Eurasian Journal of Business and Economics

1-26

Authors: John E. SPILLAN & Talha HARCAR

The current study’s emphasis is intended to provide researchers with a point of departure for understanding specific cultural differences associated with the ethnocentrism scale. Consumer characteristics such as patriotism, protectionism and social economic conservatism are analyzed. This manuscript empirically compares these three dimensions of the ethnocentrism scale (Shimp, T. A. and Sharma, S. 1987) using data furnished by Vietnamese and Indian consumers. Using confirmatory factor analysis (CFA), the findings indicate that the three dimensions of the ethnocentrism model are validated in both countries. The study results indicated that there are discernable attitudinal differences between Vietnamese and Indian consumers. The study also explores the relationship between CETSCALE subscales (patriotism, protectionism and social economic conservatism) of Vietnamese and Indian consumers and the underlying dimensions of ethnocentrism construct with different countries. The results showed that all loadings in the model were significant, leading us to conclude that the relationships between the items and latent factors were confirmed by the two datasets obtained from different countries.

27-42

Authors: Mohammad HAMAD & Teoman DUMAN

The effective design and delivery of a microcredit program is difficult under any circumstance. Similarly, the task of microcredit institutions in Bosnia and Herzegovina that provide financial stability to its most impoverished members is very much complicated. The purpose of this paper is to explore competitive advantages that microcredit industry in Bosnia and Herzegovina has by using Porter's diamond model. The demonstration of the Diamond Model is used to explain the competitive advantage that the microcredit industry has in Bosnia and Herzegovina. To analyze the competitive advantages, secondary data were used from various institutional and governmental resources .The findings reflect that the meaningful objectives were set out by microcredit institutions in the country including objectively verifiable indicators of achievements. Among peers in Kosovo and in other Balkan regions (Albania, Croatia, Macedonia, Montenegro, Serbia), as well as peers similar in size and market outreach from Eastern Europe and Central Asia (ECA), the Bosnian microcredit institutions are some of the most highly leveraged. There is a clear upward trend in the median indicator for portfolio at risk between 2006 and 2008. The inflationary pressures that started at the end of 2007 in BH as well as the repercussions of the global 2008/2009 financial crisis have affected the repayment capacity of clients. From a policy perspective, the results suggest that in order to improve efficiency in the microcredit sector, and in the financial sector as a whole, a unified banking agency for the country must be established. Despite being hopeful for future, this doesn't seem likely to happen until the Bosnian Constitution is amended sometime in the future.

63-77

Authors: Nidhi GROVER & G.S. BHALLA

The study endeavors to analyze the effect of awareness level regarding bancassurance among the bank customers on choice of Insurance product in India. A primary survey of 552 bank customers, who have purchased bancassurance, reveals the following facts using ordered response Probit analysis: i) regardless of the present efforts of the banks, the expected level of awareness among the customers of banks regarding bancassurance is either partial or significant; ii) the expected probability of complete awareness is very low; iii) the banking sector needs to improve upon the level of awareness regarding bancassurance among their customers and the factors like frequency of dealing with bank customers, bank brochures and other publications may prove to be helpful; and iv) the reasons because of which, three sources of information namely, Newspapers, Bank Staff and Direct Mail are failing to spread complete information regarding bancassurance among customers of the banks are needed to be analyzed. However, an execution of structural equations model rejects the hypothesis of insignificant effect of level of awareness on choice of insurance product in weak form.

97-112

Authors: Ali Akbar Naji MEIDANI, Mohammad Ali FALAHI & Seyyed Mohsen Seyyed Agha HOSSEINI

The aim of this study is to investigate the realization of the law of diminishingreturns in usage of major oil products in the industry sector of some oil exportingand importing countries during 2002- 2008. To achieve this aim, in a first stage the efficiency of industry sector of countries has been calculated using DEA window analysis and then in the second stag the existence of an inverted U' shape relationship between major oil product consumption and efficiency has been tested in the context of dynamic panel data (GMM) approach. The results confirm this relationship in each group of countries except that the turning point in the case of oil importing countries is much higher than oil exporting countries. This firstly suggests that oil dependence in oil importing countries is more than oil exporting countries and secondly indicates that the industry sector of oil importing countries have advanced technology and high scale and capacity so that they can take benefits of oil products consumption without decrease in efficiency.

129-142

Authors: Aytac GOKMEN & Dilek TEMIZ

With the comprehensive advent in information and communication technologies and worldwide ease of transportation, the volume of international trade and business increased profoundly. Within this process, a Born Global Firm (BGF), right from its initiation, aims at creating competitive advantage by marketing a large volume of its products in various international markets by utilizing technological advances. Therefore, the rational behind the idea of BGF is to become an international firm in a short period of time and making international business affairs core of its business activities. Thus, the aim of this study is to review the concept of BGF theoretically and relate the issue to foreign trade affairs resting on significant sources related to the Turkish case mainly focusing on trade statistics as to review the potential development of BGFs in Turkey.

1-14

Authors: Mehmet MERCAN, Ismet GOCER, Sahin BULUT & Metin DAM

In this study, the effect of trade openness on economic growth was searched for the most rapidly developing countries (emerging markets; Brazil, Russia, India, China and Turkey, BRIC-T) via panel data analysis by using the annual data of the period from 1989 to 2010. As trade openness variable, the rate of external trade (Export+ Import) to GDP was used. According to empirical evidence derived from the study made with panel data analysis it was found that the effect of openness on economic growth was positive, and statistically significant in line with theoretical expectations.

39-51

Authors: Dilek ALTAS & Hakan OZTUNC

Watching the commercials depends on the choice of the viewer. Most of the television viewing takes place during “Prime-Time” unfortunately; many viewers opt to zap to other channels when commercials start. The television viewers’ demographic characteristics may indicate the likelihood of the zapping frequency. Analysis made by using Multinomial Logit Model indicates how effective the demographic variables are in the watching rate of the first minute of the television commercials.

75-91

Authors: Renu SHARMA & Mandeep KAUR

Global economic environment is changing rapidly during the last two decades. This change is reflected in widening and intensifying international linkages in trade and FDI. Various countries are now favouring economic reforms for attaining rapid and sustained growth. The scope for transnational production has expended due to reduction of the barriers to international trade and the various regional integration agreements between the different countries. This paper examines the causal relationships between FDI and trade (i.e Exports and Imports) in India and China. Granger causality test has been employed to examine the causal relation between FDI and trade by using the data over the period of 1976-2011.The results for China show unidirectional causality running from FDI to imports and FDI to exports, however, there exist bidirectional causality between imports and exports. India gives the results which are not similar to China where bidirectional causality between FDI and imports; FDI and exports; and exports and imports have been found.

121-134

Authors: Nurlan ATABAEV & Junus GANIYEV

This article examines the effects of monetary transmission on real output and price level in Kyrgyzstan which is very important issue for central banks. We analyzed the relationships between the money supply, real output, price level, interest rate, credit and real exchange rate by using the vector autoregression approach (VAR) and monthly data for 2003-2011. As a result the interest rate channel remains weak, on the other hand it have been revealed that the credit channel has some affects to real output, the exchange rate channel affects the prices. Exchange rate channel remains still the most effective channel. Based on these results, it can be argued that government can use credit and interest rate channel in increasing real output, and the exchange rate channel in achieving price stability in Kyrgyzstan.

1-20

Authors: Temirlan MOLDOGAZIEV

This study examines whether the policies of fiscal decentralization in the Kyrgyz Republic (1993-2010) had any effect on revenue stability at the national level. We find reasonable evidence of revenue volatility at the national level due to instabilities in subnational revenues. In terms of tax buoyancy measures, the revenues at the national level have to grow faster to compensate for the decreasing size of revenues at the subnational level. As to the measures of tax elasticity, we find that the income tax base, and VAT to a lesser extent, grew much less rapidly than the indicator for economic activity. As a result, revenue adequacy has suffered in the Kyrgyz Republic both at national and subnational levels.

21-43

Authors: Farrukh SUVANKULOV & Yunus GUC

Since early 90s major regional powers have attempted to increase their export flows to Central Asia. This paper assesses the volume of recent export flows from China, India, Iran, Russia and Turkey to countries in Central Asia. We estimate an augmented gravity model and conduct trade complementarity analysis to compare the factual export volumes with projections generated by the model. We find that China and Turkey were the most successful. They have expanded their exports beyond numbers predicted by the augmented gravity model. Up until 2007 Russia failed to achieve model benchmarks. Exports from India and Iran remain very negligible.

57-78

Authors: Sunil KUMAR & Nitin ARORA

This study focuses on the inter-temporal and inter-state variations in technical and scale efficiency levels of Indian sugar industry. In the first stage, full cumulative data envelopment analysis (FCDEA) is used to derive efficiency scores for 12 major sugar producing states. The panel data truncated regression is employed in the second stage to assess the key factors explaining the observed variations in the efficiency levels. The results suggest that the extent of technical inefficiency in Indian sugar industry is about 35.5 percent per annum, and the observed technical inefficiency stems primarily due to managerial inefficiency rather scale inefficiency. Also, a precipitous decline in the level of technical efficiency has been noticed in the postreforms period relative to the level observed in the pre-reforms period. The availability of skilled labour and profitability have been found to be most significant determinants of technical efficiency in Indian sugar industry.

103-117

Authors: Joshua Seungwook BAHNG

This study analyzed the questions of whether capital structure adjustment in European firms differed by listing type and by current debt ratio. Major issues are concerned with (1) the adjustment speed toward target debt ratio and (2) the length of the adjustment period required toward the ratios. Results showed that (1) the speed of adjustment of firms with lower debt ratios were faster; (2) the adjustment speeds of listed firms were faster than those of delisted and unlisted firms; and (3) the length of the half-life adjustment time toward target ratio was shorter for listed firms than for delisted and unlisted firms. This paper contributed to the development of capital structure issues in that the adjustment speed could be different depending on firms’ current debt ratios and listing types, unlike previous results in the literature.

129-140

Authors: Barry A. FRIEDMAN, Nergis AZIZ, Ibrahim KELES & Salavat SAYFULLIN

Entrepreneurship is an important element of national economic growth, and college business students represent an important feeder pool for a nation’s supply of entrepreneurs. The purpose of this study is to identify and contrast predictors of students’ desire to be entrepreneurs in Kyrgyzstan, Georgia, and the United States. Three hundred and five undergraduate business students in Kyrgyzstan, Georgia, and the United States completed the Aspiring Entrepreneurial Motives Questionnaire (Aziz, Friedman & Sayfullin, 2012). While the recognition motive was important for all students, predictors of their desire to be entrepreneurs differed across the three countries. In contrast to Kyrgyzstan and the United States, students’ in Georgia overall desire to be entrepreneurs was more complex as finance, recognition, freedom, marketing opportunities and economic conditions reached significance. National initiatives that recognize entrepreneurial accomplishments may therefore encourage more individuals to start and manage businesses. A more complex strategy may be required in Georgia, as the decision to be an entrepreneur appeared to be more multidimensional.

165-186

Authors: Kapil CHOUDHARY & Sushil BAJAJ

This study investigates whether spot and futures markets are playing an important role in the assimilation of information and price discovery in the Indian stock market. For accomplishing this purpose, high frequency price data of 31 individual securities, observed at five minutes interval for the time period of April 2010 to March 2011 have been used. The present study applies the Johansen’s cointegration and Engle and Granger’s residual based approach to determine the long-run equilibrium between the two markets. Besides this, Granger causality test and VECM (Vector Error Correction Model) have been applied to determine the direction of causality and the leading market. The results of the study depict that there is a bi-directional information flows or feedback between the spot and futures markets in case of 30 securities and one security i.e. Wipro is showing unilateral relationship from spot to futures. As far as price discovery role of spot and futures markets is concerned, both markets are playing an important role implying that futures (spot) prices may contain useful information about spot (futures) prices. Besides this it is also evidenced that futures market is leading the spot market in case of 12 securities whereas 19 securities are being led by the spot market.

1-13

Authors: M. Veysel KAYA & Erkan DEMİRBAŞ

The aim of this study is to analyze the relation between military interventions, coalitions and economic growth. In the study the relation between foreign direct investment, unemployment and growth also analyzed. For this purpose a semi-log model is constructed and Ordinary Least Squares (OLS) method used to test the linear relation between military interventions, coalitions, certificates given to foreign companies for investment, unemployment and GDP per capita. According to the results of analysis, presence of the co-integration is confirmed in the long-run between mentioned variables. And it is found out that there is a negative and significant relation between unemployment, number of certificates given to foreign companies for investment, coalition and economic growth. The relation between military intervention and growth is found insignificant and negative. The VECM model was used to test the causality shows that during the transition process from short-run to long-run, balance will be established. Deviation of GDP per capita in the short-run will gravitate towards balance in the long-run.

25-44

Authors: Pramod Kumar NAIK & Puja PADHI

The study investigates the relationships between the Indian stock market index (BSE Sensex) and five macroeconomic variables, namely, industrial production index, wholesale price index, money supply, treasury bills rates and exchange rates over the period 1994:04–2011:06. Johansen’s co-integration and vector error correction model have been applied to explore the long-run equilibrium relationship between stock market index and macroeconomic variables. The analysis reveals that macroeconomic variables and the stock market index are co-integrated and, hence, a long-run equilibrium relationship exists between them. It is observed that the stock prices positively relate to the money supply and industrial production but negatively relate to inflation. The exchange rate and the short-term interest rate are found to be insignificant in determining stock prices. In the Granger causality sense, macroeconomic variable causes the stock prices in the long-run but not in the short-run. There is bidirectional causality exists between industrial production and stock prices whereas, unidirectional causality from money supply to stock price, stock price to inflation and interest rates to stock prices are found.

71-90

Authors: Alexi DANCHEV & Ender SEVINC

The paper aims to outline the relationships between willingness to work (WTW),human capital and job satisfaction. It formulates WTW as an indicator of laborsupply and provides direct estimation of the link between WTW and the rise of knowledge and skills. The authors assume positive relationships between WTW, human capital and job satisfaction. Data collected by interviewing Turkish citizens were used to test the formulated hypotheses. The study outlines the link between the influence of the accumulated knowledge and skills on WTW and the job satisfaction factors. The paper can be regarded as a starting point for studying one important relationship in the economy: WTW, human capital and job satisfaction.

99-120

Authors: Kemal OZDEN & Chigozie ENWERE

Developing countries in the twenty-first century is experiencing rapid urbanization with a high concentration of people in the urban areas while the population of people in the rural areas is decreasing due to the rise in rural-urban push which has adverse consequences on the economic and political development of developing countries, in particular African cities. Therefore, this study seeks to analyze the trends and nature of urbanization in Africa from the pre-colonial era to the contemporary period of globalization in order to ascertain the implications of rapid urbanization on the processes of democratic transitions, on the vagaries of food sufficiency and crisis as well as its multiplier effects on the escalating rate of poverty and insurgency in the cities. These problems stem from the lack of good governance, high rate of corruption and the misappropriation of state resources through diverse economic liberalizing reforms and development strategies. Thus, this study affirms that urbanization is a process that requires objective management and institutional role differentiations and performance to create the organizational synergy, moderation and frugality necessary for the equitable distribution of the common wealth for the greatest good of all peoples not only in the urban areas but also in the rural areas which invariably will bring about political and economic development in African cities, and reduce the high incidences of poverty, insurgency and food crisis.

1-12

Authors: Ibrahim Halil EKSI, Berna Balci IZGI, Mehmet SENTURK

This paper investigates the effects of crude oil prices on the industrial production for some of the OECD countries. According to it, the empirical results sign that there is statistical meaningful short term causality from crude oil price to industrial production in all countries except France. In France however, causality is from industrial production to oil price in short run. The error correction mechanism is run for US. The causality is from oil price to industrial production in long run for US. These results show us that oil prices do affect industrial production index. Another interesting finding that, similar results were observed for oil exporting and importing countries such as Saudi Arabia and Iran as well. This situation is important that firm sensitivity towards oil price shows a similarity among the countries.

17

Authors: Sandeep KAUR

Trade in services has accounted for 20 per cent of global trade. Despite the increasing importance of services trade in global economy, there has been limited research on service trade which uses determinants driving such trade. The present paper has examined the export potential in service sector of USA with its Asian trade partners (Japan, China, India, Singapore, South Korea and Hong Kong) by taking into account geographic, economic and other features. The approach is based on gravity model, widely used to analyze trade in goods and has more recently been applied to service sector. Being a nature of study is of panel data i.e. for 9 years (2000-2008) and six cross sections, the study used panel data methodology. The study revealed that USA has export potential in services for India and Japan. Regarding the convergent and divergent economies, USA had convergence in exports with three Asian countries (Hong Kong, India and Korea) and divergence with three Asian countries (Japan, China and Singapore). There is a large scope for export expansion for Hong Kong, India and Korea.

51-70

Authors: Evan E. ANDERSON

One of the central tenets of socialism and central planning economics, as practiced by the East European countries, was that this organization of employment, production and activity could achieve higher growth rates than market economies. This paper presents an historical analysis of economic performance of seven countries: Bulgaria, Czechoslovakia, GDR, Hungary, Poland, Romania and Yugoslavia during the crucial period of socialism (1960-80). It studies the relationship between industry output growth rates and output instabilities in approximately twenty-five industries. Using empirically estimated models it was found that the instability (volatility) of industry output increased with growth rates and at an increasing rate. Since instability creates substantial costs, these findings imply that the true value of income and product streams in East European countries, after discounting for instability, was lower than otherwise believed. A decomposition of instability into two sources, systemic structure versus operational implementation is suggested.

87-99

Authors: Tímea BUDAI

Because of the standardization of world economy, the speeding up of technical development and the sharpening market competition there is more and more responsibility on managers, whose primary duties are to make sure the efficient and successful work of the organizations. More and more of them realize that the quality (structure, culture, attitude etc.) of the organization can be counted as one of those features that determine success and advantage in contest most. Organization development, which applies structural and behavioral changes to improve both the output of the organization and its members’ general feeling (personal development and well-being), intends to assist them in this respect. By this time the concept of organization development has become more or less known among Hungarian theoretical and practical experts as well. The foundations of organization development were put down in America in the fifties and sixties while carrying out group dynamic surveys at several organizations and summing up the observations. Therefore Americans are called the pioneers of organization development, but most of kind researches are still made.