Asian Economic and Financial Review

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

No.4

SV Mixture, Classification Using EM Algorithm


Pages: 553-559
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SV Mixture, Classification Using EM Algorithm

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Ahmed Hachicha, Fatma Hachicha, Afif Masmoudi
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Ahmed Hachicha, Fatma Hachicha, Afif Masmoudi (2013). SV Mixture, Classification Using EM Algorithm. Asian Economic and Financial Review, 3(4): 553-559. DOI:
The present paper presents a theoretical extension of our earlier work entitled???A comparative study of two models SV with MCMC algorithm??? cited, Rev Quant Finan Acc (2012) 38:479-493 DOI 10.1007/s11156-011-0236-1 where we propose initially a mixture stochastic volatility model providing a tractable method for capturing certain market characteristics. To estimate the parameter of a mixture stochastic volatility model, we first use the Expectation-Maximisation (EM) algorithm. The second step is to adopt the clustering approach to classify the database into subsets (clusters).

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Barriers to Entry and Two-Sided Markets: A Research in a Shopping Mall in Istanbul


Pages: 542-552
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Barriers to Entry and Two-Sided Markets: A Research in a Shopping Mall in Istanbul

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Serkan DILEK, Nurdan COLAKOGLU
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Serkan DILEK, Nurdan COLAKOGLU (2013). Barriers to Entry and Two-Sided Markets: A Research in a Shopping Mall in Istanbul. Asian Economic and Financial Review, 3(4): 542-552. DOI:
Two-sided markets are the new issues in economic theory and have been studied since the beginning of the 21th century. Barriers to entry are also important to provide a balanced full competition condition in markets. Generally, incumbent firms don???t want new rivals because new rivals usually mean decreases in profits provided that firms seek profit maximizing. However, some of the previous studies show that profit maximizing firms can find unprofitable to set up barriers to entry in two-sided markets. The aim of this study is to confirm these studies by conducting a research in a shopping mall in Istanbul. To this end, we prepared a survey and applied it in this area. We hope that the results are pioneering for further studies.

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Eva versus Other Performance Measures


Pages: 532-541
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Eva versus Other Performance Measures

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Hechmi Soumaya
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Hechmi Soumaya (2013). Eva versus Other Performance Measures. Asian Economic and Financial Review, 3(4): 532-541. DOI:
Create value not only intended to satisfy shareholders. This is also the way to ensure the ability of the company to ensure its sustainability and finance its growth. The company will not attract new capital if it destroys value. "The concept of value creation is none other than the intersection of strategy (create value) and technique (evaluate the company)"(Powilewicz, 2002). The basic idea behind the different measures of value creation by a company is that a company creates value for its shareholders when the return on capital exceeds the cost of different sources financing used or the cost of capital. We are interested in analyzing the difference between EVA and other measures of performance in explaining on firm value on a sample of 82 French firms that compose the SBF 250 indexes, from 1999 to 2005. Thus, we have noticed that the CF is the best measure of performance followed by BN, BR and EVA. Hence, the finding of Stern Stewart, of the supremacy of the EVA is not confirmed in our context.

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Child Benefits and Welfare for Current and Future Generations: Simulation Analyses in an Overlapping-Generations Model With Endogenous Fertility


Pages: 490-511
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Child Benefits and Welfare for Current and Future Generations: Simulation Analyses in an Overlapping-Generations Model With Endogenous Fertility

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Kazumasa Oguro, Manabu Shimasawa, Junichiro Takahata
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Kazumasa Oguro, Manabu Shimasawa, Junichiro Takahata (2013). Child Benefits and Welfare for Current and Future Generations: Simulation Analyses in an Overlapping-Generations Model With Endogenous Fertility. Asian Economic and Financial Review, 3(4): 490-511. DOI:
We constructed an overlapping-generations model with endogenous fertility to analyze the effects of child benefits and pensions on the welfare of current and future generations. The following results were obtained. First, in the case without pension and accelerated fiscal reforms, the best policy to improve the welfare of future generations is to finance the provision of child benefits by capital taxation, followed by issuing government debt, consumption taxation (VAT), and wage taxation, in that order. Second, debt reduction coupled with increasing child benefits is preferable to debt reduction alone to reduce public debt for future generations. In particular, coupling increased child benefits and fiscal reform simultaneously stands out as the most desirable option. Third, from the viewpoint of pension reform, maintaining pension benefits by increasing VAT is better than cutting benefits coupled with increasing child benefits for future generations.

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The Composition and Regulation of the Financial Services Sector in Zimbabwe


Pages: 483-489
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The Composition and Regulation of the Financial Services Sector in Zimbabwe

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Miriam Zhanero Mugwati, Doreen Nkala, Costain Mukanganiki
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Miriam Zhanero Mugwati, Doreen Nkala, Costain Mukanganiki (2013). The Composition and Regulation of the Financial Services Sector in Zimbabwe. Asian Economic and Financial Review, 3(4): 483-489. DOI:
Zimbabwe???s financial services sector continues to be found falling short in terms of observing corporate governance principles. The majority of the problems racking the sector are due to the existence of a number of regulatory bodies regulating the components that make it up. The country is currently in the process of crafting its National Code of Corporate Governance, and unless what constitutes the financial services sector in Zimbabwe is clearly defined, specific requirements for governance in the sector likely to be contained within the Code may fail to bring sanity to it. It is in this vein that the paper seeks to define what constitutes the financial services sector in Zimbabwe. The paper outlines the composition of the financial services sector in Zimbabwe by taking a comparative approach in the scope of these institutions from a regional and international dimension vis-a-vis its dynamism. The authors adopt the documentary review research method to define the composition of the financial services sector in Zimbabwe. The paper demonstrates that Zimbabwe???s financial services sector comprises of financial banking and non-financial banking institutions. The type of institutions that fall under these two major categories does not differ from what constitutes the financial services sector in other countries but what differs is the way the sector is regulated and supervised thus making Zimbabwe???s financial services sector sophisticated.

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Tourism Expansion and Economic Development: Var/Vecm Analysis and Forecasts for the Case of India


Pages: 464-482
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Tourism Expansion and Economic Development: Var/Vecm Analysis and Forecasts for the Case of India

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Andreas G. Georgantopoulos
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Andreas G. Georgantopoulos (2013). Tourism Expansion and Economic Development: Var/Vecm Analysis and Forecasts for the Case of India. Asian Economic and Financial Review, 3(4): 464-482. DOI:
This study tests for the existence and direction of causality between output growth and tourism expenditure using a trivariate model with real effective exchange rate (REER), analysed as a whole and in sub-categories (i.e. leisure travel and tourism expenditures, LTS and business travel and tourism expenditures, BTS) during the period 1988-2011 for India. For this purpose exhaustive empirical evidence are provided from the application of Phillips-Perron and KPSS unit root tests, Johansen cointegration tests, VAR models with an error-correction term, impulse responses, variance decompositions and forecasts generated from the VAR/VECM models. Results for the aggregated model indicate that all variables return to their long-run equilibrium relationships although this model failed to support the significance of causal links between total tourism expenditure and India???s real output. However, the application of the disaggregated model imply strong bidirectional causal links between growth and LTS in the long-run and unidirectional causal links from LTS and BTS to growth suggesting direct impact of tourism on the Indian real output. Finally, forecasts generated for the period 2012-2016 are promising; total tourism expenditure compared to the previous half-decade will grow at a similar pace and optimistic forecasts are generated for the case of LTS, BTS and GDP.   

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Dividend Policy and Information Asymmetry from the Signaling Perspective


Pages: 445-463
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Dividend Policy and Information Asymmetry from the Signaling Perspective

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Reza Zare, Javad Moradi, Hashem Valipour
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Reza Zare, Javad Moradi, Hashem Valipour (2013). Dividend Policy and Information Asymmetry from the Signaling Perspective. Asian Economic and Financial Review, 3(4): 445-463. DOI:
This study attempts to examine the relevance of dividend policy and information asymmetry From the Signaling Perspective and Compare the relative information content of them. Based on sampling, 88 firms from Tehran Stock Exchange (TSE) were selected and examined during 2003 to 2010. The findings show that the profit division policy(Divisible profit proportion) has positive and significant relation with market data asymmetry namely when the profit division policy  increases the data asymmetry increases, too. On the other side, the test findings indicate the investors are sensitive to the EPS changes and when the EPS changes are positive their divisible profit increases, but when the divisible profit of the company decreases the data boggles their mind and data asymmetry increases.

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How Newspaper-Article-Events, Other Stock Market Indices, and the Foreign Currency Rate Affect the Philippine Stock Market


Pages: 423-444
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Percival S. Gabriel
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Percival S. Gabriel (2013). How Newspaper-Article-Events, Other Stock Market Indices, and the Foreign Currency Rate Affect the Philippine Stock Market. Asian Economic and Financial Review, 3(4): 423-444. DOI:
Eugene Fama in his ???Efficient Market Hypothesis??? introduced the term newspaper-article-event. The aim of this paper is to find out if newspaper-article-events which are presented and discussed in newspaper articles and which could collage to create an atmosphere of investment, together with the indices of other stock markets (treated as other events) and the performance of the Philippine Peso against the US Dollar (considered as another event) could affect the closing Philippine Stock Market Indices (Phisix) during the 2004 Election Campaign in the Philippines and the 2005 Impeachment Controversy against the Philippine President Gloria Macapagal-Arroyo. Expressivity rating was conceived to measure the expressivity of newspaper articles and, in turn, represent the degree of positiveness, neutralness or negativeness of newspaper-article-events. This research found significant correlations between the closing Forex rate the day before and the present closing Phisix for the two cases. Significant models were also derived incorporating several types of newspaper articles, other stock market indices and the previous Forex rate for the two cases.

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Emerging Stock Premia: Some Evidence From Industrial Stock Market Data


Pages: 398-422
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Emerging Stock Premia: Some Evidence From Industrial Stock Market Data

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Michael Donadelli, Marcella Lucchetta
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Michael Donadelli, Marcella Lucchetta (2013). Emerging Stock Premia: Some Evidence From Industrial Stock Market Data. Asian Economic and Financial Review, 3(4): 398-422. DOI:
This paper studies the behavior of emerging stock excess returns in an industry-by-industry context. We examine stock market performance for 23 countries and ten industries over 17 years from 1995 to 2012 ??? a period that includes major changes in capital market regulations, the removal of trade barriers, the IT bubble, the 9/11 terrorist attacks, and the subprime mortgage crisis. In addition, we examine stock market co-movement and risk exposure for ten industries in eight emerging/developing stock markets. We obtain four key empirical findings. First, at industry level, we confirm that the equity risk premium in emerging markets is higher than in developed markets. We also confirm the time-varying nature of emerging stock market excess returns. Second, at country level, we identify those industries that mainly contribute to the presence of the emerging stock premia. Third, we show that some industries are more exposed to global risk factors than others. Fourth, given the increasing degree of co-movement between international stock markets, we observe that some cross-industry portfolio diversification benefits are still exploitable. Our analysis yields interesting implications for financial applications. In particular, we argue that the presence of a strong time-varying component in the ???industry-betas??? might have strong impact on the estimation of the cost of capital.

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