Globalizations and bank performance in China

The paper provides for the first time empirical evidence on the impact of economic globalization on the performance of banks operating in the Chinese banking sector. The empirical findings from this study suggest that the well capitalized banks tend to be more profitable, while expense preference behavior exerts negative impact on bank profitability in China. By examining different components of economic globalization, we find that greater economic integration via higher trade flows, cultural proximity, and greater political globalization have significant and positive influence on bank profitability levels. The impacts of personal contacts and information flows seem to work in favour of the Chinese banks. During the period under study, the empirical findings seem to suggest that liberalization (restrictions) of the capital account exerts positive (negative) influence on the profitability of banks operating in the Chinese banking sector.     

Social Media and Purchasing Behavior: A Study of the Mediating Effect of Customer Relationships

Overwhelmed by the use of social media in augmenting human interactions, researchers have developed special interest in understanding the use of social media in developing strong and customized relationships with customers. In line with this, the current study aims to explore the impact of social media on purchasing behavior with mediating effect of customer relationship. The findings indicate that majority of the respondents use social media for purchasing purpose and there is a positive relation between social media and customer relationship, as well as social media and purchasing behavior, with customer relationships fully mediating and enhancing the relationship between social media and purchasing behavior. It has been also found that the majority of the respondents use social media for purchasing purposes. This study offers new insights into the conceptual development and understanding of social media in enhancing customer relationships and affecting purchasing behavior. The study acts as a strong support and aid towards developing and managing global customer relationships through the use of social media.     

The value relevance of major media advertising expenditures: Some U.K. evidence

This study examines whether ACNielsen MEAL major media advertising expenditure measures, that are publicly available at a cost, have value relevance. Our results suggest that these advertising-expenditure measures are positively associated with market value. We also find little difference in the value relevance of these expenditures among different sizes of firms. Value relevance is found to be present only for nonmanufacturing firms. This suggests that the costly information provided by ACNielsen MEAL surveys may be potentially useful to market participants in valuing firms, at least for nonmanufacturing firms.     

Measurement of cost inefficiency with safety first measure of risk

The objectives of this paper are to incorporate a measure of risk aversion in the translog frontier cost function to estimate cost inefficiency. Risk-averse behaviour of farmers is hypothesised to reduce efficiency by leading to a situation in which the marginal value product of an input is less than price. In developing agriculture, farmers are aware of their subsistence needs and seek to minimize the probability of their incomes falling below a disaster level of income. Using such a safety first principle, a measure of risk-taking is developed and explained by socio-economic characteristics. This measure is used in the translog cost function as a fixed input and, using the frontier approach (with half normal distribution of inefficiency disturbance), a measure of cost inefficiency is obtained. This is related to socio-economic characteristics such as education, assets and holding size. A survey data of 436 farmers for the North-West Frontier Province of Pakistan is used to reach policy conclusions for reducing cost inefficiency.     

Bond Market Development,Economic Growth and Other Macroeconomic Determinants: Panel VAR Evidence

This paper examines causal relationships between bond market development, economic growth and four other macroeconomic variables in 35 countries for the period 1993–2011. Bond market development is defined in terms of the significance and presence of public sector, private sector, and international bond issues. Additional covariates being considered are the inflation rate, the real effective exchange rate, the real interest rate, and a measure of openness to international trade. We use a panel vector auto-regression model to reveal the nature of Granger causality among these variables. Specifically, we find that bond market development and the four macroeconomic covariates may be long-run causative factors for economic growth. Thus, policy makers seeking to foster economic growth are warned to check multi-causal studies involving all these variables before setting their policies.     

Innovation,financial development and economic growth in Eurozone countries

Using a panel vector auto-regressive model, we study interactions between innovation, financial development and economic growth in 18 Eurozone countries between 1961 and 2013. We focus on whether causality runs between these variables both ways, one way, the other way or not at all. Our empirical results show that development of the financial sector and enhanced innovative capacity in the Eurozone contributes to long-term economic growth in the countries in the region.     

Do financial distress and liquidity crises affect value and size premiums?

This study investigates the impact of liquidity crises on the relationship between stock (value and size) premiums and default risk in the US market. It first examines whether financial distress can explain value and size premiums, and then, subsequently, aims to determine whether liquidity crises increase the risk of value and size premium investment strategies. The study employs a time-varying approach and a sample of US stock returns for the period between January 1982 and March 2011, a period which includes the current liquidity crisis, so as to examine the relationship between default risk, liquidity crises and value and size premiums. The findings indicate that the default premium has explanatory power for value and size premiums, which affect firms with different characteristics. We also find that liquidity crises may actually increase the risks related to size and value premium strategies.     

Economic growth and the development of telecommunications infrastructure in the G-20 countries: A panel-VAR approach

This paper examines the linkages between the development of telecommunications infrastructure (DTI), economic growth, and four key indicators of operation of a modern economy: gross capital formation, foreign direct investment inflows, urbanization rates, and trade openness. By studying the G-20 countries over the period 1991–2012 and employing a panel vector auto-regressive model for detecting Granger causality, we find a network of long-run causal connections between these variables, including bidirectional causality between DTI and economic growth.