The effects of exchange rate pass-through and cost channel on price level: The case of fragile five countries

ABSTRACT

In this study, we investigated whether the exchange rate and the interest rate had an effect on the inflation rate in the fragile five countries between the years of 1996Q4 and 2015Q4. In this context, a model was created to estimate the effect of interest rate and exchange rate on the inflation rate. The methods used in the study take into account cross-section dependence and heterogeneity. As a result of the analysis, it was determined that there was an exchange-rate and interest-rate pass-through effect in the fragile five countries. Moreover, it was found out that the cost channel and price puzzle were effective in Indonesia and South Africa but were not effective in Turkey, Brasil and India.     

Middle‐income countries: trapped or merely slowing?

Since the turn of the century, growth has slowed in a number of middle income economies, giving rise to fears ‐ exacerbated by the financial crisis of 2008‐09 ‐ that they were entering a low growth equilibrium. A survey of the literature on the middle income trap suggests that it is difficult to rigorously identify countries that might be trapped; that in most cases growth appears to be regressing to a longer term normal and in East Asian economies remains at a respectable 5 percent to 7 per cent rate; that the research on the trap has yet to come up with a new growth model for middle income economies; and that policy recommendations on offer are of the generic variety applicable to virtually all economies, developed and developing.     

Problems and challenges facing the islamic banking system in the west: The case of the UK

This study investigates the main problems, challenges, and opportunities facing Islamic banking in the United Kingdom. The study reports the results of interviews that were undertaken with senior officials of several key financial institutions who have had many years of experience in dealing with Islamic banking. Our interviews revealed that, although by strict definition Islamic banks do not currently exist in the UK, London is one of the major centers for Islamic banking and finance. It is apparent that the experience of previously established Islamic institutions, such as Al‐Baraka, has made other institutions realize that it is possible to provide Islamic banking services in the UK under nonbanking regulations. The interviews also revealed that the main problem that Islamic banking faces in the UK is heterogeneous clients and potential clients. Moreover, regulatory hurdles, competition from conventional banks, and lack of adequately qualified and trained personnel exacerbate the situation. The study concludes by identifying opportunities such as e‐banking that may have a significant impact on the future of Islamic banking in the UK. © 2004 Wiley Periodicals, Inc.     

Twenty Years of Expenditure Inequality in Indonesia, 1993–2013

In this article, we consider the recent increase in inequality in Indonesia. We make new, consistent estimates of expenditure inequality for 1993–2013, using several measures that draw on household expenditure data from the National Socioeconomic Survey (Susenas) for 1993–2013. In doing so, we note that the central statistics agency, Badan Pusat Statistik (BPS), used grouped data for its estimates of inequality until 2009 and that this underestimated inequality up to then. Thus the rise in inequality reported since 2009 actually has a longer history. We argue that Indonesia experienced divergence and convergence at the same time: the magnitude of the rise in inequality was significant (divergence), but the rise was greatest in provinces or districts with low initial levels of inequality (convergence). We consider the literature on drivers of changes in inequality and identify a set of hypotheses, with an empirical basis, which we introduce as potential Indonesian-specific drivers of rising inequality for future exploration.     

Exploring Portfolio Diversification Opportunities Through Venture Capital Financing: Evidence from MGARCH-DCC,Markov Switching,and Wavelet Approaches

Islamic financial institutions are being pressurized by critics to offer profit and loss sharing (PLS) financing, such as venture capital (VC) financing, for the purpose of entrepreneurial development aligned to the principle of equity risk sharing. Our study aims to link PLS investments with portfolio optimization opportunities for the Islamic asset managers. Using portfolio analysis with dynamic conditional correlation, Markov switching, and maximal overlap discrete wavelet transformation, our findings tend to indicate that there is indeed a portfolio optimization opportunity in investment universe for the fund managers who invested in PLS investments in the context of VC asset class over the long run.     

When idealists evade taxes: the influence of personal moral philosophy on attitudes to tax evasion – a Lebanese study

This paper explores attitudes regarding tax evasion and the relationship between personal moral philosophy and such attitudes in a weak tax environment. The results confirm the multidimensionality of tax evasion attitudes. Idealism was negatively related to self‐interest tax evasion attitudes while relativism was positively related to such attitudes. Idealism was also positively related to tax evasion attitudes stemming from concerns about the justice of the tax system. Idealists in a weak tax environment seemingly go through a cognitive reframing process where they recognize that the tax system is unfair, and accordingly tax evasion is a way to serve a different moral absolute, that is of equity, rather than another different moral absolute, which is fulfilling obligations to governments. The results are also explained in light of the suggested low moral intensity of tax evasion among respondents. Policy implications are presented.     

Incentives and Disincentives of Corporate Environmental Disclosure: Evidence from Listed Companies in China and Malaysia

Previous studies on motivations for corporate environmental disclosure (CED) in emerging countries are generally undertheorized and have neglected to investigate disincentives. This study addresses this gap using legitimacy theory to determine whether differences exist between Chinese and Malaysian managers in relation to incentives and disincentives for CED. Our findings reveal that differences exist suggesting that legitimization strategies, if employed, vary and perceptions of legitimacy threat differ between countries. The study also reports that the dominating incentive for managers in both countries is to appear reputable; implying a strategic CED approach is undertaken in an attempt to alter public perceptions about the legitimacy of an organization. Interestingly, the incentive of regulatory pressure was found insignificant in both countries in persuading companies to engage in CED. Finally, potential damage to a company's reputation received considerable support from all respondents revealing a degree of uncertainty about CED. Overall, the study contributes to the literature on CED practices in emerging economies and points to some policy suggestions. © 2015 Wiley Periodicals, Inc.     

Company Financial Performance and ISO 9000 Registration: Evidence from Malaysia

This study investigates factors, including ISO 9000 registration, that impact on corporate performance, in a sample of Malaysian companies. To achieve this objective, the annual reports of 162 companies (81 ISO 9000 accredited companies and 81 non-ISO accredited companies) were collected and a performance evaluation model was estimated. The results of the analysis revealed that factors such as ISO 9000 registration, return on assets (ROA), economic value added (EVA) and industrial category (INDCAT) determine corporate performance.