Access Pricing,Quality Degradation,and Foreclosure in the Internet

Access to both a local and a global network is needed in order to get complete connection to the Internet. The purpose of this article is to examine the interplay between those two networks and how it affects the domestic public policy towards a domestic provider of local access. We find that a cost-oriented regulation is detrimental to domestic welfare, because it shifts profit to the foreign provider of global access. The optimal policy is that the regulator commits itself to set an access price above costs, possibly the same price as in an unregulated market economy. A regulation of the global access price has a non-monotonic effect on domestic welfare, and there is a potential conflict between international and domestic regulation policy.     

Equity Risk Premium Puzzle: Evidence from Indonesia and Sri Lanka

This paper investigates the equity risk premium puzzle in the Indonesian and Sri Lankan stock markets in order to identify the relationship between the volatility of excess returns and the equity risk premium. The asymmetric impact of negative shocks on the equity risk premium is also examined using threshold and exponential GARCH-M models. We analyse data on the excess returns of the Indonesian and Sri Lankan stock markets from 2004 to 2013, and we find that the impact of the conditional volatility of excess returns on the equity risk premium is not significant in either country. Instead, we find an impact from negative return shocks on the equity risk premium only in Sri Lanka. Therefore, we conclude that investors are not compensated for the conditional volatility of the excess returns in these two markets, while Sri Lankan investors are compensated for the risk of negative shocks.     

Scientific and technological interactions between Russia and Ukraine: Forecasting opportunities and mechanisms for their implementation

The paper presents the research results of an investigation into the state of scientific, technological, trade and economic interactions between Russia and Ukraine in terms of their potential, prospects, and problems impeding their cooperation. It is shown that there is a considerable scientific and technological potential both in Russia and Ukraine. Opportunities and conditions for the modernization of both countries’ economies are shown to depend on the coordinated use of their potentials.     

Measuring and explaining the efficiencies of the United Arab Emirates banking system

Using newly collected data from a survey distributed to all banks in the United Arab Emirates (UAE), this article measures economic efficiency in the banking industry, namely allocative, technical, pure technical and scale efficiency. Employing a nonparametric Data Envelopment Analysis (DEA) approach, the study estimates the efficiency for a cross section of the UAE banks in 2004. The results indicate that the dominant source of inefficiency in the UAE banking is stemming from allocative inefficiency rather than technical inefficiency. Furthermore, the main source of the relatively small size, technical inefficiency in the UAE banking industry is not the scale inefficiency but rather pure technical inefficiency. The results further indicate that the UAE banks are able to use their input resources more efficiently when they have more branches, and that newer banks are performing better than older banks on average. Moreover, the results also show that short experiences of employees affect efficiencies negatively and government ownership tends to reduce efficiency (as the government shares increase in the bank, the efficiency scores get lower). Finally, the most interesting results have to do with finding higher average efficiencies in banks that employ more women, more managers and less national citizens of the UAE.     

Trends and prospects of ensuring energy resources in Ukraine

The article examines the state of power supply in Ukraine for the period from 2000 to 2010. The trend in the Ukraine GDP energy intensity (at purchasing power parity), compared to other countries of the Commonwealth of Independent States, is analyzed. The key points of demand determination and of alternative ways to satisfy it in Ukraine for the period until 2015 are formulated. A forecast of production and consumption of energy resources was conducted in accordance with the expected socioeconomic development of the country through the development of advanced fuel and energy balances.     

Trade Flows,Exchange Rate Uncertainty,and Financial Depth: Evidence from 28 Emerging Countries

This article investigates the effects of real exchange rate uncertainty on manufactures exports from 28 emerging economies, representing 82% of all developing country manufactures exports, and explores the sources of heterogeneity in the uncertainty effects by controlling for the direction of trade (south‐north or south‐south), and the level of financial development of the exporting country. The empirical results show that for more than half of the countries, the uncertainty effect is unidirectional, either south‐south or south‐north, and the median impact is negative. In addition, while we find that financial development augments trade, exchange rate shocks can negate this effect. Last but not least, trade among developing economies improves export growth under exchange rate shocks.     

Design and valuation of debt contracts

This articles studies the design and valuation of debt contractsin a general dynamic setting under uncertainty. We incorporatesome insights of the recent corporate finance literature intoa valuation framework. The basic framework is an extensive form game determined bythe terms of a debt contract and applicable bankruptcy laws.Debtholders and equityholders behave noncooperatively. The firm'sreorganization boundary is determined endogenously. Strategic debt service results in significantly higher defaultpremia at even small liquidation costs. Deviations from absolutepriority and forced liquidations occur along the equilibriumpath. The design tends to stress higher coupons and sinkingfunds when firms have a higher cash payout ratio.     

Determinants of Well‐being and Poverty Changes in Cameroon: 2001–2007

Abstract: This paper identifies and decomposes sources that explain household economic well‐being in Cameroon. It uses the 2001 and 2007 Cameroon Household Consumption Surveys, synthetic variables constructed by the multiple correspondence analysis and econometric approaches that correct for potential endogeneity and unobserved heterogeneity in a step‐wise manner and simultaneously. Sources of well‐being that explain poverty are then decomposed into growth and redistribution components. Variables that significantly explain household economic well‐being are education, health, household size, fraction of active household members, working in the formal sector and area of residence. Decomposition analysis shows that the growth components largely account for changes in deprivation in terms of each regressed‐income source. With the exception of the income source education, redistribution components slowed down progress in alleviating shortfall in other regressed‐income sources. These results have implications for public interventions that affect education and health for all, labour market participation and infrastructure development.