The effects of ownership structure,sub-optimal cash holdings and investment inefficiency on dividend policy: evidence from Indonesia

Review of Quantitative Finance and Accounting - We investigate how a firm’s decision to hold excessive cash or to overinvest could influence its dividend payout policy in Indonesia....     

Resource concentration,institutional quality and the natural resource curse

Employing panel data from 14 regions in Kazakhstan, this investigation aims to discover the effect of energy (point-source) and agricultural (diffuse) resource abundance on economic growth through institutional quality. A fixed effects panel data model and Roger's standard errors model are used to consider the possible endogeneity problem. Kazakhstan has two major export products, oil (point-source) and wheat (diffuse), and in theory these two products have different impacts on growth. Auty (1997), Woolcock et al. (2001) and Isham et al. (2005) found that it is the composition of resources, rather than any kind of natural resource, which is problematic for economic growth. The novelty of this research is that the natural resource endowments are considered as a nonlinear function of institutional quality. In contrast to others, we observe that it is not the type of natural resources that breeds economic failure, but rather their “overabundant” or excess production that is often associated with rent-seeking activities.     

Traveling to your match? Assessing the predictive potential of Plog’s travel personality in destination marketing

This study revisits .Plog’s travel personality model in a true experimental setting and tests the model’s predictive power. The specific aim is to examine whether attitudinal and behavioral responses toward a destination vary as a function of the congruity between the tourist’s travel personality and the characteristics of the destination as perceived from an advertising message. The concept of self-congruity serves as a foundation for the theoretical framework. Results indicate message-personality congruity had a significant influence on visit intention via attitudes as mediators. This study provides theoretical implications for the predictive potential of Plog’s model as well as strategic marketing implications for destinations.     

The Exchange Rate: A Shock Absorber or Source of Shocks in Turkey?

This study investigates the role of the exchange rate as shock-absorber as opposed to a source of its own shocks in Turkey during the period from 1990 to 2009 by employing a structural VAR framework with long-run and short-run restrictions. We find that the economic shocks have predominantly been asymmetric relative to one of the largest trading partner, the US. Our results provide evidence of the fact that while the major source of variability in exchange rates in the pre-2001 crisis period is mainly nominal shocks, a large proportion of the exchange rate variability can be attributed to supply and demand shocks in the post-2001 crisis period. This suggets that, rather than reacting to shocks to the foreign exchange market, such as shifts in risk premia, the exchange rate moves mainly in response to the real shocks during the post-2001 crisis period. Hence, there is a sizeable role for exchange rate stabilization during this period, absorbing those shocks and therefore requiring opposed monetary policy responses.     

Deposit insurance and moral hazard problem: the case of Turkish banking system

We investigate the effect of full deposit insurance introduced in 1994 on the financial performance of Turkish commercial banks. We construct a model, under reasonable assumptions, with deposit insurance where banks undertake excessive risk –?moral hazard risk. Empirical investigation using experimental design approach supports our moral hazard hypothesis. Our findings indicate that banks subject to the moral hazard behaviour show significant increases in foreign exchange position risk and deterioration in capital adequacy relative to their benchmark after introduction of full deposit insurance system. We relate this excessive risk-taking to the moral hazard behaviour by commercial banks. The research results indicate that complete deposit insurance system distorts the incentive structure of commercial banks and thus, prevents proper functioning of market discipline mechanism and leads to the taking excessive risk-taking.     

Is conservative reporting attractive to foreign institutional investors? Evidence from an emerging market

This study investigates the relation between conservative reporting and foreign institutional ownership using a unique dataset of firms in Turkey. In doing so, we distinguish between foreign funds and corporations. Contrary to prior findings, our analysis shows that conservative reporting is not necessarily a desirable accounting feature for foreign institutional investors. We also find that the interplay between conservative reporting and ownership is significantly different between foreign funds and corporations. The estimated negative relation holds only for foreign funds. Further analysis reveals that foreign funds do not find conservative reporting desirable in low-asymmetric information firms and reduce ownership with greater accounting conservatism in such firms. The analysis sheds significant lights on the relevance of conservative reporting in alleviating the negative consequences of asymmetric information.