Economics Commons^™

Macroeconomic Adjustments Of Global Convergence: Real Exchange Rate Response Of Asia-Pacific Growth, Kumarappan Annamalai

Dissertations, Theses, and Capstone Projects

This dissertation consists of three chapters.

Chapter 1 : PURCHASING POWER PARITY, REAL EXCHANGE RATE, PRICE LEVEL INDEX and HARROD-BALASSA-SAMUELSON EFFECT: LITERATURE SURVEY

In the light of the concepts explained in the introduction section, this chapter explores the seminal papers on the Purchasing Power Parity principle, the Real Exchange rate, and the Price Level Index, showing the evolution of PPP and the methodologies adopted in exploring the characteristics of PPP and the real exchange rates. Various characteristics might be stationarity or non-stationarity of the real exchange rates (RER), variance, correlation, half-life measures, linearity versus non-linearity, etc. Various methodologies adopted were …

Executive Compensation And The Potential For Additional Efficiency Gains: Evidence From The Indian Manufacturing Sector, Levent Kutlu, Usha Nair-Reichert

School of Economics and Finance Faculty Publications

We examine the relationship between executive compensation and technical efficiency. We highlight heterogeneity in this relationship, identify opportunities for within-sector efficiency gains, and the channels through which such gains occur. Previous research mainly focuses on excessive executive compensation that does not reflect firm performance. We develop unique measures for executive overcompensation and undercompensation, and account for endogeniety. Using firm-level data for the Indian chemical, textile, and pharmaceutical sectors during 2004–2015, we conclude that the median firm overcompensates and large firms undercompensate their executives. Overcompensation decreases firms’ profits as increased executive costs outweigh the benefits of efficiency gains. Firms in the …

A Study On The Impact Of Technological Innovation Attributes On Listing Success Rate And Post-Listing Performance, Yijun Xu

Dissertations and Theses Collection (Open Access)

"Key and core technology" enterprises form the backbone of great powers. China’s STAR Market (technological innovation board) is committed to implementing strategies that will lead to technological innovation-driven sustainable development and strengthen the country by building a secure and independent industrial chain that can support the development of cutting-edge technology. From the outset, the STAR Market put forward clear requirements for "key and core technology" enterprises. The technological innovation attributes of the enterprises listed on the STAR Market are the most essential core characteristics, but a question arises as to how best to evaluate their technological innovation attributes. Are these …

Essays On Futures Market And Machine Learning, Jonathan J. Lopez Camara

Dissertations, Theses, and Capstone Projects

Chapter 1 - Big Data And Machine Learning To Predict Overnight Interest Rates. This paper is a brief introduction to the two main pieces I have elaborated as part of the dissertation. Here, I explain the reasons why I have done my research about predicting the overnight interest rates for Mexico and the United States using big data and machine learning models. I explain the connection between the two research papers, I define some basic concepts such as future contracts and the overnight funding rate for Mexico. There is a summary about the data I use, and the machine learning …

Bayesian Methods In Economics And Finance: Editor's Introduction, Jun Yu

Research Collection School Of Economics

Modern days, Bayesian methods have gained prominence in theoretical work and applications in economics and finance due to the rapid development of computational technologies and their ability to learn. The special issue intends to examine central aspects in Bayesian analysis and applications, including prior choices, model selection with massive data and latent variables, hypothesis testing, Bayesian learning. In total, this special issue contains ten papers, all subject to the Journal of Econometrics (JOE)’s normal refereeing process. Most of these papers came from a conference held at the ESSEC Singapore campus on 10 December 2018.

Charging Drivers By The Gallon Vs. The Mile: An Equity Analysis By Geography And Income In California, Samuel Speroni, Asha Weinstein Agrawal, Michael Manville, Brian D. Taylor

Mineta Transportation Institute

This study used data from the 2017 National Household Travel Survey California Add-On sample to explore how replacing the current state vehicle fuel tax with a flat-per-mile-rate road-user charge (RUC) would affect costs for different kinds of households. We first estimated how household vehicle fuel efficiency, mileage, and fuel tax expenditures vary by geography (rural vs. urban) and by income. These findings were then used to estimate how much different types of households pay in the current per-gallon state fuel tax, what they would pay if the state were to replace fuel taxes with a flat-rate road-usage charge (RUC) that …

Overnight Returns, Daytime Reversals, And Future Stock Returns, Ferhat Akbas, Ekkehart Boehmer, Chao Jiang, Paul D. Koch

Research Collection Lee Kong Chian School Of Business

A higher frequency of positive overnight returns followed by negative trading day reversals during a month suggests a more intense daily tug of war between opposing investor clienteles, who are likely composed of noise traders overnight and arbitrageurs during the day. We show that a more intense daily tug of war predicts higher future returns in the cross section. Additional tests support the conclusion that, in a more intense tug of war, daytime arbitrageurs are more likely to discount the possibility that positive news arrives overnight and thus overcorrect the persistent upward overnight price pressure.

Political Connections, Informational Asymmetry, And The Efficient Resolution Of Financial Distress, Madhav S. Aney, Sanjay Banerji

Research Collection School Of Economics

We show that securities issued by a distressed firm, often through exchange offers, providethe most efficient resolution of financial restructuring. Information asymmetry between thefirm-bank coalition and small bondholders gives rise to other forms of distress resolutionsuch as refinancing, public workout, and the inefficiency of liquidation. We find that politicallobbying by the firm-bank amplifies these inefficiencies and inhibits the development of privatemarket for distressed securities. Cross-country evidence is consistent with this and indicatesthat improved creditor rights, and information facilitating credit bureaus interact in reducingthe likelihood of inefficient distress resolution.

Pharmacy Performance Based On Financial Perspective Before And During Covid-19 Pandemic : A Case Study, Eva Sartika Dasopang, Ida Fauziah, Fenny Hasanah, Desy Natalia Siahaan, Dina Yunisma Rasyida Lubis

Pharmaceutical Sciences and Research

A pharmacy, aside from being a pharmaceutical care provider is also a functioning business. Thus, in the scope of business, pharmacy performance can be analysed using liquidity, activity, and profitability ratios. This study aimed to determine the performance of Pharmacy X based on a financial perspective before and during the COVID-19 pandemic. This research is a descriptive cross-sectional study that employed data obtained from sales and purchase records. The data were analysed using financial ratio analysis methods, including liquidity, activity, and profitability ratios. This study was conducted at Pharmacy X based on the amount of prescription and non-prescription income from …

Can Geopolitics Help Restore Missing Tools To The U.S. Trade Toolbox?, Matthew Schaefer

Yeutter Institute International Trade Policy Review

When U.S. trade negotiators and trade litigators seek to increase market access for U.S. goods and services abroad, they look in their toolbox to see what might be the best tool. The more well-stocked the toolbox, the more possibilities for increasing foreign market access. Today, when U.S. trade negotiators look in their toolbox, they see several traditional tools missing, specifically legally-binding, comprehensive (including tariff-cutting) regional and bilateral free trade agreements (FTAs) and large package deals within the World Trade Organization (WTO). Their trade litigator colleagues face a similar circumstance of missing traditional tools, specifically the loss of binding two-level dispute …

Repairing Provincial Finance, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Most of the discussion and discourse on public finances has remained focused on the federal government and FBR. The analysis of provincial finances has been sketchy and shallow, although it should occupy a salient place in the aftermath of the 18th Amendment and 7th National Finance Commission Award. It has been a decade now since the provincial governments have enjoyed both administrative, legal, and political autonomy and a large dose of injection of financial resources out of the divisible tax pool.

Does Microcredit Reduce Poverty? An Empirical Exploration In India, Aneel Karnani, Seema Sahai

Markets, Globalization & Development Review

Microcredit has grown dramatically over the last few decades and its supporters have made extravagant promises about its potential impact on reducing poverty. However, much recent research has shown that microcredit has no significant impact on reducing poverty. In this exploratory study we interview 205 clients of for-profit microcredit to better understand the causes of why microcredit has not lived up to its promise. We find the basic problem is that the lending policies of the microcredit organizations are designed to lower the costs and risks, and hence increase the profits of the organization, and are not responsive to the …

Systematic And Idiosyncratic Risks Of The U.S. Airline Industry, Rafiqul Bhuyan, André Varella Mollick, Md Ruhul Amin

School of Economics and Finance Faculty Publications

Understanding the risky nature of the airline industry has received attention in the tourism literature from separate angles. Although the systematic risk of the airline industry has been examined before, idiosyncratic risk has largely been ignored. This study fills this gap in the tourism literature by investigating the effect of passengers’ air travel on systematic and idiosyncratic risks of the U.S. airline industry. Using historical air travel data and utilizing both OLS and fixed-effect models, this paper documents negative relationships between the occupancy of airline seats and idiosyncratic risks for 21 U.S. airline companies. This negative effect of occupancy is …

Three Chapters On Investments And Financial Institutions, Cao Fang

Graduate Theses and Dissertations

Only the stock selection (“alpha”) decisions of fund managers who trade on firm-specific information should have predictive return content. Faced with the same information, skilled fund managers make similar stock selection decisions. In Chapter one, we introduce a new measure - stock investment quality - which uses fund quality to weight asymmetries in private information reflected in deviations of fund from peer group ownership on stocks in a style segment. We show stocks ranked high on investment quality generate significantly higher excess returns that persist through the ensuing year. The positive investment quality–future return relationship is robust to alternative fund …

Full Disclosure: Model Uncertainty In Adjusting For Confounders, Dieudonne Dusenge

Graduate Theses and Dissertations

This study examines the role of knowledge about underlying causal relationships in classifying controls in order to mitigate omitted- and included-variable biases. Using simulations and accounting examples, the study shows that the researcher may not distinguish good and bad controls because the underlying causal relationships are unobservable, and remedying strategies (such as the relative timing of measurement) may not remove the uncertainty in the classification. Because of the uncertainty about which controls to use, two or more models will be credible as will the distinct estimates derived from them. Next, the study shows that the current standard practice of singling …

Social Security As Markov Equilibrium In Olg Models: Clarifications And New Insights, Armando R. Lopez-Velasco

School of Economics and Finance Faculty Publications

Forni (2005) is the first author to study the politico-economic sustainability of pay-as-you-go social security in the canonical 2-period OLG model that uses Cobb-Douglas production and logarithmic utility under Markovian voting strategies. This paper (1) shows that equilibria can only exist if the economy in absence of social security is dynamically inefficient, (2) derives the exact parametric conditions that lead to existence of equilibria, (3) shows that among all the admissible arbitrary constants that produce a Markov perfect equilibrium, the maximum constant in such set produces the only equilibrium that can solve dynamic inefficiency and produces a single steady state. …

Inflation Expectations Can Be A Self-Fulfilling Prophecy, Aurobindo Ghosh, Khyati Chauhan, Muskan Bagrodia

Research Collection Lee Kong Chian School Of Business

In a commentary, SMU Assistant Professor of Finance (Education) Aurobindo Ghosh, SMU postgraduate student and Research Assistant for the SInDEx Project Muskan Bagrodia and International Monetary Fund Economic Research Assistant Khyati Chauhan weighed in on why inflation expectations matter as much as economic data. They discussed how inflation expectations can be a self-fulfilling prophecy, and shared the key takeaways of the quarterly DBS-Sim Kee Boon Institute’s Singapore Index of Inflation Expectations (DBS-SKBI SInDEx) survey. They concluded that effective communication on inflation control measures, in addition to credible policy decisions, will help consumers feel assured and refrain from basing purchasing decisions …

Does The Financial Experience Of Sec Regional Directors Impact Sec Investigations Into Reporting Entities?, James Justin Blann

Graduate Theses and Dissertations

The SEC’s Division of Enforcement is frequently criticized for its lack of oversight effectiveness, and certain vocal critics attribute this to a lack of financial experience within the SEC. Using hand-collected data on SEC regional directors, I find that the majority of these SEC officials lack financial experience. I then examine whether the financial experience of SEC regional directors impacts SEC investigations into reporting entities. Consistent with financial experience equipping directors to better process complex financial transactions and reports, I find that directors with financial experience open public company investigations 29 percent more often and conduct these investigations 34 percent …

The Cryptocurrency Participation Puzzle, Ran Duchin, David H. Solomon, Jun Tu, Xi Wang

Research Collection Lee Kong Chian School Of Business

We show that ongoing zero portfolio weights in cryptocurrency are surprisingly difficult to generate in a standard Bayesian portfolio theory framework. With ten years of prior data, equity market investors would need very pessimistic priors on mean returns to justify never having bought cryptocurrency: -10.6% per month for Bitcoin, and -19.6% per month for a diversified portfolio of cryptocurrencies. Moreover, most priors that involve never purchasing cryptocurrency imply that investors should short cryptocurrency. Optimal absolute weights are generally small but non-trivial (1-5%), frequently positive, and fairly smooth despite returns being volatile. Under a wide range of priors, the certainty equivalent …

International Asset Pricing With Strategic Business Groups, Massimo Massa, Hong Zhang, Hong Zhang

Research Collection Lee Kong Chian School Of Business

Firms in global markets often belong to business groups. We argue that this feature can have a profound influence on international asset pricing. In bad times, business groups may strategically reallocate risk across affiliated firms to protect core “central firms.” This strategic behavior induces co-movement among central firms, creating a new intertemporal risk factor. Based on a novel data set of worldwide ownership for 2002–2012, we find that central firms are better protected in bad times and that they earn relatively lower expected returns. Moreover, a centrality factor augments traditional models in explaining the cross section of international stock returns.

Customer Concentration And Corporate Carbon Emissions, Saiying Deng, Tinghua Duan, Frank Weikai Li, Xiaoling Pu

Research Collection Lee Kong Chian School Of Business

This paper examines whether economic links with major corporate customers curb corporate carbon emissions. We show that supplier firms with a concentrated customer base have significantly lower carbon emissions. The baseline results are robust to alternative measures of carbon emissions and customer concentration, and various approaches that mitigate endogeneity concerns due to omitted variables and reverse causality. Moreover, the curbing effect of customer concentration on supplier carbon emissions is more pronounced in firms facing lower customer switching costs, with less (more) supplier (customer) bargaining power, fewer redeployable assets, operating in more carbon-intensive industries, and after the Paris Agreement of 2015. …

Student Loan Debt In Mountain West States, Zachary Walusek, Caitlin J. Saladino, William E. Brown Jr.

Higher Education

This fact sheet summarizes findings on student loan debt across Mountain West states from “Student Loan Debt by State,” a report by the Education Data Initiative.

Protecting The Sovereign's Money Monopoly, Gary B. Gordon, Jeffery Zhang

Law & Economics Working Papers

Sovereign states have had a monopoly over the production of circulating currencies for well over a century. Governments, not private entities, issue circulating currencies. Indeed, in 1986, Milton Friedman and Anna Schwartz declared that “[t]he question of government monopoly of hand-to-hand currency is likely to remain a largely dead issue.” The advent of stablecoins—privately issued digital money that are pegged to fiat currencies like the U.S. dollar or the Euro—raises the question of the money monopoly from the grave.

Why did sovereign money monopolies come into existence in the 19th and 20th centuries? Should circulating private money coexist once again …

Electrical Equipment Industry Cluster, Pragati Gautam

2022 REYES Proceedings

The growing collaboration between two or more industries in a specific region in which they work in a symbiotic relationship, providing benefits to each other and contributing in the overall development of the region, is what is popularly known as business clusters. Even though this concept is commonly known and implemented in the West, South Asian economies are unfamiliar with the advantages of this unique business strategy. There are, undeniably, many potential business clusters in these developing countries, which if tapped efficiently, could result into an industrial boom.

This research focuses on investigating the existence of a business cluster in …

Chinese-Backed Fintech Lending Boom: How Did Indonesia Respond?, Angela Tritto, Yujia He, Victoria Amanda Junaedi

Diplomacy and International Commerce Reports

Peer-to-peer (P2P) online lending has the potential to boost innovation and financial inclusion in emerging markets, yet it can also incur investment and borrower-related risks, such as privacy breaches.

Driven by regulation control in China, Chinese investments flocked to Indonesia, causing a rapid expansion of online lending platforms.

Similar to what happened in China prior to the regulatory crackdown, the P2P lending boom in Indonesia saw a rise in unethical and illegal business practices. The government responded by creating new regulations and institutions to mitigate risks without stifling the potential for financial inclusion.

A proactive approach towards monitoring and regulating …

Foreign Ownership And Productivity, Jian Xu, Yu Liu, Hussein Abdoh

School of Economics and Finance Faculty Publications

This study examines the impact of foreign ownership on firm productivity in private firms, employing the World Bank Enterprise Survey (WBES) dataset, which includes over 120, 000 firms from 139 countries. We find strong and robust evidence that foreign ownership is positively related to firm productivity. We then explore possible channels through which foreign ownership could impact firm productivity. Firms with foreign ownership are more likely to engage in innovation, telecommunication, and labor cost reduction, and less likely to face financial constraints. Moreover, the foreign-productivity relationship is more pronounced in medium/large firms than in small firms. Countries with medium institutional …

A Principal-Agent Approach For Estimating Firm Efficiency: Revealing Bank Managerial Behavior, Levent Kutlu, Emmanuel Mamatzakis, Mike G. Tsionas

School of Economics and Finance Faculty Publications

We consider agency-theory-based structural and reduced form models of bank performance. In the structural models, we take into account the managerial decision-making processes, and reveal underlying managerial efforts and thereby managerial behavior. In an empirical application, we estimate performance of Eurozone banks using our novel structural and reduced form approaches by Markov Chain Monte Carlo techniques. Our findings show, for the first time, that bank underperformance persists in the Eurozone whereas considerable variability across Member States exists. Our agency-theory-based structural modeling would favor cooperation of all interested parties and towards higher financial integration.

Oil Price Shocks And Stock Market Anomalies, Zhaobo Zhu, Licheng Sun, Jun Tu, Qiang Ji

Research Collection Lee Kong Chian School Of Business

This paper provides a novel perspective to the nexus of oil prices and stock markets by examining the impact of oil price shocks on stock market anomalies. After decomposing oil price shocks into three types , we find that aggregate demand shocks have the strongest influence on stock market anomalies. In contrast, oil supply shocks and oil-specific demand shocks have little impact. Similar results are also found in the industry analysis. Interestingly, the link between aggregate demand shocks and anomalies is the strongest among firms with either small size or high idiosyncratic risks. The documented effects are robust after controlling …

Why Do U.S. Firms Invest Less Over Time?, Fangjian Fu, Sheng Huang, Rong Wang

Research Collection Lee Kong Chian School Of Business

Capital expenditures of U.S. public firms, relative to total assets, decrease by more than half from 1980 to 2020. The decline is pervasive across industries and firms of different characteristics and cannot be explained by the usual determinants of investment and many other seemingly plausible reasons. The decline is consistent with the transformation in production technology — firms rely more on intangible capital and less on fixed assets in production. Industry-level analyses yield supporting evidence. We observe similar declining trend in capital expenditure in other developed countries but not in most emerging markets.

Eradicating Malaria: Innovation Diffusion In The Face Of Grand Challenges, Han Jiang, Hao Liang, Dongning Yang

Research Collection Lee Kong Chian School Of Business

What is the role of organizational innovation—beyond technological innovation—in an era of grand challenges concerning health, poverty, and economic development around the world? How is organizational innovation developed and diffused to influence resource allocation in the field? We conduct a qualitative case study by analyzing a Chinese pharmaceutical firm’s efforts to combat malaria in Africa over 10 years. Through documentation and extensive interviews, we study the role of innovation diffusion and resource allocation to address grand challenges in emerging markets with significant institutional voids. Our conceptual model delineates the different stages of innovation diffusion to show how organizations can draw …