auditors response to political connections and cronyism in malaysia this paper extends the literature on the role of political economy in financial reporting and auditing by testing two hypotheses the first hypothesis predicts that there will be a greater increase in audit effort and audit fees for malaysian firms with political connections as a result of the asian financial crisis than for non politically connected firms because these firms have a higher risk of financial misstatements the second hypothesis predicts that the audit fees of politically connected firms will decline when capital controls are introduced by the government as a ploy to financially assist politically connected firms to rebound from the crisis and thus reduces the risk of financial misstatements the results show that there is a greater increase in audit fees for firms with political connections than for non politically connected firms as a result of the asian financial crisis however there is a decline in audit fees for politically connected firms after the capital controls are implemented

price determination in the eu ets market theory and econometric analysis with market fundamentals abstract we investigate the price determination of the european union emission allowance eua of the european union emissions trading scheme eu ets we postulate an uncertain permit price and risk averse firms which have the possibility to hedge in the forward market the firms produce final goods abate their emissions and trade permits in the permit market the dependence of the equilibrium permit price on exogenous variables is studied in a permit market model we test our theoretical findings with empirical data from 2005 to 2010 in the eu ets market we use daily forward prices of eua as our dependent variable we use several econometric models with multiple stationary time series to discover that there is a strong relationship between the fundamentals such as german electricity prices and gas and coal prices with the price of eua we find that the eua forward price depends on fundamentals especially on the price of electricity as well as on the gas coal difference in a statistically significant way

what do we know about macroeconomics that fisher and wicksell did not the answer to the question in the title is a lot in this essay i argue that the history of macroeconomics during the 20th century can be divided into three epochs

uncertainties and extreme risk spillover in the energy markets a time varying copula based covar approach abstract in this paper we explore the impact of uncertainties on energy prices by measuring four types of delta conditional value at risk covar using six time varying copulas three different measures of uncertainty economic policy financial markets and energy markets are considered and the magnitude and asymmetric effects of their influence are investigated our results suggest that there generally exists negative dependence between energy returns and changes in uncertainty the risks of clean energy and crude oil returns are more sensitive to uncertainties in the financial and energy markets while the impact of economic policy uncertainty is relatively weak the upside and downside covars and covars demonstrate significant asymmetric effects in response to extreme uncertainty movement our findings therefore have important implications for energy portfolio investment

political connections and corporate investments evidence from the recent anti corruption campaign in china abstract taking advantage of corruption scandals in china we construct a natural experiment and identify the ousting of corrupt politicians and firms connected with them through bribery and personal relationships event firms we find that the investment expenditure of event firms declines significantly after the ousting of the politicians compared with that of non event firms especially for non soes we also find that after the ousting of the politicians investment efficiency improves for event soes but declines for event non soes compared with their non event counterparts we also document that the ousting of the politicians influences firm investment decisions more after the recent anti corruption campaign for bribing firms and for firms in more corrupt regions these results are robust to alternative measurements of key variables and specifications

lobbying political connections and emergency lending by the federal reserve this paper tests whether the political connections of banks were important in explaining participation in the federal reserve s emergency lending programs during the recent financial crisis our multivariate tests show that banks that were politically connected either through lobbying efforts or employment of politically connected individuals were substantially more likely to participate in the federal reserve s emergency loan programs in economic terms participation in these programs was 28 36 more likely for banks that were politically connected than for banks that were not politically connected in our final set of tests we attempt to identify a proper explanation for this peculiar relationship while a broad literature speaks of the moral hazard associated with receiving bailouts we test whether another type of moral hazard exists in the period preceding the bailout in particular we argue that to the extent that political connections act as synthetic insurance banks may have engaged in more risky behavior that lead them to the fed s emergency lending facilities tests seem to confirm this explanation

quantifying the risk to crude oil imports in china an improved portfolio approach abstract china s rapid economic development caused a sharp increase in crude oil demand in 2011 china imported 254 million tons of crude oil in total with its dependence on imported oil reaching 56 5 this paper carries out a quantitative study on the risk of china s crude oil imports by establishing an assessment model which has two primary characteristics first the model not only uses portfolio theory to assess the risk to china s crude oil imports taking into consideration the effect of the diversified sources of imports but also introduces a correlation coefficient which considers the risks associated with importing oil from oversea sources second the correlation between import prices and global oil prices is analyzed with respect to each exporting country the ease of doing business index grading system is introduced in order to represent the risk weight for each exporting country because of these improvements the model provides operable methods for studying how global oil prices import volumes the diversification index and the political and economic situation of the exporting countries affects china s crude oil import risks as well as offers a method for implementing optimal crude oil import strategies it is concluded that china s crude oil import risks associated with the middle east are not as precarious as researchers traditionally reported among countries in the middle east there exist obvious disparities and differences affecting the kinds and types of risks involved therefore these risks should be treated piecemeal when performing an overall assessment of crude oil import risks in china it should also be noted that with respect to the middle east there is still room for china to optimize the mix of source countries in order to reduce risks china should raise the volume of imports coming from low risk countries as well as add new low risk exporting countries to its importing portfolio

discussion of what determines corporate transparency the goal of bushman piotroski and smith hereafter bps is to extend our understanding of financial information systems around the globe they focus on the availability of firm specific information to those outside of publicly traded firms to examine how and why this information varies across countries given the breadth of the question and the scope of global work the paper includes far ranging discussions of these factors and a large number of empirical variables however the analyses address two relatively straightforward questions first which aspects of the information system are observed to occur together second how are these aspects of the information system related to the government s role in the economy clearly these are important questions global variation in financial markets and accounting is a topic increasingly studied by academics in accounting as well as economics and finance these variations have been attributed with affecting economic development within countries and affecting the ability to transact business across countries la porta et al 1997 clayton jorgensen and kavajecz 2002 leuz nanda and wysocki 2003 bradshaw bushee and miller 2003 given the increasing globalization of business in general it is only reasonable to expect that studies of global

modeling systemic risk and dependence structure between oil and stock markets using a variational mode decomposition based copula method abstract this study combines the variational mode decomposition vmd method and static and time varying symmetric and asymmetric copula functions to examine the dependence structure between crude oil prices and major regional developed stock markets s p500 stoxx600 djpi and tsx indexes during bear normal and bull markets under different investment horizons furthermore it analyzes the upside and downside short and long run risk spillovers between oil and stock markets by quantifying three market risk measures namely the value at risk var conditional var covar and the delta covar covar the results show that there is a tail dependence between oil and all stock markets for the raw return series by considering time horizons we show that there is an average dependence between the considered markets for the short run horizons however the tail dependence is also found for the long run horizons between the oil and stock markets with the exception of the s p500 index which exhibits average dependence with the oil market moreover we find strong evidence of up and down risk asymmetric spillovers from oil to stock markets and vice versa in the short and long run horizons finally the market risk spillovers are asymmetric over the time and investment horizons

connectedness of economic policy uncertainty and oil price shocks in a time domain perspective abstract in this paper we investigate causality and connectedness between economic policy uncertainty and oil price shocks across time scales by incorporating the wavelet approach into the structural vector autoregression var framework proposed by diebold and yilmaz 2009 2012 2014 we find that crude oil prices behave like receivers of information from economic policy uncertainty regardless of time scale however the causality relationship between economic policy uncertainty and oil price shocks intensifies as time scales increase in addition the connectedness relationship is robust to time scale changes whereas the causal relationship intensifies as time scales increase notably the weight of us economic policy uncertainty increases in the var system as time scales increase in particular we employ the west texas intermediate wti crude oil price as an alternative measure to increase the robustness of our results and identify differences in the var system overall the total connectedness of the wti crude oil price is lower than that of the brent crude oil price regardless of time scale our results provide meaningful information for both investors and policymakers

measuring global oil trade dependencies an application of the point wise mutual information method abstract oil trade is one of the most vital networks in the global economy in this paper we analyze the 1998 2012 oil trade networks using the point wise mutual information pmi method and determine the pairwise trade preferences and dependencies using examples of the usa s trade partners this research demonstrates the usefulness of the pmi method as an additional methodological tool to evaluate the outcomes from countries decisions to engage in preferred trading partners a positive pmi value indicates trade preference where trade is larger than would be expected for example in 2012 the usa imported 2 548 7 kbpd despite an expected 358 5 kbpd of oil from canada conversely a negative pmi value indicates trade dis preference where the amount of trade is smaller than what would be expected for example the 15 year average of annual pmi between saudi arabia and the u s a is 0 130 and between russia and the usa 1 596 we reflect the three primary reasons of discrepancies between actual and neutral model trade can be related to position price and politics the pmi can quantify the political success or failure of trade preferences and can more accurately account temporal variation of interdependencies

the debt equity choice when firms adjust their capital structures they tend to move toward a target debt ratio that is consistent with theories based on tradeoffs between the costs and benefits of debt in contrast to previous empirical work out tests explicitly account for the fact that firms may face impediments to movements toward their target ratio and that the target ratio may change over time as the firm s profitability and stock price change a separate analysis of the size of the issue and repurchase transactions suggests that the deviation between the actual and the target ratios plays a more important role in the repurchase decision than in the issuance decision

some talk money in politics a partial review of the literature the financing of political campaigns is an area of active scholarly study i review some of the recent literature and discuss important methodological issues that arise in empir ical research on campaign expenditures and campaign contributions the effects of campaign expenditures and advertising on candidate and ballot measure elections are summarized as are the impacts of contributions on contributors welfare many states have changed their campaign finance laws in the past few years and i describe work that exploits variations in these laws a discussion of the strategies used by interest groups to allocate their campaign contributions provides insights into contributors motives

a test of the opec cartel hypothesis 1974 1983 this paper tests whether the higher oil prices fo the last decade could have been the result of producer collusion we find little evidence that opec influenced oil prices during the years of skyrocketing prices 1974 1980 but there is evidence that it did so during the recent years of softening prices 1981 1983

legislative restraints in corporate bailout design abstract the aftermath of the recent economic crisis saw the largest u s government bailout of corporate entities ever while the bailout was carried out with the explicit goal of restoring stability it aroused much controversy and public criticism based on moral hazard concerns as well as the exorbitant cost to the taxpayer this paper examines the bailout design on behalf of an imperfectly informed legislature aimed at shaping the incentives of a policymaker to whom bailout decisions are delegated we show that important elements of the more moral hazard proof design entail various legislative procedural hurdles which effectively make the bailouts dependent on supermajority support

predicting carbon market risk using information from macroeconomic fundamentals abstract economic theories suggest that carbon price movements are closely related to economic fundamentals this paper develops an economic state dependent sd approach to evaluate carbon market value at risk var that incorporates information from macroeconomic fundamentals into carbon return var modeling and forecasting this method implements an economic sd sampling scheme that utilizes historical carbon return observations from the relevant economic states to predict future carbon market var applying this sd method to the european union eu carbon market we confirm that the eu fundamental economy has two distinct states that correspond to expansion and recession periods and that the carbon returns have different distributions in the two states we find that the sd method outperforms the traditional non sd methods in out of sample var forecasts and this is particularly evident when the carbon market experiences large scale economy driven structural breaks

competition transmission and pattern evolution a network analysis of global oil trade abstract this paper studies the competition among oil importers using complex network theory combined with several alternative measures of competition intensity to analyze the evolution of the pattern and transmission of oil trading competition the results indicate that oil trade has formed a global competition pattern and that the role played by the asian pacific region in the evolution of this competition pattern is becoming increasingly prominent in addition global competition intensity has continued to rise and non oecd countries have become the main driving force for this increase in global competition intensity the large oil importers are the most significant parts of the global oil trading competition pattern they are not only the major participants in the competition for oil resources but also play important roles in the transmission of oil trading competition china and the united states especially display the feature of globalization whose impacts of transmission reach across the whole oil trading competition network finally a 5c changeability contestability cooperation commitment and circumstances policy framework is put forward to maintain the stability of oil trade and improve the energy security of oil importers in various aspects

detecting instability in the volatility of carbon prices this article investigates the presence of outliers in the volatility of carbon prices we compute three different measures of volatility for european union allowances based on daily data egarch model option prices implied volatility and intraday data realized volatility based on the methodology developed by zeileis et al 2003 and zeileis 2006 we detect instability in the volatility of carbon prices based on two kinds of tests retrospective tests ols recursive based cusum processes f statistics and residual sum of squares and forward looking tests by monitoring structural changes recursively or with moving estimates we show evidence of strong shifts mainly for the egarch and iv models during the time period overall we suggest that yearly compliance events and growing uncertainties in post kyoto international agreements may explain the instability in the volatility of carbon prices

reducing dependence on oil imports abstract the legacy of higher oil prices left by the 1970s has the oil importing economies reeling with another unexpected oil supply interruption threatening a knockout during the 1980s policies designed to reduce the level of oil imports have been the subject of intensive study but disagreements over their desirability has led to policymaking paralysis on the part of the major oil importing nations these disagreements have often resulted from differing views about how the world oil market works this paper considers a number of oil import reduction measures within a common framework that allows the effects of alternative assumptions about the world oil market to be investigated results from that framework suggest that there are many things that can be done to reduce dependence on oil imports with little cost and significant potential benefits under all but the most pessimistic world oil market assumptions

the directional volatility connectedness between crude oil and equity markets new evidence from implied volatility indexes in this paper we use a set of newly introduced implied volatility indexes to investigate the directional connectedness between oil and equities in eleven major stock exchanges around the globe from 2008 to 2015 the inference on the oil equity implied volatility relationships depends on diebold and yilmaz 2012 2014 2015 who proposed a set of directional measures that enable the dynamic and directional characterization of the relationships among financial variables we find uniform results across the sample countries indicating that the connectedness between oil and equity is established by the bi directional information spillovers between the two markets however we find that the bulk of association is largely dominated by the transmissions from the oil market to equity markets and not the other way around the pattern of transmissions is varying over the sample period however most of the linkages between oil and equities are established from the mid of 2009 to the mid of 2012 which is a period that witnessed the start of global recovery

dynamic return volatility dependence and risk measure of covar in the oil market a time varying mixed copula model abstract this study investigates the risk level in the oil market measured by value at risk var and conditional var covar as well as the dynamic and asymmetric dependence between wti returns and crude oil volatility index ovx by constructing six time varying mixed copula models results show that mixed copula between t copula and the 270 degree rotated clayton copula is the optimal fitting copula to measure dynamic dependence the estimated time varying kendall coefficients indicate that wti returns and ovx present negative dependence most of the time there exists a structural change point of dependence between wti returns and ovx changes on april 17 2009 while the dependence characteristics within the subsamples are similar to that in the whole sample indicating the rationality of our time varying mixed copula models finally the tests show significant risk spillover from ovx to wti returns and also asymmetric effects for covars in response to different upside and downside extreme ovx movements

what determines china s crude oil importing trade patterns empirical evidences from 55 countries between 1992 and 2015 abstract this study develops a conceptual framework that synthesizes the supply demand price and openness of crude oil trade along with a list of traditional economic political and geographical factors to investigate the determinants of crude oil imports in emerging markets we test the framework using china s crude oil imports from 55 countries for the period from 1992 to 2015 using both static and dynamic panel data models we find that china s crude oil import is associated with exporting country s supply demand and price as well as its bilateral trade relationships these factors were found to affect china s import of crude oil from the middle east however only bilateral trade relationships affect its imports of crude oil from the asia pacific furthermore we do not find substantial evidence in this research to indicate that china s direct investment increases crude oil imports from those countries this article is part of a virtual special issue entitled comparing sustainable energy policies in northeast asia toward the harmonized public private partnership

the industrial organization of congress or why legislatures like firms are not organized as markets this paper provides a theory of legislative institutions that parallels the theory of the firm and the theory of contractual institutions like market institutions legislative institutions reflect two key components the goals or preferences of individuals here representatives seeking reelection and the relevant transactions costs we present three conclusions first we show how the legislative institutions enforce bargains among legislators second we explain why given the peculiar form of bargaining problems found in legislatures specific forms of nonmarket exchange prove superior to market exchange third our approach shows how the committee system limits the types of coalitions that may form on a particular issue

does opec still exist as a cartel an empirical investigation the aim of this paper is to determine if opec acts as a cartel by testing whether the production decisions of the different countries are coordinated and if they have an influence on oil prices relying on cointegration and causality tests in both time series and panel settings our findings show that the opec influence has evolved through time following the changes in the oil pricing system while the influence of opec is found to be important just after the counter oil shock our results show that opec is a price taker on the majority of the considered sub periods finally by dividing opec between savers and spenders we show that it acts as a cartel mainly with a subgroup of its members

information linkage dynamic spillovers in prices and volatility between the carbon and energy markets abstract the european union emissions trading system eu ets has strengthened the information flow and connection between carbon market and energy markets which makes the carbon energy system more complicated this paper investigates information linkages and dynamic spillover effects between the carbon and energy markets we adopt a systemic time series approach to study connectedness in both returns and volatility in the carbon energy system moreover a rolling windows method is used to show the dynamic features empirical results show that brent oil prices play an important role in affecting carbon price changes and risks feedback exists from the carbon market to other energy markets and electricity prices are shown to be the biggest information receiver in the system it is also shown that the level of connectedness in the volatility system is substantially higher than that in the returns system our results can provide useful implications for policymakers to design market mechanisms and market investors to manage their portfolios

political connection and leverage some malaysian evidence abstract this paper extends prior work on the linkage between politically connected pcon firms and capital structure in developing countries specifically this paper focuses on the association between malaysian pcon firms and leverage and is motivated by the results of fraser et al 2006 who report a positive association between leverage and political patronage controlling for a potential misspecification in that paper this study documents that a significant proportion almost 12 of the malaysian pcon firms have negative equity and builds on the previous paper by providing fresh evidence that market to book ratio is positively associated with leverage and that borrowing pcon firms have significantly lower roa compared to non pcon firms

political incentives to suppress negative information evidence from chinese listed firms this paper tests the proposition that politicians and their affiliated firms i e firms operating in their province temporarily suppress negative information in response to political incentives we examine the stock price behavior of chinese listed firms around two visible political events meetings of the national congress of the chinese communist party and promotions of high level provincial politicians that are expected to asymmetrically increase the costs of releasing bad news the costs create an incentive for local politicians and their affiliated firms to temporarily restrict the flow of negative information about the companies the result will be fewer stock price crashes for the affiliated firms during these event windows followed by an increase in crashes after the event consistent with these predictions we find that the affiliated firms experience a reduction an increase in negative stock return skewness before after the event these effects are strongest in the three month period directly preceding the event among firms that are more politically connected and when the province is dominated by faction politics and cronyism additional tests document a significant reduction in published newspaper articles about affected firms in advance of these political events suggestive of a link between our observed stock price behavior and temporary shifts in the listed firms information environment

what do campaign contributions buy deciphering causal effects of money and votes in the 1987 1988 election cycle political action committees pacs spent 176 6 million on candidates who competed for a seat in the house of representatives what do pacs buy when contributing this money if campaign contributions are rational allocations of a contributor s income campaign expenditures could increase both the probability that the contributor s preferred candidate is elected and the likelihood that if elected the candidate will vote in the interest of the contributor most studies do not find that incumbents expenditures have a significant positive effect on the number of votes incumbents receive 11 14 15 17 29 the evidence that contributions influence congressional votes is mixed most studies find weak or no support for this hypothesis for example kau rubin and keenan 17 find that contributions from businesses mattered in only two of the eight votes they analyzed others argue that campaign expenditures play no important role in the voting decision of congressmen 5 9 12 31 the lack of finding of significant effects of money on votes has been explained with the need for better models to explain campaign contributions 5 however the theoretical developments of for example ben zion and eyton 4 bental and ben zion 3 and baron 2 have not been incorporated in the empirical analysis of the effect of campaign contributions on the voting behavior of legislators empirical models that test this relationship must allow for the endogeneity of campaign contributions for the dichotomous nature of the dependent vote variable and the nonnegativity constraint of campaign contributions most empirical work in this area utilize models that do not incorporate these restrictions in this study i plan to incorporate these aspects of the data generating process into a more detailed model of the effects of campaign contributions on congressional votes of all the reported empirical studies on this issue only chappell 5 uses a model which can properly assess the impact of money on votes chappell finds that campaign contributions do not affect votes in congress when his more detailed econometric technique is used the best test of the theory results if votes have a clear economic payoff to contributors benefits of the votes are concentrated and costs are

an assessment of tarp assistance to financial institutions six years after the passage of the 2008 troubled asset relief program commonly known as tarp it remains hard to measure the total social costs and benefits of the assistance to banks provided under tarp programs tarp was not a single approach to assisting weak banks but rather a variety of changing solutions to a set of evolving problems tarp s passage was associated with significant improvements in financial markets and the health of financial intermediaries as well as an increase in the supply of lending by recipients however a full evaluation must also take into account other factors including the risks borne by taxpayers in the course of the bailouts moral hazard costs that could result in more risk taking in the future and social costs related to perceived unfairness our evaluation is organized in five parts 1 what did policymakers do 2 what are the proper objectives of interventions like tarp assistance to financial institutions 3 did tarp succeed in those economic objectives 4 were tarp funds allocated purely on an economic basis or did political favoritism play a role 5 would alternative policies either alongside or instead of tarp and alternative design features of tarp have worked better

emission abatement untangling the impacts of the eu ets and the economic crisis abstract in this study we use historical emission data from installations under the european union emissions trading system eu ets to evaluate the impact of this policy on greenhouse gas emissions during the first two trading phases 2005 2012 as such the analysis seeks to disentangle two causes of emission abatement that attributable to the eu ets and that attributable to the economic crisis that hit the eu in 2008 09 to do so we use a dynamic panel data approach our results suggest that by far the biggest share of abatement was attributable to the effects of the economic crisis this finding has serious implications for future policy adjustments affecting core elements of the eu ets including the distribution of eu emission allowances

what drives the formation of global oil trade patterns abstract in this paper the spatial characteristics of current global oil trade patterns are investigated by proposing a new indicator moran f meanwhile the factors that influence the formation of oil trade patterns are identified by constructing four different kinds of spatial econometric models the findings indicate that most oil exporters have an obvious export focus in north america and a relatively balanced export in europe and the asia pacific region besides supply and demand factors technological progress and energy efficiency have also significantly influenced the oil trade moreover there is a spillover effect of trade flow among different regions but its impact is weak in addition oil importers in the same region have the potential to cooperate due to their similar import sources finally promotion of oil importers r d investments can effectively reduce the demand for global oil trade

causes of the eu ets price drop recession cdm renewable policies or a bit of everything new evidence the price of eu allowances euas in the eu emissions trading scheme eu ets fell from almost 30 tco2 in mid 2008 to less than 5 tco2 in mid 2013 the sharp and persistent price decline has sparked intense debates both in academia and among policy makers about the decisive allowance price drivers in this paper we examine whether and to what extent the eua price drop can be justified by three commonly identified explanatory factors the economic recession renewable policies and the use of international credits capitalizing on marginal abatement cost theory and a broadly extended data set we find that only variations in economic activity and the growth of wind and solar electricity production are robustly explaining eua price dynamics contrary to simulation based analyses our results point to moderate interaction effects between the overlapping eu ets and renewable policies the bottom line however is that 90 of the variations of eua price changes remains unexplained by the abatement related fundamentals together our findings do not support the widely held view that negative demand shocks are the main cause of the weak carbon price signal in view of the new evidence we evaluate the eu ets reform options which are currently discussed

the jeffords effect abstract in may 2001 senator james jeffords left the republican party and tipped control of the u s senate to the democrats this paper uses the surprise event to demonstrate what i term the jeffords effect changes in the political landscape have large effects on the market value of firms i use a firm s soft money donations to the national parties as the measure of how the firm aligns itself politically in this event study a firm lost 8 percent of market capitalization the week of jeffords s switch for every 250 000 it gave to the republicans in the previous election cycle on the basis of the point estimates the stock price gain associated with democratic donations is smaller than the loss associated with republican donations but the estimates are consistent with the effects being equal and opposite the results withstand several robustness checks and the effects appear to persist over time

political connection and cost of debt some malaysian evidence abstract this paper investigates the association between malaysian politically connected pcon firms and the cost of debt we extend previous research that finds malaysian pcon firms are perceived as being of higher risk by the market and by audit firms by providing evidence that lenders also perceive these firms as being of higher risk we also find that pcon firms have a significantly 1 higher extent of leverage 2 higher likelihood of reporting a loss 3 higher likelihood of having negative equity and 4 higher likelihood of being audited by a big audit firm we suggest that pcon firms are charged higher interest rates by lenders as a result of efficient contracting given their higher inherent risks additionally we find that ceo duality present in pcon firms is perceived by lenders as being more risky and that a higher proportion of independent directors on the audit committee mitigate this perceived risk

why is there so little money in u s politics in this paper we argue that campaign contributions are not a form of policy buying but are rather a form of political participation and consumption we summarize the data on campaign spending and show through our descriptive statistics and our econometric analysis that individuals not special interests are the main source of campaign contributions moreover we demonstrate that campaign giving is a normal good dependent upon income and campaign contributions as a percent of gdp have not risen appreciably in over 100 years if anything they have probably fallen we then show that only one in four studies from the previous literature support the popular notion that contributions buy legislators votes finally we illustrate that when one controls for unobserved constituent and legislator effects there is little relationship between money and legislator votes thus the question is not why there is so little money politics but rather why organized interests give at all we conclude by offering potential answers to this question this abstract was borrowed from another version of this item

capital structure and political patronage the case of malaysia this paper extends prior work on the links between political patronage and capital structure in developing economies three proxies of political patronage are developed and applied to a group of malaysian firms over a 10 year period we find a positive and significant link between leverage and each of the three measures of political patronage we also find evidence of an indirect link between political patronage and capital structure through firm size and profitability

uncertainty and crude oil returns we use a copula approach to investigate the effect of uncertainty on crude oil returns using copulas to construct multivariate distributions of time series data permit the calculation of the dependence structure between the series independently of the marginal distributions further we implement the copula estimation using a rolling window method to allow for a time varying effect of equity and economic policy uncertainty on oil returns the results show that higher uncertainty as measured by equity and economic policy uncertainty indices significantly increase crude oil returns only during certain periods of time that is we find a positive dependence prior to the financial crisis and great recession interestingly estimation of the copula over the entire sample period leads to a negative dependence between the equity and economic policy indices and the crude oil return

linear and nonlinear granger causality investigation between carbon market and crude oil market a multi scale approach abstract this paper investigates the causality between carbon market and crude oil market using a multi scale analysis approach in which two main steps are involved multi scale analysis and causality testing in multi scale analysis bivariate empirical mode decomposition bemd is employed to decompose the two series of market returns at different time scales in causality testing a linear and nonlinear integrated granger test is formulated to investigate the relationship among each pair of matched components on a similar time scale with the european union emission allowance eua futures and brent futures as study samples some interesting findings can be obtained 1 at the original data level without multi scale decomposition this study finds evidence supporting a neutrality hypothesis i e no granger causality between the carbon and crude oil markets 2 on small time scale within one week excluding non work days the two markets might be uncorrelated and driven by their own respective supply demand disequilibriums 3 for medium time scale above one week but below one year there is a strong bi directional linear and nonlinear spillover effect between the two markets due to certain extra factors with medium term effects e g significant events and policy changes 4 for long time scale the long term trends of the two markets appear an obvious linear relationship

contagion and trade why are currency crises regional abstract currency crises tend to be regional they affect countries in geographic proximity this suggests that patterns of international trade are important in understanding how currency crises spread above and beyond any macroeconomic phenomena we provide empirical support for this hypothesis using data for five different currency crises in 1971 1973 1992 1994 and 1997 we show that currency crises affect clusters of countries tied together by international trade by way of contrast macroeconomic and financial influences are not closely associated with the cross country incidence of speculative attacks

political power economic freedom and congress effects on bank performance abstract this paper studies the linkages between bank performance connections to powerful politicians and the degree of economic freedom in a bank s home state we find that bank performance is positively related to state economic freedom we also reconfirm the finding of gropper et al 2013 that bank performance is improved by political connections however the positive effect of political connections appears to be significantly reduced when there is a higher degree of economic freedom in the state indicating that political connections may matter less to banks when there is more economic freedom economic freedom in a state can have a beneficial effect on state economic growth and hence may outweigh any political connection benefits however the declines in state economic freedom in recent years could make political connections potentially more valuable to banks

impact of changes in crude oil trade network patterns on national economy abstract crude oil is one of the most important energy sources for the development of the national economy the regions along the belt and road are rich in crude oil resources as the belt and road initiative b r initiative progresses and develops further an increasing numbers of countries are participating which thus increases trade cooperation and changes the pattern of crude oil trade among countries along the belt and road b r countries this change will have various impacts on the economies of different countries based on the complex network and econometric theory we study the impact of crude oil trade pattern changes of the b r countries on each country s gdp we obtained the following results 1 the impact of national trade influence on gdp was significant and positive particularly after the initiative was proposed 2 the centrality of the country s role in the trade network had a significant and favorable impact on gdp but it was weakened after the initiative was introduced 3 the impact of the country s import risk in the network on gdp was negative 4 for countries with different economic levels changes in the role of national trade had various effects on their gdps

systemic risk in european sovereign debt markets a covar copula approach abstract we studied systemic risk in european sovereign debt markets before and after the onset of the greek debt crisis taking the conditional value at risk covar as a systemic risk measure characterized and computed using copulas we found that before the debt crisis sovereign debt markets were all coupled and systemic risk was similar for all countries however with the onset of the greek crisis debt markets decoupled and the systemic risk of the countries in crisis excepting spain for the european debt market as a whole decreased whereas that of the non crisis countries increased to a small degree the systemic risk of the greek debt market for other countries in difficulties increased especially for portugal where systemic risk tripled after the onset of the crisis whereas the systemic impact on the non crisis countries decreased

factors affecting the carbon allowance market in the us the us carbon allowance market has different characteristic and price determination process from the eu ets market since emitting installations voluntarily participate in emission trading scheme this paper examines factors affecting the us carbon allowance market an autoregressive distributed lag model is used to examine the short and long run relationships between the us carbon allowance market and its determinant factors in the long run the price of coal is a main factor in the determination of carbon allowance trading in the short run on the other hand the changes in crude oil and natural gas prices as well as coal price have significant effects on carbon allowance market

crude oil import policy of turkey historical analysis of determinants and implications since 1968 turkey is one of the most energy import dependent countries in the world suffering deeply from the economic and strategic burdens of oil importation our purpose is to determine the factors behind the crude oil import policy of turkey and to measure their contribution to a well organized import strategy we implemented a principle component analysis to construct an oil import vulnerability index oivi based on four factors which are crude oil import dependency of primary energy consumption crude oil import bill as a share of gross domestic product gdp non diversification of import sources and share of oil in total energy import the contribution of these factors to the oivi is found to be approximately equal while an overall deterioration in the oivi has been observed during periods of increasing oil prices better diversification of oil import sources has lead to significant improvements we suggest turkish policy makers implement sound policies emphasizing diversification of crude oil import sources and reduction of the share of crude oil in primary energy imports to increase energy supply security this study has also demonstrated that it is possible to construct an index representing crude oil vulnerability caused by import dependency

exploring the driving factors of global lng trade flows using gravity modelling abstract taking into account the attributes of the liquefied natural gas lng trade and the space time characteristics of trade flows this paper identifies the multiple dimensional factors that influenced the global lng trade between 2004 and 2015 following an analysis of the data via the application of gravity models the empirical results of this study indicate that these influencing factors possess both general and regional characteristics in contrast to general trade the lng trade is mainly affected by the economic magnitude of the demand side regionally pipeline natural gas has a significant substitute effect on the lng trade within the global model though not within the asian model additionally the lng trade in asia is more sensitive to the influence of import prices and research and development investment than in the global model our subsample analyses show that the results are robustness across different periods finally this paper discusses pertinent policy implications for the lng trade especially as related to asia

risk spillovers across the energy and carbon markets and hedging strategies for carbon risk this study examines the risk spillovers between energy futures prices and europe based carbon futures contracts we use a markov regime switching dynamic correlation generalized autoregressive conditional heteroscedasticity ms dcc garch model in order to capture the time variations and structural breaks in the spillovers we further evaluate the optimal weights hedging effectiveness and dynamic hedging strategies for the ms dcc garch model based on both the regime dependent and regime independent optimal hedge ratios we finally complement our analysis by examining the in and out of sample hedging performances for alternative strategies our results mainly show significant volatility and time varying risk transmission from energy markets to carbon market we also find that spot and futures segments of the emission markets exhibit time varying correlations and volatile hedging effectiveness the subsample estimates show significant changes in the hedge effectiveness over the different phases of the european carbon market these results have important investment and policy implications

opec and other commodity cartels a comparison abstract the economic literature provides specific characteristics for cartels although the theory of international cartels is not well developed in the literature and every cartel is unique some of these characteristics exist in each cartel this study investigates the existence of these characteristics in six known commodity cartels including opec in addition it compares the oil companies cartel the seven sisters to opec and summarizes the findings of opec econometric models developed in the literature in the last 25 years and concludes that the results do not support cartel or competitive models for opec although other cartels are more successful than opec many books and articles in economics use opec as a cartel example neither statistical tests nor theory support the popular use of opec as a cartel example indeed this article concludes that opec is composed of saudi arabia the dominant world producer plus several distinct sub groups and that separate models are required to explain the behavior of each assigning the power of some opec members to opec has caused confusion about its behavior recent opec success is attributed to political natural and technical capacity limitations in the oil fields that prevented countries from cheating on their quota in other words opec adherence to the quota except for saudi arabia is anything but voluntary

corporate lobbying political connections and the bailout of banks abstract political involvement has long been shown to be a profitable investment for firms that seek favorable regulatory conditions or support in times of economic distress but how important are different types of political involvement for the timing and magnitude of political support to answer this question we take a comprehensive look at the lobbying expenditures and political connections of banks that were recipients of government support under the 2008 troubled asset relief program tarp we find that politically engaged firms were not only more likely to receive tarp funds but they also received a greater amount of tarp support and received the support earlier than firms that were not politically involved

a theory of entangled political economy with application to tarp and nra the recent financial crisis has provoked a raft of contending claims as to whether the cause of the crisis is better attributed to market failure or political failure such claims are predicated on a presumption that markets and polities are meaningfully separate entities to the contrary we argue that contemporary arrangements create an entangled political economy that renders theorizing based on separation often misleading within this alternative framework of entangled political economy we illuminate both the recent troubled assets relief program tarp and the new deal s national recovery administration nra

the dynamic volatility spillover between european carbon trading market and fossil energy market abstract with the rapid spread of carbon trading in the world the interaction of carbon prices and fossil energy prices has raised growing attention but little research has discussed their time varying correlation and dynamic volatility spillover this paper employs the threshold dynamic conditional correlation dcc generalized autoregressive conditional heteroscedasticity garch model and the full baba engle kraft and kroner bekk garch model to explore these issues for the daily data of european carbon futures prices and the three fossil energy prices coal natural gas and brent oil from january 2 2008 to september 30 2014 the results indicate that first there is significant unidirectional volatility spillover from coal market to carbon market and from carbon market to natural gas market whereas there exists no significant volatility spillover between carbon market and brent oil market second carbon market and fossil energy markets have significantly positive correlation across time specifically among the three fossil fuels coal market has the highest correlation with carbon market followed by natural gas and brent oil markets finally as for the three fossil fuels their price decrease may have stronger impact on carbon price volatility than their price increase with the same degree while there is asymmetric impact of carbon price increase and decrease only on brent oil price volatility these results may help investors to well configure their portfolios and manage their investment risks and help emission trading installations to join in carbon market in a cost effective way

the benefits of lending relationships evidence from small business data this paper empirically examines how ties between a firm and its creditors affect the availability and cost of funds to the firm we analyze data collected in a survey of small firms by the small business administration the primary benefit of building close ties with an institutional creditor is that the availability of financing increases we find smaller effects on the price of credit attempts to widen the circle of relationships by borrowing from multiple lenders increases the price and reduces the availability of credit in sum relationships are valuable and appear to operate more through quantities rather than prices

futures trading with information asymmetry and otc predominance another look at the volume volatility relations in the european carbon markets this paper constitutes the first exercise of analysing the european carbon market efficiency from a double perspective combining both nature of execution venues screen vs otc trading and their volatility liquidity relations using a bivariate asymmetric gjr garch model we first document that otc exchange traded trading volume shows consistent bi uni directional granger causality to our volatility estimates consistent with greater responsiveness of the otc exchange traded market to changes in market wide idiosyncratic risks second we report significant contemporaneous and lagged positive causality of otc derivatives volume on spot futures volatility confirming that the sequential information arrival hypothesis siah applies third we find that the one way causality from otc to futures volumes is mainly driven by heterogeneous investor beliefs trading volume provides an indication on how private information is dispersed and held at different levels rather than proxying information signal itself after rejecting execution venues substitutability we advocate for systematic clearing and netting of otc positions through a unique clearing house and reporting rules to identify speculation in line with mifid art 59 proposals

the financial power of the powerless socio economic status and interest rates under partial rule of law in advanced economies interest rates vary inversely with the borrower s socio economic status which itself depends inversely on default risk these relationships depend on the impartiality of the law where the law is markedly biased in favour of certain groups the latter will pay a surcharge for capital legal power as measured by privileges before the law thus undermines financial power the capacity to borrow cheaply developing this argument this paper also tests it through judicial records from ottoman istanbul 1602 1799 three privileged ottoman groups men muslims and titled elites all paid relatively high interest rates conditional on various loan characteristics this article is protected by copyright all rights reserved

campaign contributions and congressional voting does the timing of contributions matter theoretical and empirical studies do not address whether campaign contributions from more than one election cycle are important for congressional voting behavior further they do not address whether campaign contributions from different periods have different effects on legislative voting behavior this paper analyzes the cumulative effect of campaign contributions over two time periods moreover this paper studies the importance of the timing of contributions for legislative voting behavior ten roll call votes on price supports and quotas for various farm commodities in 1981 and 1985 are analyzed most of the estimated contribution coefficients are statistically significant the results show that without campaign contributions farm interest would have lost in five of the seven votes that were won moreover contributions that were given at approximately the same time as the vote have a larger impact on voting behavior than contributions that the legislator received one or two years prior to the vote copyright 1995 by mit press

interest group competition and the organization of congress theory and evidence from financial services political action committees we develop a positive theory of how interest group competition shapes the organization of congress and use it to explain campaign contribution patterns in financial services since interest groups cannot enforce fee for service contracts with legislators legislators have an incentive to create specialized standing committees which foster repeated dealing between interests and committee members the resulting reputational equilibrium supports high contributions and high legislative effort for the interests contribution patterns by competing interests in the congressional battle over whether banks can enter new businesses support the theory which also has implications for term limits and campaign reform

the market for congressional votes is timing of contributions everything this study utilizes the timing of campaign contributions to identify whether the objective of political action committees pacs is to influence congressional votes or solely to elect a preferred candidate the results show that pac behavior is consistent with an attempt to purchase congressional votes and to influence elections contributions increase in the weeks surrounding legislative events of importance to pacs and elections the magnitude of increased contributions is examined the article also addresses the lack of legal enforcement mechanisms in vote for contribution agreements it develops hypotheses regarding the timing of contributions as an inexpensive mechanism to assure contractual performance hypotheses are tested regarding pacs incentives to mitigate potential cheating by legislators on such agreements results show that pacs use the timing of contributions as a mechanism to prevent legislators from reneging on vote for contribution trades

asymmetric risk spillover between financial market uncertainty and the carbon market a gas dcs copula approach abstract a thorough understanding the asymmetry in risk transferring mechanisms remains a challenge in the carbon market through the incorporation of the asymmetric tail distribution into the risk transferring mechanism the asymmetric response of the carbon market to financial market uncertainties can be explored herein we propose a generalized autoregressive score dynamic conditional score copula model to investigate the asymmetric risk spillover between financial market uncertainty and the carbon market we discover the existence of considerable asymmetric risk spillover from financial market uncertainty to the carbon market specifically the upper tail risk spillover effect is greater than the lower tail risk spillover effect the degree of risk spillover reached a peak during the european debt crisis also higher degrees of financial market uncertainty and especially uncertainty from the crude oil market cause a greater risk spillover to the carbon market than lower degrees of financial market uncertainty do in addition we discover that stock market uncertainty exhibits greater power than crude oil market uncertainty in transferring risk to the carbon market when systemic events occur our research provides meaningful information to investors and policy makers

dynamic behavior of co2 spot prices co2 emission allowances are traded nowadays over the counter otc and on exchanges across the european union eu it thus becomes increasingly important for traders of these emission certificates to have a valid co2 spot price model to value potential derivatives in addition co2 emitting companies require an adequate co2 spot price model in order to better assess their production costs and support emissions related investment decisions however sufficient price history is still lacking for the european union emission trading scheme eu ets we therefore present a tractable stochastic equilibrium model reflecting stylized features of the eu ets and analyze the resulting co2 spot price dynamics our main findings are that co2 prices do not have to follow any seasonal patterns discounted prices should possess the martingale property and an adequate co2 price process should exhibit a time and price dependent volatility structure a brief empirical examination regarding market efficiency complements our analysis

disability insurance and the great recession the u s social security disability insurance ssdi program is designed to provide income support to workers who become unable to work because of a severe long lasting disability at present nearly nine million former workers receive ssdi benefits following several decades of rapid growth as the program has expanded observers have debated the degree to which this program growth is due to on the one hand past policy changes and anticipated growth in the insured population or on the other hand declining returns to labor force participation among low skilled workers underscoring the important role of labor markets is the evidence that ssdi payments in appalachia responded counter cyclically to local earnings shocks caused by the coal boom and bust of the 1970s and 1980s black daniel and sanders 2002 more recently linder and burdick 2013 show that the unemployment rate was positively associated with disability benefit claiming during and after the 2001 recession a finding that ssdi receipt is sensitive to economic cycles is of concern for several reasons the first is that there is little evidence that the incidence of severe disability is itself countercyclical because of this ssdi is designed to insure against permanent earnings shocks due to onset of disability and not transitory earnings shocks due to labor market conditions its strict eligibility rules lengthy application processing times and implicit work disincentives reflect this purpose and indeed very few ssdi beneficiaries ever return to substantial labor market activity it is thus problematic if displaced and discouraged workers turn to the ssdi program when they are in need of temporary assistance since they are unlikely to ever return to work once the labor market recovers one explanation for these business cycle effects is that they are driven by conditional applicants that is workers with health impairments who would prefer to remain in the labor force but who would apply for ssdi benefits if they lost their present job autor and duggan 2003 because applying for public ssdi benefits in the united states requires that one s earnings are below the threshold defining substantial gainful activity sga the opportunity cost of applying for benefits is reduced when one becomes unemployed thus not only should there be more ssdi applicants during economic downturns there should be notable compositional differences between those who apply during economic expansions and those who apply during economic recessions using survey data coe and rutledge 2013 find that ssdi applicants during recessions have higher past earnings and more recent work experience see also lindner and burdick 2013 in this study we use administrative data to estimate the effect of labor market conditions as measured by the unemployment rate on the number of ssdi applications the number and composition of initial allowances and denials and the timing of applications relative to disability onset we analyze the period of the great recession and compare this period with business cycle effects over the past two decades from 1992 through 2012 our analysis isolates the quantity and composition of applicants who are induced to apply for ssdi benefits when labor market opportunities decline and therefore provides important new evidence about the group for whom ssdi application is a substitute for labor force participation and their impact on the ssdi program