Psychological Barriers in Gold Prices

This paper examines for the first time the existence of psychological barriers in a variety of daily and intra-day gold price series. This paper uses a number of statistical procedures and presents evidence of psychological barriers in gold prices. We document that prices in round numbers act as barriers with important effects on the conditional mean and variance of the gold price series around psychological barriers. Classification-

The Diversification Discount Puzzle: Empirical Evidence for a Transactions Cost Resolution

Prior literature on the diversification discount and the relative efficiency of internal versus external capital markets provides decidedly mixed results. We argue that transactions cost economics are useful in understanding this puzzle. According to transactions cost economics, diversified firms should outperform single-segment firms in industries with higher external transaction costs (e.g., emergent industries). Similarly, single-segment firms should outperform diversified firms in industries with low external transactions costs and high agency and other internal costs (e.g., some mature industries). This paper provides empirical evidence supporting these contentions.Diversification, transaction cost economics, internal markets

Assessing Co-ordinated Asian Exchange Rate Regimes

This study assesses alternative Asian exchange rate regimes and finds short- and long-run currency dynamics more conducive to the possibility of introducing a common peg based on a basket of the European euro, the United States dollar and the Japanese yen than the alternative of re-introducing a United States dollar peg exchange rate regime. Exchange rate systems of 3- 4- and 5- Asian currencies are examined and the dynamics in a set of 4 European currencies prior to the introduction of the Euro provides benchmark evidence. The evidence for an Asian basket peg regime is strengthened when, unlike in prior studies, the long-run parameters are estimated while accounting for generalised autoregressive conditional heteroscedasticity effects.Exchange Rate Regimes, Asia, Currency Pegs, Basket Exchange Rates

On the Globalness of Emerging Multinationals: A Study of Indian MNEs

Contrary to contentions in prior literature that emerging multinationals are only regional players, the evidence on the globalness of Indian firms presented in this study suggests that a number of emerging multinationals are global firms. Their strategies are targeted at both the developed and developing markets with the intensity of their overseas operations comparable or far greater than those of the world’s leading multinationals. Many of these firms have greater sales or capital assets outside their home base. Indeed, many of them qualify as global firms as they have a significant presence (over 10 percent of sales) in each of the four regions (triad and the non-triad developing regions) and no one region accounts for more than 50 per cent of their global sales. The study of the transformation of emerging multinationals into non-home region players provides considerable potential for better understanding management theories and practices.Emerging Multinationals, Globalness, Indian Firms

Assessing the impact of prompt corrective action on bank capital and risk

This paper was presented at the conference "Financial services at the crossroads: capital regulation in the twenty-first century" as part of session 1, "Impact of capital requirements on bank risk taking: empirical evidence." The conference, held at the Federal Reserve Bank of New York on February 26-27, 1998, was designed to encourage a consensus between the public and private sectors on an agenda for capital regulation in the new century.Bank capital ; Bank supervision ; Risk ; Bank investments

Dynamics of Equity Market Integration in Europe: Evidence of Changes over time and with events.

This paper examines the integration of European equity markets over the 1985-2002 period using a relatively new cointegrating technique that assesses how the level of integration in equity price levels changes over time. This procedure is supplemented by two other dynamic techniques that also measure the extent of time-varying integration from complementary perspectives. The three methods are in agreement that there has been an increased degree of integration among European equity markets especially during the 1997-98 period. This evidence seems to indicate that despite several years of demonstrating political willingness by European leaders to integrate their economies, it was not until the establishment of the EMU and the ECB during the 1997-98 period that the markets deemed that European integration would in fact occur. The evidence presented in this study also indicates that Frankfurt is the dominant market for equities in Europe.

The Anatomy of an Entrepreneur: Family Background and Motivation

Examines the socioeconomic, educational, familial, and professional backgrounds of entrepreneurs in high-growth industries, their motivations for becoming entrepreneurs, and their beliefs. Explores the correlations between factors

The Changing Dynamics of the East Asian Real Exchange Rates after the Financial Crisis: Further Evidence on Mean Reversion

Using an improved statistical methodology including tests designed for heterogeneous panels, this paper tests for mean reversion in monthly US Dollar based real exchange rates for nine East Asian countries, including those that were severely affected by the 1997 Asian financial crises. The empirical results reveals mean reversion in real Asian exchange rates is a feature of the post-crises sub-period (1997-2005) but not of the pre-crises sub-period (1981-1996). Additionally, we make a point that a faster speed of convergence to PPP and lower adjustment half-lives for real exchange rates compared to those reported for major industrialized country currencies and especially so for the post-crises period in Asia.Purchasing power parity; Panel unit root tests; Asian financial crisis

The Forward Exchange Rate Bias Puzzle: Evidence from New Cointegration Tests

An important puzzle in international finance is the failure of the forward exchange rate to be a rational forecast of the future spot rate. It has often been suggested that this puzzle may be resolved by using better statistical procedures that correct for both non-stationarity and nonnormality in the data. We document that even after accounting for non-stationarity, nonnormality, and heteroscedasticity using parametric and non-parametric tests on data for over a quarter century, US dollar forward rates for horizons ranging from one to twelve months for the major currencies, the British pound, Japanese yen, Swiss franc, and the German mark, are generally not rational forecasts of future spot rates. These findings of non-rationality in forward exchange rates for the major currencies continue to be puzzling especially as these foreign exchange markets are some of the most liquid asset markets with very low trading costs.flight-to-quality, contagion, multivariate GARCH