Authors:Zeynep Ozkok, Brandon Malloy, Amy Rowe Pages: 1 - 15 Abstract: Increasing levels of globalization have contributed to English becoming a preferred language of international communication, education and trade. With countries rapidly embedding English into a large variety of curricula, the demand for English as a medium of instruction is ever growing. Using information from the US Foreign Service Institute's Professional Working Proficiency values, we identify seven distinct linguistic distance from English (LDE) categories, and examine the effects of linguistic distance on income and economic growth across 97 countries over the 1980-2018 period. In addition to the direct effects of linguistic distance on incomes and growth, we further explore its impact through the channels of education and trade. Our results demonstrate that linguistic distance from English affects income levels and growth non-linearly across countries- increased distance from English does not necessarily translate into declining levels of income or growth rates. Conversely, we find that, via the trade channel, more distant languages tend to experience positive rates of growth. Controlling for regional effects or the existence of multiple languages of instruction do not alter our findings. Sub-dividing our dataset by national income levels, we show that the largest negative effects on growth are among Upper-Middle-Income countries. PubDate: 2022-03-14 DOI: 10.32479/ijefi.12725 Issue No:Vol. 12, No. 2 (2022)
Authors:Mai Ahmed Abdelzaher Pages: 16 - 25 Abstract: The purpose of this research paper is to analyze the effectiveness of the economic factors affecting Islamic and commercial banks during the Egyptian financial crisis from 2003 to 2019. A sample was taken from eleven banks registered in the Egyptian financial market, and the data were collected on an annual basis. The variables are as follows: return on assets (ROA); return on equity (ROE); reinvestment rate; size; nonperforming loans; operating leverage; loan growth; inflation rate; GDP; and deposit growth. Several statistical methods were used, such as a normality test, descriptive statistics, a t-test, and a group unit root. A panel data analysis was also applied to compare data from Islamic and commercial banks. The data revealed a negative relationship between the type of bank and ROA and ROE as well as a positive relationshipbetween the global financial crisis and the banks’ ROE and ROE. PubDate: 2022-03-14 DOI: 10.32479/ijefi.12776 Issue No:Vol. 12, No. 2 (2022)
Authors:Cong Gu, Benfu Lv, Geng Peng Pages: 26 - 36 Abstract: Platform monopoly has attracted wide attention from politicians and the public.. The European Commission has made unremitting efforts in platform antitrust enforcement in the last decade, but together with antitrust investigations, the stock prices of platform giants like Google and Facebook keep breaking their highest points. At the end of 2020, the Chinese government also started antitrust investigations towards platform companies like Alibaba. In contrast, the stock price of Alibaba crashed and lost more than half of its market value. By analyzing their CAR, we proved that the stock performance of Alibaba is significantly worse than Google after their most serious antitrust investigations. The difference reflects investors' different expectations of the European Commission and China's antitrust enforcement. A noteworthy problem then comes out: while the Chinese government is seriously strengthening platform antitrust and putting forward reforms in platform regulation, is there any authority that is able to effectively regulate the international platform giants and maximize the welfare of their users worldwide' PubDate: 2022-03-14 DOI: 10.32479/ijefi.12763 Issue No:Vol. 12, No. 2 (2022)
Authors:Lamia Kalai Pages: 37 - 51 Abstract: The aim of this paper is to study the interdependence between the Coronavirus Panic Index (PI) and major cryptocurrencies throughout the period of the Covid-19 pandemic.We investigate the evolution of cryptocurrency’s value following changes in the Covid panic index levels; then, we use the DCC-MIDAS specification to extract the long- and short-term volatility components of cryptocurrencies and study the responses of the cryptocurrencies to the pandemic panic index. The results show that the panic level metrics could be considered as a potential driver of cryptocurrencies volatility and has a significantly positive influence on the long-term cryptocurrencies correlation during stress levels. Our findings contribute to the existing literature in several ways. First ,we provide specific evidence on the driving effect of Covid panic index on cryptocurrencies’correlation during a crisis. Second, our paper adds to the current literature on cryptocurrencies and fills in the existing gap related to the lack of academic research on the pandemic’s impact on the cryptocurrency market. Third, the results offer interesting insights for future research and have important implications for investors, especially in understanding the cryptocurrencies’behavior and exploring whether cryptocurrencies can serve as a hedge against the COVID-19 crisis. PubDate: 2022-03-14 DOI: 10.32479/ijefi.11675 Issue No:Vol. 12, No. 2 (2022)
Authors:Dewa Nyoman Wiryasantika Wedagama, Dedi Budiman Hakim, Bambang Juanda, Trias Andati Pages: 52 - 60 Abstract: Weighting Average Cost of Capital (WACC) plays a critical role as a discounting factor of the corporate valuation process's estimated future free cash flow by highly influencing the valuation process. It consists of three components, namely cost of debt, cost of equity, and proportion of capital structure. Costs of debt and capital structure are easily calculated due to data stability and less volatility. Meanwhile, the cost of equity is difficult to determine due to assumption, the period taken, the method applied, and complexity. Many assets pricing methods are used to determine the required rate of return in equity, namely CAPM, Fama French Three-Factor (FF3F), and Fama French Five-Factor (FF5F). These three asset pricing models are used to determine the models with strong explanatory factors on equity return to portfolios developed from sorting FF5F factors and individual equity of four cement companies publicly listed in the Indonesia Stock Exchange (IDX). PubDate: 2022-03-14 DOI: 10.32479/ijefi.12805 Issue No:Vol. 12, No. 2 (2022)
Authors:Anu Mohta, V. Shunmugasundaram Pages: 61 - 66 Abstract: Financial literacy aids the investor in devising rational financial decisions which in turn provides financial stability to an individual and has emerged as a key to economic development in this rapidly changing financial and investing landscape. A financially illiterate person will make poor financial and investment choices which will have a detrimental effect on their financial wellbeing. The present study aims at assessing the level of basic and advanced financial literacy as well as its association with the demographic profile of millennial investors in the Delhi-NCR Region. A Chi-square test was used to analyse the data collected for the study. The findings revealed that millennials' financial literacy is low and they have poor knowledge about the time value of the money concept and find bond prices by the interest rate concept hard to comprehend. The study concludes that financial illiteracy is acute in females. The common belief that higher education qualification is an indicator of higher financial literacy holds for the study. The millennials with a lower level of income have a lower level of basic and advanced financial literacy. These conclusions were found to be statistically significant. This paper fills the research gap of millennials' financial literacy in India. PubDate: 2022-03-14 DOI: 10.32479/ijefi.12801 Issue No:Vol. 12, No. 2 (2022)
Authors:Bezawada Brahmaiah Pages: 67 - 71 Abstract: The primary objective of this paper is to examine the risk management techniques and practices of credit risk management followed by Indian commercial banks for the period from 2021-17 to 2020-21. The other objective is to compare risk management practices followed by the public sector banks (PSBs) and private sector of banks (PVBs). The study uses a sample of twelve banks consisting of six largest public sector banks (PSBs) and six largest private sector banks (PVBs) for the study. The sample accounts for 78 per cent of the banking business of the country. The study finds that the scheduled commercial banks (SCBs) are facing credit risk, market risk and operational risk. The study finds that the credit risk management process and practices include risk identification, risk assessment, risk analysis, risk evaluation, risk monitoring and risk control. The study finds that private sector banks (PVBs) have better credit risk management practices as compared to that of public sector banks (PSBs). The PSBs have more NPAs than PVBs whereas PVBs have better asset quality and better profitability ratios than PSBs during the study period. PubDate: 2022-03-14 DOI: 10.32479/ijefi.12968 Issue No:Vol. 12, No. 2 (2022)
Authors:Halit Basbuga, Hakan Kitapci, Enes Cengiz Oguz, Yusuf Elkoca Pages: 72 - 83 Abstract: In this empirical research, the effects of macroeconomic variables and the incentive policies implemented in Turkey on the employment, informal employment and income have been investigated in Turkey. Electricity consumption (Economic Growth), the USD/TL exchange rate and inflation variables were used as the macroeconomic variables. The employment incentives that are implemented by the Laws Number 5510, 25510/16322, 26322, 6111, 14857 and 05746/15746 among the employment incentive policies implemented in Turkey were used as variables. The first lagged values of employment incentives from the Laws No. 5510, 26322 and 6111 significantly affected informal employment. The first lagged values of the variables of economic growth as the macroeconomic variable and Law No. 5510 have a positive effect on reducing informal employment. As a macro-economic variable, USD/TL exchange rate has a negative and relatively high efficiency. PubDate: 2022-03-14 DOI: 10.32479/ijefi.12789 Issue No:Vol. 12, No. 2 (2022)
Authors:L.J. Basson, Sune Ferreira-Schenk , Zandri Dickason-Koekemoer Pages: 84 - 95 Abstract: A hedging strategy is designed to increase the likelihood of desired financial outcomes. Market speculators hedge investment positions if they are worth protecting against potential negative outcomes of turbulent market conditions and effective hedging implementation can reduce the impact severity on the underlying investment since these negative scenarios cannot be avoided. This paper provides a solution for investors to implement a trading strategy to effectively manage turbulent market conditions (such as the COVID pandemic) by implementing an investment trading approach. The investment strategy includes an index held by the investor (long position) and uses a fractal dimension indicator to warn when liquidity or sentiment changes are imminent within financial markets. When the threshold is breached at a predetermined level, the investor will take this observation as a change in liquidity in the market and a hedging position is undertaken. This sequence of events triggers the implementation of a hedging strategy by entering a buy put option position. The fractal indicator was found to be effective when applied to four of the six tested indices in terms of cumulative returns, but also in effect increased the risk taken by the investor for all six indices. The conclusion was made that where the outcome was similar for each economy type, both had a scenario where two out of the three economies outperformed the underlying index and had one index not outperforming the underlying index. This comparison was done to establish whether the hedging strategy had a more promising application to a developing or developed economy type. The fractal indicator was found to be effective when applied to four of the six tested indices in terms of cumulative returns, but also in effect increased the risk taken by the investor for all six indices. PubDate: 2022-03-14 DOI: 10.32479/ijefi.12976 Issue No:Vol. 12, No. 2 (2022)
Authors:Lotfi Mekhzoumi, Nadjoua Harnane, Abdellah Ayachi, Okba Abdellaoui Pages: 96 - 103 Abstract: This study contributes to the analysis of the Environmental Kuznets hypothesis (EKC) for 31 industrialized countries during 1980-2019 using long-term static and dynamic panel data methods. According to Pesaran's CD tests, the CSD issue is present in all variables. The EKC model had a long-run relationship, according to the results of the second-generation Pesaran CIPS unit roots and Westerlund tests. The estimation results of the static model (MG) and dynamic models (CS-DL and CS-ARDL) reached the same conclusion as the reliability of the EKC hypothesis, implying that environmental pollution and economic growth are linked in an inverted N-letter shape. PubDate: 2022-03-14 DOI: 10.32479/ijefi.12771 Issue No:Vol. 12, No. 2 (2022)
Authors:Kuan-Chieh Chen Pages: 104 - 109 Abstract: Due to the severity of the 2007-2009 financial crisis, the United States Federal Reserve aggressively lowered the policy rate to zero and adopted several “unconventional” monetary policies, including “Quantitative Easing (QE).” The literature has long suggested that US monetary policies had strong spillover effects on foreign countries. Accordingly, the governor of Taiwan's central bank, Dr. Fai-Nan Perng, expressed strong concerns about such ripple effects of US policy on the Taiwanese economy. This paper follows Ammer et al. (2016) to use the Federal Reserve's unconventional monetary policy announcements to support the claim that US monetary policy has significant impacts on the Taiwanese economy and financial markets. Also, the spillover effects of pre-crisis “traditional” monetary policies are compared with the spillover effects from implementing “unconventional” policies during and post-crisis. The results show that US monetary policies exert significant impacts on the Taiwanese economy. Finally, we discuss the response of Taiwan's central bank to these spillover effects. PubDate: 2022-03-14 DOI: 10.32479/ijefi.12674 Issue No:Vol. 12, No. 2 (2022)
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