Eurasian Journal of Business and Economics

14

Authors: Chung BAEK

This study investigates the impact of North Korea’s nuclear tests on Asian stock markets. Two approaches are used separately in order to identify how stock market returns and volatilities change immediately after the nuclear tests. We find that the Chinese stock market tends to be more sensitive to unexpected shocks from North Korea’s nuclear tests than other Asian stock markets. However, relatively, the Japanese stock market is little influenced by the nuclear tests though Japan is not only geographically close to North Korea but also politically vigilant to North Korea’s nuclear threats. Also, we find that strengthened return correlations (linearity) do not necessarily increase stock return volatilities.

18

Authors: Sarika MAHAJAN, Priya MAHAJAN

The spread of COVID-19 has caused severe damage to human lives and the global economy. The stock markets around the world have plummeted to their lowest levels since the 2008 Global Financial Crisis. This paper attempts to examine the joint dynamics of gold and stock market returns during unprecedented times of health and financial shock due to COVID-19 between January 2020 and May 2020 using granger test, ARMA model, and symmetric and asymmetric GARCH models to improve the understanding of the microstructure of investment scenario in India. The period considered in the study helps to evaluate the impact of lockdown due to coronavirus on Gold and Nifty index return. Results based on GARCH and E-GARCH models indicate a significant negative impact of gold on nifty returns during the sample period. The results also indicate investors' perception of gold as a safe haven asset during periods of elevated uncertainty. Thus, the study is expected to enhance the understanding of market asymmetry, the behavior of investors towards these avenues of investments, and information processing.

28

Authors: Mirgul NIZAEVA, Ali COSKUN

This study investigates the firm- and country-specific factors that affect SMEs’ access to finance and the relationship between financial constraint and firm growth in emerging economies of Central Asia. To address the research questions, a two-stage empirical analysis including ordered probit, probit, and feasible generalized least squares (FGLS) specifications were conducted. Firm-level data used in the analysis is obtained from the fifth round of the Business Environment and Enterprise Survey (BEEPS V) and country-level data acquired from national and international datasets. The study's findings implied that in the Central Asian economies, country-specific factors are more likely to affect access to external finance of SMEs than firm-specific determinants. Among firm-specific factors, only foreign ownership is significantly related to financing constraint perception of SMEs; where, the interest rate is positively, and domestic credit market, inflation, and log of GDP per capita are negatively related to financing constraint level. In Central Asia, an insignificant relationship between growth and financing constraints was found. The determinants of financing constraints and access to finance–growth relations, which address the issue of great significance for SME growth in the selected countries, were interpreted with region-specific factors.

19

Authors: Mostafa ALI

This study explores the dynamic relation between economic growth and stock market depth in the presence of three more macroeconomic indicators such as exchange rate, inflation and interest rate of Bangladesh. We use Johansen and Juselius (1990) test of co-integration and Vector Error Correction Model (VECM) to detect the possible short-run and long-run causal relation among the selected economic forces. The results of the study evidence that the lagged error-correct term of GDP (i.e., the proxy of economic growth) is found statistically significant in all three models. This manifest that GDP tends to converge to its long-run equilibrium path in response to changes in its regressors. But we find a complex network of causal linkage between the variables in the short-run. The findings of this study are of particular interest and importance to policymakers, financial managers, financial analysts and investors dealing with the Bangladesh economy and the Bangladesh stock market.

22

Authors: Shahid AHMED, Saba ISMAIL

This paper examines the effect of bilateral tariff reduction in the agriculture sector between India and China. The results are evaluated in terms of welfare, output, employment and the potential trade flows between India and China using the GTAPmodel. The present study suggests that partial tariff reduction on imports of agricultural commodities between India and China may be welfare-enhancing for both India and China while complete tariff reduction on imports of agricultural commodities may have welfare loss for India, though there will be substantial welfare gains for China. The study reveals that welfare gains for China are larger in comparison to India. The study suggests that a well calculated and strategically negotiated tariff reduction in the agriculture sector may create a win-win situation for both partners. The study further argues that China should offer preferential market access to India for mutually beneficial and welfare-enhancing engagements for both countries. Finally, the study concludes that there exists a narrow scope for 'WTO-Plus' approach for India-China agriculture trade relations. India should assess all pros and cons as it has revenue loss and impact on economically marginalised 'Farming Community'.

15

Authors: Rabson MAGWEVA, Mabutho SIBANDA

Understanding the volatility behaviour of specific sectors of the economy enables investors to formulate workable investment strategies, and policy-makers to formulate policies that dampen excess volatility. This study examined the volatility features of the infrastructure sector in emerging markets. The features assessed were the GARCH effects, volatility persistence, and leverage effects. EGARCH and GJRGARCH models of order one under normal and non-normal error distributions were employed to unpack the volatility behaviour of infrastructure returns in emerging markets. The results from both models under all distributions indicated the existence of GARCH effects, volatility clustering, volatility persistence, and leverage effects in the infrastructure sector in emerging nations. This implies that past conditional variance is significant in determining current conditional variance, thereby rendering forecasting a worthwhile task. The findings also suggest that investors interested in the infrastructure sector in emerging markets should incorporate leverage effects in their estimation of value-at-risk. Furthermore, they should focus on factors other than mean-variance portfolio optimization and consider leverage effects, excess kurtosis, and skewness when making investment decisions. Finally, investors in the infrastructure sector in emerging markets are encouraged to formulate hedging strategies as they are exposed to significant risk and uncertainty.

19

Authors: Samik SHOME, Sushma VERMA

The Indian aviation sector over the recent years has shown a significant growth prospects on various parameters like passenger traffic, freight traffic, aircraft movements and number of airports, among others. But ironically the financial performance of most of the air carrier individually is not at all impressive. Every five years one airline in India is being grounded, latest being Jet Airways which had to suspend its operations in April 2019 due to severe financial crunch. The primary aim of this paper is to assess the current financial health of different Indian airline companies. This study uses four different models i.e. Altman Modified Z” Score Model, Pilarski Model, Fuzzy Logic Model and Kroeze Model to test the existence of financial distress and simultaneously aims to assess the applicability of these models on the Indian aviation sector. The models have been applied on four airline companies. Models indicate the existence of severe financial distress in three out of four chosen airlines and also indicate their suitability to be applied to the sector. The study contributes to the existing literature on Indian aviation by attempting to indicate the suitability of studied models for indicating financial distress which can lead to potential bankruptcy.

21

Authors: Erhan ATAY, Serkan BAYRAKTAROGLU, Gulfem TANRIVERDI

The purpose of this paper is to investigate the relationships between work-life conflict (WLB) and organizational voice in the higher education sector. We surveyed a population of academicians and administrative staff of two private universities in Istanbul, Turkey. We found that there is a positive relationship between life-work conflict and work-life conflict. The work-life conflict also affects organizational voice negatively. Results reveal that when employees have conflict in their work and life affairs, they prefer to be silent rather than speak up openly about organizational policies. This paper explores the importance of the work-life conflict in regards to remaining silent as a means of creating productive workplaces. This study is an attempt to contribute to the arguments on the situation about how people can remain silent or speak up in the workplace when they are not able to achieve balance work and living domains. This paper investigates the relationship between work-life conflict and organizational voice as perceived by the employees from the higher education sector.

20

Authors: Akhil SHARMA, Abdul RISHAD, Sanjeev GUPTA

The purpose of this study is to examine the long-run and short-run impact of crude oil price and exchange rate shocks on domestic inflation in India within the framework of the Autoregressive Distributed Lag (ARDL) model. The results show that the exchange rate and oil price shocks significantly influence domestic inflation during the study period (April 1994 to February 2018). Further, the breakpoint unit root test revealed the severe impact of the 2008 financial crisis on inflation in India. The findings show that any move to scale down fuel subsidies will escalate cost-push inflation severely, as the country is an energy-dependent economy. So, policymakers shall stabilise the impact of these shocks through suitable monetary policy actions

22

Authors: Nargiza ALYMKULOVA

This paper aims to synchronize the historical developments in the economy of the Kyrgyz Republic with the works of Professor Musaeva Dzharkinay Asanovna. Prof. Musaeva, the recipient of the outstanding scholar of National Education of the Kyrgyz Republic award, was a prominent representative of the science and culture of the country. Prof. Musaeva's research reputation is based mainly on her works on agricultural economics and problems of economic growth and development of the transitional economy of Kyrgyzstan, which was ended with the formation of the idea of the Asian model of economic reforms. She was involved in several significant research initiatives and projects as part of the growing concern about economic reforms, strategy of economic development and their likely impact on the transitional economy of Kyrgyzstan, where the choice of the liberal model of economic reforms was natural and determined by the specific socio-economic and cultural-historical features of the development of the Kyrgyz people as a result of the nomadic lifestyle. These followed by the formulation and interpretation of the Asian model of the economic reforms in Kyrgyzstan and its future development trends.

16

Authors: Cemil KUZEY, M. Sait DINC, Ali H.GUNGORMUS, Lokman INCIRKUS

The purpose of this study is to examine the relationship between perceptions held by accountants regarding the e-service quality dimensions of the e-government website in connection with their behavioral and praising intentions. Using the survey method, 203 responses were collected from accountants in Turkey. A partial least square structural equation model was constructed to test both the reliability and validity of the measurement as well as the structural model. The results showed that several e-service quality sub-dimensions such as graphical quality, emotional benefits, and ease of use and control have a positive and significant impact on behavioral intention and praising intention. The study did not find support for the possible effect of layout clarity upon behavioral intention and praising intention.

18

Authors: Pulak MISHRA

The paper examines how mergers and acquisitions (M&As) in India after initiation of reforms in 1991 have affected firms’ financial performance. Using panel data and applying the method of difference GMM, it is found that neither market concentration nor M&As affected firms’ financial performance because of the multidirectional structure-conduct-performance relationships. Instead, interindustry differences in performance have been caused by capital intensity, efforts relating to marketing and distribution, and foreign technology. The findings suggest for a relook at the competition policies and laws, international trade, investment and technology development as they influence financial performance through market structure along with firms’ business strategies, efficiency and competitiveness.

28

Authors: Manoj KUMAR

This paper extends Boyle and Guthrie (2003) to investigate the interdependent effects of asymmetric financing capacities and investment costs on investment timing decisions in a duopoly with a first-mover advantage. We demonstrate several novel findings. First, suffering a significant cost disadvantage, the supplier with a larger financing capacity can still be the leader when the risk of future funding shortfalls is relatively high. Second, a weaker supplier with a significant lower financing capacity and a small cost disadvantage can even be the leader under some degree of the risk of future funding shortfalls. In addition, the weaker supplier that is still more liquidity constrained cannot be the leader anymore as its financing capacity improves and closes to that of the rival. Third, only when the risk of future funding shortfalls is relatively low, small asymmetry of investment costs can make the rival’s preemption threat effective. Finally, higher project return volatility can lead to a change of the supplier’s role from a follower to a leader under some degree of the risk of future funding shortfalls, thereby lowering the supplier’s optimal investment trigger.