Journal of Advances in Economics and Finance

6

Authors: Andrew J. Sherbo, Ryan Finn

Research Reports on Initial Public Offerings (IPOs) offer analysts with unique challenges. There is little, if any, financial background on the corporation and these Reports can be very influential as the company goes public for the first time. We examined 692 Research Reports issued on nearly 200 IPO’s during 2013 and found their Target Stock Price (TSP) accuracy to be very respectable when compared to Reports issued on mature companies. We looked at IPO Reports issued by at least one analyst with a Chartered Financial Analyst (CFA®) designation. These results showed a slightly higher, accuracy rate than reports issued by non-CFA analyst(s). Finally, we ranked twelve securities firms on their TSP accuracy rates.

8

Authors: Yu Hsing

Applying the aggregate demand and aggregate supply (AD/AS) model and based on a quarterly sample during 2001.Q1 – 2016.Q3, this paper finds that real GDP in Thailand has a positive relationship with the real effective exchange rate, government debt as a percent of GDP, labor productivity, the real oil price and a negative relationship with the real interest rate, real labor cost and the expected inflation rate. Hence, real appreciation of the Thai baht and sustainable increase in government debt as a percent of GDP would raise aggregate output.

10

Authors: Iwedi Marshal, Igbanibo Dumini Solomon

The current recession in Nigeria is characterized by dwindling oil revenue caused by drop in global crude oil price in the market, unfavorable and inconsistent foreign exchange regime, overreliance on imports, high inflation rate and mass job loses, Consequently, the economic recession in Nigeria has led to the following experiences: high cost of living, fall in investment and savings; decline in the activities of stock market, increase in crime rate, high poverty incidence, budget deficit in government spending, high rate of inflation, low domestic production capacity, depreciating value of Naira, scarcity of foreign exchange and high cost of doing business in Nigeria. Furthermore the issues of high interest rates, poor electricity supply, lack of portable water, high cost of transportation and poor state of aggregate infrastructure are resultant effects of the said recession. Some indices reveal that the growth rates in major sectors of the Nigerian economy are either slow or negative. Therefore the declaration by world economics in April 2017 that Nigerian’s economy has come out of recession is political and still far from the reality on ground. The indicators of sales manager index (SMI) do not reflect the true position of the Nigeria economy but rather capture the transaction and activities of the political elites who are in the position to spend foreign currency for everything. The study used the misery index (sum of inflation rates and unemployment rates), per capita income or real GDP to determine the economic well being of Nigeria. Our findings show that the average misery index for Nigeria economy for the period under review stood at 29.88% while the average real GDP for Nigeria for the reference period stood at (1.03%). We submit that the acclaim declaration by world economics is not true. We recommend a shift from a mono product economy to a diversified structural based economy driven by agriculture, mining and manufacturing.

10

Authors: George M. von Furstenberg

This article lays out key features of cocos debt securities and how the choice of their trigger levels and conversion terms into common equity tier 1 (CET1) affect the principal stakeholders in the issuing banks. Some of the choices favor pre-existing shareholders and others the new shareholders by conversion. Conversion of cocoses need not be dilutive; they also do not have to prove subordinate to the most junior inconvertible debt, as frequently assumed. The goal here is to help correct such misconceptions by demonstrating that expected outcomes are shaped by the issuers of cocos and not inherent features of the instrument. Balance-sheet analysis will show that conversion is a zero-sum activity so that what the former cocos holders lose pre-existing shareholders gain, and vice versa. However, the size of net gains and net losses, and who should bear them, are contentious. If management is properly incentivized to keep cocos as additional tier 1 (AT1) capital on the balance sheet the bonds could furnish CET1 in a financial crisis when such capital is most needed and least available.

11

Authors: I.O. Aishatu, G.C. Lim

Easy accessibility of information on banking activities has enabled customers to easily compare various bank products and thereby easily switch from one bank to another, resulting in diminishing customer loyalty. This results in retail banks continually working hard to make new innovations or improve their internet banking services in order to make their bank a better choice for the customer. Previous researches have shown that customer loyalty is essential for the survival and profitability of e-commerce. We investigate whether customers’ trust, satisfaction, commitment, bank reputation, and the bank’s website quality predict customer e-loyalty in a survey using structured questionnaire. Ordered logistic regression analysis was used to analyse the data. The results of the study revealed that bank reputation, satisfaction, trust, and commitment have a significant and positive impact on customer e-loyalty towards internet banking in Nigeria. However, website quality has a positive but insignificant influence on customer e-loyalty towards internet banking. The result further showed that reputation is an essential factor in building customer e-loyalty.

18

Authors: Carlos Elias, Rokas Kirlys, Kudret Topyan

This paper provides a comprehensive analysis on stock return predictability in Santiago Stock Exchange from January 2007 to January 2016 by employing portfolio method. In the riskrelated predictors, we found no statistically significant predictive power of beta, total volatility, and idiosyncratic volatility in all stock sets. In addition to market cap and short-term reversal, the two cheapness variables, book-to-market and cash-flow-to-price ratios showed consistent economically and statistically significant predictive powers in determining the stock returns in the Santiago Stock Exchange. We also found that regrouping the stocks as small and large, low and high book-to-market, beta, and momentum according to the median values adds insights to the analysis. Our results show that the set of large stocks in the exchange is the least predictable set of stocks, however, momentum is efficiently predicted their return. Momentum is significant only for the large stocks and low bookto-market stocks, and risk-related predictors are good for high beta stocks only.

10

Authors: Atrayee Ghosh Roy

The purpose of this paper is to explore the relationship between economic globalization and gender equality in India. Using time-series data covering the span of 1990 – 2009, this study particularly examines whether the 1991 Indian trade reforms have also contributed to greater gender equality in the labor market. A simultaneous equation model is developed to estimate the effect of trade liberalization on gender inequality. The results show that trade liberalization has a positive and significant effect on gender equality in the labor market. Furthermore, the results also indicate that economic growth contributes to greater gender equality while female enrollment in higher education has a negative effect on gender equality in the labor market.

16

Authors: Shiwei Jiang

This article examines the cases of Chinese state-owned oil companies in the U.S., including PetroChina, Sinopec and China National Offshore Oil Corporation (CNOOC). The author provides novel explanations why they failed in the U.S. market. With detailed analyses, the author comes to conclude that the failures of Chinese state-owned oil companies were caused by three major barriers, including CFIUS, Anti-China interest groups of U.S. Congress and the cultural differences between relation-based society and rule-based society.

21

Authors: Peter C. Ogonowski

This study evaluated the relationships between national productivity, life happiness, and cultural dimensions in a global framework. The purpose of the study originated from the continued quest for fuller explanations behind persistent differences in international productivity performance, together with the recent worrisome productivity growth deceleration observed in multiple of the world’s key economies. Based on applying multivariate regression analysis and hypotheses testing, it was found that the study’s omnibus null hypothesis, all four main null hypotheses were rejected in favor of their alternative hypotheses. The results suggested that globalization-impacted businesses seeking to optimize their productivity performance could capitalize on their human factor allocations drawing on the energy of life happiness and certain cultural dimensions—particularly individualism and power distance, either singularly or in combination with other explanatory variables. Implications and further research recommendations for enhancing the understanding of and improving productivity outcomes in a globalizing economy were also provided.

8

Authors: Marcus T. Allen

Accuracy in the value assessment process in ad valorem property tax systems is of paramount importance to equitable treatment of taxpayers, yet several previous studies suggest that assessors’ opinions of value may be systematically biased. This study uses a large sample of properties that were assessed within one year after an arm’s length transaction with observed prices to test whether task complexity affects the accuracy of assessors’ opinions of value. The results provide evidence that property characteristics and location factors impact the magnitude of assessment error.

13

Authors: Mohammed Ershad Hussain, Mahfuzul Haque

This study seeks to assess the impact of relationship between Money Supply and Per Capita GDP Growth Rate in Bangladesh over the period 1972-2014 with a VECM model. The model is specified with three variables, namely, the percentage of Broad Money to GDP (BMGDP), the Real Interest Rate (RIR) and the Annual Per Capital GDP Growth Rate (GRGDP). Findings suggest that steady BMGDP is associated with GRGDP and money supply has important impact on the rowth rate of output in the long run. The government should maintain consistency and follow “the Taylor rule” to allow money supply to increase at a steady rate keeping pace with the economic growth. Respect to such a rule will help the central bank to avoid the inefficiencies that result from execution of discretionary policy. It also helps to resist the political pressure very much prevalent in Bangladesh and often behind such discretionary policies.

20

Authors: Jan Gunnarsson, Nikola Cikusa, Anca D. Hansen

We examine how corporate governance changes over the industrial life cycle when places commit firms to certain governance structures. Focus is on industries where a significant part of the economic value is created by technological knowledge changing the conditions for corporate financing. The article extends this view to include knowledge needed to accumulate governance capabilities. The board is a crucial governance institution emphasized in the study. We find that changes in this institution depend on shareholders’ concern regarding innovation management. We also find that boards are changed over time to improve the conversational exchange, which is attained by extending the boards with directors holding degrees in engineering. The main finding is that the most successful firms recruit board members from the geographic setting in which they were founded at all stages of the industrial life cycle. The Danish wind turbine industry serves as empirical evidence.