Asian Economic and Financial Review

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Online ISSN: 2222-6737
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Total Citation: 1219

No.11

Understanding Diamond Pricing Using Unconditional Quantile Regressions


Pages: 1540-1561
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Understanding Diamond Pricing Using Unconditional Quantile Regressions

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Nicolas Vaillant, François-Charles Wolff
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Nicolas Vaillant, François-Charles Wolff (2013). Understanding Diamond Pricing Using Unconditional Quantile Regressions. Asian Economic and Financial Review, 3(11): 1540-1561. DOI:
This paper investigates the relationship between the selling price of diamonds and their weight in carats. For this purpose, we use a unique sample of 112,080 certified diamonds collected from www.info-diamond.com during the first week of July 2011. We find substantial differences in pricing depending on cut shape. The price of diamonds increases markedly with the carat weight, with a price elasticity equal to 1.94. However, estimates from unconditional quantile regressions show that the price-weight elasticity is not constant since it rises along the price distribution of diamonds. Finally, we observe the existence of significant increases in prices for diamonds featured with round weights compared to gems just below these threshold weights.

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Integrating Neural Network and Colonial Competitive Algorithm: A New Approach for Predicting Bankruptcy in Tehran Security Exchange


Pages: 1528-1539
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Integrating Neural Network and Colonial Competitive Algorithm: A New Approach for Predicting Bankruptcy in Tehran Security Exchange

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Sajad Abdipour, Ahmad Nasseri, Mojtaba Akbarpour, Hossein Parsian, Shahrzad Zamani
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Sajad Abdipour, Ahmad Nasseri, Mojtaba Akbarpour, Hossein Parsian, Shahrzad Zamani (2013). Integrating Neural Network and Colonial Competitive Algorithm: A New Approach for Predicting Bankruptcy in Tehran Security Exchange. Asian Economic and Financial Review, 3(11): 1528-1539. DOI:
Bankruptcy filings are as high today as ever, calling into question the efficacy of existing bankruptcy prediction models. This paper tries to provide an alternative for bankruptcy prediction by integrated Multi Layered Perceptron with Imperialist Competitive Algorithm (MLP-ICA) and Kohonen self organizing map. Research sample consist of 70 bankrupts and non-bankrupt company in 2001-2009 and in listed firms of Tehran Stock Exchange. Results indicate that MLP-ICA model outperform Kohonen self organizing map.

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The Role of Productivity in Economic Growth and Equilibrium


Pages: 1497-1527
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The Role of Productivity in Economic Growth and Equilibrium

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Ordean Olson
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Ordean Olson (2013). The Role of Productivity in Economic Growth and Equilibrium. Asian Economic and Financial Review, 3(11): 1497-1527. DOI:
This study reexamines the evidence for the Balassa-Samuelson effect for the 1985-2007 period. Cointegrating relationships between the real exchange rate and productivity, real price of oil and government spending are estimated using the Johansen and Stock-Watson procedures. The findings show that for each percentage point in the US-Euro area productivity differential there is a three percentage point change in the real dollar/euro valuation.  These findings are robust to the estimation methodology, the variables included in the regression, and the sample period.  We suggest that economic disequilibrium can result in a decline in economic growth.  This study will utilize von Neumann’s “A Model of General Economic Equilibrium” as an economic equilibrium standard.

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Foreign Direct Investment, Non-Oil Exports, and Economic Growth in Nigeria: A Causality Analysis


Pages: 1479-1496
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Foreign Direct Investment, Non-Oil Exports, and Economic Growth in Nigeria: A Causality Analysis

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Kolawole Olayiwola, Henry Okodua
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Kolawole Olayiwola, Henry Okodua (2013). Foreign Direct Investment, Non-Oil Exports, and Economic Growth in Nigeria: A Causality Analysis. Asian Economic and Financial Review, 3(11): 1479-1496. DOI:
The study examines the contribution of Foreign Direct Investment (FDI) to the performance of non-oil exports in Nigeria within the framework of the export-led growth (ELG) hypothesis. Available evidence in Nigeria supports that the bulk of FDI inflow into the country goes to the oil sector of the economy. From the perspective of efficiency-seeking FDI, foreign capital always aims at taking advantage of cost-efficient production condition. Given this fact, a causality analysis was undertaken in order to verify the relevance of the ELG hypothesis. Also, the dynamic interaction among FDI, non-oil exports, and economic growth is investigated using the concept of variance decomposition and impulse response analysis. The results obtained from the causality analysis revealed that a unidirectional causality runs from FDI to non-oil exports. Each of the three variables exhibited on the average and at the early stages of the out-of-sample forecast period, a dormant response to one standard deviation shock or innovation. However, they all demonstrated significant responses after some 7 years into the out-of-sample forecast period. The results also show that an encouragement of non-oil exports is a necessity for an effective FDI in Nigeria. Therefore, in designing policies towards this direction, policy response lag need to be taken into consideration. 

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Analysis of Household Heads’ Decision-To-Save with Financial Institutions in Ghana


Pages: 1466-1478
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Analysis of Household Heads’ Decision-To-Save with Financial Institutions in Ghana

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Yazeed Abdul Mumin, Abubakari Razak, Paul Bata Domanban
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Yazeed Abdul Mumin, Abubakari Razak, Paul Bata Domanban (2013). Analysis of Household Heads’ Decision-To-Save with Financial Institutions in Ghana. Asian Economic and Financial Review, 3(11): 1466-1478. DOI:
Savings in Ghana have generally being described as low in terms of the number of households who save, trends in amounts of savings and the attitude towards savings. This called for the examination of factors that motivate household heads to save in the Bole District of Ghana. A total of 120 household heads were interviewed and these heads were selected using stratified random sampling. The results of the logit regression show that educational status, value of assets, shock to household head and having commitment to financial institution positively and significantly explain the decision of households to save. The net dependents, being a male household head and being a Muslim household head negatively affect their decisions to save in the district. Therefore government needs to collaborate with stakeholders in education to educate communities on the need to get themselves education, and deal with cultural and religious traits that run at variance with savings.

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Global Energy Prices and the Behavior of Energy Stock Price Fluctuations


Pages: 1460-1465
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Global Energy Prices and the Behavior of Energy Stock Price Fluctuations

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Ugur Ergun, Azizah Ibrahim
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Ugur Ergun, Azizah Ibrahim (2013). Global Energy Prices and the Behavior of Energy Stock Price Fluctuations. Asian Economic and Financial Review, 3(11): 1460-1465. DOI:
This study investigates the impact of global crude oil and global natural gas prices on the stocks price movements of the energy companies using multivariate regression and impulse response function analysis. Our data sets consist of global crude oil prices, global natural gas prices, stock market index and the stock prices of selected energy companies operating in Turkey. Our findings imply that, (a) market index is the most important factor in energy stock price movements, (b) a shock in the market index gives permanent positive impact on the energy stock price while, global crude oil and global natural gas prices give positive impact for one year and negative impact after one year.

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Optimal Tax Policy - Financial Crisis Overcoming Factor


Pages: 1451-1459
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Optimal Tax Policy - Financial Crisis Overcoming Factor

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George Abuselidze
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George Abuselidze (2013). Optimal Tax Policy - Financial Crisis Overcoming Factor. Asian Economic and Financial Review, 3(11): 1451-1459. DOI:
Among economic reforms implemented for overcoming of world financial and economic recessions the special accent is brought to macroeconomic stabilization; strengthening of financial sphere is recognized one of imperatives of economic policy and considerable precondition of its ensuring includes adjustment of tax policy. Creation of optimal tax policy is one of the most difficult problems of economic sciences. One of the main lines of tax budget reformation includes formation of tax code taking into consideration optimal tax burden. Besides, realization of tax strategy shall be economically grounded. Tax rates and preferences and the forms of punishment of tax violators shall be selected not mechanically, but by means of mathematic calculation taking into consideration real economic situation. Just these matters are covered by the present work.

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Monetary Policy and the Behavior of a Monopolistic Bank: A Theoretical Approach


Pages: 1439-1450
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Monetary Policy and the Behavior of a Monopolistic Bank: A Theoretical Approach

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Eleni Dalla, Erotokritos Varelas
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Eleni Dalla, Erotokritos Varelas (2013). Monetary Policy and the Behavior of a Monopolistic Bank: A Theoretical Approach. Asian Economic and Financial Review, 3(11): 1439-1450. DOI:
This paper investigates the influence of monetary policy on the optimal behavior of a monopolistic bank. More specifically, we discuss how the overdraft rate and the minimum reserve requirements affect the equilibrium values of lending rate and deposit rate as well as the corresponding quantities, when there is only one commercial bank in the economy and the Central Bank. Moreover, we examine the impact of these changes on the magnitude of the spread between the equilibrium rates. It is demonstrated that monetary policy via the overdraft rate does not affect the spread, while the effect of a change in the fraction of the minimum reserve requirements differs depending on the case.

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Export and Import Products Groups’ Shares of Turkey with Cee Countries After Theirs Accessions to Eu and Before


Pages: 1419-1438
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Export and Import Products Groups’ Shares of Turkey with Cee Countries After Theirs Accessions to Eu and Before

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Selim Inanclı, Mustafa Akal
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Selim Inanclı, Mustafa Akal (2013). Export and Import Products Groups’ Shares of Turkey with Cee Countries After Theirs Accessions to Eu and Before. Asian Economic and Financial Review, 3(11): 1419-1438. DOI:
The purpose of this study is to analyze export and import shares of main products of CEE countries with Turkey before their membership to EU and then, starting from the year of 2000. After accession to EU, these countries’ export and import shares mostly increased with Turkey and EU, implying existence of trade diversion and specialization in production. It is analyzed that the largest share of Turkish export product groups in trading with CEE countries are “manufactured industrial products” and “machinery, transport equipments” within both periods. Turkey’s largest share of import products groups from these countries are “manufactured industrial product”, “chemicals and chemical products” and “crude materials, inedible, except fuels”. Because of producing similar goods at different qualities, intra-industry trade exists largely between CEE countries and Turkey. These countries usually produce industrial products accounting for more than 50% of total trade with Turkey.

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Application of Computed Financial Ratios in Fraud Detection Modelling: A Study of Selected Banks in Nigeria


Pages: 1405-1418
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Application of Computed Financial Ratios in Fraud Detection Modelling: A Study of Selected Banks in Nigeria

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Egbunike Patrick Amaechi, Ezeabasili Vincent Nnanyereugo
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Egbunike Patrick Amaechi, Ezeabasili Vincent Nnanyereugo (2013). Application of Computed Financial Ratios in Fraud Detection Modelling: A Study of Selected Banks in Nigeria. Asian Economic and Financial Review, 3(11): 1405-1418. DOI:
The study examines the application of computed financial ratios in fraud detection modeling using existing Financial Ratio Models with a view to detecting their capabilities in application in Nigerian banking system. Data were collected from published accounts and reports of 20 sampled banks between 2004 -2008, a 5 year period- preceding year and the fraud year. Logistic Regression was used in analyzing the collected data. The study revealed 16 significant ratios out of 29 financial ratios used for the study as being capable of aiding detection of fraud in the financial statements of banks. Consequently, it is recommended that auditors who are eager to look into the possibility of detecting false financial statements can adopt it and save endless time in search for possible red flags.

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