Foreign Equity Trading and Average Stock‐return Volatility

We examine whether there is a relationship between foreign equity trading and average total volatility, measured as the value‐weighted average of stock‐return variance in the Istanbul Stock Exchange. We employ foreign equity purchase and sale data to track changes in foreign equity trading, which not only enable us to capture effective foreign investor participation but also to observe the potential asymmetric effects of incoming and outgoing funds on the average total volatility. Consistent with the implications of the asymmetric information hypothesis, we find that net equity flow is positively associated with average total volatility. Furthermore, we show that net equity flow affects the average total volatility through the local and idiosyncratic volatilities, suggesting that foreign investors engage in the production of firm specific and market wide information.     

The intrapreneur role of the development directors in an international hotel group

This article fills a gap in the research undertaken into the role of intrapreneurs in the international expansion process of an organisation. The intrapreneurial role of development directors (DDs) in implementing franchising decisions in an international hotel group was investigated. In-depth interviews, observations and document analysis were used as the data collection techniques. Findings suggest that human factors play an important role in the expansion process and, in a culturally diverse context, franchising is very much the concern of the development directors who provide the attributes of intrapreneurs, both in the organisation and externally in the market.     

Determinants of ethnic minority entrepreneurial growth in the catering sector

This paper seeks to evaluate the variables which influence the growth of the Turkish-speaking ethnic minority businesses in the catering sector, in London, UK. The paper reports and analyses the findings of 111 face-to-face structured interviews with Turkish Cypriot, Kurdish and Turkish restaurant business owners. Findings suggest that fluency in English, recruitment through formal recruitment channels, and the high proportion of co-ethnic labour force makes a positive impact on business growth. The paper concludes that these determinants of growth are crucial for the ethnic minority catering entrepreneurs to gain a competitive edge in this customer focused, labour intensive sector.     

Politics and tourism interface: The Case of Cyprus

The Cyprus tourism industry has had to be sensitive to the political problems between Turkish and Greek Cypriots. Federation is considered to be a partial solution to the problems. This paper evaluates the influence of politics and nationalism on the tourism planning and development under a possible federal constitution. The views of Turkish and Greek Cypriot participants from private and public organizations are studied through semistructured interviews. The findings suggest that any future planning and development is likely to be a complex undertaking, as the two societies tend to have different sets of objectives and expectations.     

Evolution of Interdependent Preferences in Aggregative Games

We study the evolution of preference interdependence in aggregative games which are symmetric with respect to material payoffs but asymmetric with respect to player objective functions. We identify a class of aggregative games whose equilibria have the property that the players with interdependent preferences (who care not only about their own material payoffs but also about their payoffs relative to others) earn strictly higher material payoffs than do the material payoff maximizers. Implications of this finding for the theory of preference evolution are discussed. Journal of Economic Literature Classification Numbers: C72, D62.     

Measuring market power when firms price discriminate

We propose conduct parameter-based market power measures within a model of price discrimination, extending work by Hazledine (Econ Lett 93:413–420, 2006) and Kutlu (Econ Lett 117:540–543, 2012) to certain forms of second-degree price discrimination. We use our model to estimate the market power of US airlines in a price discrimination environment. We find that a slightly modified version of our original theoretical measure is positively related to market concentration. Moreover, on average, market power for high-end segment is greater than that of low-end segment.     

Exploring different measures of wage flexibility in a developing economy context: the case for Turkey

In this paper we use Turkish household labor force data to address a number of conceptual issues pertaining to the wage curve, an empirically derived negative relationship between the real wage level and the local unemployment rate. First, we show that in developing economies where labor markets are prone to high degree of segmentation by skill level, local unemployment rates disaggregated by education provide more accurate measures of the degree of group-specific wage competition and hence yield more robust results of the wage curve analyses. Second, we estimate the wage curve using various definitions of the unemployment rate, including discouraged and marginally attached workers, and the long-term unemployment rate to explore the most relevant measure of local labor market tension in the wage setting process. We find that broader definitions of unemployment serve as a more effective reference point in measuring wage flexibility for women, whose attachment to the labor market is substantially weak in the Turkish context; while for men the official and long-term unemployment rates perform well. Finally, using quantile regression we show that wage responsiveness to unemployment cannot be assumed to be constant along the wage distribution. In the Turkish case, we find a higher unemployment elasticity of wages around the median segment of wage distribution. This effect is more pronounced for women.     

Bargaining and exclusivity in a borrower–lender relationship

This paper presents a stylized model of a borrower–lender relationship where funds are gradually invested in a project with uncertain return. We show that an exclusive financing relationship arises endogenously in equilibrium due to initial lender’s superior information on the project’s progress. The analysis also identifies a novel distortionary effect of exclusivity and the consequent loss of future rents on the ex-ante choices of the borrower. When she chooses the amount of funds to be initially invested in the project, the borrower chooses to overinvest making the future rent extraction by the initial lender as costly as possible. We would like to thank Alberto Bisin, Andrew Chen, Boyan Jovanovic, Hideo Konishi, David Mauer, Efe Ok, Mike Riordan, Charles A. Wilson, and seminar participants at Society of Economic Design 2002 meetings in New York and Southern Methodist University for helpful comments. The usual disclaimer applies.