ISSN: 2056-3736 (Online Version) | 2056-3728 (Print Version)

Performance of the Greek banking sector pre and throughout the financial crisis

Iliana G. Chatzi, Mihail N.Diakomihalis and Evangelos Τ. Chytis

Correspondence: Mihail N.Diakomihalis,

Department of Accounting and Finance, Technological Educational Institute of Epirus, Greece

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This study provides an in depth comparative analysis among Greek Commercial Bank institutions listed in Athens Stock Exchange Market, during time period from 2006 to 2012. The analysis is based on CAMEL methodology. The period 2007 to 2009 is characterized by high profitability, liquidity and high capital adequacy. However, the eruption of the economic crisis in Greece during 2009 and its ominous impacts is revealed on the bank financial statements and reports. The results derived from the CAMELS evaluation have been cross-tested using the Fixed Effects Model in a panel data analysis, which verify that before crisis the traditional ratios of are statistically significant, while the Sensitivity and Liquidity variables appeared to be the only rating components that provide insights into the banks financial situation during the crisis period. We conclude that changes in the economic environment and the emergence of new risks should be considered from both, bank managers and regulators, by the implementation and evaluation of Banks’ rating system.


  Camels, Economic crisis, Greece, Banking sector, Efficiency analysis


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Cash Holdings and Firm Characteristics: Evidence from UK Market

Efstathios Magerakis, Costas Siriopoulos and Athanasios Tsagkanos

Correspondence: Athanasios Tsagkanos,

Department of Business Administration, University of Patras, Greece

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This paper investigates the determinants of UK corporate cash holdings during the period 1980-2012. The global and long term phenomenon of corporate cash pilling has drawn significant attention from researchers. Similarly, this study aims at shedding light on the empirical relationship between cash holding and specific firm characteristics. The empirical findings suggest that cash holdings are positively related to investment opportunity, as R&D and market to book ratio. Cash ratio is also positively related to industry cash flow volatility and negatively affected by cash flow, net working capital, capital expenditures, leverage, tax expenses, age and size. Regarding the development of the determinants of cash holdings, the study indicates that three major variables influenced cash holdings over the years of analysis. In particular, leverage, tax regime and capital expenditures significantly affect the corporate liquidity in UK market. Furthermore, the results suggest that cash holdings are mostly defined by trade off theory. Indeed, our findings offer stimulating insights on the factors that determine the firms’ cash holdings during the past three decades.


  Cash holdings, trade-off model, pecking order theory, free cash flow theory, liquid assets.


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Democracy, Political Stability and Economic performance. A Panel Data Analysis

Militiades N. Georgiou, Nicholas Kyriazis and Emmanouil M. L. Economou

Correspondence: Emmanouil M. L. Economou,

Department of Economics, University of Thessaly, Greece

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In the present paper we undertake to link political stability under democracy with a set of indicators for economic freedom and financial crises, using panel data analysis. The sample covers annually the period 2000-2012 for selected European Union (EU) member-states, USA and Japan. The results support our main thesis, that political stability in democratic regimes is positively related to the set of economic freedom indicators and negatively to financial crises, because greater economic freedom influences positively investment and economic growth, while financial crises, which lead to austerity policies, which again lead to recession-depression, increase dissatisfaction among citizens with the workings of democracy and thus, to the rise of extremist parties. Our findings support the idea that political stability in democratic regimes is linked to economic stability and growth and vice-versa.


  democracy, economic freedom, financial crisis, panel data analysis.


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Commodity-Price Volatility, Exchange Market Pressure, and Macroeconomic Linkages: Evidence from Latin America

Scott W. Hegerty

Correspondence: Scott W. Hegerty,

Department of Economics, Northeastern Illinois University, USA

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As a major source of commodity exports, Latin America has long been susceptible to external shocks, that continue to this day. With prices falling for oil, copper, and other key products, it is important to study the effects of commodity-price volatility on the region’s macroeconomies. Using Principal Components Analysis, this study creates an index of Latin American commodity prices. This index’s volatility is then entered into a VAR that includes exchange market pressure (EMP), U.S. stock prices, and other macroeconomic variables. Granger causality and impulse-response functions show that variables such as growth are more affected by commodity-price volatility than is EMP. One key finding is that commodity-price risk reduces economic growth in Mexico, Chile, and Peru, but appears to increase Brazil’s growth rate. Further exploration might help reveal possible differences in Brazil’s economic structure that might drive this result.


  Commodity Prices, Volatility, Exchange Market Pressure, Latin America, Vector Autoregression


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Hegerty, S.W. (2013).Exchange market pressure, output drops, and domestic credit: Do Emerging Markets Behave Differently? Economics Bulletin,33(4), 2583-2595.

Hegerty, S.W. (2014). Exchange market pressure, commodity prices, and contagion in Latin America. Journal of International Trade & Economic Development23(1), 56-77.

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Are Japanese Stock Prices Important Deterministic Elements of Exchange Rate Returns?

Yutaka Kurihara

Correspondence: Yutaka Kurihara,

Department of Economics, Aichi University, Japan

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This paper examines whether stock prices in Japan show indicator properties for the US-Japan exchange rate using an exchange rate premium model for the short-term. Empirical results show that changes in short-term interest rate flows, stock index differentials (US-Japan), and exchange rate premiums (Japanese yen/US dollar) exhibit consistent indicator properties for Japanese stock prices. The findings provide support for the arguments that financial variables exhibit indicator properties for exchange rate dynamics. In uncovered interest rate parity, there is a premium; however, the premium affects the spot exchange rate significantly. Exchange rates from the 2000s are determined by financial assets and show a strong difference from the 1990s.


  Asset prices; Exchange rates; Premium; Stock prices


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Exploratory Panel Data Evidence on the Relative Efficacy of Real Federal as Opposed to Real State Cigarette Excise Taxes in Reducing Cigarette Smoking in the United States

Fabrizio Rossi, Richard J. Cebula and Don Capener

Correspondence: Richard J. Cebula,

Davis College of Business, Jacksonville University, USA

pdf (782.55 Kb) | doi:


Within the context of the fixed-effects model, this study uses a2002-2007state-levelpanel dataset of the United States to investigate the relative effectiveness of real (constant-dollar) federal cigarette excise taxation versus real (constant-dollar) state cigarette excise taxation in reducing cigarette smoking in the United States. The empirical estimates in this study find that each of two aggregate measures of the extent of cigarette smoking, namely, the number of packs of cigarettes smoked per capita annually and the percentage of the population classified as smokers, is a decreasing function of both the federal cigarette excise tax and the state cigarette excise tax. However, it is also found that a given percentage increase in there all federal excise tax has a much greater negative impact on both the number of packs of cigarettes smoked per capita annually and the magnitude of the percentage of the population classified as smokers than does an equal percentage increase in the real state cigarette excise tax.


  cigarette smoking, federal cigarette excise taxation, state cigarette excise taxation


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Time-Varying Versus Fixed Weights in Exchange-Market Pressure Indices: Evidence From Tests Using Latin American Data

Scott W. Hegerty

Correspondence: Scott W. Hegerty,

Department of Economics, Northeastern Illinois University, USA

pdf (782.55 Kb) | doi:


Years after the 2008 Global Financial Crisis, currencies worldwide are still susceptible to spillovers not only from foreign currency markets, but also from shocks to stock or commodity prices. Understanding these spillovers is essential for policymakers to respond properly, yet defining ―crisis‖ periods can often be difficult. This paper proposes two alternative weighting schemes that can be used in the creation of an index of ―exchange market pressure‖ (EMP), constructing them, as well as a more traditional index, for five Latin American nations and three other emerging markets. Vector Autoregressive (VAR) analysis shows that the two new indices are less likely to find evidence of currency spillovers. We therefore conclude that these differences among measures make the new indices less likely to replace the baseline measure in econometric studies.


  Exchange Market Pressure, Weights, Time Series, Latin America


Bertoli, S., Gallo, G.& Ricchiuti, G. (2010). Exchange market pressure: Some caveats in empirical applications. Applied Economcs,42(19), 2435-2448.

Eichengreen, B., Rose,A.,and Wyplosz, C. (1996). Contagious currency crises: First tests. Scandinavian Journal of Economics,98(4), 463-484.

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Hegerty, S.W. (2013). Principal component measures of exchange market pressure: Comparisons with variance-weighted measures. Applied Financial Economics, 23(18), 1483-1495.

Hegerty, S.W. (2014a). Exchange market pressure, commodity prices, and contagion in Latin America. Journal of International Trade & Economic Development, 23(1), 56-77.

Hegerty, S.W. (2014b). Measuring exchange market pressure and its contagion in the East African Community. South African Journal of Economics,82(2), 239-257.

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Pesaran, M.H.,&Shin, Y. (1998). Generalised impulse response analysis in linear multivariate models, Economics Letters,58, 17-29.

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Sims, C.A. (1980). Macroeconomics and reality. Econometrica, 48, 1-48.

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The exposure of technology and knowledge intense sectors to the business cycle

Werner Hölzl, Serguei Kaniovski and Andreas Reinstaller

Correspondence: Andreas Reinstaller,

Austrian Institute for Economics Research (WIFO), Austria

pdf (782.55 Kb) | doi:


This paper studies the business cycle sensitivity of industries using different industry groupings. The results show that technologically intense industries are heavily affected by business cycles. While the overall importance of business cycles for long-run growth seems to be rather limited, we observe for industries with high technology intensity that business cycles may have persistent long-run effects on sectoral performance.


  technology shocks, business cycle, long-run restrictions, sectoral response, structural change


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Aghion, P., Angeletos, G. M., Banerjee, A., Manova, K., "Volatility and growth: Credit constraints and the composition of investment", Journal of Monetary Economics, 2010, 57(3), pp. 246–265.

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Gali, J., 1999. Technology, employment, and the business cycle: Do technology shocks explain aggregate fluctuations? American Economic Review 89, 249-271.

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