Asian Economic and Financial Review

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Online ISSN: 2222-6737
Print ISSN: 2305-2147
Total Citation: 1219

No.3

How is the Risk Tolerance of Individual Investors in Kyrgyzstan?


Pages: 404-415
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Ebru Caglayan --- Raziahan Abdieva
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Ebru Caglayan --- Raziahan Abdieva (2014). How is the Risk Tolerance of Individual Investors in Kyrgyzstan?. Asian Economic and Financial Review, 4(3): 404-415. DOI:
Investment and saving behaviour of individuals are important issues in the economies. Risk tolerance of investors affects the investment decisions. In Kyrgyzstan, a transition economy, while the investment resources are high, savings of individuals in financial organizations are low. This study analyses the risk tolerance of individual investors in Kyrgyzstan and determines the factors influencing investor types. In the study multinomial logit model is used to determine these factors. The findings of the study show that men take more risk than women in Kyrgyzstan. When the age increases people become less risk lover. Having non-wage income increases taking risk and increases in the rate of investment. The findings also indicate that income has a positive effect on the risk loving sense.
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Maintaining Order in the Microfinance Sector in Ghana


Pages: 387-403
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Maintaining Order in the Microfinance Sector in Ghana

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Olivia Anku-Tsede
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Olivia Anku-Tsede (2014). Maintaining Order in the Microfinance Sector in Ghana. Asian Economic and Financial Review, 4(3): 387-403. DOI:
This study examines the processes of maintaining order in the microfinance sector, particularly, the processes of resolving disputes, the types and causes of disputes that arise between microfinance institutions, their clients and workers. The study used empirical evidence derived from microfinance institutions, their clients as well as employees and commission agents within the Greater Accra Region of Ghana to aid in the examination of how order is maintained as well as the processes of resolving disputes in the microfinance sector. The study suggests that the adoption of an informal alternative dispute resolution mechanism yields better and cheaper results than litigation or legal means. The study further suggests that, parties to a microfinance transaction are reluctant to resort to litigation and would rather borrow at high interest rates to pay off loans than litigate. The findings show that MFIs maintained order by keeping good working relationships with their clients and staff as well as conducting credit or background checks on both clients and staff before dealing with them. Record keeping was also found to be crucial in the maintenance of order in the microfinance sector.
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Service Sector as an Engine of Growth: Empirical Analysis of Pakistan


Pages: 377-386
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Service Sector as an Engine of Growth: Empirical Analysis of Pakistan

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Hira Mujahid --- Shaista Alam
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Hira Mujahid --- Shaista Alam (2014). Service Sector as an Engine of Growth: Empirical Analysis of Pakistan. Asian Economic and Financial Review, 4(3): 377-386. DOI:
The objective of the present study is to examine the determinants of service sector growth such as external debt, population, gross domestic product per capita, foreign direct investment and government consumption and employed labour force in services. For this purpose the study employed co-integration technique and vector error correction model for investigating long run as well as short run relationship among variables respectively during the annual time period 1976-2010. Results proposed that there is significant effect of population, foreign direct investment, consumption and investment on service sector growth in Pakistan.
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Why South-South FDI is Booming: Case Study of China FDI in Nigeria


Pages: 361-376
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Why South-South FDI is Booming: Case Study of China FDI in Nigeria

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Oji-Okoro Izuchukwu --- Daniel Ofori
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Oji-Okoro Izuchukwu --- Daniel Ofori (2014). Why South-South FDI is Booming: Case Study of China FDI in Nigeria. Asian Economic and Financial Review, 4(3): 361-376. DOI:
As economic linkage between south-south countries especially China with Nigeria have grown in intensity, it is seen as an engine to Nigeria economic growth. Therefore the amplified presence of China investment in Nigeria is now widely noticed and has drawn scrutiny from the populace raising questions of whether collaboration with the Asian giant is beneficial to the country and it developmental goals. This paper investigates why south-south foreign direct investment (FDI) is booming in Nigeria from 1992-2010 through the application of three-step procedures (Autocorrelation Function, Unit-root test and Granger Causality test). The results of the analysis affirmed the existence of autocorrelation and Unit-root with Granger causality showing that China FDI inflow is bidirectional with Gross Domestic Product (GDP) indicating a significant contribution in the economy growth of the country. In line with the findings to boost more foreign investment from China to Nigeria the research recommends, among other things, the creation of enabling investment climate and adequate macroeconomic policies in the country to ensure better productivity and sustainability of investment.
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An Empirical Test of Income Distribution and Migration Relationship: A Case of Turkey


Pages: 355-360
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An Empirical Test of Income Distribution and Migration Relationship: A Case of Turkey

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Okyay UCAN --- F.Merve PARLAKYILDIZ --- M.Basaran OZTURK
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Okyay UCAN --- F.Merve PARLAKYILDIZ --- M.Basaran OZTURK (2014). An Empirical Test of Income Distribution and Migration Relationship: A Case of Turkey. Asian Economic and Financial Review, 4(3): 355-360. DOI:
The relationship between migration and income distribution is an important phenomena. There are two types of migration: internal (in migration) and external (out migration). Both of them are because of politic, economic and social reasons. Here both of them are considered inside Turkey. Data is chosen from 2008-2012 periods for the 12 statistically divided regions in Turkey. Following the Panel unit root test, panel least square methods is used for the empirical part. As to result, it is concluded that for the 2008-2012 periods, migration has an adjusting role for 12 statistical regions in Turkey.
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Prospects of Crop Insurance as a Risk Management Tool among Arable Crop Farmers in Ghana


Pages: 341-354
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Prospects of Crop Insurance as a Risk Management Tool among Arable Crop Farmers in Ghana

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Robert Aidoo --- James Osei Mensah --- Prosper Wie --- Dadson Awunyo-vitor
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Robert Aidoo --- James Osei Mensah --- Prosper Wie --- Dadson Awunyo-vitor (2014). Prospects of Crop Insurance as a Risk Management Tool among Arable Crop Farmers in Ghana. Asian Economic and Financial Review, 4(3): 341-354. DOI:
The aim of this study was to assess the willingness of farmers to adopt crop insurance and the critical factors that influence the premium they are willing to contribute towards such a scheme. Two out of the eleven (11) agricultural operational areas in the Sunyani Municipality were selected purposively due to their dominance in maize and cassava production. Four (4) communities were randomly selected from each operational area through balloting and fifteen farmers were then selected from each community through the use of random numbers. A total of 120 farmers were selected from the Municipality for personal interviews to elicit primary information with the help of a structured questionnaire. A binary logistic regression model was used to identify the factors that influence farmers’ willingness to adopt crop insurance as a risk mitigation strategy. A double logarithmic multiple regression model was employed to determine the factors that influence the premium farmers were willing to pay towards a crop insurance scheme. Evidence from the study indicates that majority (76%) of farmers were willing to adopt crop insurance; age of farmer, land tenure system practiced and educational level were found to be the key drivers of crop insurance uptake, ex ante. The study revealed that government subsidy would be required for such an insurance scheme since the premium farmers pledged to pay was quite low and likely to be uneconomical from the perspective of private insurers. It was revealed that on-farm income, farm size, land tenure, educational level and amount of savings by farmers significantly influenced the premium farmers pledged to pay towards a crop insurance scheme. The study recommended periodic training and education of farmers to improve their knowledge on crop insurance as a risk management tool and the need for farmers to save in order to enhance the uptake of crop insurance when it is introduced in the study area.
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Analysis of Farm Households Poverty Status in Ogun States, Nigeria


Pages: 325-340
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Analysis of Farm Households Poverty Status in Ogun States, Nigeria

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ADEKOYA Olusoji Adetayo
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ADEKOYA Olusoji Adetayo (2014). Analysis of Farm Households Poverty Status in Ogun States, Nigeria. Asian Economic and Financial Review, 4(3): 325-340. DOI:
The paper examined the poverty status of farm households in Ogun State, Nigeria using a descriptive statistics, Foster, Greer and Thorbecke poverty (FGT) indices and Logit regression model. The data used were generated from a survey involving 117 farm household’s randomly selected using multistage sampling technique. Results of analysis revealed that majority (70.9%) of the farm households do not have access to potable water; they live in mud buildings while the common toilet facility was the bush. The mean per capita consumption expenditure among the farm households was ₦9,103.85 with the FGT poverty incidence, poverty gap and severity of poverty estimated to be 78.1%, 55.8% and 43.0% respectively. Poverty incidence was found to be higher among male headed (60%) and farming (63.9%) households and those having over five members (66.1%).The logit regression further indicates that the likelihood of being poor were more with large households, non-educated farm households head and households without access to credit and other non-farm income. It is therefore recommended that government should strengthen the various government credit agencies in order for them to make enough credit available to farmers, strengthen the adult literacy education programmes and encourage farmers to expand their farm land for increased production.
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Monetary Uncertainty and Demand for Money in Korea


Pages: 317-324
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Monetary Uncertainty and Demand for Money in Korea

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Mohsen Bahmani-Oskooee --- Sahar Bahmani
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Mohsen Bahmani-Oskooee --- Sahar Bahmani (2014). Monetary Uncertainty and Demand for Money in Korea. Asian Economic and Financial Review, 4(3): 317-324. DOI:
Friedman’s volatility hypothesis asserts that increased volatility of money supply can lower the velocity of money or increase the demand for money. Previous studies have tested this hypothesis by using data from a few industrialized countries. In this paper, we estimate the demand for money in Korea after including a measure of volatility of nominal money supply. We provide support for Friedman’s hypothesis in the short run as well as in the long run.
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Foreign Direct Investment Decisions into China and India


Pages: 300-316
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Foreign Direct Investment Decisions into China and India

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Ayşe Yüce, Mauricio Zelaya
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Ayşe Yüce, Mauricio Zelaya (2014). Foreign Direct Investment Decisions into China and India. Asian Economic and Financial Review, 4(3): 300-316. DOI:
We investigate the foreign direct investment projects of the multinational companies into the two major BRIC countries: India and China. Our results indicate that wage levels and country population and GDP growth are the major factors that affect company directors’ decision to invest into these countries.
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Is Protectionism Rational Under the Financial Crisis? Analysis from the Perspective of International Political Relations


Pages: 278-299
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Is Protectionism Rational Under the Financial Crisis? Analysis from the Perspective of International Political Relations

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Jie Cai, Lian An
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Jie Cai, Lian An (2014). Is Protectionism Rational Under the Financial Crisis? Analysis from the Perspective of International Political Relations. Asian Economic and Financial Review, 4(3): 278-299. DOI:
Protectionism against economic globalization (free trade and FDI) always surges in the financial crises as the pressure from unemployment mounts. This paper aims to assess the rationality of the protectionism. Instead of analyzing from the pure economic efficiency perspective, this paper assesses the rationality of protectionism from the political relation perspective. By building a costly signal model, we demonstrate that the financial crisis does not change the role of trade and FDI as a signal to reduce the international conflicts and foster cooperation among countries. By employing simultaneous equation models, it is empirically found that trade/FDI and cooperation exhibit significant positive reciprocity, even in the presence of the shock. Variance decompositions from generalized VAR indicate that trade and FDI work in complement to each other to increase the cooperation. It is therefore concluded that using protectionism as a measure to deal with financial crisis is not a well-grounded policy.
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