ISSN: 2056-3736 (Online Version) | 2056-3728 (Print Version)
Thet Mon Soe
Correspondence: Thet Mon Soe, thetm185@gmail.com
Saitama University, Japan
pdf (349.63 Kb) | doi: https://doi.org/10.47260/bae/7214
This paper aims to examine the effects of inward foreign direct investment (FDI) on economic growth and domestic investment at the regional-level and sectoral-levels of Myanmar economy, by applying a panel vector-autoregressive model framework. The major research questions are twofold: whether inward FDI causes economic growth or economic growth attracts inward FDI, and whether inward FDI crowds in or crowds out domestic investment. The main findings are summarized as follows. In the regional level analysis, there is a difference in the FDI-economic growth relationship between the FDI-intensive region and the FDI-less-intensive one. In the FDI-intensive region, the bidirectional FDI-economic growth relationship is found, supporting the both hypotheses of FDI-driven growth and growth-driven FDI, while the FDI-driven growth effect is larger than the growth-driven FDI one. In the FDI-less-intensive region, on the other hand, FDI deteriorates economic growth whereas economic growth still induces FDI. The difference in the FDI-economic growth relationship between the regions might come from the gap in agglomeration effects. In the sectoral level analysis, the crowd-in effect of FDI on domestic investment is found in the non-oil and gas sectors, since the FDI in the oil and gas sector has less linkages to domestic investment.
Inward foreign direct investment, Myanmar, Economic growth, Domestic investment, Panel vector autoregressive model
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Huaibing Yu
Correspondence: Huaibing Yu, HuaibingYu@my.unt.edu
Department of Finance, University of North Texas, USA
pdf (349.63 Kb) | doi: https://doi.org/10.47260/bae/7213
Based on data of 6 major developed stock markets, this paper provides empirical evidences about how stock markets across the globe behave during the Covid-19 global pandemic. Evidences show that the movements of most stock market indices were individually dependent on the development of the Covid-19 pandemic in the corresponding countries during the pre-bottom period. However, this phenomenon largely faded away after stock markets bottomed out and entered into the recovery stage. Vector error correction model (VECM) confirms the cross-markets equilibrium during the Covid-19 pandemic and the majority of stock markets are expected to restore to new equilibriums relatively quickly if exogenous shocks are introduced in the future.
Covid-19 Pandemic, Stock Market, Cointegration, Market Behavior, Market Impact
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Costas Siriopoulos and Maria Skaperda
Correspondence: Costas Siriopoulos, Konstantinos.Syriopoulos@zu.ac.ae
College of Business, Zayed University, U.A.E.
pdf (349.63 Kb) | doi: https://doi.org/10.47260/bae/7212
This study analyses the performance of US Mutual Funds, from the perspective of Long Memory (LM), exploring if the returns of MFs are systematic due to their active management or they are random. The sample was 200 US equity MFs, from four categories, Large Cap, Middle Cap, Small Cap and World Stock, both 1- and 5-stars rating funds according to Morning Star rating. The time period was starting between 1981 and 2006 and ending 2016. Rescaled Range Analysis (R/S) employed for the Hurst exponent estimation, so to detect LM. Using Surrogate Data Analysis (SDA), the study was extended to Hurst exponent estimation for surrogate time series. The findings suggest that the selection of a MF presents a lot of complexity for investors. The 5-star MFs, with high qualified, and so expensive managers, tend to achieve random returns, while the returns of 1-star MFs, are more systematic. These MFs have higher fees than the 5-star MFs, but the management fees paid are quite inferior. This leads to the conclusion, that it might be preferable to pay for gaining an almost the same, but systematic return than to pay for the ties of the manager.
Hurst exponent, Rescaled Range Analysis, Long Memory, Surrogate Data Analysis, Bootstrap, Mutual Fund Performance, Morning Star.
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Gengnan Chiang and Chin-Chi Liu
Correspondence: Chin-Chi Liu, liueric1213@gmail.com
Department of Finance, Ling Tung University, Taiwan
pdf (349.63 Kb) | doi: https://doi.org/10.47260/bae/7211
The purpose of this study is to explore whether the regulatory quality influences the relation between life insurance development and economic growth by applying a nonlinear panel smooth transition regression (PSTR) model. Using the data from Worldwide Governance Indicators (WGI) to assess the soundness of regulatory quality, this paper finds that the relationship between life insurance development and economic growth is significantly positive in the countries with relatively better regulatory quality. Our findings not only indicate that sound regulatory quality could encourage the growth effect of life insurance sectors but also have far-reaching practical implications for other economies to realize regulatory quality should matter for the development of the economic growth.
Regulatory quality, Life insurance development, Economic growth, Nonlinear panel smooth transition regression (PSTR) model.
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Amal Essayem, Wided Khiari and Azhaar Lajmi
Correspondence: Azhaar Lajmi, azhaar.lajmi@yahoo.fr
University of Tunis, Tunisia
pdf (349.63 Kb) | doi: https://doi.org/10.47260/bae/7210
The purpose of this paper is to understand determinants of liquidity buffers in the GCC’s Islamic banks. We apply the model of Bonner et al. (2005) on balanced panel data, bank specific data and annual balance sheet data for all reporting banks. The data cover a period of 8 years from 2004 until 2011 for 24 Islamic banks from GCC region that includes mainly Saudi Arabia, United Arab Emirates, Bahrain and Kuwait. Results show that liquidity buffers negatively related to the size of the bank, the capitalization is negatively related to liquidity buffers in Islamic banks in the GCC region and the ratio of deposits is negatively related to liquid assets holding in Islamic banks, but not statistically significant. In addition, we found a positive relationship between the profitability and liquidity buffers in Islamic banks of the GCC region. Finally, we found a different result when it comes to macroeconomic variables. First we noticed a negative impact of the inflation on liquidity buffers and second, a positive significant relationship between GDP real growth and liquidity buffers in Islamic banks in the GCC region. Our findings can serve as a tool for policy makers in the GCC region to adopt sounder strategies of liquidity management.
Islamic banking, GCC region, Liquidity Buffers, panel regression
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Sangheon Han and Dong Joon Lee
Correspondence: Sangheon Han, han-sh@nucba.ac.jp
Nagoya University of Commerce and Business, Japan
pdf (349.63 Kb) | doi: https://doi.org/10.47260/bae/729
This paper examines the location selection by retailers in a bilateral duopoly. We suppose that the location is unconstraint. We compare two cases. One case is that each retailer incurs its transportation costs in order to purchase goods from its manufacturer. Another case is that it does not pay the transportation costs. Our conclusions are two. One is that both retailers locate inside the city, when retailers incur the transportation costs. The other is that consumer surplus and social welfare is larger under retailers’ paying transportation costs than under retailers’ no-paying transportation costs.
Unconstraint Location, Consumer Surplus, Social Welfare, Vertical Structure
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Sheng-Yeh, Wu and Guan-Ru, Chen
Correspondence: Guan-Ru, Chen, dionysiac@isu.edu.tw
International Finance Department, I-Shou University, Taiwan
pdf (349.63 Kb) | doi: https://doi.org/10.47260/bae/728
This study develops a two-period model in which the manufacturer determines a price floor and sets production output prior to resolution of uncertainty. The closer the distance between the minimum price and the high-demand-state price, the higher the degree of price rigidity. Solving for the minimum resale price and production output, the model indicates that asymmetric price transmission could be a characteristic of competitive markets. The retail price in a highly concentrated retail market might be lower than that in a retail market with fierce competition. The relationship between price adjustments and the market competition suggests that the reason underlying price rigidity should be considered while formulating the antitrust and monetary policies.
Price Rigidity, Price Floor, Uncertainty
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Anastasiou Athanasios, Kalamara Eleni and Kalligosfyris Charalampos
Correspondence: Anastasiou Athanasios, athanastas@uop.gr
Department of Management Science and Technology, University of Peloponnese, Greece
pdf (349.63 Kb) | doi: https://doi.org/10.47260/bae/727
The purpose of this paper is to estimate the extent of tax evasion in Greece for the period 1980-2018. For this estimation we have chosen to apply an indirect method of approach to the issue, as developed by Tanzi, based on the assumption that estimating the size of the shadow economy can lead us to a safe measurement of the extent of tax evasion. More precisely, through the Currency Demand approach which is based on the basic assumption that activities under the shadow economy constitute a direct response of taxpayers to the increased tax burden and also that cash is mainly used to conduct such transactions and of the wealth derived from them, the size of the shadow economy was determined using the method of the University of Leicester research team and then the level of tax evasion was assessed by imposing an annual tax rate on it as a ratio of total tax revenue to Gross Domestic Product. The results showed a significant increase of the size of tax evasion during the period considered, while the model estimation showed that most of the tax evasion came from direct taxation.
Macroeconomics, public economics, applied economics, tax evasion, Greece
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Yaya KEHO
Correspondence: Yaya KEHO, yayakeho@yahoo.fr
Ecole Nationale Supérieure de Statistique et d’Economie Appliquée (ENSEA) Abidjan, Côte d’Ivoire
pdf (349.63 Kb) | doi: https://doi.org/10.47260/bae/726
A growing body of research has examined the determinants of CO2 emissions. This literature has used mean-based regression methods in which only the mean effects of covariates are estimated. In this paper, we use the quantile regression methodology for a panel of 45 countries to investigate whether or not the factors that drive pollution do so in the same way for high and low pollution countries. The Environmental Kuznets Curve is confirmed and the positive effect of economic development is larger in low pollution countries. Energy consumption and financial development increase CO2 emissions and their effects are larger in countries with lower levels of pollution. Industrialization increases pollution especially in countries with higher level of pollution. Openness to trade and urbanization are negatively related to emissions in low pollution countries. All these findings suggest that pollution control policies should be tailored differently across low and high pollution countries.
CO2 emissions, Energy consumption, GDP, trade openness, financial development, quantile regression.
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Apostolos Kiohos
Correspondence: Apostolos Kiohos, akiohos@uom.edu.gr
Department of International and European Studies, University of Macedonia, Greece
pdf (349.63 Kb) | doi: https://doi.org/10.47260/bae/725
Non- Life and Life Insurance companies are the main expedients of risk transfer and risk management procedure in the economy and the society. This paper examines, in eight worldwide advanced insurance markets, whether there are transmissions of news of conditional volatility from the non-life to life insurance sector. The reason is that, regularly, non-life insurance risks have higher volatility and they are less predictable than life insurance risks. A GJR - GARCH model is used to test these relationships for the period January 1st 1990 to June 28th 2019 using daily trading observations for each listed insurance index. The results suggest that the French and the Australian non-life insurance sectors influence their life insurance sectors to a greater extent than the other countries insurance indices under study. There is also evidence that the leverage effect indicates that bad news concerning the non-life insurance index shows a more intense impact on the volatility of the life insurance index than the good news in the majority of the countries under study. However, bad and good news are symmetrical in French and Australian insurance markets.
Insurance risks, Volatility, Non- Life Insurance, Life Insurance, GJR GARCH
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