Eurasian Journal of Business and Economics

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.