Search

The paper utilizes a comprehensive approach to threshold cointegration to analyse the Israeli per capita Gross Domestic Product (GDP) growth dynamics. The time-series data for the years 1980–2019 are taken. The study uses a two-regime threshold error correction model (TECM) to test short- and long-term growth factors. The results reveal that Research and Development (R&D) expenses measured as a percentage of GDP are the primary driving force in the long and short term. The threshold value of 3.25% of GDP exhibits a substantial difference between the two regimes corresponding to the development phases of the Israeli economy. The results are validated using various tests for threshold models. The general conclusion is that the applied hierarchical procedure for TECM model construction is robust and universal for modeling economic growth. The results allow the formulation of policy implications.

For the past three decades, Eastern European countries have exhibited a noticeable decline in their share of the industrial production sector overall, but not uniformly. Simultaneously, trade liber...

We study risk perceived by small and medium technological enterprises (SMTEs) in their collaborative activities. We aim to explain prior findings regarding the situational factors that shape collab...

The Israeli economy in the first two decades of the 21st century is an example of an economic transformation that may serve as a role model for addressing many challenges to economic growth. Data from this period have shown significant developments in economic growth over this relatively short period of time and indicate that these advances are attributable to policies targeting inflation, labor force participation and education. While challenges remain—including economic inequality, suboptimal health care and the threat of coronavirus pandemic to global growth—we explore developments evidenced to promote economic growth.

This paper studies venture capital investment in the United States, with an emphasis on the Clean-Technology industries. The Clean-Technology industries encompass ventures that compete in markets with products and services that explicitly take environmental issues into account. This paper explores the importance of macroeconomics variables, aggregate venture capital investment on Clean-Technology and investment backed by venture capital. Quarterly data of capital venture investment and number of deals are used for the period 1995-2020. The results indicate that Clean-Tech investment offers investors possibilities for some degree of diversification.

W artykule przedstawiono definicje i cechy charakterystyczne dla przedsiębiorczości technologicznej. Wskazano, że przedsiębiorczość technologiczna jest badana pod kątem nurtów występujących w naukach o zarządzaniu, m.in. kształtujących – teorii przedsiębiorczości i teorii innowacji oraz warunkujących jej rozwój – dynamicznych umiejętności organizacyjnych, teorii zasobowej, teorii wiedzy, teorii behawioralnej itp.Opracowanie podejmuje problematykę uwarunkowań i ich znaczenia w przedsiębiorczości technologicznej. Wskazuje, jak zmiany uwarunkowań globalnego rynku doprowadziły w ostatnich latach do stwierdzenia, że jednym z kluczowych sposobów na poprawę innowacyjności i konkurencyjności przedsiębiorstw jest przedsiębiorczość technologiczna.

Latin America has experienced a surge in foreign direct investment (FDI) in the last two decades, in parallel with the ratification of major regional trade agreements (RTAs) and bilateral investment treaties (BITs). This paper uses the latest developments in the structural gravity model theory to study if the co-existence of BITs and two major regional agreements, Mercosur and the Latin American Integration Association (ALADI), exerts enhancing or overlapping effects on FDI for eleven countries in Latin America over the period 1995&ndash, 2018. The study is novel as it accounts for variations in the degree of investment protection across BITs within Latin America by computing a quality index of BITs. It also explores the nature of interactions (enhancing/overlapping effects) between RTAs and BITs. The findings reveal that belonging to a well-established regional trade agreement, such as Mercosur, is significantly more effective than BITs in fostering intra-regional FDI. Phasing-in effects are large and significant and there is evidence of enhancing effects. Results within the bloc are heterogeneous: BITs exert a positive, but small effect, for middle income countries. However, BITs are not effective in attracting FDI in the case of middle to low income countries, unless these countries ratify BITs with a high degree of investment protection.

For the past three decades, Eastern European countries overall, but not uniformly, have exhibited a noticeable decline in their share of the industrial production sector. At the same time, trade liberalization and integration in international production networks were intensified, bringing different levels of economic development of countries in this region. The objective of this paper is to examine the impact of the real effective exchange rate (REER) on the deindustrialization or reindustrialization process in 25 post-communist Eastern European countries. The paper employs heterogeneous panel common factor approach for the period 1995-2018 to exploit the effect of diverse levels of export complexity, stage of economic development, and intensity of participation in global value chains on REER- industrial production relationship. The results establish a heterogeneous yet significant negative relationship between REER and industrial production. Our findings indicate that higher economic complexity and participation in global value chain reduces the effect of depreciation on industry development.https://www.textfixer.com/tools/remove-line-breaks.php

This paper investigates returns-volatility for six base metals traded on London Metal Exchange. Dividing the daily sample that extends from January 2, 2007 until February 15, 2018, to three periods, the financial crisis, “stabilization” and “prosperity.” The study applies panel data with Generalized Auto-Regressive Conditional Heteroskedasticity (GARCH) models. The analysis shows high conditional variance for the first two periods. The best model is the panel model with random effects for the first period and with fixed effects for the second. For the “prosperity” period, the best model is “pooled regression.” For this period, one cannot dictate any accumulation of variances.

This paper examines the effectiveness of a monetary transmission mechanism from the federal funds rate to the London Interbank Offered Rate (LIBOR). In particular, the paper employs a co-integration and vector error correction models to examine the degree and the direction of pass-through from the federal funds rate to the LIBOR. Two sub-periods are selected, 1987:02-1994:01 and 1994:02-2002:05, in order to examine this relationship. Results indicate a significant co-integration relationship between the federal funds rate and the LIBOR for the first and second periods. However, in the second period, the two variables adjust differently to a deviation from equilibrium.

This paper examines the value implications of remedial actions taken by the Securities Exchange Commission (SEC) during 2011 that culminated in delisting a number of Chinese companies from United States public exchanges. To achieve that we examine the institutional characteristics and performance of Specified Purpose Acquisition Companies (SPACs) used as a financing tool and gateway to the U.S. capital markets by Chinese companies in period 2004–2011. Evidence shows that SPACs merging with companies from China are not inferior in corporate structure when compared with other SPACs. While their institutional characteristics are similar, the performance tests indicate that Chinese SPACs lose value around SEC decision dates, but in overall they outperform other SPACs listed in the U.S.

Under the current global forces, economics muddled with politics is exerting undue pressures on the BRICS countries and is challenging the sustainability of their accord. Unanticipated problems are increasingly inhibiting economic and social prosperity. This paper analyzes the current difficulties that the BRICS are facing, scrutinizes their unique individual economic and political environments, and ventures to anticipate their prospects. Our consensus is that the future prosperity of these countries depends not only on their individual political and economic environments, but also on the major global powers. Furthermore, the current inevitable interconnectivity of politics and economics provides foresight into their future role on the world stage.

Opportunism is an obstacle to close collaboration in page relationships. But little is known about what causes it. This study examines how the risk perception perspective influences opportunism in collaboration in small and medium technology enterprises. This paper answers the following research question: Is perception of risk for entrepreneurs in small and medium technology enterprises as an antecedent of opportunism? Using data from 304 responses to an opinion questionnaire survey. The data were analysed with structural equation models (SEM). The results show that the relational risk perceptions and the performance risk perceptions have a positive influence on their tendency to become opportunist. These findings confirm that risk perception is an important perspective to understand why contractors behave opportunistically. This paper focusses on the antecedents of opportunism in managerial decisions and their awareness.

Israel, a small country in Asia, is the start-up nation, a technology hub, the second largest start-up ecosystem in the world, a leader in innovation and cutting-edge technologies. What are the key components of the dynamic innovation culture that have made the state of Israel one of the most important entrepreneurial and technology-driven economies in the world? This chapter analyzes the basis of this miracle. It describes the huge population increase due mainly to immigration, large injections of capital, technological progress and transition from basic production of growing citrus and polishing diamonds, to current state of the art technologies.

Free Cash Flow (FCF) was adopted in the late 1980s as a financial tool to evaluate the firm and its individual projects. We question the procedure of calculating the FCF where a significant portion of Current Liabilities is offset against Current Assets, thereby creating the hybrid asset Net Working Capital (NWC). Borrowed from accounting methodology, that procedure distorts the FCF size, composition, volatility, and estimated value. Our empirical analysis shows that the nature and extent of those distortions can misinform the firm's stockholders, lenders and borrowers, and investors at large. We propose a revised FCF that would avoid those distortions.

Israel, a small country in Asia, transitioned from a labor-intensive economy to become a nation with the second largest startup ecosystem in the world. What have propelled this extraordinary growth that made the state of Israel one of the most important entrepreneurial and technology-driven economies? This paper provides some background on the Israeli economy and a detailed analysis of the main drivers for this marvel transformation. It describes the impacts of change in population due to immigration, large capital injections, and economic transition from basic production of growing citrus and polishing diamonds to current state of the art technologies.

This paper examines Specified Purpose Acquisition Companies (SPACs) used as a financing tool for the shipping industry in the period 2004–2013. SPACs that focused on acquisitions in the shipping industry have statistically similar characteristics to the population of SPACs that entered U.S. financial markets. Additionally, shipping companies merge into SPACs for the benefits of acquiring a public listing and receiving the SPAC's cash. The paper constructs an original SPAC Shipping Index and compares its performance with benchmark indices. Under some conditions, managers of SPACs with a focus on shipping on average exhibit a return of $154 for every $1 invested.

This paper examines how commercial banks reacted to the changes in monetary tools in mid-1994, when The Federal Reserve Bank altered its policy by implicitly targeting the Federal Funds Rate (FFR). Prior to 1994, the FFR had a lagged effect on the prime rate that charged commercial banks their best customers. However, after the move by the FED in 1994, commercial banks responded immediately by changing their prime lending rate to the Federal Funds Rate plus a three-percent spread. The result is important because it demonstrates how a more transparent monetary policy targeting can have, in fact, the desired effect.

In this paper we investigate the impact of regional trade agreements (RTAs) and bilateral investment treaties (BITs) on intra-regional foreign direct investment (FDI) across Latin American countries from 1995 to 2012. We use an augmented gravity model in which we control for cross-country heterogeneity, multilateral resistances and endogeneity of RTAs/BITs. This study empirically reveals that belonging to a well-established RTAs, such as MERCOSUR, is significantly more effective than the enforcement of BITs in fostering intra-regional FDI. We observe heterogeneous impacts within the bloc: BITs exert a positive but small effect, with an estimated increase in FDI stocks between 4-7.25%, for middle income countries such as Argentina, Brazil, Chile, Costa Rica, Mexico and Uruguay. However, we observe a non-significant effect on middle-low income countries as Bolivia, Colombia, Ecuador, Peru and Paraguay. Our results suggest that political risk and the level of institutional development in the host country act as strong determinants of BITs effectiveness. Furthermore, we find that the main determinants affecting intra-bloc FDI are factor endowments and market potential. These findings shed clarity into the current debate on the effectiveness of BITs versus RTAs as an adequate mechanism to attract foreign investment.

This study documents the changes in the corporate design of modern Specified Purpose Acquisition Companies (SPACs) for the years 2003–2012. Do institutional characteristics of SPACs determine the success of their merger outcomes? The paper finds that SPACs significantly redesigned their structure in the period under observation. In addition, the probability of a merger for SPACs increases if they are able to announce the deal soon after the Initial Public Offering (IPO), if the deal focuses on China and when their IPO is underwritten by Early Bird Capital.

This paper analyzes the responses of the United States and the economies of the Economic and Monetary Union (EMU) to the financial and economic crisis of 2008–2009. The crisis illuminates the fundamental structural problems within the EMU, the European Union and the United States and the scale and scope of interconnections among the world economy. The paper focuses on the reactions of the real sector to the financial disturbances in these economies. Both comparative static and dynamic methodologies are used in order to appraise the scope and pace of adjustments in response to the global crisis.

This paper examines the controversy involving international trade by employing a simple model. It analyzes the effects of unilateral technological improvements in one entity on the welfare of that entity and its trading partners. Improvements in one country are irreversible and lead to substantial welfare effects on its trading partner. The result reveals some unpleasant free trade arithmetic. However, the results do not suggest that the trade should be curtailed. Rather, the paper advocates a critical need to allocate additional resources in order to maintain their competitive edge in an era when economies are becoming increasingly integrated.

One of the favorite exercises in financial research is to set up an investment strategy based on some criterion of interest and use historical data to test whether it would have earned excess returns. Honest testing, of course, requires trying the strategy with out-of-sample data that was not used in fitting model parameters. Typically, returns are computed relative to the cost to set up the position. For a trade like a short sale that produces a cash inflow at the outset—essentially a loan from the market—excess return is measured by the reduction in the cost of funds below the riskless borrowing rate. A strong, and rather puzzling, result found by many researchers over the years is that equity put options seem to be overpriced on average. The excess returns from writing puts appear to be higher than should be required to satisfy nearly any plausible kind of investor utility function. What this analysis does not take into account, however, is that for many such trades collateral has to be posted, and adjusted daily as the position is marked to market. In this article, Berkovich and Shachmurove consider several trading strategies involving options on the S&P index and the VIX, taking account of the amount and cost of the margin deposits required to carry the positions. They find that while the margin is pathdependent and can’t be known a priori when the trade is initiated, the effect on profitability is large, to the point that apparently high alphas from put writing can easily become negative once the actual cost of implementing the trade is fully taken into account.

The volatility of an asset price measures how uncertain we are about future asset price movements. It is one of the factors affecting option price and the only input into the Black–Scholes model that cannot be directly observed. Thus, estimating volatility properly is vital. Two approaches to calculating volatility are historical and implied volatilities. Using index options listed on the Chicago Board of Options Exchange, this paper focuses on historical volatility. Since numerous methods of estimating volatility may provide different results, this paper assesses the impact of volatility estimation method on theoretical option values.

This paper analyses the patterns of Montenegrin specialization and trade since its independence in 2006. The paper answers the questions how Montenegrin trade patterns have changed since its newly acquired independence. How were these changes affected by, and in turn how did they affect the overall level of economic development in Montenegro? The global financial crisis had a significant negative impact on the Montenegrin economy, due to the ongoing credit crunch, a decline in the real estate sector, and a fall in aluminum exports. In 2012, real GDP growth slipped to 0.5%, reflecting the general downturn in most of Europe.

This paper uses the framework of institutional economics to explain the recurring phenomena of financial crises. How do various institutions fail in predicting, responding to and reducing the burden of the crises? How do they further contribute to the domino effects that nearly led to the collapse of financial institutions worldwide? Institutional economics holds that a country's institutions - its political, educational, and social systems - determine and characterize its economy. Institutional environments shape the way people perceive economic relations. The interdependence of economics, law and morality characterize the ability of institutions to act on unforeseen circumstances and to adapt to changes.

This paper describes and analyzes the impacts of economic institutions on the Euro. It analyzes the impact of economic institutions for countries joining the European Union. In order to depict and explain Europe's role in the world economy, this study provides a detailed analysis of the Eurozone trade with the world. The study offers potential solutions to the Financial Crisis of the European Union and details their advantages and disadvantages, with an emphasis on the role and importance of economic institutions.

This paper examines and resolves a puzzling issue associated with less developed country (LDC) exportcompositions.Sincethenewlyindustrializedcountry(NIC)takeoffduringtheearly1970s,LDCexportshaveinvolved an increasingly broader and diversified export base. Yet trade theories, both “old” that focus onclassic comparative advantage, and “new” which rely on scale economies, lead to expectations of growingspecialization as a concomitant of LDC takeoff.This study examines periods of rapid growth and structuraltransformationoftradeforarepresentativegroupofLDCscoveringawidegeographicandtemporalsample. 1. Introduction Economic Development literature generally agrees that increasing export diversifica-tion is a concomitant to economic development.An accepted explanation for Africa’sexport stagnation in recent decades is its dependence on mono-culture,and on a singleor small number of commodities.The fact that African countries lag behind other lessdeveloped countries (LDCs) is often explained by its

One of the few constants since the United States declared its independence is the presence of frequent financial crises with similar causes. In the nineteenth century, these panics were frequent with eight occurring over the century. However, following the Second World War there was a period of relative calm, which may have led to complacency. The Savings and Loans and the current financial crises have shown that these events remain a very real threat to economic stability.

Many are currently studying the origins of the financial crisis in an attempt to answer two seemingly simple questions: why did it happen, and can another crisis be prevented? Those two questions have proved incredibly divisive. The majority opinion of The United States Financial Crisis Inquiry Commission was submitted with two dissenting positions. Furthermore, The 2010 Economic Report of the United States President does not perfectly align with any opinion presented in that report. Few studies, however, provide proper consideration to the evolution of macroeconomic thought and lengthening of the business cycle preceding the current crisis.

Is free trade always good for advanced industrialized countries? Are fears of globalization and outsourcing imaginary, totally unfounded, and misguided? Is the West always going to benefit from technological improvements in the East? This article constructs a few thought experiments to analyze such issues. The article provides some rational insight into the puzzle of why global trade is so controversial. The effects of technological improvements in the East on the welfare of both the East and the West are analyzed. The conclusion highlights some of the less desirable effects of outsourcing in a more globalized world.

The Chinese economy is in a stage of energy transition: from low efficiency solid fuels to oil, gas, and electric power, from agriculture to urbanization and industrialization, from heavy industry to lighter and high tech industry, from low motorization to rapid growth of the motor vehicle population. Experts fear that continued rapid economic growth in China will translate into a massive need to expand imports of oil, coal, and gas. We build an econometric model of the Chinese energy economy based on the energy balance. We use that model to forecast Chinese energy consumption and imports to 2020. The study suggests that China will, indeed, require rapidly growing imports of oil, coal, and gas. This growth is not so sensitive to the rate of economic growth as to increases in motorization. It can be offset, but probably only in small part, by increasing domestic energy production or by improvements in the efficiency of use, particularly in the production of electric power.

The combined economies of Brazil, Russia, India and China (BRICs) appear likely to become the largest global economic group by the middle of this century. Our paper summarizes the features of each economy that justify this forecast, and highlights some of the country-specific obstacles that could prevent its realization. Specifically, we contribute an analysis of the relative difficulty of doing business within each country and discuss how this, combined with a lack of long-term conditions to promote growth, affects the potential of these markets to lead the future world economy.

The most popular measure of concentration, Gini coefficient, does not showuniformly all the changes taking place in a flow of goods between objects. This work presents mechanisms for creating alternative coefficients that when used together with Gini index mitigate that inconvenience.

This paper assesses the reactions of the United States and the twelve economies of the European Monetary Union (EMU) to the financial crisis of 2008-2009. The rapidly spreading financial and economic contagion uncovered structural problems of each member of the EMU that impacted their relative competitiveness. Furthermore, the crisis highlights the scale and scope of interdependences in the world economy. It unveiled economic and institutional flaws in the EMU, the European Union (EU) and the U.S. Additionally, in the U.S., the crisis brought to light institutional and industry conflicts of interest, as well as glaring regulatory failures.

Financial markets have experienced unprecedented transformations, signs of which have emerged since the late 1970s. In recent years substantial consolidation occurred. In response to changes in macroeconomic variables, such as GDP, industrial production, inflation and the political business cycle, the institutional structure of stock exchanges has evolved in terms of economic performance. This paper compares the performances of financial markets and presents comparisons of the leading five stock exchanges by studying the evolution of the unitized risk values for real rates of return during the 1950-2012 time-period.

This paper presents a simple static model of a world economy with two countries, two goods, and two representative agents. Initial endowments are the source of each good. Given that the endowments of the two goods across the two countries are asymmetric, the countries have an incentive to trade. Under certain conditions, it is possible that a onetime increase in a good of one country may be called an endowment shock that reduces the welfare of its trading partner. This endowment shock is the equivalent of manna from heaven.