Do sovereign rating announcements affect emerging market exchange rate correlations? A multivariate DCC-GARCH approach

This article investigates the effects of sovereign credit rating announcements on time-varying exchange rate return correlations for a sample of 11 emerging market countries over the period 2002–2015. The data set covers daily exchange rates and long-term foreign currency sovereign ratings, outlooks and watch list. The pairwise time-varying correlations are derived by corrected Dynamic Conditional Correlation (cDCC) modelling which is a member of multivariate Generalized Autoregressive Conditional Heteroskedasticity (GARCH) models family. Furthermore, to capture the global factor effect, a dynamic-weighted index is created by using dynamic principal component (DPC) analysis. Findings suggest that some of the emerging market exchange rate co-movements are affected by rating announcements. Upgrades of Moody’s and downgrades of Fitch lead to spillovers. Main source of these spillovers are sovereign credit rating changes of European countries, especially Czech Republic and Turkey. Countries with high amount of external debt, large current account deficit and speculative grade are more prone to be influenced by announcements on a foreign country’s long-term sovereign rating.     

Evidence for Financial Contagion in Endogenous Volatile Periods

The objective of this study is to analyze cross‐border contagious dynamics in both foreign exchange markets and stock exchange markets. Propagation is analyzed with respect to the transmission of excessive volatility that is endogenously determined. The contagion process is discussed in the context of financial systems, foreign direct investments and trade. Implementing a vector autoregressive‐multivariate generalized autoregressive conditional heteroskedasticity (VAR‐MGARCH) model, we show that country‐specific turbulence in financial markets is able to create unanticipated financial contagion across countries. Diversified trade and financial relations decrease the risk of exposure to contagion from external markets. The world's largest economies, however, play a price‐setter role, and diversification is of secondary importance. Asymmetric transmission of the empirically predicted contagion prevails in the latter case.     

Subculture as learning context: subcultural music consumption as language,channel and journey

ABSTRACT

Subcultures cultivate alternative and resistive discourses and practices as well as transcendental meanings, experiences and identities. Yet, current knowledge falls short in documenting the ways in which subcultures facilitate learning. Therefore, this study empirically investigates the ways in which music subcultures offer consumers a learning context and potentially transformative process. Via an extensive online and offline ethnographic research design, the findings show how music subcultures enable learning at both the individual and collective levels. Findings reveal that the language of music awakens, the channel of music engages, and the music as journey of experiences facilitates action, navigation from one subcultural scene to another, alternative ways of knowing and critical social learning. Subcultures of music therefore provide consumers with a highly informal and unstructured experience in a participative, (inter)active, creative learning context.     

State‐owned Enterprises,Inequality, and Political Ideology

State‐owned enterprises continue to play a considerable role in many economies. In this study we empirically investigate the connections between these enterprises and inequality as mediated through political ideology. Using cross‐country data on the relative size of the state‐owned enterprise sector, we find strong empirical support for an inverted U‐shaped relationship between its size and income inequality. We also find strong evidence that left‐wing (vis‐a‐vis right‐wing) governments are associated with a larger state‐owned enterprise sector in countries with higher inequality. This result is robust to using cross‐sectional vs. panel data, different identification strategies, and various controls.     

A new perspective on the competitiveness of nations

The capability of firms to survive and to have a competitive advantage in global markets depends on, amongst other things, the efficiency of public institutions, the excellence of educational, health and communications infrastructures, as well as on the political and economic stability of their home country. The measurement of competitiveness and strategy development is thus an important issue for policy-makers. Despite many attempts to provide objectivity in the development of measures of national competitiveness, there are inherently subjective judgments that involve, for example, how data sets are aggregated and importance weights are applied. Generally, either equal weighting is assumed in calculating a final index, or subjective weights are specified. The same problem also occurs in the subjective assignment of countries to different clusters. Developed as such, the value of these type indices may be questioned by users. The aim of this paper is to explore methodological transparency as a viable solution to problems created by existing aggregated indices. For this purpose, a methodology composed of three steps is proposed. To start, a hierarchical clustering analysis is used to assign countries to appropriate clusters. In current methods, country clustering is generally based on GDP. However, we suggest that GDP alone is insufficient for purposes of country clustering. In the proposed methodology, 178 criteria are used for this purpose. Next, relationships between the criteria and classification of the countries are determined using artificial neural networks (ANNs). ANN provides an objective method for determining the attribute/criteria weights, which are, for the most part, subjectively specified in existing methods. Finally, in our third step, the countries of interest are ranked based on weights generated in the previous step. Beyond the ranking of countries, the proposed methodology can also be used to identify those attributes that a given country should focus on in order to improve its position relative to other countries, i.e., to transition from its current cluster to the next higher one.     

Trade and Convergence: A Dynamic Panel Data Approach

The objective of this paper is to provide, theoretically and empirically, an interpretation of comovement between the scale of an economy and its growth rate. I paid special attention to human capital accumulation and international trade environment and emphasized their spillover effects on growth and convergence among countries. 1 employed a technique using a cross-sectional and time series panel. The estimations in my empirical models were done using the nonlinear least-squares method in which I applied a dynamic procedure for an economy along its balanced growth path. I arrived at mixed results. The empirical results show that international spillover effects of human capital accumulation and intermediate goods production have positive and significant effects on the growth process of a nation. The national level of human capital, however, has negative and insignificant effects on this process.     

Does antidumping cause investment and R&D?: Evidence from Turkey

This article employs Turkish firm-level data and analyses the effect of antidumping protection on capital spending and Research and Development (R&D). Using matching techniques and alternative control groups and applying difference-in-difference methodology, we find that antidumping duties imposed by the Turkish government significantly increase fixed investment and R&D expenditures. We also show that antidumping duties are effective in terms of increasing the domestic sales. To our knowledge, our article represents the first attempt to analyse the effect of antidumping policy in Turkey, a very active user of temporary trade barriers, using firm-level data.     

Alternative food consumption (AFC): idiocentric and allocentric factors of influence among low socio-economic status (SES) consumers

ABSTRACT

This paper explores the factors that drive consumer demands for alternative food consumption (AFC) options in western society (i.e. plant-based, organic and local diets) as means to achieve sustainability and a state of food well-being. Specifically, we propose a holistic framework in order to identify factors that influence its adoption: idiocentric (functional, ideological and experiential) and allocentric (situational, sociocultural and institutional). The proposed framework provides a basis for discussion on how marketing can contribute to the establishment of AFC in western society and contribute to sustainability and food-well-being among low socio-economic status (SES) consumers. Marketing and public policy implications of this framework are discussed in light of food consumption by low SES consumers, a target particularly vulnerable to flawed states of food well-being.