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Vol.6 No.1
March 2018

 Page Number

 Article Information

1-15

Educational Attainments and Labor Participation of Females across the Turkish Regions: A Panel Data Approach

Seyit Kose and Sahabettin Gunes

DOI: 10.15604/ejef.2018.06.01.001

Abstract

This paper aims at testing whether educational attainments of females beside other primary determinants have significant impacts on their participation in the labor markets across the regions of Turkey during the years 2004-2016. Even though there are certain number of empirical studies on this fact, they mostly employ time series data or micro data sets. However, very few of them stick with the regional data analysis and also do not take care of the recent developments in the empirical literature. So, the existing empirical findings do not suggest a clear evidence about the matter, particularly about the Turkish regional differences, yet. Therefore, this work exploits a panel data technique that pays attention to the recent empirical considerations. The findings suggest that, in contrary to most of the current empirical results, both the high school and the higher education graduations of females beyond the other determinants do not have significant impacts on their participation rates in the labor market across the Turkish regions in the relevant span.

Keywords: Turkish Labor Market, Female Labor Participation, Female Educational Attainments, Regional Differences

16-24

R&D Investments and Spillovers under Endogenous Absorptive Capacity: Competitive R&D Cannot Take Full-advantage of Complementarity in Absorptive Capacity while Cooperative R&D Can

Mário A.P.M. Da Silva

DOI: 10.15604/ejef.2018.06.01.002

Abstract

We show that the setting up of general conditions on complementarity in absorptive capacity gives rise to different, if not opposite Nash equilibrium outcomes to those found when absorptive capacity is assumed to be determined only by the similarity of R&D orientations. Firms that cooperate in R&D can take full-advantage of complementarity in R&D by adopting firm-specific R&D paths, which appears to contradict findings and predictions of existing theoretical literature on R&D and spillovers. Oddly, firms competing in R&D cannot gain the most from the potential of complementarity in knowledge by not choosing firm-specific R&D approaches in equilibrium under even milder conditions, which is contrary to another prediction of existing related models.

Keywords: Absorptive Capacity, Complementarities, R&D, Knowledge Spillovers

25-34

Selection of the Optimal Way of Development for the Oil Dependent Economy of Kazakhstan

Nurlan Aitkaliuly Nurseiit and Ken Charman

DOI: 10.15604/ejef.2018.06.01.003

Abstract

The report describes the current problems in the country’s economy, characteristic of Kazakhstan’s economy. This is shown by the high dependence of the country’s economy on natural resources and changes in prices for them. In the past, rapid development of natural resources, in particular hydrocarbons, allowed the country to maintain high growth rates. However, because of the expected low oil prices in the foreseeable future and the transition of hydrocarbon production to the stage of the plateau, this driver of growth has dried up. The article also discusses possible ways of finding new drivers of growth.

Keywords: Economic Growth, Oil Dependency, Kazakhstan, Hydrocarbons, Government Policy

35-46

Working Capital Financing in Reverse Supply Chains – New Perspectives (Auto-Financing)

Anca Iuliana Nicolae

DOI: 10.15604/ejef.2018.06.01.004

Abstract

Competition among Global Supply Chains has been studied intensively in recent years. While forward supply chains strategies such as supply chain or operational redesign were studied often, for reverse logistics most development strategies represented a new direction of research, especially regarding Supply Chain Finance domain. This paper explains how a reverse supply chain can obtain finances for its daily activities in its sorting phase by using a linear model based on penalties for the working capital issue. Here, traditional working capital financing (obtained normally from a financial institution) is replaced by a new production model, resulting in daily activities financing from another actor of the reverse logistics. In this case, the working capital provider is no longer a financial institution, but the original raw material provider. This approach gives a new perspective about finances in a supply chain hence it does not add more financial constraints for companies, and helps in the same time the whole supply chain from an operational point of view. As a result, the manufacture company has less financial constraints, the sorting process improves significantly both in financial and non-financial terms, and the overall supply chain is more competitive on the market.

Keywords: Global Supply Chains, Reverse Supply Chains, Single Equation Model, Sorting Process, Supply Chain Finance, Working Capital

47-55

The Impact of Basel III Adoption by G20 Members on their Credit Ratings

Mohammed Kalloub, Ayhan Kapusuzoglu, and Nildag Basak Ceylan

DOI: 10.15604/ejef.2018.06.01.005

Abstract

This study aims to analyze the effect of Basel III standards adoption made by 27 countries included in Basel III adoption reports (including G20 group members) on their credit rating. In addition, the study tests the impact of some macroeconomic variables on sovereign credit rating. The data are obtained from BCBS semi-annual adoption reports, along with other macroeconomic indicators published by IMF and World Bank; however, the basic indicator for credit rating is Standard &Poor’s credit rating. The period under the study is between 2011 and 2016. The results of the analysis show that there is a strong statistical significant positive effect of Basel III standards on 27 countries’ credit rating.

Keywords: Basel III, Credit rating, Liquidity Coverage Ratio

56-63

Informal Sector and Urbanization Externalities in Vietnam

Thi Bich Tran

DOI: 10.15604/ejef.2018.06.01.006

Abstract

This paper investigates the impacts of urbanization on the productivity of informal household businesses in urban places of Vietnam. Urbanization externalities are measured by the diversity of industry, which are disaggregated from formal and informal sources, and city size. Results from the paper show that informal household businesses in urban places benefit from clustering with formal enterprises but not from informal firms in other industries. Furthermore, the concentration in large and dense urban areas does not bring benefits to informal household businesses. The results call for more attention on the urban planning towards the informal sector in urban places of Vietnam.

Keywords: Urbanization, Informality, Productivity

64-83

Foreign Bank Penetration and its Impact on Banking Industries

Bahtiar Usman, Syofriza Syofyan, Lucky Nugroho, and Soeharjoto

DOI: 10.15604/ejef.2018.06.01.007

Abstract

The purpose of this study is to measure the impact of penetration of foreign banks in the Indonesian banking industry. The measured effects are limited to competition and efficiency during the years 2000-2011, during which was a recovery from the economic crisis in Indonesia. Panzar-Rosse measures the competition and Conjectural Variation approaches. The efficiency is measured by the Standard Profit Efficiency approach. By using panel regression method with SUR (Seemingly Unrelated Regression), we found that penetration of foreign banks will increase competition and efficiency of banking in Indonesia, especially to medium and small banks through spillover effect on domestic banking system. The increase in total assets, total loans and the amount of third party funds held by foreign banks in Indonesia will increase competition and efficiency of banks in Indonesia.

Keywords: Foreign Banks, Bank Competition, Bank Efficiency

84-92

On the Relation between Oil Price and U.S. Dollar: A Review of Financial Point-Of-View

Vincenzo Costa and Angela Maddaleni

DOI: 10.15604/ejef.2018.06.01.008

Abstract

If it studies the relationship between crude oil price and U.S. dollar, classical literature finds a positive sign for the correlation of these two variables, i.e. the oil price and the dollar grow up together or they fall together. Instead, researches which use the data of more recent years show a negative link, so that if one variable is rising, the second one is decreasing and vice versa. Besides, there are two possible directions of causality: the economic theory explains the influence of oil price towards U.S. dollar; while the financial perspective is coherent with the opposite way. This second thesis is confirmed by the empirical evidence. In this framework, the futures and other financial derivatives have changed the picture, modifying how crude oil is priced and valued by the market. In this paper, we review the literature about the above relationship, inspecting whether or not the empirical results validate the theory, under the financial point-of view, i.e. the second interpretation.

Keywords: Exchange Rates, Oil Price, Asset Price, Inflation, Granger’s Causality, Currency

93-106

Good Governance and Economic Growth: An Investigation of Thailand and Selected Asian Countries

Paitoon Kraipornsak

DOI: 10.15604/ejef.2018.06.01.009

Abstract

Good governance has been placed an important factor in economic development especially in developing countries. Consequently, good governance is set to be one of the development goals in the millennium of the United Nations. The paper aims at comparatively investigating level of governance of Thailand and few other Asian countries. The study examined Worldwide Governance Indicator (WGI) comparatively among selected Asian countries. High percentile ranks of the WGI were found in advanced economies. Framework of production function is used to quantitatively analyze effect of being good governance on income per head. The production function was estimated for 16 Asian countries during 1996 – 2016 using the fixed effect model indicated by the Hausman Test. The result showed that apart from capital per head and total factor productivity growth, the good governance can additionally be a significant factor that contributes to growth of income per head. A higher composite governance index by 1 percent from the past year can help raise country’s income per head by US $31.34 or 0.54 percent per year. For Asian developing countries, the good governance is therefore a crucial factor that can contribute significantly to their growth.

Keywords: Cross Countries Comparison, Governance, Growth of Income Per Head, Least Square Dummy Variable Model, Production Function, Worldwide Governance Index

107-132

Public Expenditures and Growth in a Monetary Union: The Case of WAEMU

Nihal Bayraktar and Blanca Moreno-Dodson

DOI: 10.15604/ejef.2018.06.01.010

Abstract

The focus of the paper is on how public spending volume, composition (current versus capital) and quality are linked to economic growth in lower-income countries that are members of a monetary union. We specifically investigate the case of the West Africa Economic and Monetary Union (WAEMU) countries, which have fluctuating growth rates and relatively low-income levels compared to other parts of the world. The empirical analysis covers the period 2000-2013. The results indicate that total public spending has a significant impact on growth. While the impact of the capital component is positive and statistically significant, the effect of the current component tends to be negative, but not significant. When the capital component is further split into two: public fixed capital investment and public other capital expenditures, defined as total public capital expenditure minus public fixed capital investment, the results show that not only physical capital formation but also human capital spending is important for growth. While the volatility measure for public investment has a clear negative and statistically significant impact on growth, the quality of public fixed investment has a positive impact. The findings also indicate that fiscal deficits have not been an important constraint to the effectiveness of government spending on growth, reflecting the fiscal discipline achieved in the union. On the other hand, the debt-to-GDP ratio clearly shows a significant negative impact on growth, indicating the risk associated with debt distress. Total fiscal revenue has a significant and positive effect on growth, most likely indicating relatively low levels of fiscal revenues to GDP ratios, partially boosted by natural resources, coupled with grants. In each regression specification, it is observed that the contributions of both trade openness and private investment on growth are positive and significant. The results also indicate that the quality of institutions, measured by an index of bureaucracy quality, is critical to enhancing the positive effect of public spending on growth. The findings are robust to different regression methodologies, as well as the inclusion of short- and medium-term data.

Keywords: Public Spending, Current and Capital Components, Growth, WAEMU Countries

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