We argue that the broad and legally enforceable protection offered to investors by bilateral investment treaties (BITs) worsens the human rights practices of developing countries. In such countries, BITs lock-in initial conditions attractive to investors that tend to be linked to vertical investment flows and trade competition, and include low environmental standards or labor rights. BITs also constrain the provision of welfare benefits, basic infrastructure, investment in environmentally friendly technologies or land reform. The combined lock-in and constraining effects of BITs are sources of popular grievance and dissent in states that host foreign investment. BIT protected investor rights, however, limit the ability of governments to back-down vis-a-vis investors, lowering the relative cost of human rights violations. Finally, we argue that democracies have higher accountability and a lower threat perception for dissent, mitigating the negative effect of BITs. Evidence from 113 developing countries from 1981 to 2009 supports our hypotheses.
{"title":"Bilateral Investment Treaties (BITs): The Global Investment Regime and Human Rights","authors":"C. Bodea, Fangjin Ye","doi":"10.2139/ssrn.3054606","DOIUrl":"https://doi.org/10.2139/ssrn.3054606","url":null,"abstract":"We argue that the broad and legally enforceable protection offered to investors by bilateral investment treaties (BITs) worsens the human rights practices of developing countries. In such countries, BITs lock-in initial conditions attractive to investors that tend to be linked to vertical investment flows and trade competition, and include low environmental standards or labor rights. BITs also constrain the provision of welfare benefits, basic infrastructure, investment in environmentally friendly technologies or land reform. The combined lock-in and constraining effects of BITs are sources of popular grievance and dissent in states that host foreign investment. BIT protected investor rights, however, limit the ability of governments to back-down vis-a-vis investors, lowering the relative cost of human rights violations. Finally, we argue that democracies have higher accountability and a lower threat perception for dissent, mitigating the negative effect of BITs. Evidence from 113 developing countries from 1981 to 2009 supports our hypotheses.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-10-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122343704","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-08-04DOI: 10.11130/JEI.2017.32.4.937
Antoine Bouët, Lionel Cosnard, D. Laborde
This paper reviews the literature on the measurement and characterization of trade integration in Africa. We offer the complete evaluation of available indicators and methodologies. The indicators include those that have recently emerged from network analysis like indicators of trade in value-added commodities. It is concluded that Africa is characterized by weak trade integration, particularly with the rest ofthe world. This is naturally explained by high trading costs that are evaluated by tariffs, non-tariff measures, and other trade costs, such as those related to border and documentary compliance. The region’s small number of trading partners and low product diversification are also noticeable. However, the use of more refined indicators shows that intra-African trade is relatively high when compared with trade with other continents, contrary to what can be concluded from some simple trade share indicators.
{"title":"Measuring Trade Integration in Africa","authors":"Antoine Bouët, Lionel Cosnard, D. Laborde","doi":"10.11130/JEI.2017.32.4.937","DOIUrl":"https://doi.org/10.11130/JEI.2017.32.4.937","url":null,"abstract":"This paper reviews the literature on the measurement and characterization of trade integration in Africa. We offer the complete evaluation of available indicators and methodologies. The indicators include those that have recently emerged from network analysis like indicators of trade in value-added commodities. It is concluded that Africa is characterized by weak trade integration, particularly with the rest ofthe world. This is naturally explained by high trading costs that are evaluated by tariffs, non-tariff measures, and other trade costs, such as those related to border and documentary compliance. The region’s small number of trading partners and low product diversification are also noticeable. However, the use of more refined indicators shows that intra-African trade is relatively high when compared with trade with other continents, contrary to what can be concluded from some simple trade share indicators.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"56 7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-08-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124475038","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper summarizes research findings and resources to guide efforts to reconnect wildlife habitat in order to conserve biodiversity and climate, reduce wildlife-vehicle collisions, and protect local economies.
{"title":"Reducing Wildlife-Vehicle Collisions & Preserving Local Climate/Economy","authors":"K. Dopp","doi":"10.2139/ssrn.2827176","DOIUrl":"https://doi.org/10.2139/ssrn.2827176","url":null,"abstract":"This paper summarizes research findings and resources to guide efforts to reconnect wildlife habitat in order to conserve biodiversity and climate, reduce wildlife-vehicle collisions, and protect local economies.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"123 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-06-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131931251","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper reviews evidence on the impact of EU policies on global food security, focusing on four EU policy areas: agricultural policy, bioenergy policy, trade policy, and development (food aid) policy. Old concerns related to the detrimental impact of EU farm subsidies, food aid and tariffs on poor countries’ food security. New concerns relate to impacts of EU food standards and bioenergy policies. The EU policies which created the largest distortions on global markets (in the area of trade, agriculture, food aid, and bioenergy) have been substantially reformed over the past decades. Recent global food price fluctuations have also re-emphasized that the impact of EU policies on the poor’s food security differ depending on whether these are consumers or producers, or whether countries are exporters or importers. Overall, our review explains that in many areas the impact of EU policies on global food security is less obvious and more complex than often argued.
{"title":"EU Policies and Global Food Security","authors":"J. Bureau, J. Swinnen","doi":"10.2139/ssrn.2961695","DOIUrl":"https://doi.org/10.2139/ssrn.2961695","url":null,"abstract":"This paper reviews evidence on the impact of EU policies on global food security, focusing on four EU policy areas: agricultural policy, bioenergy policy, trade policy, and development (food aid) policy. Old concerns related to the detrimental impact of EU farm subsidies, food aid and tariffs on poor countries’ food security. New concerns relate to impacts of EU food standards and bioenergy policies. The EU policies which created the largest distortions on global markets (in the area of trade, agriculture, food aid, and bioenergy) have been substantially reformed over the past decades. Recent global food price fluctuations have also re-emphasized that the impact of EU policies on the poor’s food security differ depending on whether these are consumers or producers, or whether countries are exporters or importers. Overall, our review explains that in many areas the impact of EU policies on global food security is less obvious and more complex than often argued.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"45 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-03-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128175226","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Central African Economic and Monetary Community known as CEMAC, is made up of six States in Central Africa, namely: Gabon, Cameroon, the Central African Republic (CAR), Chad, the Republic of the Congo and Equatorial Guinea.It is no exaggeration to say that CEMAC countries rely heavily on the exploitation of Extractive Industries (EI) for their respective development. Yves Alvarez et al. note that “like many other countries in Africa, the member countries of the CEMAC rely heavily on the exploitation of raw materials to support growth. However, for many reasons, these countries find that industrial exploitation based on foreign direct investment (FDI) does not create sufficient training to drive countries towards sustainable and sustainable development.” But, does relying heavily on the exploitation of raw materials is enough to sustain growth? This is a crucial issue. What do we see in the CEMAC area? Countries whose principal activity is to extract and exploit natural resources provided by nature" in their solid forms (mineral resources), liquid (oil resources) and gas (gas resources) - have become a central theme of political, economic and social analyses of African countries rich in natural resources. Two main reasons justify this. First of all, the Extractive Industries “represent a significant share of Gross Domestic Product (GDP) and account for a large share of the GDP of these countries, more than half of GDP for the most part.
{"title":"Mining CEMAC: Dependence that Undermines the Economy of the Community of States","authors":"Hermann-Habib Kibangou","doi":"10.2139/ssrn.3148301","DOIUrl":"https://doi.org/10.2139/ssrn.3148301","url":null,"abstract":"The Central African Economic and Monetary Community known as CEMAC, is made up of six States in Central Africa, namely: Gabon, Cameroon, the Central African Republic (CAR), Chad, the Republic of the Congo and Equatorial Guinea.It is no exaggeration to say that CEMAC countries rely heavily on the exploitation of Extractive Industries (EI) for their respective development. Yves Alvarez et al. note that “like many other countries in Africa, the member countries of the CEMAC rely heavily on the exploitation of raw materials to support growth. However, for many reasons, these countries find that industrial exploitation based on foreign direct investment (FDI) does not create sufficient training to drive countries towards sustainable and sustainable development.” But, does relying heavily on the exploitation of raw materials is enough to sustain growth? This is a crucial issue. What do we see in the CEMAC area? Countries whose principal activity is to extract and exploit natural resources provided by nature\" in their solid forms (mineral resources), liquid (oil resources) and gas (gas resources) - have become a central theme of political, economic and social analyses of African countries rich in natural resources. Two main reasons justify this. First of all, the Extractive Industries “represent a significant share of Gross Domestic Product (GDP) and account for a large share of the GDP of these countries, more than half of GDP for the most part.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"70 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121572958","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The subprime mortgage crisis was the most devastating financial crisis since the Great Depression. The steady rise of housing purchases and seemingly limitless increase in home values drew many investors to the United States real estate market. The business growth in this sector was so compelling that financial firms created new secondary markets that were perceived as diversifying risk, which in turn prompted lenders to create innovative funding vehicles and loose and fast loan qualification processes. The federal government was ill prepared to deal with this shift in the financial world to market-based demand, and the results were disastrous. Lenders embraced predatory lending practices, borrowers with bad credit overextended themselves beyond their means, and foreclosures occurred at startling rates as home values plummeted, resulting in a world-wide economic depression. Ten years later, we reflect on the events that led up to and caused the subprime mortgage crisis for lessons learned to improve management, marketing, and finance incentive practices.
{"title":"Lessons Learned in Management, Marketing, Sales, and Finance Incentive Practices a Decade after the Subprime Mortgage Crisis","authors":"Jason Earl Thomas","doi":"10.5539/IJBM.V12N3P19","DOIUrl":"https://doi.org/10.5539/IJBM.V12N3P19","url":null,"abstract":"The subprime mortgage crisis was the most devastating financial crisis since the Great Depression. The steady rise of housing purchases and seemingly limitless increase in home values drew many investors to the United States real estate market. The business growth in this sector was so compelling that financial firms created new secondary markets that were perceived as diversifying risk, which in turn prompted lenders to create innovative funding vehicles and loose and fast loan qualification processes. The federal government was ill prepared to deal with this shift in the financial world to market-based demand, and the results were disastrous. Lenders embraced predatory lending practices, borrowers with bad credit overextended themselves beyond their means, and foreclosures occurred at startling rates as home values plummeted, resulting in a world-wide economic depression. Ten years later, we reflect on the events that led up to and caused the subprime mortgage crisis for lessons learned to improve management, marketing, and finance incentive practices.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-02-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121211094","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We outline the various channels through which women are part of the global trading economy. It focuses on women as consumers, workers, business owners, and informal cross-border traders. Trade theory offers rich implications for the relationship between gender and trade, but depends on patterns of consumption and production that may differ across countries. As an example, we examine the case of agricultural products, a sector in which products are consumed relatively more intensively by women than by men. The evidence shows that tariffs are higher in this sector, which means that women consumers are disadvantaged relative to men. On the other hand, the extension of export opportunities in developing countries in light manufacturing industries, such as apparel, can offer important prospects for women workers; these opportunities are often their entry point into the formal labor market, and provide an independent income that can change household power dynamics in a favorable way. New empirical evidence from developing country firms shows that internationally engaged firms tend to employ a higher proportion of women workers. However, much remains to be done. Discriminatory norms are deeply engrained in all countries, and are reflected in a global gender wage gap. Moreover, women-owned businesses, although active in the international economy, face specific obstacles that make it harder for them to grow and succeed. Although trade has the potential to support gender-inclusive growth and development, it will be important to get domestic regulatory settings right, so that a positive cycle can result.
{"title":"Trade and Women","authors":"Ben Shepherd, Susan F. Stone","doi":"10.2139/ssrn.2990273","DOIUrl":"https://doi.org/10.2139/ssrn.2990273","url":null,"abstract":"We outline the various channels through which women are part of the global trading economy. It focuses on women as consumers, workers, business owners, and informal cross-border traders. Trade theory offers rich implications for the relationship between gender and trade, but depends on patterns of consumption and production that may differ across countries. As an example, we examine the case of agricultural products, a sector in which products are consumed relatively more intensively by women than by men. The evidence shows that tariffs are higher in this sector, which means that women consumers are disadvantaged relative to men. On the other hand, the extension of export opportunities in developing countries in light manufacturing industries, such as apparel, can offer important prospects for women workers; these opportunities are often their entry point into the formal labor market, and provide an independent income that can change household power dynamics in a favorable way. New empirical evidence from developing country firms shows that internationally engaged firms tend to employ a higher proportion of women workers. However, much remains to be done. Discriminatory norms are deeply engrained in all countries, and are reflected in a global gender wage gap. Moreover, women-owned businesses, although active in the international economy, face specific obstacles that make it harder for them to grow and succeed. Although trade has the potential to support gender-inclusive growth and development, it will be important to get domestic regulatory settings right, so that a positive cycle can result.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"70 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-01-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126797420","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Russian Abstract: Третий год в стране наблюдается тенденция роста внутреннего туризма. Каждый регион заинтересован в большом притоке туристов, поэтому стремится не только сделать пребывание гостей наиболее комфортным, но и сделать отдых незабываемым, поэтому региону нужны новые подходы, которые выводили бы курорты КМВ на наиболее выгодные, конкурентоспособные рыночные позиции. English Abstract: For the third year in the country there is a tendency of growth of domestic tourism. Each region is interested in a large influx of tourists, so not only strives to make each guest's stay more comfortable, but also make the holiday a memorable one, so the region needs new approaches that were taken resorts КMV on the most favorable, competitive market position.
{"title":"Управление Развитием Регионального Туристско-Рекреационного Комплекса Кмв в Условиях Социально-Экономической Трансформации (Management Development of Regional Tourism Complex KMV in the Socio-Economic Transformation)","authors":"Валентина Жильцова","doi":"10.2139/ssrn.2889234","DOIUrl":"https://doi.org/10.2139/ssrn.2889234","url":null,"abstract":"Russian Abstract: Третий год в стране наблюдается тенденция роста внутреннего туризма. Каждый регион заинтересован в большом притоке туристов, поэтому стремится не только сделать пребывание гостей наиболее комфортным, но и сделать отдых незабываемым, поэтому региону нужны новые подходы, которые выводили бы курорты КМВ на наиболее выгодные, конкурентоспособные рыночные позиции. \u0000 \u0000English Abstract: For the third year in the country there is a tendency of growth of domestic tourism. Each region is interested in a large influx of tourists, so not only strives to make each guest's stay more comfortable, but also make the holiday a memorable one, so the region needs new approaches that were taken resorts КMV on the most favorable, competitive market position.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"46 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129708041","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2016-11-25DOI: 10.6084/M9.FIGSHARE.4253237.V2
Wenfa Ng
Depending on whether you are a political scientist or an economist, there are dichotomously different views on the utility of a strong currency. Specifically, political economy argues that a strong currency is the buttress of a strong country; on the other hand, micro and marcoeconomics put forward the view that a currency’s value ebbs and flows depending on market forces and economic fundamentals. But, what are the advantages and disadvantages of a strong currency? It depends on the structure of the economy, and the strength of its fundamentals relative to major trading partners. A weak currency, which is also an undervalued currency, is useful if the country relies heavily on exports to the world. These exports could be electronics, agricultural or services. Hence, given the argument that a country needs to export goods to earn income for the economy, would an undervalued currency be preferable over an overvalued (strong) one? The answer requires the examination of the other side of the equation: the role of imports to an economy. If the country is an open economy with the need to import raw materials or semi-finished products for final assembly, a strong or slightly overvalued currency would reduce the cost of imports and the final price of the exported product, making it more competitive in the international market. On the other hand, if the manufacturing process rely less on imports of components, a weak or undervalued currency would boost the export of the final product as it is cheaper after accounting for currency differentials. Hence, it is a trade-off between the relative balance of imports and exports that flow in and out of an economy that suggests a suitable price for a currency that would have, overall, a balanced effect on the economy: i.e., no significant advantage and disadvantage in either direction. The economic measure of this is terms of trade - the relative price of imports versus exports. Therefore, one may ask: how should the exchange rate be set? And on what timescale? Daily or monthly? Should the currency's price be based on a benchmark interest rate, bank reserve requirement, or on a basket of currencies of the major trading partners of a country? Or alternatively, could a currency’s exchange rate be set based on changes in terms of trade of a country against the major trading partners of an economy? Using data from the daily fluctuations of a currency in the foreign exchange markets, does the movement in price of the currency correlates with that of terms of trade, which provide some measure of economic fundamentals in pricing a currency; thereby, helping sort out the portion of a currency’s price underpinned by financial flows and sentiments in the market. On the other hand, is terms of trade a better reflector of the dynamic operation of an economy, and thus, tells a cogent tale of the monthly (not daily) fluctuations in exchange rate, where daily price differences in a currency get their information input from relat
{"title":"Value and Disvalue of a Strong Currency","authors":"Wenfa Ng","doi":"10.6084/M9.FIGSHARE.4253237.V2","DOIUrl":"https://doi.org/10.6084/M9.FIGSHARE.4253237.V2","url":null,"abstract":"Depending on whether you are a political scientist or an economist, there are dichotomously different views on the utility of a strong currency. Specifically, political economy argues that a strong currency is the buttress of a strong country; on the other hand, micro and marcoeconomics put forward the view that a currency’s value ebbs and flows depending on market forces and economic fundamentals. But, what are the advantages and disadvantages of a strong currency? It depends on the structure of the economy, and the strength of its fundamentals relative to major trading partners. A weak currency, which is also an undervalued currency, is useful if the country relies heavily on exports to the world. These exports could be electronics, agricultural or services. Hence, given the argument that a country needs to export goods to earn income for the economy, would an undervalued currency be preferable over an overvalued (strong) one? The answer requires the examination of the other side of the equation: the role of imports to an economy. If the country is an open economy with the need to import raw materials or semi-finished products for final assembly, a strong or slightly overvalued currency would reduce the cost of imports and the final price of the exported product, making it more competitive in the international market. On the other hand, if the manufacturing process rely less on imports of components, a weak or undervalued currency would boost the export of the final product as it is cheaper after accounting for currency differentials. Hence, it is a trade-off between the relative balance of imports and exports that flow in and out of an economy that suggests a suitable price for a currency that would have, overall, a balanced effect on the economy: i.e., no significant advantage and disadvantage in either direction. The economic measure of this is terms of trade - the relative price of imports versus exports. Therefore, one may ask: how should the exchange rate be set? And on what timescale? Daily or monthly? Should the currency's price be based on a benchmark interest rate, bank reserve requirement, or on a basket of currencies of the major trading partners of a country? Or alternatively, could a currency’s exchange rate be set based on changes in terms of trade of a country against the major trading partners of an economy? Using data from the daily fluctuations of a currency in the foreign exchange markets, does the movement in price of the currency correlates with that of terms of trade, which provide some measure of economic fundamentals in pricing a currency; thereby, helping sort out the portion of a currency’s price underpinned by financial flows and sentiments in the market. On the other hand, is terms of trade a better reflector of the dynamic operation of an economy, and thus, tells a cogent tale of the monthly (not daily) fluctuations in exchange rate, where daily price differences in a currency get their information input from relat","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-11-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123879827","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study investigated the disposition effect under economic crisis (Brexit & GFC) and found that the stock markets of New Zealand, Australia and Mumbai did not show any significant disposition effect during the crisis period. The paper utilizes secondary data analysis to discuss the disposition effect and employs the method developed by Weber and Camerer (1998) and operationalized by Lin (2011).The finding of the study is consistent with the prediction that economic crisis does not necessarily show the disposition effect in these markets because as investors face major financial and economic crises, they may sell the losing stocks, since they are worried about larger loses in the future. The study results provide evidence that the investors may form a self-control mechanism (Lin, 2011) in order to prevent loss expansion during the crisis, and they will sell losing stocks once the losses exceed their limit of tolerance. The results also support the proposition that the presence of disposition effect is influenced by the market atmosphere and the “framing dependence” of investors, and when faced with high uncertainly like Brexit and GFC, investors sell losing stocks to prevent the spread of loss (Shefrin, 2000).The study supports the finding of Boebel and Taylor (2000) who conducted the study based on account information of brokers of individual investors in the New Zealand market and found no disposition effect.
{"title":"Brexit and Disposition Effect: Evidence from New Zealand, Australia and Indian Stock Markets","authors":"M. Abraham","doi":"10.2139/ssrn.2869450","DOIUrl":"https://doi.org/10.2139/ssrn.2869450","url":null,"abstract":"This study investigated the disposition effect under economic crisis (Brexit & GFC) and found that the stock markets of New Zealand, Australia and Mumbai did not show any significant disposition effect during the crisis period. The paper utilizes secondary data analysis to discuss the disposition effect and employs the method developed by Weber and Camerer (1998) and operationalized by Lin (2011).The finding of the study is consistent with the prediction that economic crisis does not necessarily show the disposition effect in these markets because as investors face major financial and economic crises, they may sell the losing stocks, since they are worried about larger loses in the future. The study results provide evidence that the investors may form a self-control mechanism (Lin, 2011) in order to prevent loss expansion during the crisis, and they will sell losing stocks once the losses exceed their limit of tolerance. The results also support the proposition that the presence of disposition effect is influenced by the market atmosphere and the “framing dependence” of investors, and when faced with high uncertainly like Brexit and GFC, investors sell losing stocks to prevent the spread of loss (Shefrin, 2000).The study supports the finding of Boebel and Taylor (2000) who conducted the study based on account information of brokers of individual investors in the New Zealand market and found no disposition effect.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"2006 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-11-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125830377","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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