Public Information Arrival and the Fisher Effect in Emerging Markets: Evidence from Stock and Bond Markets in Turkey

We examine the impact of inflation on nominal stock returns and interest rates in Turkey's emerging economy, which has a moderately high, persistent, and volatile inflation rate. Empirical evidence indicates that Turkey's inflation increased more than nominal stock returns and interest rates, implying that real returns to investors declined during our sample period. Among the different sector indexes we study, the financials sector serves as the best hedge against expected inflation, and the Fisher effect appears to hold only for this sector. We also find that public information arrival plays an important role, especially in the stock market.     

Time-varying managerial overconfidence and corporate debt maturity structure

We examine the impact of managerial overconfidence on corporate debt maturity. We build upon the argument that managerial overconfidence is likely to mitigate the underinvestment problem, which is often the major concern for long-term debt investors. Within this context, we hypothesise that managerial overconfidence increases debt maturity. Our empirical evidence, based on time-varying measures of overconfidence derived from computational linguistic analysis and directors’ dealings in their own companies’ shares, supports this hypothesis. Specifically, we find that the changes in both first person singular pronouns and optimistic tone are positively related to the change in debt maturity. Moreover, we find that the insider trading-based overconfidence of CEO, who is most likely to influence investment decision and thus the underinvestment problem, has a stronger impact on debt maturity than the overconfidence of other directors (e.g. CFO). Overall, our study provides initial evidence for a positive overconfidence-debt maturity relation via overconfidence mitigating the agency cost of long-term debt.     

Fuel Intensity,Access to Finance and Profitability: Firm-Level Evidence from China

Sustainability and energy economics together as a field has rapidly developed in recent years. However, it is still limited of the literature regarding the effect of energy on firm performance. This article fills the gap by providing empirical evidence from China on the fuel intensity-performance link at the firm level. Our findings are summarized as follows: (i) firms’ fuel intensity significantly constrains the firms’ profitability and the constraint effect is significantly greater for firms with no access to finance; (ii) an increase in fuel intensity reduces profitability by intensifying the financial constraint effect; and (iii) financial access moderates the constraint effect of fuel intensity on firm’s performance. The policy implications of the findings are discussed.     

The role of electronic word of mouth,conventional media,and subjective norms on the intention to purchase <Emphasis Type="Italic">Sharia</Emphasis> insurance services

The aim of this study was to investigate the effect of electronic word of mouth (eWOM) and conventional media on subjective norms and intention to purchase Sharia insurance in Indonesian Muslim society. The research data consisted of 458 Muslim clients who were members of an online community and also policy holders of Sharia insurance in the three largest cities in Indonesia: Jakarta, Semarang, and Surabaya. This study used purposive sampling and structural equation modeling. The research showed that eWOM and conventional media can affect subjective norms. Additionally, subjective norms have a significant effect on the intention to purchase among Sharia insurance customers. This study validated the importance of the variables of eWOM and conventional media in influencing subjective norms and intention to purchase. For Sharia insurance company management, this study can serve as a very useful reference in drafting and formulating campaign strategies. This study also justifies the integrated relationship between eWOM and conventional media with subjective norms and intention to purchase Sharia insurance.     

Who drives whom ‐ sukuk or bond? A new evidence from granger causality and wavelet approach

Sukuk is a highly appealing alternative instrument of conventional bond in the financial market over the last two decades. To a certain extent, the market players assume sukuk as the same as bond. However, sukuk has its own fundamental asset backed principles, whereas bond is backed by debt. The objective of the study is to examine the Granger‐causality and lead–lag relationship between sukuk and bond by using the data of the Malaysian Government securities return for both conventional and Islamic instruments. The data for every working day of 7 years covering the period from January 31, 2007 to December 31, 2013 were collected from Bloomberg database. The yield returns of both securities have been plotted for each six months of a year. This study applied both Granger‐causality and dynamic co‐movement techniques such as, continuous wavelet transforms (CWT) coherence for analyzing the temporal evolution of the frequency content of both securities by decomposing each period into different time scales. The empirical findings of the paper reveal that with a bit of exception, there is a causal relationship between sukuk securities and conventional bonds for a given period of time. For robustness, this study applied the wavelet coherence approach and found that bond is led by sukuk in the long term investment horizon rather than in the short term. Our findings relating to the lead‐lag relationship between sukuk and bonds have important implications in terms of policy regulations and investment management. Future research and market practices could reinvestigate the differences between these two securities across different markets and types.     

Mobilizing knowledge: determining key elements for success and pitfalls in developing community-based tourism

Community-based tourism (CBT) has often been cited as an alternative to mass tourism and an approach for tourism to become more sustainable. If developed well, CBT can become a poverty alleviation mechanism and a way to access improvements in quality of life, providing empowerment and greater economic benefit to individuals in local communities. Despite the plethora of literature on CBT and evaluation of models, there is little analysis of the facilitators and barriers to achieving it. Through the use of case studies in both academic and grey literature, this paper serves as an instructive review of the CBT literature to synthesize the key elements of success and the challenges.     

Corruption and public spending on education and health

Existing country and regional studies show that the effect of corruption on public spending on health and education is mixed. This letter reveals that the effect of corruption on health and education spending is significant and non-linear in a panel of 134 countries observed over two decades: For an overwhelming majority of countries, corruption has a positive effect on the share of public resources spent on public health and a negative effect in the case of education. The results presented are robust to several econometric challenges ignored in the literature.     

Political Party Affiliation of the President,Majority in Congress,and Sin Stock Returns

We find that in contrast to the stock market, which performs better during Democratic presidencies, “sin” stocks—publicly traded producers of tobacco, alcohol, and gaming—perform better during Republican presidencies and even more so when the Republican presidency is accompanied by a Republican majority in at least one chamber of Congress. We examine whether sin firms use contributions to establish connections with politicians and find that sin firms contribute more to Republican candidates and that these contributions are greater when Republicans are in power. We also find a positive relation between political contributions and future returns. The relation is stronger for contributions to Republicans.     

Impact of the stock market capitalization and the banking spread in growth and development in Latin American: A panel data estimation with System GMM

This research is aimed at assessing the impact of the stock market capitalization and the banking spread in per capita economic growth (as a proxy of economic development) in the major Latin American economies during period 1994–2012. To do this, a panel data model is estimated with both system and difference Generalized Method of Moments. The main empirical findings are that economic growth in the countries under study is positively impacted by the stock market capitalization and negatively by the banking spread. Typical problems of multicollinearity and autocorrelation appearing in panel data analysis are corrected under the proposed methodology.     

Implementing New Institutional Logics in Pioneering Organizations: The Burden of Justifying Ethical Appropriateness and rustworthiness

This mixed-methods case study describes the experiences of a rural health organization in Canada that was a pioneer in undergoing institutionally driven radical change. This change was advocated by senior managers and physicians with the strong backing of the government. The senior managers and physicians made a strong case for the radical change and argued that a focus on efficiency and wellness would lead to improved service and quality of patient-care. However, this radical change initiative was resisted by nurses and support staff who perceived that these changes were being driven by market-based institutional logics and questioned their ethical appropriateness in a public system. They also expressed a lack of trust given the large-scale layoffs in a prior restructuring. These findings run counter to extant theory by highlighting the role of agency despite institutional pressures. Specifically, change implementers not only face the burden of justifying ethical appropriateness of institutional logics, but also are required to engage in persuasive discourse that these institutional logics protect the interests of the members.