THE ECONOMICS OF THE UNCOVERED INTEREST PARITY CONDITION FOR EMERGING MARKETS

Abstract Financial account liberalizations since the second half of the 1980s paved the way for the burgeoning literature that investigates foreign exchange market efficiency in emerging markets (EMs) via testing for the uncovered interest parity (UIP) condition. This paper is the first to provide a broad and critical survey on this recent literature. Specifically, we attempt to answer the following questions. First, are the EMs different from the developed economies in the context of the UIP condition? Second, to what extent can these differences contribute to the debate on the UIP literature? Third, what are the empirical challenges specific to the EMs in testing for the UIP condition?     

Gender and Perceived Fundamental Moral Orientations: An Empirical Study of the Turkish Hotel Industry

Recent history is replete with scandalous acts and charitable acts within the business community. Unfortunately, scandalous acts seem to occur with greater frequency than charitable acts – at least as reported in the broadcast and print media. An interesting corollary to the incidence of scandalous and charitable acts is the apparent differential involvement of men and women, particularly in scandals. This article explores a possible explanation for the apparent gender differential in involvement in scandals and acts of charity. Drawing on a conceptual framework of three Fundamental Moral Orientations (FMOs) – selfishness, self-fullness, and selflessness – and relevant literature on gender effects, this article explores whether men and women are perceived as differing fundamentally in how they approach moral dilemmas. This phenomenon is examined with a sample of personnel (n = 682) from the hotel industry in Turkey. Results of the study indicate that gender has some effect on the perceived adoption of FMOs, and that these gender effects are generally consistent across age, educational level, and organizational rank categories. Implications of the findings are discussed.     

Measuring the Impact of Price-Induced Innovation on Technological Progress: Application to the U.S. Food Processing and Distribution Sector

A model of price-induced innovation is presented incorporating long-run prices as arguments in the production function serving the role of stimulating firms to seek innovations. The empirical application examines the production structure and technological progress of the U.S. food processing and distribution sector for the period 1948–1991. The empirical model separates scarcity, innovation, and exogenous technical change responses in analyzing the Morishima elasticities for input combinations and multifactor input biases. The results suggest significant structural changes occurring in the food processing and distribution sector since 1980. Focusing on multifactor input bias, results suggest that there are no wide changes in technical change patterns over the last forty years. However, Morishima elasticity results suggest a more varied pattern of technical change between inputs. The price-induced technical progress has a dominant contribution on input decisions compared with the exogenous technical change.     

Effects of Gender,Occupational Stereotyping,and Culture on Perceived Service Quality in Anglo-Saxon and Middle Eastern Cultures

This article investigates whether customers perceive receiving better service from same-gender service providers or from opposite-gender service providers. It also examines how occupational stereotyping and cultural values influence the perceived quality of service in eight industries. Based on 1,180 respondents from four counties, insights are provided on the effects of gender, occupational stereotyping, and culture on service quality. The study found significant gender and cultural effects on service quality and significant interaction effects of gender and culture. It was also determined that occupational stereotyping and culture significantly affect perceived service quality within each culture, which could have important managerial implications.     

What future for Middle Eastern studies?

Middle Eastern Studies (MES) has increasingly come under attack in recent years. The critics have included the more politically oriented (as with Martin Kramer who reproached Middle Eastern scholars for failing to serve US interests) as well as generalists in various social science disciplines (who have criticised MES for having produced ‘theory-free’ work thereby failing to serve the cause of building cumulative social scientific knowledge). Middle Eastern scholars have responded to such criticism by seeking to point to various contributions MES has made over the years. These debates between Middle Eastern scholars and their critics have revealed three alternative future courses for MES: (1) going back to its roots in ‘Oriental Studies’ (as called for by Martin Kramer in Ivory Towers on Sand); (2) establishing itself firmly in the discipline-oriented social sciences (as called for by the avatars of methodology in the Social Sciences); (3) building upon the pioneering works of those Middle Eastern scholars who have sought to theorise from Middle Eastern experiences thereby contributing both to MES and the disciplines. Pointing to how the sides to these debates differ radically in terms of their understanding of ‘theory’, the article will suggest that the future of MES would be shaped depending upon which understanding of ‘theory’ comes to prevail.     

Tax perceptions and the demand for public expenditure: evidence from UK micro-data

Using responses from the 1995 British Social Attitudes Survey (BSAS), this paper assesses if there is evidence of voter misperception of tax costs. We find convincing evidence of income tax (IT) and value added tax (VAT) misperceptions, with a systematic bias towards overestimation of tax burdens for VAT, contrary to predictions of the fiscal illusion literature. We then integrate tax misperceptions into a model of demand for public expenditure. Voters' spending preferences are strongly related to their incomes, actual tax costs, and other fiscal-related household characteristics. A tendency to overestimate tax burdens appears to have only a modest influence on demands for public spending.     

Data Mining Approach for Direct Marketing of Banking Products with Profit/Cost Analysis

Nowadays, many businesses, such as banks, use direct marketing methods to reach customers to minimize the campaigning cost and maximize the return rate. To achieve this, huge customer data should be analyzed to determine the most appropriate product offer for each customer and the most effective channel to reach her/him. However, since only a very small amount of responses collected from the customers are positive to the offers, the dataset is very imbalanced. This decreases sensitivity ratio of prediction results and makes it difficult to make a successful product and channel selection for the offer. In this paper, we propose a hybrid system, which first classifies the customers to decide if s/he is interested in the offered product, and then clusters them for product and channel suggestions. Experiments with real life banking data show very promising accuracy results for predicting the proper product and channel for the customers. Moreover, cost-profit analysis is also added to this problem. Our experiment results show that the proposed method decreases a fraction of the total profit, but since the decrease in the total cost is very large, there is a huge increase in the overall profit/cost ratio.     

Going-Private Decisions and the Sarbanes-Oxley Act of 2002: A Cross-Country Analysis

This article investigates whether the passage and the implementationof the Sarbanes-Oxley Act of 2002 (SOX) drove firms out of thepublic capital market. To control for other factors affectingexit decisions, we examine the post-SOX change in the propensityof American public targets to be bought by private acquirersrather than public ones with the corresponding change for foreignpublic targets, which were outside the purview of SOX. Our findingsare consistent with the hypothesis that SOX induced small firmsto exit the public capital market during the year followingits enactment. In contrast, SOX appears to have had little effecton the going-private propensities of larger firms. (JEL G30,G34, G38, K22)     

Costs of a missing FTA: the case of Turkey and Algeria

Turkey has been deeply integrated with the EU, its largest trading partner, particularly following the Customs Union agreement in 1996. However, the free trade agreements (FTAs) signed by the EU with third party countries may create some unfair competitive pressures, market share and welfare losses for Turkey. This study investigates the impact of the FTA signed by Algeria and the EU in 2005 on Turkey’s trade flows. Covering 181 countries, a difference-in-differences analysis embedded in an extended gravity framework is employed to quantify the trade effects of the EU-Algeria FTA for the period of 1996–2013. Our findings suggest that bilateral trade between Turkey and Algeria is affected adversely due to the FTA. The counterfactual analysis shows that Turkish exports and imports to/from Algeria could have been 12 and 17% higher, respectively, had there been no FTA between the EU and Algeria.