Browsing International Business Faculty Papers by Issue Date
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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.
- 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.
- 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.
- ItemEmerging market multinationals : an analysis of performance and risk characteristics(The Haworth Press, Inc., 2005) Aybar, C. Bulent; Thirunavukkarasu, ArulThis study explores the risk and performance characteristics of emerging market multinationals (EMNCs). We use a sample composed of 79 EMNCs from 15 countries located in Africa, Asia, Eastern Europe-Russia, and Latin America. Our risk and performance analyses are based on monthly share price returns collected over 1996-2003 period and annual accounting data. We find that EMNCs on average perform better than their respective country market indices, a widely used EM benchmark, S&P500 and, global market index (MSCI-World) during the period of analysis. Our sample firms on average earn 13.21% return on assets, 8.97% return on equity, and 11.96% return on invested capital. We also find that EMNC returns are highly volatile, and despite some level of diversification achieved by EMNCs, their returns remain highly sensitive to local market shocks. The cross-sectional analysis of the determinants of the performance of the EMNCs reveals that leverage and systematic risk are the most important factors, followed by size. Our analysis indicates that performance is not affected by the degree of internationalization and EMNC investments in developed markets have a positive impact on the value. Finally, our results indicate that EMNCs in less risky emerging markets enjoy higher firm value.
- ItemFinancial crisis and firm performance : empirical evidence from Turkey(Blackwell Publishing Ltd., 2006-07) Gonenc, Halit; Aybar, C. BulentThe objective of this study is to examine the impact of concentrated ownership and business group affiliation on the performance of Turkish firms during the financial crisis by controlling balance sheet currency exposure, international involvement and firm size. Our analysis focuses on a 12-month window encapsulating the February 2001 financial crisis. Our findings show that balance sheet exposure is the key determinant of the firm performance during the crisis periods. While we find evidence that firms with higher concentrated ownership experience lower stock market performance prior and during the financial crisis, business group affiliation does not have any impact on the performance. However, there is weak evidence that stock market performance increases with the level of business group diversification.
- ItemAnalysis of attitudes of Turkish citizens towards the effect of European Union membership on the economic, political, and cultural environment(Routledge, 2007-09) Aybar, C. Bulent; Mergen, A. Erhan; Perotti, Victor; Reid, David McHardyPrevious studies on Turkey’s possible accession to the European Union have mostly focused on the level of support for membership as expressed by Turkish citizens. The purpose of this paper is to shed some light on the specific expectations and perceptions of the Turks about the EU membership process, focusing on economic development, democratic progress, economic and political stability, and cultural influence. In both the focus group studies and the final survey, the authors targeted people who have some knowledge about the EU accession process and EU membership, namely, academics and business people.