An investigation of the effects of exchange rate volatility on exports in East Asia

This study investigates the effects of the exchange rate volatility on the export flows of Indonesia, Malaysia, Republic of Korea, Singapore, Thailand, and the Philippines during 1974–2011. Towards this goal a trade weighted real effective (rather than the bilateral) exchange rate and three different measures of volatility, i.e. obtained from an ARCH model, a GARCH model and a moving-average standard deviation measure are used in this study. Specifically, the export flows between six Asian countries and the rest of the world are investigated rather than focusing on trade with only one country. Our findings reveal that the exchange rate volatility has a significant impact on export flows in the short run as well as in the long run for all the countries in the sample. The impact in the long run is predominantly negative with the exception of Singapore, but in the short run the impact varies across countries. Moreover, our results are robust to the alternative measures of volatility used and most of the findings in the long run and short run are also robust to the crisis period.     

Natural resources and international labour mobility

We study the relationship between natural resource wealth and (skilled and unskilled) emigration. The source data for international migration rates come from Brücker, Capuano, and Marfouk (2013) and measures of resource wealth from the World Bank database. We find that natural resource abundance reduces skilled emigration regardless of countries’ natural wealth, but that natural resources reduce unskilled emigration only in resource-rich countries.     

Bound by Gravity or Living in a ‘Post Geography Trading World’?* Expert Knowledge and Affective Spatial Imaginaries in the Construction of the UK’s Post-Brexit Trade Policy

A key battle has been fought within the UK cabinet on the direction of post-Brexit trade policy. The opposing sides have favoured either continued alignment or a ‘hard’ break with the European Union’s (EU’s) regulatory and customs regime, in the latter case to allow the UK to pursue an independent and ambitious trade policy agenda. Contrary to much commentary on ‘post-truth’ politics, both sides have relied on rival forms of expertise to support their claims. I argue for the need to not only re-emphasise the malleability and political nature of expert knowledge, but also appreciate its emotional bases. The Treasury has led the charge in favour of a softer Brexit by drawing on econometric (‘gravity’) models that emphasise the economic costs of looser association with the EU. In contrast to this attempt at technocratic legitimation, the specific legal expertise drawn upon by cabinet advocates of ‘hard’ Brexit has appealed to an emotive political economy of bringing the UK, and its (in this imaginary) overly regulated economy, closer to its ‘kith and kin’ in the Anglosphere, deepening the UK ‘national business model’. I conclude by calling for more explicitly emotive and values-based argumentation in the public debate on the UK’s future trade policy to improve the quality of democratic deliberation.     

Mergers and Acquisitions and Market Volatility of Brazilian Banking Stocks: An Application of GARCH Models

The main objective of this research was to investigate the impacts caused by announcements of mergers and acquisitions (M&As) on the volatility of the returns of Brazilian bank stocks from 1994 to 2015. In order to achieve the proposed objective, this study applied Generalized Autoregressive Conditional Heteroscedastic (GARCH) class models to the series to model their volatility. Our results confirmed the impact of the announcement of M&As on volatility. They suggest that M&A announcements are expected to cause a negative reaction if related to an expansion or a deal involving a less-well known bank, and a positive reaction if it involves well-known bank with good reputation—a higher level of confidence and a lower level of information asymmetry for investors.     

Dividend reinvestment plans: An empirical analysis

This study examines the effect of initiating discount and no discount dividend reinvestment plans on shareholder wealth. The results show a negative response to DRP announcements, which is significantly smaller than that found in studies of new equity offerings. These results are consistent with the Scholes and Wolfson (1989) hypothesis that managers in need of equity capital use DRPs to mitigate the adverse stock price effects of new equity issue announcements. Furthermore, there is a significant difference in the price response of discount and no discount DRPs for industrial firms. This result is supportive of the signaling potential of discount DRPs. Supportive evidence is also found in the analysis of firm characteristics for industrial firms.     

Critical thinking and communication skills: Integration and implementation issues

This article describes issues associated with implementing an integrated approach to critical thinking and communication skills within accounting courses. The article builds on the work of Hirsch and Collins (1988) and discusses the following issues: (a) the collaboration of accounting and English faculty, (b) types of assignments, (c) assignment design, (d) the feedback process, (e) revisions in courses to accommodate a communication skills program, and (f) resources and motivation. The examples offered are from management/cost accounting courses, but our experience suggests that such an integrated approach to teaching critical thinking and both oral and written communication skills works well within most accounting and other business courses. However, individual programs will need to be tailored in order to address the issues defined here in ways that best fit their mission, goals, and resources.     

Commodity Prices and the Business Cycle in Latin America: Living and Dying by Commodities?

We analyze the dynamic interactions between commodity prices and output growth of the seven biggest Latin American exporters: Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Venezuela. Using a novel definition of Markov-switching impulse response functions, we find that the response of each country's output growth to commodity price shocks is time dependent, size dependent, and sign dependent. The major evidence of asymmetries in output growth responses occurs when commodity price shocks lead to regime shifts. Thus, we conclude that the design of optimal countercyclical stabilization policies should consider that the reactions of economic activity vary considerably across business cycle regimes.     

Dominating estimators for minimum-variance portfolios

In this paper, we derive two shrinkage estimators for minimum-variance portfolios that dominate the traditional estimator with respect to the out-of-sample variance of the portfolio return. The presented results hold for any number of assets d≥4$d\ge 4$ and number of observations n≥d+2$n\ge d+2$. The small-sample properties of the shrinkage estimators as well as their large-sample properties for fixed d$d$ but n→∞$n\to \infty$ and n,d→∞$n,d\to \infty$ but n/d→q≤∞$n/d\to q\le \infty$ are investigated. Furthermore, we present a small-sample test for the question of whether it is better to completely ignore time series information in favor of naive diversification.