Internationalisation,growth and pay inequality: a cointegration analysis for Turkey, 1970–2007

The nature of the internationalisation-growth-inequality nexus is very complex; and therefore, not surprisingly, there is no consensus on whether increasing openness to trade leads to higher inequality or not – in fact, there is even no full understanding on the impact of the openness on the economic growth. In the case of Turkey it is observed that there is relatively little empirical work that addresses the issue of inequality. Considering this fact, the study aims to provide some more evidence on the complex relationship between trade openness, foreign direct investment, economic growth and pay inequality by utilising a combination of different Theil Indices of pay inequality. The paper utilises the Johansen Cointegration and Granger Causality methods. Our findings yield that higher economic growth resulting from trade openness comes with higher pay inequality.     

Time‐Varying Capital Requirements and Disclosure Rules: Effects on Capitalization and Lending Decisions

We investigate how banks’ capital and lending decisions respond to changes in bank‐specific capital and disclosure requirements. We find that an increase in the bank‐specific regulatory capital requirement results in a higher bank capital ratio, brought about via less asset risk. A decrease in the requirement implies more lending to firms but also less Tier 1 capital and higher bank leverage. We do not observe differences between confidential and public disclosure of capital requirements. Our results empirically illustrate a tradeoff between bank resilience and a fostering of the economy through more bank lending using banks’ capital requirement as policy instrument.     

Neoliberalization of Istanbul's Nightlife: Beer or Champagne?

This article shows how the transformation of Istanbul's entertainment industry and of Beyo?lu, Istanbul's oldest, largest and the most diverse entertainment district, represents and reproduces spatial and economic divisions in the city. We argue that these differences also become compounded and intertwined with distinctions in consumption and taste. Taking a simultaneous look at the spatial, economic and symbolic transformations of the entertainment industry enables us to understand how and why these intense divisions emerge, and what kind of contestations, rationalizations and resistance strategies are at work in this transformation. A major contribution of this article is to document and discuss the political economy of the process of urban transformation in the city through the lens of the entertainment industry, providing an interesting case of ‘neoliberalism on the ground'. Examining the neoliberalization of nightlife in a relatively understudied context, Istanbul, also reveals that its segmentation and spatial inequality are not just determined by political economy but are also constitutive of it. By adding the concept of ‘image consumption' and taste distinctions into the analysis, the article also uncovers the symbolic nature of the ongoing transformations. Finally, exploring Beyo?lu as a district in transition with persistent contestations contributes, in turn, to the right to the city debate.     

An Options Approach to Valuing Expansion Flexibility in Flexible Manufacturing System Investments

Flexibility in manufacturing processes provides an ability to change or even reverse the decisions made in earlier periods. The traditional economic evaluation methods of investments in flexible manufacturing systems ignore the value of flexibility, which should be one of the key issues in the justification process. Options approach appears as a means of overcoming the limitations of conventional discounted cash flow methods. In this work, a methodology for valuing expansion flexibility of flexible manufacturing systems is presented. Expansion flexibility in a phased manufacturing investment can be valued by viewing an initial investment as being analogous to purchasing an option to exchange one risky asset for another risky asset within a time period from the initial investment. While keeping the option to expand is of value, a thorough analysis requires that the opportunity cost of delaying expansion be taken into account. In this paper, an analytic approximation methodology for valuing sequential American exchange options on dividend paying stocks is employed for valuing expansion flexibility. A comprehensive numerical example is presented to illustrate the approach, and sensitivity analyses are performed.