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- ItemFinancial liberalization, financial deepening and efficiency implications in the emerging markets : preliminary evidence from Turkey(Elsevier, 1998) Aybar, C. BulentThe chapter investigates the implications of financial liberalization and financial deepening on the intertemporal behavior of stock returns in the Turkish equity markets. The objective of the study is to test return predictability and the changes in this behavior in two qualitatively different time periods. The empirical findings indicate that return behavior does not change as the financial markets deepen in Turkey. Return characteristics qualitatively remain unchanged and return predictability continues. The adverse implications of this finding are rather severe and they are addressed in the conclusions.
- ItemThe emerging securities market in Russia(Routledge, 1998) Khambata, Dara; Aybar, C. BulentThis paper examines the Russian equity market from speculative infancy to its modern-day status as an asset in the global economy.
- ItemVolatility in Istanbul Stock Exchange(Istanbul Stock Exchange, 1998-09) Yavan, Zafer A.; Aybar, C. BulentSince economic agents make the decisions based on the perceived distribution of the random variables in the future, assessment and measurement of the variance has a significant impact on their course of action. Therefore, market participants’ ability to accurately measure and predict the stock market volatility has wide spread implications. This capability has a particular importance in an environment, where the perception of high levels of volatility has the potential to erode the investor confidence and divert the capital inflows from equity markets. This is a particular concern for the emerging equity markets that lack the advanced institutional and informational infrastructures and which are very vulnerable to domestic and foreign capital flows. The purpose of this study is to determine the time-varying characteristics of volatility in an emerging stock market by utilizing rich family of ARCH models. The primary focus of the study is to explore the nature of volatility in the ISE.
- ItemGlobalization, emerging market economies and currency crisis in Asia : implications on economic reform and development(St. Louis University, 1999) Aybar, C. Bulent; Milman, Claudio D.Recent experiences in Latin America and Asia provide ample evidence that countries in the process of integration are increasingly exposed to internal and external economic shocks. More importantly, this growing vulnerability of particularly developing economies has the potential of undermining decades of development efforts. The Asian crisis clearly demonstrates that we are increasingly unable to predict the triggers of such crises, and certainly lack the institutional arrangements to contain them. This translates into the fact that our ability to manage the interaction between domestic and international economic forces is limited or undermined by certain factors. This practical outcome has the potential to delay the process of globalization and integration of developing economies into the world economy.
- ItemFoundations of foreign direct investment(Southern New Hampshire University, 1999-09-29) Broaden, CharlotteTo adequately understand foreign direct investment, one must trace the origins of international trade beginning with comparative advantage theory, which views trade from the standpoint of perfect competition, to the new classical theories that focus on imperfect markets. The debates that are raised in these theories touch on many issues, however, central to the underlying theme in all of these theories are the issues of efficiency and equity as they impact both the home and host countries. Understanding the theories in and of themselves is not enough to explain the concept of foreign direct investment. We need an instrument to tie the two together and that instrument or more preferably, institution, is the multinational corporation (MNC). The literature is inconclusive in providing a precise definition of the MNC. A generally accepted theorem is that MNC’s are composed of a corporate structure where operations are in two or more countries on such a scale that growth and success depend on more than one nation, and where decisions are made on the basis of global alternatives (Parry 1973). For the basis of this paper, we shall also accept this premise. This paper will examine how international trade theory impacts foreign direct investment decisions. We will investigate the idea of a MNC moving from the notion of perfect competition to the concept of dealing with market imperfections as well as follow the evolution to the "new paradigm" of international trade.
- ItemForeign direct investment under uncertainty : an options pricing strategy(Southern New Hampshire University, 1999-10-19) Broaden, Charlotte
- ItemPatterns of corporate ownership and privatization in Visegrad countries : 1989-1996(Routledge, 2000) Aybar, C. Bulent; Khambata, Dara; Milman, ClaudioThe article analyzes merger and acquisition activities in Visegrad Countries (the Czech Republic, Poland, Hungary and Slovakia). The analysis established linkages among the FDI, Privatization and M&A activities and reports the characteristics of transactions in the region in a comparative spirit. The findings indicate that majority of activities in the region involved foreign investors from Western Europe and USA. The M&A activities were concentrated in manufacturing segments such as automobiles, food processing, glass and clay, service segments such as telecom, utilities and financial services. The study also revealed some pre and post transaction ownership patterns in respective countries as well as methods of acquisition.
- ItemComparative analysis of the Mexican and Turkish currency crises(Routledge, 2000) Aybar, C. Bulent; Ajami, Riad A.; Bear, Marca M.The study aims to explore characteristics of currency crises in emerging markets. Two recent experiences in Mexico and Turkey respectively analyzed carefully to identify common elements in the development and eruption of the crises. Results of the study suggest that there are several background factors and triggers that were consistent in both cases. Finally a discussion of the policy implications of the findings concludes the study.
- ItemThe long run performance of privatization related ADR issues(Southern New Hampshire University, 2000-11) Aybar, C. BulentAmerican Depository Receipts (ADRs) have been increasingly used in the Share Issue Privatization process (SIP) by privatizing governments both in developed and developing countries. In this study long-term performance of 143 privatization related ADR programs were analyzed. The ADR programs covered in the study were initiated between 1984 and 1999, and included a diverse mix of companies from 29 different industries across 31 developed an emerging markets. The analysis of the long run performance of these programs revealed interesting patterns. In all cases, average cumulative returns and average cumulative abnormal returns of developed country privatization related ADRs exceeded emerging market privatization returns. Same conclusion was reached by using an alternative return calculation methodology. While sample companies generally outperformed their respective country indices and FT World index, they under performed the S&P500 Index.
- ItemA note using mergers and acquisitions to gain competitive advantage in the United States in the case of Latin American MNCs(Elsevier Science Inc., 2001) Milman, Claudio D.; D’Mello, James P.; Aybar, C. Bulent; Arbelaez, HarveyThe "new" economic and business climate in Latin America, fostered by multilateral trade agreements such as NAFTA, MERCOSUR, and the ANDEAN Pact, suggests that Latin American (LA) firms must become more aggressive and competitive in order to survive. Foreign direct investment in the form of mergers and acquisitions (M&A) is often an effective way of competing in a tough global environment. Using transactions data collected from Security Data Company's Worldwide Merger and Acquisition database, this paper analyzes the relative involvement of firms from five LA countries (Argentina, Brazil, Chile, Mexico, and Venezuela) in acquiring targets in the United States of America. Transaction characteristics examined and summarized include the annual distribution (1985-1998) of the deals, the industrial sector of the target firm, the form of acquisition method used, and the form of ownership of the target firm. The trends are analyzed, and implications for managers are indicated.
- ItemComparative performance of IPO in Japan and United States(Southern New Hampshire University, 2001) Takei, Hideki; Samii, MassoodThe increase in the initial public offerings (IPOs) in recent years has created a considerable interest in the study of their behavior. The price performance of post IPO has been studied extensively. However, these studies have focused on the US market and there is very little systematic analysis on the comparative performance of IPOs in various international markets. In this paper we evaluate post IPO performance of stocks in the US and in Japan. The major conclusion is that while the over all pattern of price performance is the same in both markets, there are differences that distinguish the two markets.
- ItemTrade balances, economic growth and linkages to multinational foreign direct investment to Asia(Southern New Hampshire University, 2001) Hassan, Mahboubul; Samii, MassoodThis research has investigated whether trade balance is an indicator of foreign direct investments by a multinational corporation. It addresses two principal research questions. First, what are the determinants of foreign direct investment (FDI) in Asia? Second, is trade balance an indicator of FDI? If so, is there any lag effect on FDI for a specific Asian country? Based on annualized time series data for 8 sampled countries in Asia, the results indicate for majority of sampled Asian countries significant statistical correlation exists between the four explanatory variables (GDP growth rate, trade balance, percentage change in real wages, and the average tax rate) and the monetary size of FDI. For majority of sampled Asian countries the coefficient of trade balance is statistically significant, and for only 2 sampled Asian countries, the study indicate significant statistical correlation exists between one period lag monetary size of FDI and the current period FDI. Based on the empirical findings, an MNC, by investing (FDI) in either exportable or import substitutable products of countries that are facing trade balance problems, will be in a stronger position to negotiate better incentives from the host country which in turn will enhance the MNCs value. This research has also shown that an MNC, which is looking for a location of its FDI, will be better off by investing in the sampled Asian countries that are facing trade balance problems and simultaneously are the recipient of FDI.
- ItemMeasuring the impact of globalization : an analysis of the risk and return of multinational firms(Southern New Hampshire University, 2001-02-28) Broaden, Charlotte; Samii, MassoodThere have been several debates in the literature over the issue of multinational firms and their impact on profitability and risk. Previous literature suggests that multinational firms decrease their systematic risk owing to the diversification benefit of having cash flows in different countries. More recent empirical evidence has surfaced suggesting the contrary in that multinationals may increase their risk due to an increase in the standard deviation of cash flows from such additional risk factors as political risk, exchange rate risk, and information asymmetry. In conjunction with lower risk, it has been posited that firms have higher leverage. Empirical studies on profitability have shown similar rates of return for both domestic and international firms. Through the use of pooled regression analysis this paper finds support for the hypothesis that multinational firms experience lower debt, and lower profitability.
- ItemPrivatization and regulation in Turkish telecommunications(Southern New Hampshire University, 2001-03) Aybar, C. Bulent; Guney, E. Serhat; Suel, HasanThe importance of efficient workings of network industries and the markets in which they operate has long been recognized in the literature. In a parallel fashion, policy makers around the world initiated various restructuring efforts focusing on these sectors. However, the issues of privatization and much needed subsequent regulatory framework face considerable challenges in developing countries. Both political opposition and difficulties encountered in the process of privatization caused major delays in overall privatization and restructuring efforts of these countries. This paper focuses on the telecommunications sector and the Turk Telekom case, in particular, assessing the prospects for its much-debated divestiture, evaluating the company specifics and subsequent regulatory agenda. In doing that, it emphasizes the current "telecom meltdown" in international markets, and compares telecommunications privatizations of various nations. Additionally, the study reviews major regulatory methods and draws on some recommendations for policy makers in the light of the U.S experience in this sector.
- ItemNetwork externalities and internationalization : a Four Forces model of internationalization for firms operating in network externality environments(Southern New Hampshire University, 2002) Hecox, Mark G.; Samii, Massood; Nugent, Nicholas; Dhakar, Tej; Fellman, Philip VosAs stated in the dissertation, "The global economy continues to evolve into a high-density, inter-networked environment. With increasing interactions enabled by the Internet and digital communication platforms, products, firms and industries have to evolve their form and function to adapt for survival. Business network relationships are becoming increasingly important in the internationalization decision process. Inter-networking technology is changing the way firms view the international business landscape. The economics of inter-networking must be considered in effective internationalization decision making. This research endeavors to examine empirically how and why economic, relationship and technology forces uniquely associated with an network externality environment shape the internationalization behavior of high technology firms operating in network externality environments. Firms operating in network externality oriented markets face economic, technology and relationship forces that differ significantly from those firms operating in traditional non-externality environments. In addition, many of the firms operating in this type of environment are in developing high technology industries like computer peripheral equipment, pre-packaged software and related computer devices. According to Ward's business directory, these firms currently represent over $500 billion US dollars in gross sales and are fueling the global communication technology revolution. Most current internationalization literature, theory and empirical work are based on firms operating in traditional non-externality environments. Much of the classical foreign direct investment and internationalization theory has centered on an economic theory paradigm (Dunning 1976, Kindelberger 1969, Knickerbocker 1974, Magee 1977). Stages and process models of internationalization have relied on transaction cost principles related to international manufacturing environments. More recent internationalization theory from the networking relationship school has begun to acknowledge the importance of using an organizational behavior paradigm to help explain the complexity of the internationalization phenomena. To adequately address the internationalization of high technology firms, Coviello and McAuley (1999) suggest that a combination of paradigms be used. In my theoretical framework that follows, I use a combination of economic theory, organizational theory and network theory to explain causal relationships driving the internationalization decision strategy of high technology firms operating in network externality environments. I present a causal model - The Four Forces Model of Internationalization for Firms Operating in Network Externality Environments - identifying causal relationships with the forces affecting firm internationalization and the associated predicted outcomes. It is suggested that these forces are unique in combination to firms operating within network externality environments and that they conspire to shape internationalization decision making and resulting outcomes. The implications for firm internationalization strategy are discussed. From this model evolved my key propositions for empirical testing. In order to develop an empirically based explanatory dissertation with relevant causal relationships regarding the internationalization of firms operating in industries that exhibit network externalities, I will use a multiple case study research strategy. As articulated by Yin (1994) this approach is good for complex organizational phenomena, of which firm internationalization has been described and for addressing "how" and "why" types of research questions. In order to avoid a less than rigorous contribution to theory, the multiple case study methodology that I employ is of an explanatory nature seeking to identify and confirm causal relationships among the key variables in the internationalization of these firms. I use an experimental approach to test my theoretical framework with each case decision. By seeking non-random patterns using a pattern matching design combined with a quantitative analysis technique known as Degrees-of-Freedom analysis, I am able to collect rich qualitative data and test my model predictions empirically and quantitatively against the observed outcomes. By statistically comparing the observed and predicted patterns, I am able to determine the level of support for my model predictions and research propositions." (Library-derived description)
- ItemProducer environment's impact on the reverse investment strategies of large developing country firms(Southern New Hampshire University, 2002) Broaden, Charlotte; Samii, Massood; Aybar, C. Bulent; Nugent, Nicholas; Johnson, R. LarryAs stated in the dissertation, "Throughout the 1980s and into the 1990s financial investors, corporate strategists and political leaders from the world largest economies were engaged in intensifying their focus on emerging or developing economies. The developing economies were seen as the new frontier for economic growth for some of the world's largest corporations. Not only did these developing economies provide the picture of opportunity - companies in the industrialized world became dependent upon on overseas markets for both economies of scale and increasing profits. Simultaneously, developing economies benefited as well. Capital, technology and management expertise flowed into these economies providing a basis for economic growth. However along with opportunity comes risk. Financial shocks rocked the global economy in the mid 1990s, (beginning with the peso crisis that struck Mexico and then followed by the Asian financial crisis). Political instability in the form of increased crime, kidnapping, assassinations and guerrilla activity were on the rise. These economic and political shocks became the impetus for "capital flight", sending capital fleeing back to the safe haven of their domestic markets or other stable advanced economies. Firms in developing economies were forced to consider alternative avenues for increasing their economic well-being. One alternative that can be given serious consideration is reverse investment. Historically, developing nations have participated in foreign direct investments (FDI) outflows to more developed and advanced economies. Albeit, the level of flows have been miniscule in comparison to the outflows from advanced nations, over time these outflows are becoming a significant factor in the development of transnational firms from developing economies. This activity is the focus of this thesis." (Library-derived description)
- ItemGlobal shock transmission to emerging markets(Southern New Hampshire University, 2003-07) Dasari, Usha; Dhakar, Tej S.; Samii, MassoodThe process of global integration has intensified the competition in world markets during the 1990s. In the new environment, many developing countries are increasingly relying upon greater trade integration for upgrading their international competitiveness and promoting their dynamic comparative advantage. In view of growing global integration, this paper attempts to analyze whether Indian, Hungarian and Polish economies have become more internationalized as a result of economic reforms embraced by each of these countries in early 1990s and hence vulnerable to global economic cycles: the integration hypothesis. The paper applies variance decompositions derived from vector auto regression to assess the degree of economic integration of the three economies with U.S. economy. The study concludes that, in the pre-liberalization period U.S. economy did not influence the Indian, Hungarian and Polish economies. Shocks from U.S. had no impact on their aggregates. In the post liberalization period, however, the results are mixed. Hungarian aggregates show very low degree of integration with US followed by Poland, and India. Although, all the three countries have shown varying degrees of integration in the post-liberalization period, none of the economies are found to be overly vulnerable to international shocks. It can be argued that despite opening of economy and transition towards integration with the global economy, the degree of integration across countries still remains significantly low.
- ItemPerformance and value implications of cross-border acquisitions in telecommunications industry : the case of US Telecom companies(Southern New Hampshire University, 2003-07) Aybar, C. Bulent; Kan, Ozgur BerkThis study analyzes the impact of cross-border acquisitions of US Telecom Operators on the shareholder value and firm performance. We analyzed the value implications of 33 acquisitions made by US Telecommunication companies in 18 countries located in North America, Europe, Latin America and Asia Pacific. While 15 of the target companies were domiciled in developed countries, 18 were located in Latin American and Asian emerging markets. Total value of acquisitions included in the sample was $12.3bn with a mean transaction value of $363.8m. Our small sample analyses revealed that cross-border acquisitions of US Telecom companies on the average did not create value for the shareholders. We also could not identify any significant performance improvements in the post acquisition period. An interesting result of our empirical analysis was the finding that acquisitions of targets in emerging markets generated higher cumulative abnormal returns than the targets in developed country markets.
- ItemThe evolutionary mechanisms of hybridization in the current global environments of corporate governance : potential stabilities of hybrid structures(Southern New Hampshire University, 2004) Takei, Hideki; Fellman, Philip Vos; Hassan, Mahboubul; Samii, Massood; Nugent, NicholasAs stated in the dissertation, "Corporate governance is an important dimension of management. Appropriate governance practices lead companies to continuously improving prosperity by guiding them through environmental uncertainties and the risks of operations, especially operations in unfamiliar overseas environments. In this regard, effective corporate governance structures have been critical to the success of multinational enterprises (MNEs) that tend to face higher levels of uncertainty and risk than domestic corporations. In addition to the serious uncertainty and risk in international business environments, MNEs have had to deal with varying and often unfamiliar requests and values on the part of local investors and regulatory authorities. These groups frequently define their interests and the objectives of their investments on the basis of their own cultural and historical background. As financial markets have globalized, they have also been made more complex as a result of encouraging international investors to participate in several indigenous and multinational securities markets. These various requests, values and demands on the part of international investors or local regulatory authorities have often been a drag on the overseas performance of MNEs.2 While indigenous governance structures might be quite well suited to local values and regulatory demands, they are unable to deal with the requests and values of home country corporations and their investors. This provides a serious challenge to multinational corporate governance than the existing indigenous structures. In this regard, one of the latest findings is that more effective governance structures may come about through the emergence of hybrid governance. Hybrid governance is the result of a process whereby indigenous corporate governance structures are modified to accommodate international requirements, but without sacrificing deeply rooted historical and cultural values. In this regard, it is more accurate to speak of "hybridization", or a transformation of governance structure and a change in the overall governance paradigm, rather than a simple process of modification. A hybrid governance structure is, fundamentally, a new structure which while sensitive to local values, nonetheless meets a reasonable international standard of due diligence. Interestingly, some recent studies on hybrid corporate governance (Aoki, 2000) argue that the highest level of corporate performance in MNE's may come not from local governance structures, nor from overseas governance structures of the developed countries but rather from a hybridized governance system. While the superior potential performance of hybrid structures has been previously argued (Aoki, 2000), there have not been confirmatory studies of actual corporate performance to date. One reason for this is that the structure of emergent hybrid governance has not been clearly differentiated from that of more traditional concepts of corporate governance. In earlier studies, hybrid models were described as having "semistrong" governance attributes from different types of indigenous corporate and social structures (Williamson, 1996). By semi-strong, earlier authors, particularly Williamson, actually mean a system where external values are rather arbitrarily grafted onto local governance structures. In theory, this kind of structure draws upon relatively equal amounts from the overseas company's governance environment and the local governance environment. In terms of models, this kind of hybridization is relatively primitive. While these models attempt to mix local and international values, they do so in an unintegrated or additive fashion. In other words, while they may add governance provisions and requirements in relatively equal measure from both the local system and the international system, there is no attempt to integrate these two elements. In this case, the principal attributes of semistrong governance models are the result of an unstable hybrid model. The model is unstable because the process lacks any integrative function. An additional complication in the literature has been that hybrid corporate governance models have been traditionally addressed as a transitional phase of governance which is, on the whole, assumed to be following a pattern of global convergence (Bradley et al, 1998). The problem here is that convergence is assumed rather than demonstrated and this then results in a mischaracterization of the process of hybridization, and often in the definition of a model where the various elements of hybridization are inherently unstable (i.e., they are temporary, transitional mechanisms) (Williamson, 1996). One consequence of this mischaracterization is that by assuming hybridization is merely an intermediate step on the way to global convergence the hybrid model is seen as a merely temporary, intermediate process. Williamson (1996) sees hybrid structures as the "mid-point" on the path to convergence and he envisions a process where, after this mid-point, hybrid attributes start disappearing, in order to be replaced by rather unspecified "convergent" elements. Clarifying this process does not, unfortunately, lead to any better description of the process of evolution and adaptation in corporate governance structure. Where the point of governance has been most clearly articulated (Bradley et al, 1998; Logue and Seward, 1999) it turns out that the so-called "point of convergence" is simply the Anglo-American, purely contractarian system. Far from being a point of convergence, this would simply be the imposition of one local system across global markets. To date, recent historical evidence suggests that not only is such an outcome improbable (Kester, 1991; Roe, 1999; Aoki, 2000; Gilson, 2001; Licht 2002) but also that the "transaction cost proof of the universality of shareholder value is, at best, a delusion and at worst a pointless triviality (Fellman and Takei, 2003)." (Library-derived description)
- ItemEuro pricing of crude oil : an OPEC's perspective(Middle East Economic Association and Loyola University, 2004-09) Samii, Massood; Thirunavukkarasu, Arul; Rajamanickam, MohanaIn the late 1970s and the early part of the 1980s, a debate emerged within the Long Term Strategy Committee of the Organization of Petroleum Exporting Countries (OPEC) whether to continue the pricing of crude oil in United States dollars or to shift to an alternative currency. This debate was rooted in the persistent decline in the value of the United States dollar relative to other global currencies. The choice of currencies available to price crude oil was limited for OPEC because of the inadequate liquidity of most other currencies. With the recent emergence of the euro, the issue of choice of currency for pricing crude oil has emerged once again for policy discussion. The current paper is focused on the implications of a shift in the pricing of crude oil from United States dollar to euro on OPEC members. Winners and losers are identified based on economic gains and losses. It is concluded that while such a policy would incrementally benefit OPEC en bloc, it would result in a disadvantage for the countries whose major trading partner is the United States and, therefore, would not be a Pareto optimal solution.