Do Imports and Exports Adjust Nonlinearly? Evidence from 100 Countries

A country is said to live within its international budget constraint if its exports and imports are cointegrated. Previous studies that tried to verify the cointegration between exports and imports used linear models and supported the theory in almost 50% of countries. In this paper, when we use the nonlinear ARDL approach and asymmetry cointegration method, we support the long-run link between imports and exports in 94 out of 100 countries in our sample. This study is not only the most comprehensive study in the literature, but it is also the first to show that, indeed, trade flows adjust in a nonlinear fashion

Empirical evidence on the relationships between concentration and profitability in Latin American banking

There has been growth in globalization as a result of increased liberalization. This has also resulted in an increase in the role of financial institutions, such as banks. It is the purpose of this study to test Classen’s (2001) hypothesis that increase foreign bank presence has positive welfare implications and that the functioning of national banking markets are improved as a result. Using financial data for 2003 this paper will examine the influence of foreign bank entry on Latin American domestic markets.Latin American banking; Concentration and Profitability; Foreign Bank Influence

Financial assets, expected return and risk, speculation, uncertainty, and exchange rate determination

Purpose: The objective of this paper is to determine the movements (long-term trend) of the exchange rate by forecasting the rate of return and risk (return to variability ratio, RVR) that financial assets have in two economies and for four different investments. Design/Methodology/Approach: Risk averse speculators will try to maximize their return and minimize their risk by investing domestically or abroad, but these capital flows will affect the value of the two currencies (their exchange rate). Findings: The empirical results show that before 2001 the return in the U.S. was high and the dollar was appreciated; after 2001, the same return became negative and the dollar was depreciated, but after 2004 the returns have growing positively for the U.S., and the returns for the Euro-zone are falling. Practical Implications: We can say that the dollar may appreciate with respect to euro, except if we will have any other domestic or external shocks on the two economies. Still the results of this analysis are not very conclusive. Originality/value: International investors are investing in countries with higher return and lower risk. This increase in demand for these assets, increases the demand for currency in that country and its currency is appreciated.peer-reviewe

An econometric study of forecasting French foreign exchange rates

Purpose: The objective of this paper is to study possible diversity of exchange rate models, by applying both parametric and nonparametric techniques, and examines said models’ collective predictive performance. Design/Methodology/Approach: We shall choose the forecasting predictor with the smallest Root Mean Square Forecast Error (RMSE). The better type of exchange rate model is in the Autoregressive model’s equation, according to the empirical evidence, although none of this data yields an optimal forecast. Findings: In our conclusion, the error correction versions of these exchange rate models will be adjusted so that credible long-run elasticities can be imposed on each model’s fundamental variables.peer-reviewe

Empirical evidence on the relationships between concentration and profitability in Latin American banking

There has been growth in globalization as a result of increased liberalization. This has also resulted in an increase in the role of financial institutions, such as banks. It is the purpose of this study to test Classen’s (2001) hypothesis that increase foreign bank presence has positive welfare implications and that the functioning of national banking markets are improved as a result. Using financial data for 2003 this paper will examine the influence of foreign bank entry on Latin American domestic markets

Empirical evidence on the relationships between concentration and profitability in Latin American banking

There has been growth in globalization as a result of increased liberalization. This has also resulted in an increase in the role of financial institutions, such as banks. It is the purpose of this study to test Classen’s (2001) hypothesis that increase foreign bank presence has positive welfare implications and that the functioning of national banking markets are improved as a result. Using financial data for 2003 this paper will examine the influence of foreign bank entry on Latin American domestic markets

Do Imports and Exports Adjust Nonlinearly? Evidence from 100 Countries

A country is said to live within its international budget constraint if its exports and imports are cointegrated. Previous studies that tried to verify the cointegration between exports and imports used linear models and supported the theory in almost 50% of countries. In this paper, when we use the nonlinear ARDL approach and asymmetry cointegration method, we support the long-run link between imports and exports in 94 out of 100 countries in our sample. This study is not only the most comprehensive study in the literature, but it is also the first to show that, indeed, trade flows adjust in a nonlinear fashion