Asian Economic and Financial Review

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No.4

Monetary Policy Shocks and Exchange Rate Volatility in Nigeria


Pages: 544-562
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Monetary Policy Shocks and Exchange Rate Volatility in Nigeria

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Babatunde Wasiu Adeoye --- Olufemi Muibi Saibu
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Babatunde Wasiu Adeoye --- Olufemi Muibi Saibu (2014). Monetary Policy Shocks and Exchange Rate Volatility in Nigeria. Asian Economic and Financial Review, 4(4): 544-562. DOI:
This paper analysed the effects of monetary policy shocks using changes in various monetary policy instruments on exchange rate volatility in Nigeria. This paper investigates the relationship between exchange rate volatility and monetary policy shocks in Nigeria. The paper applies the classical ordinary least square to examine the short-run monetary policy determinants of exchange rate volatility in Nigeria. Also, the error correction mechanism model was estimated after establishing the long-run interaction among set of incorporated variables using the Engle-Granger approach. The results from the paper show that both real and nominal exchange rates in Nigeria have been unstable during the period under review. In the short, the variation in the monetary policy variable explains the movement/behaviour of exchange rate through a self-correcting mechanism process with little or no intervention from the monetary authority (CBN).
In addition, the results from the causality tests between the exchange rate volatility and monetary policy variables showed that there is a causal link between the past values of monetary policy variables and the exchange rate. This is obvious in the case of the past value of the interest rates. Such that, a change in the level of previous values of monetary policy variables causes exchange rate volatility. Finally, the paper reiterated and concluded that inflation rate, reserves, interest rate and money supply depreciate and cause volatility in nominal exchange rate which further reinforce other findings that monetary policy is crucial to exchange rate management in Nigeria. 

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An Early Warning System for Turkey: The Forecasting of Economic Crisis by Using the Artificial Neural Networks


Pages: 529-543
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An Early Warning System for Turkey: The Forecasting of Economic Crisis by Using the Artificial Neural Networks

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Fuat Sekmen --- Murat Kurkcu
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Fuat Sekmen --- Murat Kurkcu (2014). An Early Warning System for Turkey: The Forecasting of Economic Crisis by Using the Artificial Neural Networks. Asian Economic and Financial Review, 4(4): 529-543. DOI:
An economic crisis is typically a rare kind of an event but it impedes monetary stability, fiscal stability, financial stability, price stability, and sustainable economic development when it appears. Economic crises have huge adverse effects on economic and social system. This study uses an artificial neural network learning paradigm to predict economic crisis events for early warning aims. This paradigm is being preferred due to its flexible modeling capacity and can be applied easily to any time series since it does not require prior conditions such as stationary or normal distribution. The present article analyzes economic crises occurred in Turkey for the period 1990-2011. The main question addressed in this paper is whether currency crises can be estimated by using artificial neural networks.

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The Effect of Exchange Rate Fluctuations on Economic Growth Considering the Level of Development of Financial Markets in Selected Developing Countries


Pages: 517-528
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Mehdi Basirat --- Arezoo Nasirpour --- Alireza Jorjorzadeh
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Mehdi Basirat --- Arezoo Nasirpour --- Alireza Jorjorzadeh (2014). The Effect of Exchange Rate Fluctuations on Economic Growth Considering the Level of Development of Financial Markets in Selected Developing Countries. Asian Economic and Financial Review, 4(4): 517-528. DOI:
This study aimed to investigate the effect of exchange rate fluctuations on economic growth considering the rate of development of financial markets in developing countries over the period 1986-2010. The effects of variables such as trading volume, inflation, and production of the previous period on economic growth have been studied as well. The results obtained by analyzing panel data of 18 countries show that the effect of financial development on economic growth as well as the effect of exchange rate fluctuation on economic growth are negative and significant. On the other hand, the mutual effect of exchange rate fluctuations and financial development on economic growth is positive, but the effect in the studied countries is so small that is not statistically significant.
Contribution/ Originality

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The Impact of Trader Behavior on Options Price Volatility


Pages: 503-516
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Ping-Hung Chou --- Pei-Shan Wu --- Teng-Tsai Tu
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Ping-Hung Chou --- Pei-Shan Wu --- Teng-Tsai Tu (2014). The Impact of Trader Behavior on Options Price Volatility. Asian Economic and Financial Review, 4(4): 503-516. DOI:
Because relatively few studies have examined the behavior among different types of traders in the options market, this investigation conducts an empirical study examining the impact of trader type on price volatility in the TXO market. It has been more than 10 years since the TXO market started in 2001. Compared with mature foreign options markets, the TXO market is considered as an emerging market and most transactions in the market are speculative in nature.This study investigates whether informed investors choose to trade options because of their higher leverage, which makes them attractive to speculators seeking to benefit from variations in the underlying price. This study also examines whether institutional investors are better informed than individual investors. In addition, this study attempts to illuminate the role played by market makers, whether as traditional specialists to provide liquidity and thus stabilize the price, or as opportunistic traders. Furthermore, this study aims to discover the relationship between trading duration and options price volatility, to clarify whether liquidity-based trading or informed-based trading dominates the TXO market. The empirical results suggest that institutional investors are better informed than individual investors. Meanwhile, market makers are liquidity providers in the put market, but liquidity demanders in the OTM and ATM call markets. Furthermore, the results verify that liquidity-based trading dominates the OTM call and put markets.
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Reit Performance Analysis: Are other Factor Determinants Constant?


Pages: 492-502
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Olusegun Olaopin Olanrele
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Olusegun Olaopin Olanrele (2014). Reit Performance Analysis: Are other Factor Determinants Constant?. Asian Economic and Financial Review, 4(4): 492-502. DOI:
This main focus of this paper is to propose a regression analysis for the appraisal of REIT performance. The quantitative data required for the study were extracted from the annual financial reports of AMFIRST REIT, a REIT company listed in the Bursa Securities Commission, for the period 2007 to 2013. A regression analysis on the data and the study rejected the assumption of holding other factor constant when analysing REIT performance, all factor determinants have simultaneous effect on REIT performance. The findings are useful for the REIT industry to predicting the minimum expected return from the beginning of a financial year. However, this paper is the result of the study at micro (individual) level and cannot be adopted as an aggregate for National REIT performance. There is need to extend the study to more REIT companies for an aggregate conclusion.
Contribution/ Originality

  1. Alias, A. and C.Y. Soi Tho, 2011. Performance analysis of reits: Comparison between m-reits and uk-reits. Journal of Surveying, Construction and Property, 2(Special issue): 38-61.
  2. Allen, M.T., J. Madura and T.M. Springer, 2000. Reit characteristisc and the sensitivity of reit returns. Journal of Real Estate Finance and Economics, 21(2): 141-152.
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The Study of Staff Satisfaction in Consulting Center System-A Case Study of Job Consulting Centers in Ho Chi Minh City, Vietnam


Pages: 472-491
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The Study of Staff Satisfaction in Consulting Center System-A Case Study of Job Consulting Centers in Ho Chi Minh City, Vietnam

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Chia Nan Wang --- Nhu Ty Nguyen --- Tran Thanh Tuyen
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Chia Nan Wang --- Nhu Ty Nguyen --- Tran Thanh Tuyen (2014). The Study of Staff Satisfaction in Consulting Center System-A Case Study of Job Consulting Centers in Ho Chi Minh City, Vietnam. Asian Economic and Financial Review, 4(4): 472-491. DOI:
The topic of job satisfaction has been investigated over the years. However, the environmental impact of the work of job consulting centre’s employee satisfaction is beginning to attract the attention of the researcher. Job consulting centre has become an integral part of most organizations today, play an important role in supplying-jobs services. This study aims to examine the key factors that are closely associated with job satisfaction of employees working at job consulting centre as well as to suggest proper solutions to enhance the performance of these organizations.The current investigation is implemented by surveying the employees and then made a comparison of their satisfaction level on all aspects of the work. The questionnaire is composed of three important parts: Demographics, Satisfaction Level and Overall Satisfaction. The data are carried out by using descriptive statistic, exploratory factor analysis, reliability analysis, multiple linear regressions, and correlations analysis, to get all purposes of the research.The results show that Administration, Working Condition, Staff Interaction are factors that have the strongest impact on the overall satisfaction. These research findings have emphasized the necessity of conducting more researches on job satisfaction of staff in the job consulting centres. Being aware of the difficulties, which exists in their workers’ lives and consider this as an emergency situation, the policy makers with their future suitable policies will gradually create a comfortable working environment for employees. When employees’ motivation in working is improving, and this could make better service-providing in job consulting for a big city like Ho Chi Minh City.
Contribution/ Originality

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A Cointegration Test for Turkish Foreign Exchange Market Efficiency


Pages: 451-471
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A Cointegration Test for Turkish Foreign Exchange Market Efficiency

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Macide Çiçek
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Macide Çiçek (2014). A Cointegration Test for Turkish Foreign Exchange Market Efficiency. Asian Economic and Financial Review, 4(4): 451-471. DOI:
This study examines the within-country market efficiency of the Turkish foreign exchange markets on the basis of the forward rate unbiasedness hypothesis, in case of the Turkish lira/US dollar and the Turkish lira/Euro for the period February 5, 2005 through July 26, 2013 by Johansen cointegration method. Unit root test results support the market efficiency in its weak-form. However, the existence of cointegration between the forward rates and its corresponding future spot rates with a unitary cointegrating vector and there exists no systematic expectation errors provide evidence for forward rate unbiasedness hypothesis and thus against market efficiency in semi-strong form. In the Turkish lira/US dollar foreign exchange market, the speed of adjustment towards long run equilibrium is a bit faster, and also the forward rates explain a bit more proportion of the movements of the spot rates in comparison with the Turkish lira/Euro market.
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Market Reaction To Dividend Initiation Announcements on the Ghana Stock Exchange: The Case of Industrial Analysis


Pages: 440-450
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Market Reaction To Dividend Initiation Announcements on the Ghana Stock Exchange: The Case of Industrial Analysis

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Yakubu Awudu Sare --- Seyram Pearl Kumah --- Andrews Salakpi
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Yakubu Awudu Sare --- Seyram Pearl Kumah --- Andrews Salakpi (2014). Market Reaction To Dividend Initiation Announcements on the Ghana Stock Exchange: The Case of Industrial Analysis. Asian Economic and Financial Review, 4(4): 440-450. DOI:
This study examines the market’s reaction to dividend initiation announcements. In particular, it considered the magnitude of abnormal returns during the days that surround announcements of dividend initiation. This study expects to reveal whether dividend initiation is important to investors on the Ghana Stock Exchange. It also expects to reveal whether the type of firm’s industry has influence on the investors’ investment decision. This is accomplished by measuring the abnormal returns before, during and after dividend initiation announcements. Using an event study approach, the evidence shows that dividend initiation announcements are greeted positively by investors. Industry based analysis is made to ascertain if firms in different industries react differently to dividend initiation announcement. The industries included: manufacturing, financial service and the other industries. The results suggest that firms in the manufacturing industry experience stronger investors’ reaction than firms in the other industries.
Contribution/ Originality

  1. Aharony, J. and I. Swary, 1980. Quarterly dividend and earnings announcements and stockholders' returns: An empirical analysis. Journal of Finance, 35(1): 1-12.
  2. Amidu, M., 2007. How does dividend policy affect firms performance on the Ghana stock exchange? Investment Management and Financial Innovations, 4(2): 103-147.
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Impacts of International Oil Price Changes on Vietnam’s Economy - An Input-Output Study


Pages: 432-439
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Impacts of International Oil Price Changes on Vietnam’s Economy - An Input-Output Study

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Nguyen Van Chung
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Nguyen Van Chung (2014). Impacts of International Oil Price Changes on Vietnam’s Economy - An Input-Output Study. Asian Economic and Financial Review, 4(4): 432-439. DOI:
In this paper we investigate the impacts of international oil price changes on Vietnam’s economy by using an input-output analysis. The goals of our study are: 1. establishing a price sub-model and output sub-model in the input-output analysis framework; 2. analyzing impacts on both price and output sectors. The result shows that impact in the long run is much higher than in the short run. While the 10% increase in petroleum prices experiences negative results, the 5% increase in prices shows a positive effect, implying that a small change in oil prices may enjoy resource reallocation efficiency. In the short run the manufacturing sector will suffer if electricity and public utility prices reflect a 10% increase in oil prices.
  1. Cunado and Gracia, 2005. Oil prices, economic activity and inflation: evidence for some Asian countries, The Quarterly Review of Economics and Finance, Elsevier, vol. 45(1), pages 65-83, February.
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  3. Kumar, 2005. The macroeconomic effects of oil price shocks: Empirical evidence for India, (Policy studies: TERI school of advanced studies, New Delhi, India).
  4. Miller, R.E. and P.D. Blair, 1985. Input-output analysis: Foundations and extensions, Englewood Cliffs. NJ: Prentice-Hall.
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Are Online Pharmacy Prices Really Lower in Mexico?


Pages: 416-431
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Are Online Pharmacy Prices Really Lower in Mexico?

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Thomas M. Fullerton, Jr. --- Francisco J. Pallares --- Adam G. Walke
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Thomas M. Fullerton, Jr. --- Francisco J. Pallares --- Adam G. Walke (2014). Are Online Pharmacy Prices Really Lower in Mexico?. Asian Economic and Financial Review, 4(4): 416-431. DOI:
Empirical research on international pharmaceutical prices has uncovered numerous interesting commonalities and differences across international markets. This study examines price differences for brand name medicines sold over the Internet in the United States and Mexico. Web sites in both countries advertise their services in English and price their products in dollars. Sample data for 50 top selling medicines are from October 2011 for equal dosages on a per unit basis, exclusive of shipping fees, handling charges, and taxes. For a few medicines, the savings available to consumers who purchase them from companies in Mexico are very large. For most medicines in the sample, the savings are comparable to those available from Internet sources in other countries. Non-parametric test results indicate that the price differences are statistically significant.
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  6. Calvillo, J.P. and L. Lal, 2003. Pilot study of a survey of US residents purchasing medications in Mexico: Demographics, reasons, and types of medications purchased, Clinical Therapeutics, 25(2): 561-577.
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