a larger impact on economic performance in countries with better institutions (i.e., social and political variables which affect economic outcomes)? Using data from more than fifty countries, we observe that there is a positive relationship between the quality of education and GDP per capita. In addition, we find that the quality of education has a more beneficial effect on GDP per capita in countries with better law and order conditions, government stability, and overall institutional environment. These results remain unchanged under various scenarios.     

Corporate Governance and Dividend Payout Policy: A Test Using Antitakeover Legislation

Managers strongly prefer not to pay dividends as dividend payouts reduce the amount of cash subject to managerial discretion ( Easterbrook, 1984 ; Jensen, 1986 ). Previous empirical tests of the relationship between corporate governance and dividend payout policy employ endogenous measures of this agency problem. Using a relatively exogenous measure that incorporates state antitakeover laws and the differences‐in‐differences approach, our analysis indicates that dividend payout ratios and propensities fall when managers are insulated from takeovers. The impact of antitakeover laws on dividend payouts is more pronounced for firms with poor corporate governance and small firms.     

Does social learning promote cooperation in social dilemmas?

In this study, we analyze how emergence of cooperation is related to social learning. Cooperation is an example of social behavior. It is frequency-dependent that is the success of a particular behavior depends on the number of individuals adopting each behavioral trait. We study how social learning can affect the evolution of cooperation in social dilemmas represented by two well-known games: Prisoner’s Dilemma (PD) and Snowdrift (SD). We show that, in the PD game, increase in the proportion of social learners leads to the alleviation of the social dilemma. Whereas, in the SD game increasing the proportion of social learners does not always lead to the alleviation of the social dilemma, that is there is no simple monotonic relation between social learning and the weakening of the social dilemma.

     

Can hedging tell the full story? Reconciling differences in United States aggregate- and industry-level exchange rate risk premium

While the importance of currency movements to industry competitiveness is theoretically well established, there is little evidence that currency risk impacts US industries. Applying a conditional asset pricing model to 36 US industries, we find that all industries have a significant currency premium that adds about 2.47 percentage points to the cost of equity and accounts for approximately 11.7% of total risk premium in absolute value. Cross-industry variation in the currency premium is explained by foreign income, industry competitiveness, leverage, liquidity, and other industry characteristics, while its time variation is explained by US aggregate foreign trade, monetary policy, growth opportunities, and other macro variables. The results indicate that methodological weakness, not hedging, explains the insignificant industry currency risk premium found in previous work, thus resolving the puzzle that currency risk premium is important at the aggregate stock market level, but not at the industry level.     

η-Pseudolinearity

The notion of η-pseudolinearity is introduced. First, some characterizations of an η-pseudolinear function are obtained. Then characterizations of the solution set of an η-pseudolinear program are derived. The paper generalizes various results on pseudolinear functions and programs.     

European Bank Performance Beyond Country Borders: What Really Matters?

The paper analyzes bank performance in the context of the integrated EuropeanUnion market and its member countries. First, the paper investigates the technicalefficiency of banks in each country sample using a Data Envelopment Analysis(DEA) model incorporating only banking variables. Then, a second DEA modelis defined incorporating environmental factors together with banking variables inorder to standardize the country-specific environmental conditions. Based on thesemodels, the paper systematically analyzes the efficiency position for each of theEuropean banking industry if average banks decide to operate in any other country.The results indicate that adverse (advantageous) environmental conditions are apositive (negative) factor for the home banking industry and being technicallyefficient appears to be a significant deterrence to foreign competition.