International Research Journal of Finance and Economics
 Issue 145
 February, 2016
The Caspian Sea and global importance (with an emphasis on economic importance of it)
Ahmad Mir

The Caspian region includes parts of Central Asia and Caucasus In terms of geographically that after the collapse of the Soviet Union in 1991 that it has enjoyed special importance in terms of Geo-economic and Geo-strategic importance. This issue led to the attention of regional and trans-regional powers in this area indeed, the created power vacuum in the Caspian Sea after the collapse of the Soviet Union has transformed this condition into the region for competition of great power in order to gain geopolitical advantage. The complexity of competition in this strategic area and rich resources of underground, natural, human, and exposure to an intersection that join that connect Russia, China, Iran, Turkey and Europe to each other are topics that have added to the importance of the Caspian sea. In this paper tries to offer the descriptive and analytical approach of statistical data should be studied the geopolitical cause of the region and competitions.
Keywords: Caspian Sea region, the Soviet Union, the strategic region, competition
Bankruptcy Village Credit Institutions and Implications Accounting as habitus Their Management
Anantawikrama Tungga Atmadja

Village Credit Institutions or so-called LPD Pakraman Bontihing is a financial institution established for the welfare of manners Pakraman. But this goal cannot be achieved with good because it went bankrupt LPD repeated. To understand the phenomenon of bankruptcy in LPD Pakraman Bontihing, this study will answer some questions about the background, process, and the implications of the bankruptcy LPD Pakraman Bontihing.
This study was conducted with a critical ethnographic method that focuses on the description and deconstructive interpretation of aspects of cognition and evaluation owned by informants. Data were obtained through interviews, documentary studies, and participant observation. Interviews were conducted with informants coming from LPD board, board Pakraman, village offices, customers, manners Pakraman Pembina Village Credit Institutions, Regional Development Bank Bali, local government and other parties related to the operational activities of LPD. Data were analyzed with the theory of structuralism Constructivist.
Through this study understood that the bankruptcy LPD Strengthen the caused by failure Pakraman LPD habitus and the number of irregularities by actors interacting with use of several of its capital in this financial institution. This bankruptcy Brings Pakraman following various implications for other domains connected to it. This event implies Also the declining legitimacy of accounting knowledge and the emergence of religious discourse magical dimension to complete. Complementary discourse is intended to improve the compliance of the actors who carry out accounting practices so that the bankruptcy LPD does not reoccur.
Keywords: habitus, bankruptcy, LPD, constructivist structuralism, discourse
New Privatization Framework in Greece for State-Owned Enterprises and the Progress of the Privatization Programme
Spyridon Repousis

Purpose - The aim of this paper is to describe the new privatization framework for state-owned enterprises in Greece and the progress of privatization programme during 2011-2015.
Design/methodology/approach - Sales of state-owned assets have been proposed as a way for highly-indebted countries to ease the pain of fiscal consolidation. Privatizations have been part of the Troika’s conditionality in Greece since the outbreak of the crisis. In March 2011, Greece signed an agreement with the Troika for a very ambitious privatization plan. The original plan was to raise €50bn by 2015. It is tempting to think that high-debt countries, as Greece, could alleviate the recessionary impact of the budget-consolidation process by selling (poorly managed) assets and stakes in their state-owned enterprises (SOEs), and by using the proceeds to buy back their debts
Findings - Despite the potential merits of privatization in terms of long-run efficiency, in practice it is unlikely to improve short-run fiscal solvency. The efficiency gains from privatizations are very small up to now in Greece in comparison to original plan of €50bn. The implication is that the Troika policy of linking financial assistance to privatizations is inappropriate and self-defeating. This envisaged the sale of public utilities, tourism resorts, concessions for the Athens airport and the port of Piraeus, and government shares of the OTE telephone company. Privatization progress was disappointing during 2011-2015, mainly due to delays in the required legal and regulatory changes (‘Government Pending Actions’ in the Commission’s jargon). Efficiency gains are extremely less than expected. Most important year about privatization progress was 2015.
Originality/value – To my best knowledge, this paper is the first to review the specific topic and above findings are important for policy makers and international investors.
Keywords: Privatization, State-Owned Enterprises, Greece
Public expenses and economic growth in Congo

This article aims to proceed an econometric appraisal of the connection between the total public expenses and their components (capital from public expenses and current ones) and the economic growth in Congo from 1960 to 2013.We have therefore analyzed the links of causality according to GRANGER’s view and have carried out the valuation of the design on the long term and the pattern for correcting mistakes using the ordinary least square method (OLS) between those expenses and the economic growth. We have found out a mutual causality bond between the current public expenses and the economic growth. However, no causal link has been established between the investment expenses and the economic growth. But, according to GRANGER’s point of view, the total public expenses determine the economic growth. Moreover, our results point out that the investment expenses, the current and the total ones have positive impacts during a short term as well as in a long one when dealing with the economic growth in Congo.
Keywords: Total Public Expenses; Economic Growth; Causality, Cointegration; Capital Expenses; Current Expenses; Positive Effects.
The Effect of Positive Feedback Trading on the Short-term Dynamics of Nine Asian Exchange and Stock Markets
Shu-Yu Lin and Fu-Chiao Chyr

This paper empirically investigates whether feedback trading destabilizes the nine Asian exchange and stock markets. We investigate this issue by using an extended version of the model proposed by Sentana and Wadhwani (1992), which is estimated with a multivariate ABEKK GARCH-M procedure. The present empirical study provides some insights into the existence of positive feedback trading and the effects of such trading on the exchange rate and stock price dynamics of nine Asian economies. First, the higher volatility is, the more markets are influenced by positive feedback traders, which proves the serial correlation of both exchange rate and stock returns for all nine Asian economies. Second, we find strong evidence that the serial correlation of both exchange rate change and stock returns are influenced by the conditional covariance between exchange rate change and stock returns. Finally, the null hypotheses for three nested asset pricing models with four models of conditional second moments are strongly rejected. We conclude that our extension of the Sentana and Wadhwani model explains the dynamics of foreign exchange rates and stock prices in these nine Asian economies more clearly than the three nested models do. Overall, our results suggest that positive feedback trading destabilized the nine Asian exchange and stock markets for the period analyzed.
Keywords: Time-varying Risk Premia, Positive Feedback Trading, Intertemporal Capital Asset Pricing Model
JEL Classification Codes: G15, F21, F31, F37
Trading Days in Indonesia: Empirical Evidence
R. Adisetiawan and Yunan Surono

This research aims to test the effect of day trading and its effect on abnormal return, return, return and volatility of shares in Indonesia stock exchange (IDX) during the period from 2000.1 to 2016.2. Testing the stock return and abnormal return using regression, while for stock return volatility using GARCH. The test results proved that there was significant influence between the trading days against the return and volatility of stock return on the real level of 99%, but the results are not significant abnormal return tests against the stock.
Keywords: Day Trading, Abnormal Return, Return, Return Volatility Stocks, GARCH
Re-thinking Foreign Reserve Accumulation As A Strategy for Development: Evidence from A Developing Economy
Chinwe Regina Okoyeuzu, Obiamaka P. Egbo and Vincent A. Onodugo

The global recession of the first decade of the new millennium pushed many countries towards flurry of economic programmes to survive and stay afloat. The Nigerian government, on the premise that holding of external reserve is expected to generate confidence in the economy, adopted the cyclical theory of foreign reserve by setting aside certain amount of money saved from crude oil production. The foreign reserve initially maintained an upward movement thereby exhibiting unprecedented growth. This growth trend however took a downward trend since December 2013 till date. Analysing secondary data from the Central Bank of Nigeria (CBN) Statistical Bulletin, this paper argues that no one has won a currency war but rather demand for one’s currency should be promoted. The findings of this study suggest that confidence in an economy is mostly multi-factorial consisting of both the reliability of a country’s economic policies and the investment climate. This study concludes that without a good investment environment, accumulation of reserves will never be enough to build international community’s confidence as well as drive economic growth. It therefore recommends that rather than depleting the foreign reserve to stabilize the currency, there is need to bridge the infrastructure gap so as to reduce the cost of doing business in Nigeria. There is an urgent need to diversify the economy so as to improve external trade and deal with the issue of insecurity and insurgency.
Keywords: Foreign Reserves, developing economy, infrastructure and Nigeria.
The Effect of Financial Statement Disclosure on Stock Prices "An applied study on industrial shareholding companies in Amman Financial Market (Bourse)"
Mashhour Hathloul Maharmah

This study aims to test the effect of financial statement disclosure on stock prices on industrial shareholding companies, and investigating the information content of this statement on either stock prices and (trading volumes) it is also aims to investigate the ability of investors to earn abnormal return by using this information and to evaluate in nature drawing sources of information from secondary data.
The behavior of stock prices is studies on the basis of daily movements. On this paper an attempt was made to analyze the stock prices of all industrial shareholding companies listed in Amman bourse using market model to estimate the normal return and the percentage change of daily stock prices to estimate the actual return. The hypothesis of this study was examined by using parametric tests as one-sample test and paired sample test. It was found that there was no information content to these statements on stock prices and investors couldn’t use this information to earn abnormal return. This study provide a source of help to industrial companies' manager to improve either way of publishing financial statement or the information content of these statements. It's also a source of help to investors to improve their understanding of these statements.
Keywords: financial statement disclosure, stock prices, abnormal return, normal return, information content.
The 2007-2009 Global Financial Crisis and Economic Growth
Chai-Liang Hunag and Yu-Ching Chang

We collected 43 market indexes and macroeconomic data from 1995 to 2010 to empirically investigate the impact of the global financial crisis on economic growth and its components, with a focus on the attendant stock market crisis. Using a variety of indicators of a stock market crisis constructed for this paper, we found that the stock market crises in our worldwide sample of countries significantly slowed economic growth, especially in the developed countries, during the global financial crisis. Our results also show that the economic slowdown was due to declines in investment. The other growth components, including consumption, government spending, and net exports are non-significant.
Keywords: Economic growth, Global financial crises, Stock market crisis, Twin crises.
JEL Classifications: O16, O49, G10
A Future Business Challenge in the Middle East: Drawing Foreign Capital Flows into the MENA Region
Suleyman Tulug Ok

Middle East and North Africa (MENA) countries have only been able to draw insignificant levels of foreign direct investment (FDI) over the last three decades compared to their economic growth performance and continue to disappoint relative to other regions in the world. This paper aims to analyze the motives for FDI inflows via an empirical study using panel data comprising nineteen countries in the region over the time span 1995 – 2009. Using a fixed effects panel regression, we find that macroeconomic factors such as the size of economy, level of trade openness measured by total trading volume and imports of services attract FDI inflows into MENA countries, while inflation risk expectedly acts as deterring factor. However, under an increasing wave of globalization, the mentioned traditional factors are no longer sufficient to explain the changing levels of FDI. The quality of institutions and degree of economic freedom are increasingly being factored into investors' choices. Therefore, these motives are also investigated in this study with results showing that less tariff / non-tariff barriers, lower levels of tax rates, higher fiscal freedom and lower corruption play a vital role in attracting capital flows to the region. Our evidence supports the argument that while the MENA region offers competitive advantages to foreign investors regarding economic growth, lack of trade openness and poor performance of institutional factors have hindered efforts to capture higher levels of investment.
Keywords: Foreign direct investment, Panel data analysis, Middle East and North Africa, Institutional factors, International factor movements, Determinants of FDI
JEL classifications: C23; F21; F23; 053