International Research Journal of Finance and Economics
 Issue 144
 January, 2016
Can the UAE avoid the Oil Curse by Economic Diversification
Ilham Haouas and Almas Heshmati

This paper takes an in-depth look into the UAE economy as a model but also as a reminder of the struggles ahead. The findings support the fact that the UAE is facing an oil curse. Declining levels of total factor productivity, GDP volatility, negative returns on investment, and a labor force that is too reliant on government supply of jobs are among the many reasons that support the thesis. The UAE has made good progress in recent years to diversify its economy. However, the drivers of economic growth in the UAE are vulnerable to external shocks outside of the Emirate’s control. It is now critical that the UAE take steps to mitigate economic disruptions that might result from these shocks. In this case study the UAE economic performance is examined, and a data-driven roadmap for sustainable growth is suggested. The analysis shows that greater efforts are needed to stimulate the diversification of the production base by encouraging increased domestic, especially private, investment. Well-targeted policies should be adopted to accelerate reform and facilitate the involvement of the private sector in the economy.
Keywords: Growth accounting, TFP, Oil curse, Economic diversification, UAE
JEL Classification Number C22; E20; L16; L71; O11; O53
Survey on the nature of time Sharing and its effects on the legal system of Iran and America
Adel Ahmadi, Mohammad Javad Mousazadeh kangari

Timeshare ownership of vacation or recreation condominium property is a popular choice for persons who wish to secure a long term commitment to a particular location. Timeshares are not in fact investments and one should not buy a timeshare with the expectation of reselling it for a profit. While one might buy a timeshare property to make an investment in a lifestyle, few timeshares appreciate, only the ones in choice locations during specific seasons. Then, through assessment of ownership and its surrounding issues and its relationship with public rights like sharing, nature and basis of time-sharing contracts would be studied. It should be mentioned that time-sharing, as a kind of ownership, has same effects of absolute ownership; although, due to reliance of this kind of ownership on time, it includes also specific effects. Application of this new law is useful in various affairs; although, the best application is in tourism industry, which has been considered in the present study.
Keywords: time sharing, Iran’s law, legal contracts, public right
Legal Protection for Users of Air Transport Services in Domestic Flights

The method used in this research is the method of normative legal research with the type of data in the form of primary legal materials composed of Law No. 1 of 2009 on Flights, Law No. 8 of 1999 on Consumer Protection and Regulation of the Minister of Transport of the Republic of Indonesia Number 77 Year 2011 On Responsibility Carrier Air Transport. Secondary legal materials in these study flight expert opinions, findings in the field based experience, while the non-legal materials are flight dictionary. Techniques of collecting legal material carried by the literature search and experience of the researchers themselves.
Results of this study found that the rules regarding the provision of special facilities for the disabled, the elderly, children under the age of 12 (twelve) years old and the sick are not found in domestic flights in Indonesia. The procedure for obtaining compensation to the passengers who died as a result of an aircraft accident is very convoluted. In addition the results of this study found that the compensation to the passengers due to flight delays has not been optimally implemented.
Keywords: legal protection, air transport services
The Impact of Sales Promotion on Purchasing Decision of Children's Meals at Fast Food Restaurants in Jordan
Dr. Raed Ahmad Momani and Dr. Sima Ghaleb Magatef

This study aims to identify the impact of the sales revitalization of the decision to buy children's meals at fast-food restaurants, this study was conducted on the parents of children in Jordan, who attend these restaurants accompanied by their children, due to lack of children's ability to fill in the questionnaire. This study also focused on the knowledge of the impact of independent variables represented by coupons, discounts, places to play and gifts on the dependent variable and the decision to purchase meals from fast food restaurants. To achieve the objectives of this study, data collected through the selection of a random sample of parents who attend these restaurants accompanied by their children, where the total of questionnaires distributed was 500, but only 440 of which received, which is 88% of the total. The results showed that there is a strong effect of coupons on the purchase decision, and it ranked first among other variables. The one followed it regarding the impact on the dependent variable the variable of discounts. Finally, playing areas occupied the third place in influence on the dependent variable represented by the purchasing decision, while the rest of the factors showed weakness in influencing the dependent variable, either for lack of interest by the fast-food restaurants in them, or the lack of consumer awareness of their importance to increase the purchasing decision.
Keywords: sales promotion, coupon, price-off, play area, premium, purchasing decision.
Drivers of Disclosing and Non- Disclosing Environmental Information in the United Arab Emirates
Azzam (M. T.) Hannon and Ahmad Faisal Hayek

This study investigated the drivers why companies listed in Dubai Financial Market (DFM) disclose or don’t disclose environmental information in their annual reports.
A questionnaire of three sections, demographic information, drivers for disclosure of environmental information, drivers for not disclosing environmental information, was distributed to accounting and finance department employees in the sample firms. They were asked to assess the importance of a number of reasons in deciding whether to disclose or not to disclose environmental disclosures based on a five-point Likert scale.
The result shows that the most highly ranked drivers of disclosing environmental information are: to provide “true and fair” view of operation, disclosing environmental information a result of having audit committee, to meet legal obligations, to meet supplier’s interest, and to meet Customer’s interest. The most highly ranked drivers of not disclosing environmental information are: priorities are given to other types of disclosures, fear of liability discourages environmental disclosures, the size and structure of board of directors at the company.
The study result, supported by the theoretical background, provides valuable information about companies’ reasons for disclosing or not disclosing environmental disclosures in the United Arab Emirates.
Keywords: Environmental Disclosure, Drivers of Environmental Information, Dubai Financial Market (DFM), United Arab Emirates (UAE).
Juvenile Delinquency
Mohamad Alinia

Juvenile crimes are a popular issue of social research. Juvenile crimes slow down the development of a society. The present research aimed at exploring the socio-economic factors of juvenile crime.
Keywords: Juvenile delinquency, risk Factors, economic factor
The Level of FCF Can Affect the Investment – Firm Value Relationship?
Hechmi Soumaya

The existence of liquidity excess in the firm (FCF) may be a factor influencing the value creation through the investment process.
This research proposes an analysis of the effect of FCF level on the investment – firm value relationship on a sample of 82 French firms that compose the SBF 250 index, from 1999 to 2005.
Our results corroborate the free cash flow theory, since high free cash flow firms that invest sustain a decrease in value whereas low free cash flow firms that invest experience an increase in value.
Keywords: Investment decisions, firm value, free Cash flow (FCF)
Investor Sentiment, Stock Returns and Volatilities: Evidences from Cash, Futures, and OTC Markets in Taiwan
Hsiang-Hsi Liu and Chun-Chou Wu

This study applies different volatility models to delineate conditional volatility patterns, incorporating extreme sentiment indicators into the models for dynamic structure of returns. For this research, different grades are designed for tailed trading volume as a proxy for extreme investor sentiment to detect the relationships between investor sentiment and market returns in Taiwan. Meanwhile, the direct and indirect effects of these sentimental factors on market returns are also examined. Additionally, the impacts of the financial tsunami on return and volatility structure are also discussed and it was found that the extreme sentiment indicators can still play a substantial role in exploring the changes for market returns. Most importantly, when incorporating specific sentiment indicators into short and long run volatility structures, it can be inferred that these sentiment indicators might indirectly influence their return processes by its asset’s volatilities.
Keywords: Tailed trading volume, Sentiment indicators, Component volatility.
JEL classification: G12, G14
Analysis of the Capital Structure of Companies Listed on the Lima Stock Exchange: A Model of Partial Adjustment
Álvaro Tresierra Tanaka, Brenda Silupú Garcés and Marissabel Mendoza Barrezueta

The capital structure of companies is a central theme in corporate finance. However, no conclusive evidence about how Peruvian companies choose their capital structure has been found to date. This paper captures the nature of capital structure, using the generalized method of moments estimation technique, for a balanced data panel of 152 Peruvian companies that are listed on the Lima Stock Exchange. Additionally, the implications of using different types of debt instruments have been analyzed differentiating short-term debt from long-term debt. Finally, we estimate the adjustment speed at which Peruvian companies return to the objective level of debt.
Keywords: Debt policy, Speed of adjustment, Debt-capital, Financial hierarchy.
JEL Classifications: C33, G32
Probabilistic Approach to the MARR/IRR Indicator to Assess Financial Risk in Investment Projects
Jorge Harry Harzer, Alceu Souza, Wesley Vieira Da Silva, June Alisson Westarb Cruz and Claudimar Pereira da Veiga

This study proposes a new risk scale to interpret the MARR/IRR indicator of the multi-index methodology in a way that better represents the level of project risk by associating the index with the loss of capital probabilities. Using the Monte Carlo method, these probabilities were calculated for indicators ranging from 0.30 to 0.98 with different MARRs and seven percentage points of variability between the MARR and IRR values. The results show that the loss probabilities do not rely on the absolute difference between the MARR and the IRR, when the indicator is calculated, but instead on the value of the indicator itself, besides the variability percentage attributed to the MARR and the IRR. As research contribution, the proposed risk scale, like the original one, provides five classifications regarding the degree of loss.
Keywords: Investment Analysis; Risk in Investment Projects; Multi-index Methodology; Finance; MARR/IRR Indicator