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Vol.4 No.1
March 2016

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 Article Information

1-23

Effects of Global Incidents on Dynamic Correlations of Emerging European Countries

Dogus Emin

DOI: 10.15604/ejef.2016.04.01.001

Abstract

This paper aims to investigate the international integration of stock markets of emerging European countries with the world market and to analyse the evolution of the integration levels in the case of four global/regional incidents; the 1998 Russian crisis, the 2001 Dotcom crisis and 9/11 shocks, the 2004 EU enlargement, and the 2007-2009 global financial crisis. The findings show that volatilities of the stock markets and correlation structures of those markets with the world market significantly change due to the impacts of global/regional incidents. Although, it is obvious that each incident has differential impact on each country depending on the internal dynamics of those countries at the times of incidents, the findings still clearly reveal the general common impacts of the investigated incidents on the return volatilities and the correlation structures of the sample countries with the world market.

Keywords: Dynamic Correlation, Stock Market Integration, Crisis, Emerging Europe

24-40

Bid-Ask Spreads, Trading Volume and Return Volatility: Intraday Evidence from Indian Stock Market

Rashmi Ranjan Paital and Naresh Kumar Sharma

DOI: 10.15604/ejef.2016.04.01.002

Abstract

This paper empirically examines the relationship between stock return volatility, trading volume and bid-ask spread within the scope of mixture of distribution hypothesis (MDH) and sequential information arrival hypothesis (SIAH) in the Indian stock market using high frequency 5-minute data set over the period of 2 July 2012 to 31 December 2012. This is the first kind of study in India using bid-ask spread as an additional information variable along with trading volume to investigate the relationship with stock return volatility. Our empirical findings provide evidence of a positive contemporaneous relationship between return volatility and trading volume, and also between return volatility and bid-ask spread. Moreover, the results of Granger causality test show that the information content of trading volume and bid-ask spread are useful for predicting stock return volatility. Our results indicate that information arrival to investors tends to follow a sequential rather than a simultaneous process. This finding is consistent with the sequential information arrival hypothesis and contradicts the mixture of distribution hypothesis.

Keywords: Intraday, Volatility, Trading Volume, Bid-Ask Spread, Granger Causality, MDH, SIAH

41-55

Financial Policies of Turkish Industrial Companies during the Global Crisis

Cenk Gokce Adas and Yesim Kartalli

DOI: 10.15604/ejef.2016.04.01.003

Abstract

Latest global financial crisis that shrank the credit market affected the companies’ financial policies since the credit contraction led the firms to rely more on their own resources rather than external financing. The expectation during such crises is more equity issues along with less borrowing. In economic literature there are some evidence supporting this fact for developed countries. As an emerging country Turkey’s case is different than that of advanced countries. The era commenced with Lehman turmoil by passed Turkish economy in the first years due to the solid, strong and healthy banking sector due to the measurements taken after 2001 banking crisis of Turkey. Therefore, international lenders did not hesitate directing their funds to Turkish banks. As a result, Turkish companies did not suffer in financing their investments through bank loans. Moreover, the growth policy of Turkey based on current account deficit supported Turkish economy and in turn the firms due to the abundance of liquidity after the peak of the crisis. In this work we examined 164 industrial firms that are traded on Borsa Istanbul to see if there happened to be a shift in their financing preferences during the recent global crisis. We found that the importance of borrowing had not decreased and that contradicts the expectations. As of equity issues, before and after 2009 no radical change has been observed. In 2009 where the crisis hit worst Turkish economy leading a 4.7% GDP decrease, the equity issues were doubled.

Keywords: Financial Crises, Financing Policy, Short-Term Capital Movement, Credit

56-72

Impacts of Corporate Governance on Firm Performance: Turkey Case with a Panel Data Analysis

Cahit Yilmaz and Ali Hakan Buyuklu

DOI: 10.15604/ejef.2016.04.01.004

Abstract

There has been increasing attention all over the world on corporate governance issues after experiencing some financial crises and corporation scandals. It is assumed that the investors search for emerging economies to diversify their investment portfolios and maximize their returns is considering corporate governance applications. Investors are also concerned about governance factors to minimize their risks. In this study, we examine the impact of corporate governance variables on firms’ financial performance in Turkey. The relationship between ownership structures, board structures and financial performances are tested.  Influence of corporate governance variables, board size, share of independent board members, foreign investors, leverage ratio on firms’ financial performance “return on assets” are utilized on firms traded in Turkey’s stock exchange BIST 100. This research concludes that corporate governance variables influence firms’ performances. Shares of independent board members and leverage have negative influences while foreign ownership has a positive influence on firms’ financial performances.

Keywords: Corporate Governance, Financial Performance, Board Structure, Ownership Structure, Turkey

73-79

Human Sustainable Development in the Context of Europa 2020 Strategy

Alina-Mihaela Ion and Dragos Vespan

DOI: 10.15604/ejef.2016.04.01.005

Abstract

Human development is a constant concern at European level. Thus, various programs have been proposed with the main objective of developing skills of citizens and informing them about training courses as part of lifelong learning and of employment in the labour market. The article highlights the evolution of European Union through the investments in human capital. The objective of this paper is represented by the analysis of the impact of sustainable human development through trans-disciplinary and inter-disciplinary education in the context of the European Union strategy proposed for the following period up to 2020. Europe 2020 represents a strategic plan for European Union development until 2020, having as main objective raising the standard of living and the quality of life for European citizens. Europe 2020 strategy promotes a new vision for the economy of European Union. For the following period until 2020 there is a major concern for creating favourable conditions for development of a sustainable intelligent economy that promotes inclusion. Some of the main activities with a major impact on creating such conditions are investments in education, research and innovation. The article analyses the current and recent past years’ situation in terms of sustainable development from educational and economic perspectives at European Union level. The analysis was done based on Eurostat data, using specific statistical methods.

Keywords: Human Development, Sustainable Development, Lifelong Learning, Information and Communication Technology, Europe 2020

80-90

Improvement of the Pension System in Uzbekistan: Through the Experience of the European Union Countries

Dilshodjon Alidjonovich Rakhmonov

DOI: 10.15604/ejef.2016.04.01.006

Abstract

Government’s policy in financing social sphere is becoming more and more topical. In this regard, managing pension system effectively, conducting research basing on “income distribution through the time” principle in its financing is of particular significance. In this article the possibility of applying the experience of European Union countries in the level of coverage of population by the pension plan and its development in Uzbekistan.

Keywords: Pension System, Social Insurance

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