Business and Economics Research Journal

1-19

Authors: Sinem Ateş, Ali Coşkun, M. Abdullah Şahin, M. Levent Demircan

Financial literacy and behavioral biases are critical factors affecting the financial decisions and behaviors of investors. We survey 596 individual stock investors to measure their financial literacy, to examine their behavioral biases and to investigate the relationship between financial literacy and behavioral biases. Results suggest that around half of the investors have a low financial literacy level, their main source of financial information is advice from parents or friends, and they have a high level of behavioral biases. While some of these behavioral biases are independent of the level of financial literacy, there is a significant relationship between a number of other biases and the level of financial literacy.

39-52

Authors: Sumeyra Gazel

This study aims to investigate relationship between financial developments and economic growth for troubled ten countries (Brazil, Colombia, Chile, South Africa, South Korea , Peru, Russia, Thailand, Singapore and Taiwan). In this context, troubled ten countries have been examined with dynamic fixed effects estimator and Common Correlated Effects Mean Group for the years 1990-2014. Gross Domestic Product per Capita was used as a proxy for economic growth in the study. On the other hand, Broad Money, Gross Capital Formation and Domestic Credit to Private Sector (% of GDP) are used as proxies for financial development. The results point to different for the long and short term. The results demonstrate that there isn’t a relationship between financial development and economic growth in the context of analyzed long-term. However, it is possible to say that there is a weak positive relationship between financial development and economic growth in short term.

73-88

Authors: Ahmet Ay, Oktay Kızılkaya, Tuba Akar

In this paper, the effects of corruption and democracy on foreign direct investments are examined empirically for 10 developing countries over the period 1995-2013. Panel unit root tests, panel cointegration test, panel FMOLS estimator, and panel vector error correction causality methods are employed in the paper. According to the findings, there is a cointegration relationship among corruption, democracy, and foreign direct investments. Decrease of corruption and increase of democracy level, affect foreign direct investments positively in 10 developing countries which constitute panel, in accordance with evaluating estimate results of cointegration coefficients. According to the findings obtained from the causality analysis, there is unidirectional causality from corruption to foreign direct investments in the short run while there is unidirectional causality from corruption and democracy to foreign direct investments in the long run. These findings support the hypothesis which argue that democracy and corruption have significant effects on foreign direct investments. Today, it can be seen that foreign investors test the trustworthiness of political regime in host country. Reviewing policies towards foreign investors appears as a substantial factor for host countries.