This paper reviews the waves of democratization and the development of the public administration and public finances in Hungary, with special attention municipalities caused by the changes in sub-national finance regulation since 2010. During the transition yeas, Hungary was very forward looking and the first among CEE countries to end central planning and to introduce market rules into the economy. Everybody expected the decentralization to be a success story. 25 years later, Hungary not only failed to meet the expectations, but also undergone though a situation in 2008 to start a massive recentralization process. This paper puts fiscal decentralization in Hungary in a historical context while critically investigating the findings of recent literatures on decentralization process in Hungary. The critical investigation of past experiences and reform steps of the current government suggest possible reform measures to solve the financial problems of Hungarian municipalities.
{"title":"Destined to be defaulted: Local government insolvency and bailout in post-transition Hungary","authors":"Izabella Barati-Stec","doi":"10.18533/JEFS.V2I04.147","DOIUrl":"https://doi.org/10.18533/JEFS.V2I04.147","url":null,"abstract":"This paper reviews the waves of democratization and the development of the public administration and public finances in Hungary, with special attention municipalities caused by the changes in sub-national finance regulation since 2010. During the transition yeas, Hungary was very forward looking and the first among CEE countries to end central planning and to introduce market rules into the economy. Everybody expected the decentralization to be a success story. 25 years later, Hungary not only failed to meet the expectations, but also undergone though a situation in 2008 to start a massive recentralization process. This paper puts fiscal decentralization in Hungary in a historical context while critically investigating the findings of recent literatures on decentralization process in Hungary. The critical investigation of past experiences and reform steps of the current government suggest possible reform measures to solve the financial problems of Hungarian municipalities.","PeriodicalId":130241,"journal":{"name":"Journal of Economic and Financial Studies","volume":"129 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133098273","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}
A fuzzy Data Envelopment Analysis model is adopted in this paper to assess the operational efficiency of life insurance companies in Taiwan. The study was conducted from 2008 to 2012 and the data were taken from Taiwan Economic Journal and related financial statements provided by the Taiwan Insurance Institute. The results indicate that the operational efficiency of insurance companies affiliated to financial holding companies appears to be better than that of insurance companies not affiliated with financial holding companies, signifying that the synergy generated after a financial holding company is formed and the cross-selling between its subsidiary groups are highly beneficial to the management of a life insurance company affiliated to such a financial holding company. The chief contribution of this paper is that, in the past, the data envelopment analysis models applied often could not calculate due to missing input and output data. The study adopts the fuzzy linear mathematics to solve the uncertainty.
{"title":"Data Envelopment Analysis with Missing Data: An Application to Life Insurance Industry in Taiwan","authors":"Yao-Hung Yang","doi":"10.18533/JEFS.V2I04.86","DOIUrl":"https://doi.org/10.18533/JEFS.V2I04.86","url":null,"abstract":"A fuzzy Data Envelopment Analysis model is adopted in this paper to assess the operational efficiency of life insurance companies in Taiwan. The study was conducted from 2008 to 2012 and the data were taken from Taiwan Economic Journal and related financial statements provided by the Taiwan Insurance Institute. The results indicate that the operational efficiency of insurance companies affiliated to financial holding companies appears to be better than that of insurance companies not affiliated with financial holding companies, signifying that the synergy generated after a financial holding company is formed and the cross-selling between its subsidiary groups are highly beneficial to the management of a life insurance company affiliated to such a financial holding company. The chief contribution of this paper is that, in the past, the data envelopment analysis models applied often could not calculate due to missing input and output data. The study adopts the fuzzy linear mathematics to solve the uncertainty.","PeriodicalId":130241,"journal":{"name":"Journal of Economic and Financial Studies","volume":"117 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133390327","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 aims to understand the socioeconomic and family backgrounds that affect individual economic opportunity in term of labor income on and above average income in different regions of Thailand. The results present that both age and marital status have positive impact to individual’s economic opportunity. Because it related to the necessity in personal family life. People works in Bangkok not necessary to get economic opportunity greater than others. Most inequality indicators show the inequality situation in Thailand still not as high as expectation. However, ordinary person usually get only less than 50% (0.4855) opportunity to get earning equal or more the average. Also, the society should concern the inequality of economic opportunity in optimal level which make equality parameter not greater than 0.5. This will create the mechanism to minimize the level of inequality, as a whole.
{"title":"An analysis of inequality of economic opportunity in Thailand","authors":"M. Pinitjitsamut","doi":"10.18533/JEFS.V2I04.74","DOIUrl":"https://doi.org/10.18533/JEFS.V2I04.74","url":null,"abstract":"This study aims to understand the socioeconomic and family backgrounds that affect individual economic opportunity in term of labor income on and above average income in different regions of Thailand. The results present that both age and marital status have positive impact to individual’s economic opportunity. Because it related to the necessity in personal family life. People works in Bangkok not necessary to get economic opportunity greater than others. Most inequality indicators show the inequality situation in Thailand still not as high as expectation. However, ordinary person usually get only less than 50% (0.4855) opportunity to get earning equal or more the average. Also, the society should concern the inequality of economic opportunity in optimal level which make equality parameter not greater than 0.5. This will create the mechanism to minimize the level of inequality, as a whole.","PeriodicalId":130241,"journal":{"name":"Journal of Economic and Financial Studies","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127729736","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 approaches the value added method for Gross Domestic Product (GDP) measurement that explains the interrelationship between the expenditure approach and the income approach. The economic growth model is also proposed with three key elements of capital accumulation, technological innovation, and institutional reform. Although capital accumulation and technological innovation are two integrated elements in driving economic growth, institutional reforms play a key role in creating incentives that effect the transitional and steady state growth rate in the real world economy. The paper provides a theoretical insight on economic growth to understand incentives and driving forces in economic growth model.
{"title":"Value Concept and Economic Growth Model","authors":"T. H. Trinh","doi":"10.18533/JEFS.V2I04.97","DOIUrl":"https://doi.org/10.18533/JEFS.V2I04.97","url":null,"abstract":"This paper approaches the value added method for Gross Domestic Product (GDP) measurement that explains the interrelationship between the expenditure approach and the income approach. The economic growth model is also proposed with three key elements of capital accumulation, technological innovation, and institutional reform. Although capital accumulation and technological innovation are two integrated elements in driving economic growth, institutional reforms play a key role in creating incentives that effect the transitional and steady state growth rate in the real world economy. The paper provides a theoretical insight on economic growth to understand incentives and driving forces in economic growth model.","PeriodicalId":130241,"journal":{"name":"Journal of Economic and Financial Studies","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131964516","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 aim of this article is to present a model concerning bank management during the period of decline. Our focus is on bank mergers as a way out in from a crises situation. Generally, the explicit factor behind bank decline usually relates an economic downturn. However, the implicit, triggering factor behind bank decline relates to bank management. The available options for crisis bank management beside mergers are to cut costs, to increase income, to get more own capital, to manipulate bookkeeping data, to sell the bank, to buy banks or to declare failure. Based on 309 bank mergers during 1990 to 2013, we found that bank managers in many cases gradually lost their confidence concerning their capability of successfully running their banks, therefore choosing to merge.
{"title":"Bank management in bank decline: Bank mergers as a recovery recipe?","authors":"A. Kjellman, R. Tainio, Taisto Kangas","doi":"10.18533/JEFS.V2I06.149","DOIUrl":"https://doi.org/10.18533/JEFS.V2I06.149","url":null,"abstract":"The aim of this article is to present a model concerning bank management during the period of decline. Our focus is on bank mergers as a way out in from a crises situation. Generally, the explicit factor behind bank decline usually relates an economic downturn. However, the implicit, triggering factor behind bank decline relates to bank management. The available options for crisis bank management beside mergers are to cut costs, to increase income, to get more own capital, to manipulate bookkeeping data, to sell the bank, to buy banks or to declare failure. Based on 309 bank mergers during 1990 to 2013, we found that bank managers in many cases gradually lost their confidence concerning their capability of successfully running their banks, therefore choosing to merge.","PeriodicalId":130241,"journal":{"name":"Journal of Economic and Financial Studies","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130835472","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}
While there is extensive literature documenting the discrepancy between IPO offer prices and their respective closing prices on the first day, few had examined the relationship between the offer, first-trade, and the first-day closing prices of IPOs. We examine the IPO trading return on the first day (opening price-to-closing price) to determine whether investment banks are efficient in setting the first-trade prices. We also examine when final offer price is set relative to when trading starts as a proxy for level of oversubscription. We find that open-to-close return is positive and significant. It is negatively related to the offer-to-open return, even after controlling for issue characteristics and market conditions. This is particularly prominent during the bubble period when laddering agreements were arguably widespread. These findings suggest the possibility of substitution between lower offer-to-open return for higher open-to-close return in the secondary market. We also find that high ranked underwriters are more conservative in setting of the first-trade price relative to the closing price in first-day trading. They tend to leave more return to the secondary market investors even after controlling for our measures of difficulty in setting the offer price. Overall, these results suggest that information learned in the book-building process is important in explaining the first trading day returns.
{"title":"Do the underwriters efficiently set first-trade prices in IPOs?","authors":"L. Booth","doi":"10.18533/JEFS.V2I05.143","DOIUrl":"https://doi.org/10.18533/JEFS.V2I05.143","url":null,"abstract":"While there is extensive literature documenting the discrepancy between IPO offer prices and their respective closing prices on the first day, few had examined the relationship between the offer, first-trade, and the first-day closing prices of IPOs. We examine the IPO trading return on the first day (opening price-to-closing price) to determine whether investment banks are efficient in setting the first-trade prices. We also examine when final offer price is set relative to when trading starts as a proxy for level of oversubscription. We find that open-to-close return is positive and significant. It is negatively related to the offer-to-open return, even after controlling for issue characteristics and market conditions. This is particularly prominent during the bubble period when laddering agreements were arguably widespread. These findings suggest the possibility of substitution between lower offer-to-open return for higher open-to-close return in the secondary market. We also find that high ranked underwriters are more conservative in setting of the first-trade price relative to the closing price in first-day trading. They tend to leave more return to the secondary market investors even after controlling for our measures of difficulty in setting the offer price. Overall, these results suggest that information learned in the book-building process is important in explaining the first trading day returns.","PeriodicalId":130241,"journal":{"name":"Journal of Economic and Financial Studies","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-10-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124676109","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 main objective of the study is to evaluate the extent to which investors’ education level or specialization in finance or accounting determines investor risk tolerance at the Nairobi Securities Exchange using a total of 500 individual investors out of 9,32,510 investors holding CDS accounts. Data is collected through questionnaires comprising 13-item risk tolerance instrument and demographic attributes that determine individual investors’ risk tolerance. Analytical framework included ordinal logistic regression model, as well as an analysis of variance and Wolfowitz Wald test at α=0.05. The key findings are that investor education level are significant in the determination of risk tolerance only at below the high school level with a positive impact of 1.831 log of odd for every unit increase in risk tolerance. Specialization in finance or accounting discipline also influenced investor risk tolerance at a significance level of 0.022 with a negative impact of -0.389.
{"title":"Evidences of investors’ risk tolerance in Nairobi securities exchange: Does education or specialization matter?","authors":"T. Olweny","doi":"10.18533/JEFS.V2I05.145","DOIUrl":"https://doi.org/10.18533/JEFS.V2I05.145","url":null,"abstract":"The main objective of the study is to evaluate the extent to which investors’ education level or specialization in finance or accounting determines investor risk tolerance at the Nairobi Securities Exchange using a total of 500 individual investors out of 9,32,510 investors holding CDS accounts. Data is collected through questionnaires comprising 13-item risk tolerance instrument and demographic attributes that determine individual investors’ risk tolerance. Analytical framework included ordinal logistic regression model, as well as an analysis of variance and Wolfowitz Wald test at α=0.05. The key findings are that investor education level are significant in the determination of risk tolerance only at below the high school level with a positive impact of 1.831 log of odd for every unit increase in risk tolerance. Specialization in finance or accounting discipline also influenced investor risk tolerance at a significance level of 0.022 with a negative impact of -0.389.","PeriodicalId":130241,"journal":{"name":"Journal of Economic and Financial Studies","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-10-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129181362","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 is to investigate the determinants effective tax rate for the firms listed on China’s stock markets. The panel data consists of 481 firms from 2007 to 2009 as our empirical data. In order to illustrate a country’s tax policies on firms’ real tax burdens, the dependent variable, ETR, is left-censored at 0 and right-censored at 1, the estimation for panel data model with two-sided censoring suggested by Alan, Honor´e, and Leth-Petersen (2014) is implemented in this paper. There are two important findings are obtained: first, this model can add more observations especially the observations with tax preferences. Second, theories suggest that ETR reflects outcomes of tax preference and this paper is the first time to consider the effective tax rates set between 0 and 1 and this range is more meaningful for the ETRs.
{"title":"Determinants of effective tax rates for firms listed on Chinese stock market: Panel models with two-sided censors","authors":"Yong-Ching Chiou, Y. Hsieh, Wenyi Lin","doi":"10.18533/JEFS.V2I05.141","DOIUrl":"https://doi.org/10.18533/JEFS.V2I05.141","url":null,"abstract":"This paper is to investigate the determinants effective tax rate for the firms listed on China’s stock markets. The panel data consists of 481 firms from 2007 to 2009 as our empirical data. In order to illustrate a country’s tax policies on firms’ real tax burdens, the dependent variable, ETR, is left-censored at 0 and right-censored at 1, the estimation for panel data model with two-sided censoring suggested by Alan, Honor´e, and Leth-Petersen (2014) is implemented in this paper. There are two important findings are obtained: first, this model can add more observations especially the observations with tax preferences. Second, theories suggest that ETR reflects outcomes of tax preference and this paper is the first time to consider the effective tax rates set between 0 and 1 and this range is more meaningful for the ETRs.","PeriodicalId":130241,"journal":{"name":"Journal of Economic and Financial Studies","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-10-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126468498","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 Turkish banking system went through a period of crisis in 1999-2001. As a result, reforms were instituted and the banking system was consolidated. The system was then only mildly affected by the global crisis in 2008. This study examines the process of bank failures and mergers and acquisitions during this period in Turkey. A proportional hazard is used to determine the bank-specific accounting ratios that predict bank defaults and mergers and acquisitions in Turkey. The focus is on capitalization, a key regulatory tool. Capitalization decreases the failure rate, as expected, and does so at a decreasing rate. This is consistent with regulatory policy that focuses on capitalization. For banks at risk, income is a good short-run predictor of default. The results for mergers and acquisitions imply that under-capitalized banks are more likely to be acquired. Finally, the implied "frontier" for the trade-off between return and equity and default risk is calculated.
{"title":"Bank Failures and Mergers in Turkey: 1992-2014","authors":"Meral Varish Kiefer","doi":"10.18533/JEFS.V2I05.144","DOIUrl":"https://doi.org/10.18533/JEFS.V2I05.144","url":null,"abstract":"The Turkish banking system went through a period of crisis in 1999-2001. As a result, reforms were instituted and the banking system was consolidated. The system was then only mildly affected by the global crisis in 2008. This study examines the process of bank failures and mergers and acquisitions during this period in Turkey. A proportional hazard is used to determine the bank-specific accounting ratios that predict bank defaults and mergers and acquisitions in Turkey. The focus is on capitalization, a key regulatory tool. Capitalization decreases the failure rate, as expected, and does so at a decreasing rate. This is consistent with regulatory policy that focuses on capitalization. For banks at risk, income is a good short-run predictor of default. The results for mergers and acquisitions imply that under-capitalized banks are more likely to be acquired. Finally, the implied \"frontier\" for the trade-off between return and equity and default risk is calculated.","PeriodicalId":130241,"journal":{"name":"Journal of Economic and Financial Studies","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-10-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128521428","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 examine three broad mutual fund sectors: equities, fixed income, and money market funds, to ascertain whether fund flows explain investment returns or whether investment returns attract funds. This question has been studied before but for the most part, research results have not been intuitive. Our findings are substantially different from the results of previous studies. We believe that our results are intuitively more obvious. We fail to reject both causal hypotheses. That is, we find that investment returns are affected by funds flows and that funds flows towards high returns.
{"title":"Mutual fund flows: Where does the money go?","authors":"H. Platt, Licheng Cai, Marjorie B. Platt","doi":"10.18533/JEFS.V2I05.146","DOIUrl":"https://doi.org/10.18533/JEFS.V2I05.146","url":null,"abstract":"We examine three broad mutual fund sectors: equities, fixed income, and money market funds, to ascertain whether fund flows explain investment returns or whether investment returns attract funds. This question has been studied before but for the most part, research results have not been intuitive. Our findings are substantially different from the results of previous studies. We believe that our results are intuitively more obvious. We fail to reject both causal hypotheses. That is, we find that investment returns are affected by funds flows and that funds flows towards high returns.","PeriodicalId":130241,"journal":{"name":"Journal of Economic and Financial Studies","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-10-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121650797","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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