German,US and Central and Eastern European Stock Market Integration

This paper examines the long-term linkages between seven Central and Eastern European (CEE) emerging stock markets and two developed stock markets, namely the German and the US markets. The stability of the long-run relationships is studied using recursive cointegration analysis. The results reveal that the financial linkages between the CEE markets and the world markets increased with the beginning of the EU accession process. Furthermore, the application of the Gonzalo and Granger (J Bus Econ Stat 13:27–35, 1995) methodology indicates that the examined stock markets are partially integrated, while there is also evidence that the emerging stock markets of Central and Eastern Europe except for Estonia together with the German and the US stock markets, have a significant common permanent component, which drives this system of stock exchanges in the long run. Finally, it is worthwhile to note that the global financial crisis of 2007–2009 caused a slowdown in the convergence process. In addition we find evidence that the Slovenian stock market exhibits a moderate increase in the transitory component and this may be attributed to the Slovenian full membership in the euro area.     

Public policies to enhance regional entrepreneurship: another programme failing to deliver?

Small Business Economics - This paper examines public policies aimed at enhancing entrepreneurship. Drawing upon both theory and prior empirical work, it formulates four tests of policy...     

The Relevance of the Monetary Model for the Euro / USD Exchange Rate Determination: a Long Run Perspective

This study tries to fill a vacuum in the literature on the relevance of economic fundamentals for the Euro / USD exchange rate determination. We adopt the Monetary Model for the Exchange Rate Determination as our testing vehicle and investigate the relevance of various versions of this model over a long time horizon, spanning the period from the inception of Euro till the present time. We rely on cointegration analysis to conduct our empirical research and in accordance to the relevant literature we fail to accept most of the variants of this model. However, we get encouraging results from an expanded version of the Monetary Model where demand and productivity factors appear in the set of the exchange rate determinants.     

Political cycles in Greece’s municipal employment

We consider the politically motivated fluctuations in Greece’s municipal employment, constructing a data-set from primary data and focusing on the composition of municipal employment in terms of employment relationship forms. Our analysis produces strong evidence of pre-electoral manipulation through increases in the number of contract employees. Considering a number of control variables and robustness checks does not affect the key results. Such variables include whether mayors run for reelection, incumbents’ political alignment with central government, partisan shifts, general elections, mayors’ turnover rate, and timing patterns. Our evidence provides insights into Greece’s political economy in the run-up to the current economic crisis.     

Low Inflation vs. Stable Inflation: Evidence from the UK, 1688–2009

This paper investigates the relationship between inflation and inflation volatility. Using annual data from 1688 to 2009, the results show that UK inflation and its volatility have been positively correlated when inflation exceeds a certain value, but negatively correlated when inflation is below this threshold. The evidence also suggests that the break in the relationship occurs between annual inflation rates of 0.6% and 5.5%, which includes both the 2% inflation target of many central banks, and the 3.5% break point predicted by the New Keynesian model of Coibion et al. (2012).     

One size fits all? High frequency trading,tick size changes and the implications for exchanges: market quality and market structure considerations

This paper offers a systematic review of the empirical literature on the implications of tick size changes for exchanges. Our focus is twofold: first, we are concerned with the market quality implications of a change in the minimum tick size. Second, we are interested in the implications of changes in the minimum tick size on market structure. We show that there is a large body of empirical literature that documents a decrease in transaction costs following a decrease in the minimum tick size. However, even though market liquidity increases, the incentive to provide market making activities decreases. We document a strong link between the minimum tick size regulations and the recent increase in high frequency trading activity. A smaller tick enhances the price discovery process. However, the question of how multiple tick size regimes affect market liquidity in a fragmented market remains to be answered. Finally, we identify topics for future research; we discuss the empirical literature on the minimum trade unit and the recent calls for a minimum resting time for quotes.     

Openness to Trade and the Potency of Monetary Policy: How Strong is the Relationship?

Economic theory suggests that an economy's openness to international trade reduces the ability of monetary policy to affect output. Using quarterly data from the 1960:1–1993:4 period for a set of eight countries (Australia, Canada, Germany, Italy, Japan, South Africa, the U.K., and the U.S.A.), this article's empirical results support this theoretical prediction: the more open the economy, the smaller the output effects of a given change in the money supply. This finding, robust across all the different specifications and estimation methods examined, has straightforward implications for stabilization policy. Moreover, it suggests that an economy's net benefit from joining a monetary union is increasing with the economy's openness to foreign trade.     

The day-of-the-week effect is weak: Evidence from the European real estate sector

The day-of-the-week effect for the securitized real estate indices is investigated by employing daily data at the global, European and country level for the period 1990 to 2010. We test for daily seasonality in 12 countries using both full sample and rolling-regression techniques. While the evidence for the former is in line with the literature, the results for the latter cast severe doubts concerning the existence of any persistent day-of-the-week effects. Once we allow our sample to vary over time, the average proportion of significant coefficients per day ranges between 15 % and 24 %. We show that higher average Friday returns evident in previous literature, remain significant in 21 % of the rolling samples. We conclude that daily seasonality in the European Real Estate sector is subject to the data mining and sample selection bias criticism.     

Entrepreneurship,Income Inequality and Public Spending: A Spatial Analysis into Regional Determinants of Growing Firms in Greece

International Advances in Economic Research - One of the key determinants of economic growth, regional prosperity and sustainable development is entrepreneurship. This paper aims to identify...