IMF-Related Announcements, Fundamentals, and Creditor Moral Hazard: A Case Study of Indonesia

Previous tests of creditor moral hazard cannot distinguish between two types of investor behavior: expectations of implicit guarantees or better future economic fundamentals due to a prospective IMF program. The novelty of our approach lies in the inclusion of the forward foreign exchange rate in the empirical tests of creditor moral hazard, which reflects investors’ expectations about the country’s future fundamentals and allows us to separate the effects of fundamentals from those of moral hazard. Using Indonesian financial markets as a case study, we first conduct tests of creditor moral hazard in the Indonesian bond and stock markets. Then, we use the forward exchange rate to confirm the interpretation of the bond and stock market results. Our results show that IMF-program related news, especially, the announcement of program negotiations, brings about higher stock returns and lower bond spreads, even though the bath sells at a forward discount on the same day. These results suggest creditor moral hazard in the Indonesian bond and equity markets.http://deepblue.lib.umich.edu/bitstream/2027.42/40066/3/wp680.pd

Creditor Moral Hazard in Equity Markets: A Theoretical Framework and Evidence from Indonesia and Korea

This paper expands on the work of Sarno and Taylor (1999) and develops three alternative models in which creditor moral hazard might occur in equity markets under different assumptions regarding the existence of asset market bubbles and implicit guarantees. Incorporating IMF-related news associated with the own country and with other countries to our models, we are able to predict the expected change in investor behavior and its effect on stock returns. Using daily stock returns for Indonesia and Korea, we test the ability of the models to predict the expected changes in stock returns on the days of IMF-related news such as program negotiations and program approval. Our results regarding Korea and, to a lesser extent, Indonesia are consistent with the creditor moral hazard models that assume implicit guarantees and asset price bubbles. Our results show that, if there is creditor moral hazard in equity markets, its duration could be measured only by days, suggesting that creditor moral hazard is a short-term phenomenon.http://deepblue.lib.umich.edu/bitstream/2027.42/40045/3/wp659.pd

Testing creditor moral hazard in sovereign bond markets: A unified theoretical approach and empirical evidence

This paper critically evaluates the existing empirical literature on creditor moral hazard in sovereign bond markets, proposes a unified theoretical approach to test for IMF-induced creditor moral hazard, and provides empirical evidence, using daily sovereign bond market spreads of Indonesia and Korea. The results suggest that IMF-related news regarding program negotiations and approval may be associated with creditor moral hazard, but their impact on spreads is short-lived, indicating that creditor moral hazard could be best described as a short-run phenomenon. --

Testing Creditor Moral Hazard in Sovereign Bond Markets: A Unified Theoretical Approach and Empirical Evidence

This paper critically evaluates the existing empirical literature on creditor moral hazard in sovereign bond markets, proposes a unified theoretical approach to test for IMF-induced creditor moral hazard, and provides empirical evidence, using daily sovereign bond market spreads of Indonesia and Korea. The results suggest that IMF-related news regarding program negotiations and approval may be associated with creditor moral hazard, but their impact on spreads is short-lived, indicating that creditor moral hazard could be best described as a short-run phenomenon.Creditor moral hazard, financial markets, the IMF, and news

The Mediating Effect of Leader Member Exchange on Personality Congruence and Affective Commitment

The personality congruence of supervisors and subordinates and its influence on work outcomes is a relatively new topic in social and behavioral sciences. Most well-known personality theory is Big Five that includes openness, conscientiousness, neuroticism, extraversion and agreeableness traits. LMX theory focuses on the mutual relationship between a supervisor and a subordinate. There is a gap in the literature regarding the mediating role of LMX perceptions of subordinates on the relationship between personality congruence of supervisors and subordinates and affective commitment (AC). The purpose of this cross-sectional design was first to explore the direct relationship between supervisors and subordinates personality congruence and AC of subordinates. The second purpose of this study was to explore the role of LMX as a mediator between the personality congruence of supervisors and subordinates and AC of the subordinates. A cluster sampling method was used to gather 400 supervisor-subordinate dyads from 3 technopolises in Ankara, who completed self-reported questionnaires. A technopolis is a technology science park. Polynomial regression analysis was conducted to measure the congruence level of dyads\u27 personality traits and structural equation modeling was used to analyze the mediating effect of LMX. Results revealed that, LMX has no mediating effect on personality congruence and AC. The results also revealed that there is a significant relation between the agreeableness congruence of supervisors and subordinates, and AC. This information can be used by organizations by pairing up agreeable dyad members to increase affective commitment. The findings of this study may create positive social change by promoting optimum functioning organizations that have committed employees which would affect the society and economy in a positive way

Testing Creditor Moral Hazard in Sovereign Bond Markets: A Unified Theoretical Approach and Empirical Evidence

This paper critically evaluates the existing empirical literature on creditor moral hazard in sovereign bond markets, proposes a unified theoretical approach to test for IMF-induced creditor moral hazard, and provides empirical evidence, using daily sovereign bond market spreads of Indonesia and Korea. The results suggest that IMF-related news regarding program negotiations and approval may be associated with creditor moral hazard, but their impact on spreads is short-lived, indicating that creditor moral hazard could be best described as a short-run phenomenon.http://deepblue.lib.umich.edu/bitstream/2027.42/40051/3/wp665.pd

Foreign capital in a growth model

Within an endogenous growth framework, this paper empirically investigates the impact of financial capital on economic growth for a panel of 60 developing countries, through the channel of domestic capital formation. By estimating the model for different income groups, it is found that while private FDI flows exert beneficial complementarity effects on the domestic capital formation across all income-group countries, the official financial flows contribute to increasing investment in the middle income economies, but not in the low income countries. The latter appears to demonstrate that the aid-growth nexus is supported in the middle income countries, whereas the misallocation of official inflows is more likely to exist in the low income countries, suggesting that aid effectiveness remains conditional on the domestic policy environment

5-Fluorouracil, epirubicin and cisplatin in the treatment of metastatic gastric carcinoma: A retrospective analysis of 68 patients

BACKGROUND: Gastric cancer is one of the most common types of cancer and one of the most frequent causes of cancer-related death. The majority of gastric cancers show distant metastasis at the time of diagnosis. At present, there is no general agreement over one standard chemotherapy regimen for metastatic gastric cancer. AIMS: We evaluated the activity and toxicity of the combination of 5-Fluorouracil (5-FU), epirubicin and cisplatin (FEP) in previously untreated patients with metastatic gastric cancer. SETTING AND DESIGN: Medical Oncology Department of Uludag University Faculty of Medicine, Bursa; retrospective study. MATERIAL AND METHODS: Sixty-eight patients received 5-FU 300 mg/m2 on Days 1-5, epirubicin 50 mg/m2 on Day 1 and cisplatin 60 mg/m2 on Day 1, every 4 weeks. A median of 3.5 cycles was administered. The response rate, time to disease progression, survival and toxic effects were analyzed. STATISTICAL ANALYSIS USED: Overall survival and time to progression were estimated using Kaplan-Meier method. RESULTS: There were 4 partial responses and 1 complete response (overall response rate 7.3%); 16 patients had stable disease. Median progression-free and overall survival rates were 3.1 months (95% CI 1.9-4) and 6 months (95% CI 4.2-7), respectively. The principal toxicity was myelosupression. Grade 3-4 neutropenia occurred in 27.9%, anemia in 17.6%, and thrombocytopenia in 11.7% of patients. Non-hematological toxicity was mild and manageable. CONCLUSIONS: We concluded that FEP combination as used at the doses and schedules in this study has inferior activity against metastatic gastric cancer

The Ki-67 proliferation index predicts recurrence-free survival in patients with dermatofibrosarcoma protuberans

Dermatofibrosarcoma protuberans (DFSP) is an uncommon soft tissue sarcoma that originates from the dermis or subcutaneous tissue in the skin. While its prognosis is generally favorable, disease recurrence is relatively frequent. Because morbidity after repeated surgery may be significant, an optimized prediction of recurrence-free survival (RFS) has the potential to improve current management strategies. The purpose of this study was to investigate the prognostic value of the Ki-67 proliferation index with respect to RFS in patients with DFSP. We retrospectively analyzed data from 45 patients with DFSP. We calculated the Ki-67 proliferation index as the percentage of immunostained nuclei among the total number of tumor cell nuclei regardless of the intensity of immunostaining. We constructed univariate and multivariate Cox proportional hazards regression models to identify predictors of RFS. Among the 45 patients included in the study, 8 developed local recurrences and 2 had lung metastases (median follow-up: 95.0 months; range: 5.2−412.4 months). The RFS rates at 60, 120, and 240 months of follow-up were 83.8%, 76.2%, and 65.3%, respectively. The median Ki-67 proliferation index was 14%. Notably, we identified the Ki-67 proliferation index as the only independent predictor for RFS in multivariate Cox proportional hazards regression analysis (hazard ratio = 1.106, 95% confidence interval = 1.019−1.200, p = 0.016). In summary, our results highlight the potential usefulness of the Ki-67 proliferation index for facilitating the identification of patients with DFSP at higher risk of developing disease recurrences

Why do some patients with stage 1A and 1B endometrial endometrioid carcinoma experience recurrence? A retrospective study in search of prognostic factors

Objectives: Endometrial endometrioid carcinoma (EEC) is the most encountered subtype of endometrial cancer (EC). Our study aimed to investigate the factors affecting recurrence in patients with stage 1A and 1B EEC. Material and methods: Our study included 284 patients diagnosed with the International Federation of Gynecology and Obstetrics stage 1A/1B EEC in our center from 2010 to 2018. The clinicopathological characteristics of the patients were obtained retrospectively from their electronic files. Results: The median age of the patients was 60 years (range 31–89). The median follow-up time of the patients was 63.6 months (range 3.3–185.6). Twenty-two (7.74%) patients relapsed during follow-up. Among the relapsed patients, 59.1% were at stage 1A ECC, and 40.9% were at stage 1B. In our study, the one-, three-, and five-year recurrence-free survival (RFS) rates were 98.9%, 95.4%, and 92.9%, respectively. In the multivariate analysis, grade and tumor size were found to be independent parameters of RFS in all stage 1 EEC patients. Furthermore, the Ki-67 index was found to affect RFS in stage 1A EEC patients, and tumor grade affected RFS in stage 1B EEC patients. In the time-dependent receiver operating characteristic curve analysis, the statistically significant cut-off values were determined for tumor size and Ki-67 index in stage 1 EEC patients. Conclusions: Stage 1-EEC patients in the higher risk group in terms of tumor size, Ki-67, and grade should be closely monitored for recurrence. Defining the prognostic factors for recurrence in stage 1 EEC patients may lead to changes in follow-up algorithms