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The Effect of Industry and Firm’s Ownership on Capital Structure of Firms in Bosnia and Herzegovina
Azra Bajramovic
DOI: 10.15604/ejef.2016.04.04.001
Abstract
This paper examines the effect of industry and firm ownership on capital structure of firms in Bosnia and Herzegovina. Since most of the studies for developed and other transition economies explore the effect of different determinants on capital structure through firms’ leverage, that approach was used in this study too. Data on firms listed in two stock exchanges were obtained for the period of 2011-2015. Effects of industry and ownership on firm’s leverage were tested through the use of ANOVA and t-test. The results indicate differences in significance of industry and firm’s ownership for the firms listed in Sarajevo and Banja Luka Stock Exchange. For firms listed in BLSE industry effects have proven to be statistically significant where manufacturing firms have higher leverage while firms in water supply, electricity, gas supply industry have lower leverage. The results also show that privately owned firms will have higher leverage compared to state owned firms.
Keywords: Capital Structure, Leverage, Industry Effect, Ownership Effect
Towards to New Illustration of Resource Curse: FDI Channel Empirical Evidence from Gulf Cooperation Council (GCC) Countries
Mohamed M. Elheddad
DOI: 10.15604/ejef.2016.04.04.002
Abstract
This paper extends a high influential contribution by Poelhekke and Van der Ploeg (2013), on the new mechanism of natural resource curse which is FDI. Using panel data of FDI inflows (aggregate and disaggregate) for six oil dependent countries (GCC) during a period 1980-2013; our main findings are as follows. First, total FDI is negatively correlated with natural resources measured by oil prices constant 2000 in the long run and short term. This negative impact ranged between 0.21% and 0.41% if oil prices changed by one percent increase. Secondly, FDI in resource sector falls by around 0.44-0.47%, but non-resource FDI increased by about 0.21-0.29% when the interaction term between oil revenues and initial oil prices (1980) increases by 1%. These results are robust even after including other FDI determinants.
Keywords: FDI, Oil Prices, Natural Resource Curse, GCC Region, Panel Data
Behaviors of Companies after Initial Public Offering: The Case of Turkey
Ercan Ozen
DOI: 10.15604/ejef.2016.04.04.003
Abstract
Companies that went public have some aims such as finding fund for their new investments and being more recognized. On the other hand, investors have some purposes in the market for instance getting dividend and capital earnings. After the initial public offering (IPO), some companies show good performance while the others have lower performance, and so it causes loss for investors. In the process of IPO, companies announce their future strategies to the investors. This study aims to determine companies’ performances after IPO and whether they could be able to fulfill their strategies and plans as they promised before. Therefore, nonfinancial companies which went public between 2006 and 2012 are analyzed. The data is obtained from prospectus and financial statements of these companies. The results of the analysis show that the companies which perform activities according to their plans become successful and maintain their profitability. Thus, this causes positive effects on stock prices of these companies. On the other hand, other companies which could not be able to fulfill their plans have lower profitability. Their stock prices were affected negatively and this lead to investors’ lost. The results of the study emphasizes that it is necessary to ensure a balance between both companies and investor benefits.
Keywords: Initial Public Offering, Borsa Istanbul, Company, Profit, Investor Right
Oil Prices and Trade in Turkey: A Wavelet Continuous Transform Analysis
Nuray Terzi and Sadullah Celik
DOI: 10.15604/ejef.2016.04.04.004
Abstract
Since the beginning of the Great Recession, the conceptuality of the economic literature has been going through an unprecedented change at a rate which is mind-boggling. The flaws of the DSGE model that let to its breakdown, the existence of a zero lower bound for a period that is much longer than expected, the important and intriguing models that the literature on nowcasting offers, heterodox beliefs of yesterday that became orthodox notions such as the non-linearity of all variables used in empirical analysis as well as the role of measurement errors in these variables as the main cause of continuous fluctuations have all been at the forefront of this wave of new research in economics to build robust (or at least not flawed) models that are somewhat capable of explaining the nature of human behavior that has been shaped by the global technological advances which hardly has been a part of the past conventional economic analysis. Moreover, questions surrounding the models used to employ expectation formation of individuals and the shifting focus to company culture rather than just a representative agent have added additional fuel to a debate which seems to be only at its infant stages. Nonetheless, there are still important topics which are much simpler to tackle with that are left unattended by the literature among all this chaos that dominates the research and the empirical applications. One of them is the literature between the relation of oil prices and trade deficit. This paper studies the oil price-trade deficit relationship in the emerging market of Turkey, employing one of the recent unconventional methods that take into account the non-linear nature of the variables, the wavelet methodology. Our findings show that these two variables are definitely positively related and oil prices are leading the trade deficit, especially during the periods of turmoil and fluctuations.
Keywords: Global Trade, Oil Prices, Emerging Market, Financial Crisis, Wavelet Analysis
The Relationship Between Health and Growth in Eurasian Economic Union
Ayhan Kuloglu and Ebru Topcu
DOI: 10.15604/ejef.2016.04.04.005
Abstract
This paper examines the long run and causal relationship between health expenditures and economic growth in the in Eurasian Economic Union over the period 1995-2014. For this examination, panel cointegration and causality methodologies are utilized. Cointegration results which obtained from Pedroni and Kao tests support an evidence of a long run relationship among the variables under investigation. Long run elasticities indicate that health expenditures affect growth positively. Causality results, on the other side, provide a strong support of a bi-directional running between health expenditures and economic growth both in the short and in the long run.
Keywords: Health Expenditures, Economic Growth, Eurasian Economic Union
Municipal Solid Waste Illegal Dumping and its Spatial Autoregression: The Case of the Republic of Korea
Youngjae Chang and Geumsoo Kim
DOI: 10.15604/ejef.2016.04.04.006
Abstract
We reviewed the data pertaining to the illegal dumping of municipal solid waste in the Republic of Korea for the year 2011 to check for the presence of spatial autoregression of illegal dumping among 224 basic autonomous units with reference to the “Broken Windows Theory.” We found that a pure neighborhood effect exists even after controlling for conventional variables that explain illegal dumping behavior. Interestingly, however, the neighborhood effect is largely offset by so-called relative price effect such that the number of illegal dumping reported in one region is in fact decreased as the price of vinyl bag for MSW in neighboring regions increases, which is seemingly against the implication of the “Broken Windows Theory.”
Keywords: Illegal Dumping, Spatial Econometrics, Municipal Solid Waste
Gender Bias and Child Labor: Spain, Latin America and Developing Countries from A Long-Term Comparative Perspective
Enriqueta Camps-Cura
DOI: 10.15604/ejef.2016.04.04.007
Abstract
In this paper, several historical scenarios are compared, each very different to the each other in both institutional and geographical terms. What they have in common is the relative poverty of part of the population. This approach allows combining micro historical analysis (in the Catalan case) with a macro comparative approach in developing countries. Through these micro historical and macro regression analyses we obtain the result that adult women’s skills and real wages are a key factor when we wish to explain the patterns of child labor. While female real wages increased sharply in 19th century Catalonia, we obtain very different results in the case of developing countries. This gender bias is identified as one of the very significant effects of human capital which held by women and helps to explain why in some cases children continue to work and also why some parts of the world continue to be poor according to our regression analysis.
Keywords: Child Labor, Women’s Work, Human Capital, Fertility, Income Inequality
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