equity valuation using multiples we examine the valuation performance of a comprehensive list of value drivers and find that multiples derived from forward earnings explain stock prices remarkably well pricing errors are within 15 percent of stock prices for about half our sample in terms of relative performance the following general rankings are observed consistently each year forward earnings measures are followed by historical earnings measures cash flow measures and book value of equity are tied for third and sales performs the worst curiously performance declines when we consider more complex measures of intrinsic value based on short cut residual income models contrary to the popular view that different industries have different best multiples these overall rankings are observed consistently for almost all industries examined since we require analysts earnings and growth forecasts and positive values for all measures our results may not be representative of the many firm years excluded from our sample

energy security in asean a quantitative approach for sustainable energy policy abstract we investigate energy security of the association of southeast asian nations asean under the 4 a s framework the asean economic community aec agreement launched in 2015 renewed a regional focus on energy security and sustainability we employ an analytic framework to quantitatively assess progress in different categories including availability acceptability affordability and applicability key metrics include the documentation of co 2 emissions energy access measures and energy supply reserves from 2005 2010 we identify relevant energy indicators using high quality historical data from the iea and world bank we find that asean made little progress toward establishing energy security in the previous five year planning period 2005 2010 as it regressed in most categories except applicability therefore we suggest that increased development of renewable energy and energy efficiency technologies would move asean in a positive direction toward achieving energy security and sustainable energy policy goals

combining value estimates to increase accuracy the estimates provided by discounted cash flow the method of comparables and market prices usually disagree combining two or more of these value estimates makes sense because every bona fide estimate provides information and because relying on one estimate ignores the information content of the others how then should financial analysts combine different value estimates to form a more accurate estimate than that provided by any one method drawing from bayesian decision theory the delaware block method and forecasting research this article suggests five rules of thumb for combining two or more value estimates into a superior value estimate

quantile relationship between oil and stock returns evidence from emerging and frontier stock markets abstract this study extends the literature on the asymmetric effect of oil price fluctuations on emerging and frontier stock markets via a quantile on quantile approach that allows to capture normal and extreme states in each respective market we find that oil risk exposures are heterogeneous across the emerging and frontier stock markets and indeed display quantile specific characteristics observing uniform patterns of oil risk exposures within groups of countries that include both importers and exporters we argue that oil price risk serves as a systematic risk proxy capturing the market s concerns regarding global growth expectations rather than a simple import export commodity our findings suggest that signals from the oil market either via measures of trading activity in oil futures or changes in basis values could be utilized by policy makers to improve models of stock market volatility

the high unemployment trap a model of the labor market under firing restrictions and endogenous quits is constructed it is shown that in the spirit of blanchard and summers the model can generate multiple equilibria for plausible parameter values with a low quits high unemployment equilibrium coexisting with a high quits low unemployment equilibrium

quantifying the impacts of energy price reform on living expenses in saudi arabia abstract as part of vision 2030 saudi arabia has initiated a broad based energy reform programme aimed at gradually reducing its dependence on oil this paper assesses the impacts of energy price reforms on living expenses of various household groups in saudi arabia for this purpose the input output table combined with household expenditure data are used to model the impacts results show that the distributional impacts of energy price reforms are regressive with low income households experiencing a higher increase in living expenses compared to high income households the impacts are primarily instigated by rising prices of energy intensive products after decomposing the impacts into direct and indirect effects it was found that indirect effect is not only responsible for a considerable rise in household expenditure on energy intensive products but it is also distributionally regressive it is therefore vital for policymakers to review and fine tune the social protection system to protect poor households against reforms

growth and value hybrid valuation model based on mean reversion abstractthis article proposes a novel valuation model growth and value hybrid model to estimate the stock price this proposed model combines the essence of the asset based approach the income based approach and the principle of mean reversion to develop the theoretical closed form formula consisting of three coefficients value coefficient value support coefficient and growth coefficient regression analysis is employed to fit market data to determine these coefficients moreover this study proposes the double sorting method to build the quantile regression models of the formula to estimate the stock price at a specific quantile the results show that the predictive capability of the hybrid valuation model is superior to the model without using value support coefficient which supports the assumption that the pbr is not associated with the roe when the roe is less than a threshold in different time periods of the stock market no significant difference exists on the value support coefficient howe

environmental impacts of coal subsidies in turkey a general equilibrium analysis abstract in this study we aim at providing an analytical framework for turkey to study the macroeconomics and environmental impacts of the existing coal subsidization scheme to this end we develop a regionally differentiated applied general equilibrium model spanning over 2015 2030 our analytical apparatus focuses exclusively on the fiscal implications as well as the environmental repercussions of the removal of the subsidies on greenhouse gas emissions with the aid of a set of alternative policy scenarios against a business as usual path we study the regional and sectorial performances of growth employment investment and capital accumulation consumption welfare and trade balance our results indicate that by simple elimination of the coal subsidization scheme turkey can reduce its aggregate gaseous emissions by as much as 5 without a significant loss in its gdp

valuation of bankrupt firms this study compares the market value of firms that reorganize in bankruptcy with estimates of value based on management s published cash flow projections we estimate firm values using models that have been shown in other contexts to generate relatively precise estimates of value we find that these methods generally yield unbiased estimates of value but the dispersion of valuation errors is very widethe sample ratio of estimated value to market value varies from less than 20 to greater than 250 cross sectional analysis indicates that the variation in these errors is related to empirical proxies for claimholders incentives to overstate or understate the firm s value

does hometown advantage matter the case of institutional blockholder monitoring on earnings management in korea this study uses a large sample of korean firms to examine institutional blockholders influence on corporate earnings management the korean market is an interesting setting to study institutional monitoring because it is dominated by chaebols which are characterized by ineffective internal governance mechanisms we find evidence that institutional blockholders deter opportunistic financial reporting and such activities are the most evident among domestic institutional blockholders foreign institutional blockholders especially those with short term investment objectives lead to more discretionary reporting our findings are robust to various empirical models and endogeneity checks moreover this study offers new insight into the proximity advantage of domestic institutional investors with regard to monitoring information it also highlights institutional investors roles in shaping corporate governance in emerging markets in which sound corporate governance has become increasingly important for firms long term sustainability one important policy implication is that regulatory authorities should aim to promote institutional investors participation in these markets

measuring value relevance in a possibly inefficient market an interesting question in assessing value relevance of accounting variables is whether measures of value relevance are materially affected by market inefficiencies we explore this question in two steps first we analytically examine the impact of market inefficiencies on the estimation of coefficients in value relevance regressions and derive a procedure that corrects potential biases caused by such inefficiencies the procedure adjusts contemporaneous stock prices for future risk adjusted price changes and yields value relevance coefficient estimates that capture both contemporaneous and delayed market reactions second we apply this procedure to three types of studies that have attracted much attention in the accounting literature 1 the value relevance of earnings and book values 2 the value relevance of residual income value estimates and 3 the value relevance of accruals and cash flows we compare coefficient estimates obtained from conventional value relevance regressions with those from regressions employing our adjustment procedure and find statistically significant differences in both level and return regression coefficient estimates the magnitude of differences in coefficient estimates for return regressions is large enough to affect economic inferences we find that coefficients of lagged price deflated residual income value estimates move significantly closer toward a predicted value of one implying a meaningful reduction of bias last we find that cash flows now have significantly larger coefficient estimates than accruals consistent with their greater persistence

risk constrained self scheduling of hydro wind units for short term electricity markets considering intermittency and uncertainty abstract in view of the intermittency and uncertainty associated with both the electricity production sector of restructured power system and their competitive markets it is necessary to develop an appropriate risk managing scheme so that it is desirable to trade off between optimum utilization of intermittent generation resources i e renewable energy resources uncertain market prices and related risks in order to maximize participants benefits and minimize the corresponding risks in the multi product market environment the main goal of this paper is to investigate risk management by introducing a novel multi risk index to quantify expected downside risk edr which is caused by both the wind power and market price uncertainties value at risk var method is used to assess the mentioned risk issue by the proposed weighted edr so that an optimal trade off between the profit and risk is made for the system operations also the roulette wheel mechanism is employed for random market price scenario generation wherein the stochastic procedure is converted into its respective deterministic equivalents moreover the autoregressive integrated moving average arima model is employed to characterize the stochastic wind farm wf generation by predetermined mean level and standard deviation of wind behavior as well as temporal correlation the problem is formulated as a mixed integer stochastic framework for a hydro wind power system scheduling and tested on a generation company genco

cross sectional efficiency and labour hoarding in a matching model of unemployment we study positive and normative aspects of steady state equilibrium in a market where firms of endogenous size experience idiosyncratic shocks and undergo a costly search process to hire their workers the stylized model we propose highlights interactions between job security provisions and sectoral shocks in determining the natural rate of unemployment the allocation of labour and the extent of labour hoarding and rationalizes cross sectional asymmetries of gross employment flows at the firm level in our model where productivity and search costs are dynamically heterogeneous across firms decentralized wage bargains imply important cross sectional inefficiencies which overshadow the static search inefficiencies on which simpler models focus

on the job search and moral hazard we analyze the interaction between intertemporal incentive contracts and search frictions associated with on the job search in our model agency problems call for wage contracts with deferred compensation at the same time workers do on the job search deferred compensation improves workers incentives to exert effort but distorts their on the job search decisions we show that deferred compensation is less attractive when the value to the worker firm pair of on the job search is high moreover the interplay between search frictions and wage contracts creates feedback effects if firms in equilibrium use contracts with deferred compensation fewer firms with vacancies enter the on the job search market and this in turn reduces the distortions created by deferred compensation these feedback effects between the incentive contracts used and the activity level in the search markets can lead to multiple equilibria a low turnover equilibrium where firms use deferred compensation and a high turnover equilibrium where they do not furthermore the model predicts that firms are more likely to use deferred compensation when search frictions are high and when the gains from on the job search are small

is oil supply choked by financial market pressures abstract since the late 1990s financial analysts have focused strongly on short term profitability for benchmarking and valuation of international oil and gas companies the increasing pressure for strict capital discipline among oil and gas companies may have reduced their willingness to invest for future reserves and production growth the current high oil price is partly due to low exploration activity in the oil industry the last decade we present and discuss the background for this development based on previous academic research industry trends and current valuation practices an estimated econometric model of stock market valuation among oil and gas companies suggests that analysts and companies have put exaggerate weight on short term earnings and accounting profitability we therefore expect that the attention will shift back to long term reserve and production growth

commercial energy subsidies in developing countries opportunity for reform abstract energy subsidies are still pervasive in many developing countries oil exporters heavily subsidize all domestic oil consumption while several importers subsidize particular petroleum products estimates of foregone revenues in the oil exporting countries approximate one third of all oil export revenues finally subsidies for electricity natural gas and coal are even more pervasive in virtually all of the countries studies the prices of these fuels do not reflect marginal costs

valuing and pricing ipos abstract this paper investigates how underwriters set the ipo firm s fair value an ex ante estimate of the market value using a unique dataset of 228 reports from french underwriters these reports are issued before the ipo shares start trading on the stock market and detail how underwriters determined fair value we document that underwriters often employ multiples valuation dividend discount models and discounted cash flow dcf analysis to determine fair value but that all of these valuation methods suffer from a positive bias with respect to equilibrium market value we also analyze how this fair value estimate is subsequently used as a basis for ipo pricing we report that underwriters deliberately discount the fair value estimate when setting the preliminary offer price part of the intentional price discount can be recovered by higher price updates we find that controlling for other factors such as investor demand part of underpricing stems from this intentional price discount

the effect of the set of comparable firms on the accuracy of the price earnings valuation method the price earnings pie valuation method estimates a firm s stock price as the product of its earnings and the pie multiple determined from a set of comparable firms this paper studies empirically the accuracy of the pie valuation method when comparable firms are selected on the basis of industry risk and earnings growth the effect of adjusting earnings for cross sectional differences in leverage is also examined

is cash flow king in valuations contrary to the common perception that operating cash flows are better than accounting earnings at explaining equity valuations recent studies suggest that valuations derived from industry multiples based on reported earnings are closer to traded prices than those based on reported operating cash flows the question addressed in the article is whether the balance tilts in favor of cash flows when the following are considered 1 forecasts rather than reported numbers 2 dividends rather than operating cash flows 3 individual industries rather than all industries combined and 4 companies in non u s markets in all cases studied earnings dominated operating cash flows and dividends ndustry multiples are used often in practice both to provide stand alone quick and dirty valuations and to anchor more complex discounted cash flow valuations to obtain a company valuation one simply multiplies a value driver such as earnings for the company by the corresponding multiple which is based on the ratio of stock price to that value driver for a group of comparable companies choices for value drivers include various measures of cash flow book value earnings and revenues but earnings and cash flows are by far the most commonly used in the study reported here we compared the valuation performance of earnings multiples with the performance of multiples based on two measures of cash flow operating cash flow and dividends for a large sample of companies drawn from 10 national markets valuation performance in our study does not refer to picking mispriced stocks 1 we focused

sectoral shifts and cyclical unemployment reconsidered this paper develops a new measure of reallocation shocks based on the variance of industry stock market excess returns to assess the contribution of sectoral reallocation to unemployment in the postwar u s economy the beveridge curve relationship is used to establish that this series isolates reallocation shocks reallocation shocks are found to explain only a moderate share of the fluctuations in aggregate unemployment on average over the period however reallocation accounted for a substantial share of increases in unemployment in several episodes particularly the mid 1970s reallocation shocks also account for a larger share of fluctuations in unemployment of longer durations than of shorter durations

economic social and environmental impacts of fuel subsidies a revisit of malaysia abstract subsidizing energy has been widely used but is economically unfavorable the malaysian government has shown strong intention to reduce energy subsidies recently but face challenges to prepare policy instruments to manage the impact this study develops a computable general equilibrium cge model with breakdown of households by income level to evaluate the potential impacts of removing energy subsidies on the malaysian economy it is shown that removing petroleum and gas subsidy would improve economic efficiency and increase gdp up to 0 65 budget deficit would be largely reduced after removing the petroleum subsidies especially when the saved subsidy cost is not budgeted for other expenditure households would be worse off in most scenarios due to higher price level but some compensation policy could make the lowest income group no worse than baseline without harm the economy the reduction in carbon emissions ranges 1 84 6 63 in different scenarios the simulation results suggest malaysia to completely remove all fuel subsidies and use the saved funding to cut budget deficit or spend on education health and other service sector it is also necessary to set a compensation scheme to minimize public resistance and make sure such scheme is affordable

energy security in china a quantitative analysis and policy implications abstract this study aims to examine how china s energy security has changed over 30 years of reform and the opening period it constructs a 4 as quantitative evaluation framework the availability of energy resources the applicability of technology the acceptability by society and the affordability of energy resources the quantitative results show that china s energy security was at its best during the sixth fyp period 1981 1985 but then deteriorated until it hit higher levels between 1995 and 2005 however it was still lower than the level reached during the sixth fyp period during the eleventh fyp period 2006 2010 the energy security situation deteriorated again differences in policy priority over the study period appear to affect the country s energy security status this study suggests that china needs to develop renewable energy resources on a large scale and pay more attention to emissions control to reverse the downward trend in energy security

incidence and impact the regional variation of poverty effects due to fossil fuel subsidy reform since fossil fuel subsidy reforms can induce significant distributional shifts and price shocks effective compensation and social protection programs are crucial based on the statistical simulation model by araar and verme 2012 this study estimates the regional variability of direct welfare effects of removing fuel subsidies in nigeria uncompensated subsidy removal is estimated to increase the national poverty rate by 3 4 on average however uniform cash compensation that appears effective at the national average is found to fail to mitigate price shocks in 16 of 37 states thus putting livelihoods and public support for reforms at risk states that are estimated to incur the largest welfare shocks coincide with hotspots of civil unrest following nigeria s 2012 subsidy reform attempt the study illustrates how regionally disaggregated compensation can be revenue neutral and maintain or reduce pre reform poverty rates in all states overall it highlights the importance of understanding differences in vulnerability and designing tailored social protection schemes which ensure public support for subsidy reforms

good subsidies or bad subsidies evidence from low carbon transition in china s metallurgical industry abstract since the metallurgical industry has become the main source of china s carbon dioxide emissions and energy consumption in recent years low carbon transition in that industry is of great significance for achieving china s carbon reduction targets it is generally believed that phasing out fossil fuel subsidies is an effective way to reduce energy related co2 emissions since it can increase the energy prices and lower its consumption this paper aims to investigate whether the energy subsidy removal can promote the low carbon transition of china s metallurgical industry taking inter fuel and inter factor substitution effects as the link we calculate the co2 mitigation potential on the assumption that the subsidies for each category of fossil energy were eliminated we find that the metallurgical industry has a sluggish reaction to the changes in energy price supposing eliminating the energy subsidies in the period of 2003 2015 the amount of reduced co2 would be 487 286 million tons accounting for a slight proportion of the total emissions in the industry but it is meaningful for the global co2 mitigation since it approximates the whole co2 emissions in norway during the same period these findings can provide some new insights for the energy subsidy issue and suggest that the additional measures are required to promote the low carbon transition in china s metallurgical industry rather than just relying on the removal of fossil fuel subsidies

input output analysis of co2 emissions embodied in trade the effects of sector aggregation abstract energy related co2 emissions embodied in international trade have been widely studied by researchers using the environmental input output analysis framework it is well known that both sector aggregation and spatial aggregation affect the results obtained in such studies with regard to the latter past studies are often conducted at the national level irrespective of country or economy size for a large economy with the needed data studies may be conducted at different levels of spatial aggregation we examine this problem analytically by extending the work of su et al su b huang h c ang b w zhou p 2010 input output analysis of co2 emissions embodied in trade the effects of sector aggregation energy economics 32 1 166 175 on sector aggregation we present a numerical example using the data of china and by dividing the country into eight regions it is found that the results are highly dependent on spatial aggregation our study shows that for a large country like china it is meaningful to look into the effect of spatial aggregation

stock market dispersion and unemployment abstract the sectoral shifts hypothesis advanced by lilien 1982 and davis 1987 suggests that unemployment is in part the result of resources being reallocated from declining to expanding sectors of the economy using u s data from 1931 to 1987 we test this hypothesis by constructing an index measuring the dispersion among stock prices from different industries we find that lagged values of this index significantly affect unemployment we show that the stock market dispersion index is less contaminated by aggregate demand influences than lilien s employment dispersion index which makes our test less vulnerable to the abraham and katz 1986 critique

the causal relationship between electricity consumption and economic growth in the asean countries abstract this paper investigates the causal relationship between electricity consumption and economic growth among the association of south east asian nations asean 4 members namely indonesia malaysia singapore and thailand using modern time series techniques for the period 1971 2002 the results indicate that there is a bi directional causality between electricity consumption and economic growth in malaysia and singapore this means that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption in the two countries however uni directional causality runs from economic growth to electricity consumption in indonesia and thailand without any feedback effect thus electricity conservation policies can be initiated without deteriorating economic side effects in the two countries

socio economic development and electricity access in developing economies a long run model averaging approach abstract access to electricity continues to be a popular subject in empirical studies however the choice of key factors related to electricity access in the literature to date has been ad hoc due to the lack of a theoretical framework this paper adopts a bayesian model averaging bma approach to selects important factors related to electricity access from 26 socioeconomic indicators using a sample of 48 developing countries and reveal their long term relationship with electricity access the bma approach allows us to identify the optimal empirical model when a theoretical foundation is not available moreover it allows us to address the relative importance of variables using posterior inclusion probabilities and thus has clear policy relevance our results show that access to finance education economic development infrastructure and industrialisation are positively related to electricity access in the long run although the long run relationship does not indicate causality it shows that to maintain this relationship policy adjustments against any deviations from the relationship are needed our study suggests that electrification needs not only economic educational and infrastructural development but also private sector participation governments commitment and political will and integration with poverty reduction and other development schemes

exchange rate exposure abstract in this paper we examine the relationship between exchange rate movements and firm value we estimate the exchange rate exposure of publicly listed firms in a sample of eight non us industrialized and emerging markets we find that exchange rate movements do matter for a significant fraction of firms though which firms are affected and the direction of exposure depends on the specific exchange rate and varies over time suggesting that firms dynamically adjust their behavior in response to exchange rate risk exposure is correlated with firm size multinational status foreign sales international assets and competitiveness and trade at the industry level

evaluating the role of subsidy reform in addressing poverty levels in malaysia a cge poverty framework abstractmalaysia as one of the top subsidised countries around the world has launched to reduce subsidies to capture its development goals this study therefore analyses the effects of the subsidy reform on the macroeconomic welfare and poverty levels of malaysia by applying a cge model the findings suggest that subsidy removal leads to significant falls in both income and consumption of rural urban and non citizen households and consequently decreases their welfare however poverty levels among rural households will most likely increase significantly when compared to urban households due to their relatively low level of income compared to other groups

job security provisions and employment european countries have enacted various job security provisions over the last 30 years employers are required to pay workers on separation or to give advance notice of termination in anything less than a perfectly functioning market there are effects of the provisions on employment incumbents are more likely to retain their jobs but new workers are less likely to be hired an examination of the european data suggests that severance pay requirements reduce employment

impacts of energy subsidy reform on the malaysian economy and transportation sector malaysia is paying a high level of subsidies on the consumption of energy about 5 of its gdp therefore reforming the energy subsidies as planned by the government will have a significant impact on household welfare and energy intensive sectors such as the transport sector this study employs a computable general equilibrium cge model to highlight the transmission channels through which the removal of energy subsidies affects the domestic economy the findings show that the shock increases real gdp and real investment while decreasing malaysian total exports and imports the removal of energy subsidies also decreases the aggregate energy demand and consequently decreases the level of carbon emissions in the malaysian economy in addition households experience significant falls in their consumption and welfare the transport sector is significantly influenced through an increase in production costs due to an increase in the prices of intermediate inputs the total output and total exports of the whole transport sector decrease while its imports increase in addition the use of all kinds of transport by households decreases significantly the malaysian energy subsidy reform leads to an initial decrease in co2 emissions and demand for electricity gas and petroleum products in the entire transport sector

decarbonisation perspectives for the polish economy abstract in the coming decades the energy sector in poland will undergo a substantial transition towards low carbon usage which will have a predominant impact on the economy several modernization scenarios for energy policy are currently being discussed by the government and not yet concluded the main objective of this paper is to provide a tool that allows to simulate such scenarios and to show the impact of decarbonisation on the whole economy we propose an intertemporal hybrid general equilibrium modeling that incorporates energy technologies bottom up approach directly into a macroeconomic structure top down approach by accounting for wide adjustments in the economy while controlling for all major constraints the model gives a unique and detailed insight into the future shape of the energy sector and prospects of low carbon economy in poland our simulation results suggest that there are no free lunches no realistic energy mix allows to achieve sustainable positive economic growth when considerable emission reduction is to be achieved the price on co2 will exceed eur 100 for 30 emission reduction with respect to business as usual scenario gradual phase out of coal requires focusing on biomass technology the first best nuclear and wind power the second best

impact of oil price shocks on output inflation and the real exchange rate evidence from selected asean countries this article analyses the impact of oil price shocks on real output inflation and the real exchange rate in thailand malaysia singapore the philippines and indonesia asean 5 using a structural var model the cointegration tests indicate that the macroeconomic variables of these countries are cointegrated and share common trends in the long run the impulse response functions reveal that oil price fluctuations do not impact the asean 5 economies in the long run and much of its effect is absorbed within five to six quarters the variance decomposition results further assert that with a few exceptions oil price shocks do not explain a significant variation in any of the variables under consideration we also identify a very unique pattern of response to oil price fluctuations between malaysia and singapore and between the philippines and thailand the pairs exhibit a high degree of similarity in their responses they do not share any commonalities across the group

household welfare implications of fossil fuel subsidy reforms in developing countries abstract with over 200 countries reaching an agreement with the stated aim of restricting global warming to well below 2 c above pre industrial levels the most comprehensive climate change agreement was recently signed though most of the hard work lies ahead it marks an important first step for the collective global community to address climate change fossil fuels continue to remain one of the largest contributors to greenhouse gas emissions and for many developing countries high levels fossil fuels continues to enable an overconsumption of fossil fuels given the sensitivity of governments to subsidy reforms this study examines the household welfare implications of the removal of fossil fuel subsidies it finds that while welfare implications are unambiguously positive for government the results are mixed for private households although in an overwhelming majority of cases the results are positive however even in the cases where the welfare implications are negative for private households we find that it is possible for governments to carry out the reforms in such a way as to be welfare improving to households incomes by compensating them with some of the fiscal savings gained from the subsidy reform

energy subsidy reform for growth and equity in egypt the approach matters abstract phasing out energy subsidies is high on the agenda of policymakers in several middle eastern and north african countries the impact of such reform can vary widely depending on the country and policy this paper contributes to the existing literature by examining the phasing out of energy subsidies in egypt under alternative economic scenarios in particular we consider egypt s short and long term economic adjustment under different assumptions on labor market flexibility spending options of subsidy savings and alternative social protection measures results from economy wide model simulations suggest that energy subsidy cuts may hamper economic growth in the short term but depending on the policy measure will improve growth perspectives and household welfare in the longer term yet findings also point to likely adverse impacts of the reform on household consumption in the short and longer run to counteract such negative impacts targeted social protection measures should be continued and scaled up in parallel with the phasing out of energy subsidies

unemployment and labor market reform a contract theoretic approach why do many democracies fail to reform their labor market institutions to answer this question we study the feasibility of reforms that include compensation to insiders for the removal of labor market regulations under asymmetric information a reformer who wants to buy the approval of voters has to pay them an informational rent in addition to the pure costs of compensation that would arise under symmetric information in this setting unemployment may be constrained pareto efficient labor market reforms may fail politically because none of the reform packages proposed wins the approval of a majority of voters we also discuss the role of capital taxation in a reform program jel classification d70 e61 j68

renewable energy in eastern asia renewable energy policy review and comparative swot analysis for promoting renewable energy in japan south korea and taiwan abstract japan south korea and taiwan are deficient of domestic fossil energy sources and depend significantly on imported fuels since the oil shock in the 1970s all three countries have promoted renewable energy as an alternative energy source to improve energy security currently renewable energy is being promoted to build low carbon economies this study reviews the development of renewable energy policies and roadmaps it also examines and compares strengths weaknesses opportunities and threats swot of these countries in the context of advancing renewable energy policies and technologies and expanding domestic renewable energy installations as well as strategically positioning themselves in the international renewable energy market as exporters of clean energy technologies through the swot analysis this paper identifies a capacity for additional renewable energy deployment in these countries and highlights the necessity of increased cooperation between the three countries to strengthen their domestic and regional renewable energy sectors and compete in the global renewable energy market in the post fukushima era

input output and structural decomposition analysis of singapore s carbon emissions singapore is an island city state it lacks conventional energy resources and is alternative energy disadvantaged in the past decade 2000 2010 its energy related carbon emissions increased from 37 8 to 44 4 million tonnes of co2 this paper analyses the city state s carbon emissions from the demand perspective using the input output i o method and investigate the drivers of emission changes using structural decomposition analysis sda it is the first comprehensive analysis of singapore s emissions using the i o framework the results obtained show that exports accounted for nearly two thirds of its total emissions and growth in its emissions in the last decade was largely export driven emissions increased as export oriented industries and export volume expanded fuel switching and energy efficiency however helped to lower growth in emissions besides exports household related emissions accounted for about a quarter of singapore s total emissions the emissions related to different household groups remained fairly stable as increases in embodied indirect emissions were offset by decreases in direct emissions the high income household group registered the largest increase in direct emissions while the middle income household group registered the largest increase in embodied emissions the policy implications of our findings are discussed

comprehensive measurement of energy market integration in east asia an application of dynamic principal component analysis abstract the energy market integration emi in east asia has been carried out for over a decade despite the efforts exerted by countries in the region little has been known about the emi progress this paper innovatively applies the dynamic principal component analysis to measure the emi and its evolution in east asia between 1995 and 2011 the emi is measured by using information from all the five dimensions that have been identified in the literature 1 energy trade liberalisation 2 investment liberalisation 3 development of energy infrastructure and its associated institutional arrangements 4 domestic market openness and 5 energy pricing reform results show that although significant progress has been made for emi in east asia there are significant cross country disparities in different aspects moreover we show that further efforts towards emi in general should focus on liberalising national markets first then phasing out fossil fuel subsidies and finally liberalising investment regime since national market liberalisation is the least developed dimensions certain countries that lag behind in emi need to learn from either their past experiences or from other nations and focus their efforts on their relatively weak dimensions

multiple equilibria in the british labour market some empirical evidence abstract this paper takes a simple imperfectly competitive aggregate labour market model with increasing returns which can lead to non existence or multiplicity of equilibria the model is estimated using annual aggregate data for britain some evidence is found and recent british economic history is interpreted using the model

skills search and the persistence of high unemployment abstract the persistence of high unemployment rates in europe has fueled theories advocating the existence of multiple natural rates of unemployment labor market institutions and increasing returns to scale have been singled out as the main causes of multiplicity and therefore of high unemployment traps the contribution of this paper is both to expand the set of mechanisms leading to multiple natural rates of unemployment and to establish a minimum set of assumptions under which such multiplicity may arise to this aim a search matching model is presented where households allocate time to market and non market activities and invest both in physical and human capital it is shown that under the standard assumption of concavity in production and matching such a model yields multiple long run equilibria with different rates of unemployment this result does not rely on labor market institutions or increasing returns to scale multiplicity in our model arises from differences in the intensity of use of human capital across time consuming activities

attracting attention in a limited attention world exploring the causes and consequences of extreme positive earnings surprises we investigate why extreme positive earnings surprises occur and the consequences of these events we posit that managers know before analysts when extremely good earnings news is developing but can have incentives to allow the earnings news to surprise the market at the earnings announcement in particular managers can use an extreme positive earnings surprise to attract investor attention when they believe their stock is neglected and future performance is expected to be strong analysts who must allocate scarce resources across many firms can also be inattentive and miss signals that suggest good performance is going to be announced using various proxies for extreme positive earnings surprises management expectations for future performance and desire for attention and analyst neglect we find evidence that an extreme positive earnings surprise is a predictable event these findings are incremental to controlling for a firm s information environment earnings volatility and operating leverage finally we show that extreme positive earnings surprises are a successful method for attracting attention with significant increases in the number of institutional owners the number of analysts and trading volume during the subsequent three years this paper was accepted by mary barth accounting

diversification effects of energy subsidy reform in oil exporters illustrations from kuwait abstract for oil exporters energy subsidy reform and economic diversification are critical policy responses to recent fundamental changes in the global oil market and oil price declines yet the relationship between them is little understood this article investigates linkages between energy subsidy reform and accelerating economic diversification away from hydrocarbons in a low oil price environment using illustrations from kuwait it employs an economy wide general equilibrium model with oligopolistic industrial structure the first of its kind for an economy in the middle east and north africa that embodies unique elements of the country s economic structure oil dependence public sector dominance subsidies sovereign wealth funds industrial collusive pricing behaviour and guest workers the article argues that contrary to common popular discourse kuwait s economy has a diversified economic base but this base fails to diversify export or government revenue needed for economic sustainability results show that weak economic diversification in oil exporters with a similar economic structure is not primarily due to dutch disease as dominant in the literature but to economic constraints and distortions that impair structural change and exacerbate overdependence on hydrocarbons labour and competition reforms relax some constraints achieving large efficiency gains that extend economy wide and can expand non energy tradable sectors the analysis has important policy implications first the potential role of pricing regulation in small economies in moderating economic impacts of negative oil shocks second in oil economies characterized by pervasive oligopolies microeconomic reform can be a channel to achieve efficiency and better diversification effects of subsidy reform

pass through and exposure firms differ in the extent to which they pass through changes in exchange rates into foreign currency prices and in their exposure to exchange rates the responsiveness of their profits to changes in exchange rates because pricing affects profitability a firm s pass through and exposure should be related this paper develops models of exporting firms under imperfect competition to study these related phenomena from these models we derive the optimal pass through decisions and the resulting exchange rate exposure the models are estimated on eight japanese export industries using both the price data pass through and financial data for exposure exchange rates can have a major inf luence on the pricing behavior and profitability of exporting and importing firms firms differ in the extent to which they pass through the change in exchange rates into the prices they charge in foreign markets they also differ in their exposure to exchange rates the responsiveness of their profits to changes in exchange rates previous papers have studied either pass through or exposure but none has studied these two phenomena together yet because pricing directly affects profitability the exposure of a firm s profits to exchange rates should be governed by many of the same firm and industry characteristics that determine pricing behavior this paper develops models of firm and industry behavior that are used to study these closely related phenomena together it also provides estimates of pass through and exposure behavior using data from japanese export industries to examine pass through behavior and exchange rate exposure we model a firm with sales to a foreign export market this exporting firm competes with a foreign firm in that export market the costs of the exporting firm are based primarily in the local domestic currency while the foreign firm

how oil prices affect east and southeast asian economies evidence from financial markets and implications for energy security abstract oil prices have been volatile to investigate how oil price swings affect asian economies this paper examines how they affect industry and aggregate stock returns economic theory implies that there is a strong link between a sector s stock return and its economic activity evidence presented here indicates that sectors such as airlines food and industrial transportation are harmed by oil price increases and that sectors such as oil and gas production and exploration benefit the findings also reveal that many industries within each country are impacted by oil prices the paper concludes by offering several suggestions to help asian economies weather the effects of oil price changes and increase energy security

kuwait s energy subsidy reduction examining economic and co2 emission effects with or without compensation abstract this paper examined economy wide impacts of reducing energy subsidy in kuwait a social accounting matrix sam was constructed and a computable general equilibrium cge model was developed the cge model was used to simulate separate and combined effects of a 25 reduction of subsidy to three energy products natural gas oil and electricity this policy shock was applied to the model in two scenarios in each round the subsidy reductions were applied to each energy product separately in turn and then finally simultaneously to all energy products in the first scenario subsidy reductions were applied and results were compared with the baseline scenario given in the sam this yielded adverse effects across a range of endogenous variables it leads to large energy price increases as high as 255 for electricity gross domestic product gdp marginally declined by 0 28 in scenario 2 the subsidy reduction was accompanied with cash transfers to energy users a compensation for welfare loss the amount of transfer was equivalent to the sum of the amount of subsidy reductions the results indicated that such transfers would reduce the adverse effects of the policy reform the effects on gdp was reversed it rose by 1 01 the price effect was slightly lower electricity price rose by 245 finally sensitivity of the model results was examined by varying the elasticity of the substitution of composite energy and capital in production greater possibility of substitution seems to cause subsidy reform to have much larger positive or smaller adverse economy wide effects the simulation experiments suggest that subsidy reform would need to be accompanied by demand side stimulus or supply side initiatives to encourage energy conservation

worker financed versus firm sponsored training how are skilled workers supplied to the economy a search and matching model of general human capital is developed to contrast worker financed training with firm sponsored training to evaluate which type of training might prevail in the economy it will be shown that firm sponsored training is more likely to occur when there is greater friction in the labour market whereas worker financed training prevails in a less frictional market moreover the model has multiple equilibria in labour markets with intermediate friction comparative statistics exercises tell us that reductions in labour market friction result in less firm sponsored training in the economy but encourage worker financed training

renewable energy in five south east asian countries review on electricity consumption and economic growth abstract the present study is an archival statistical overview of the possibility of renewable energy production in five south east asian countries and their economic capacity the five south east asian countries under review are the philippines thailand malaysia indonesia and singapore all of which have a combined population of 420 million this number is a little less than the population of 25 european countries these five countries have created a large market in the world and have enjoyed significant economic growth in recent years tropical climate in the region facilitates the potential for using clean and green energies this article clarifies the effective relation between energy capacities and economic indices in these countries and analyzes the results using a survey the paper shows that despite the shortage of energy in these countries brought by their fast economic growth the share of renewable energy in energy production is constantly declining and more reliance is still placed on fossil fuels for energy production

a review of biofuel policies in the major biofuel producing countries of asean production targets policy drivers and impacts since the turn of this century development of biofuels have progressed rapidly in indonesia malaysia philippines and thailand the major biofuels producing countries in the asean association of south east asian nations the article analyses the biofuel polices underlying drivers and way forward for sustained biofuel development in these countries favorable regulatory and economic mechanisms have played an important role in the production utilization and market penetration of biofuels in these countries a large variety of biofuel support policies are in place ranging from policy targets blending mandates tax incentives and other financial schemes to stimulate the development and adoption of biofuels indonesia is leading the region in biodiesel production and thailand is leading in ethanol production though each of these countries have had occasional setbacks in their production in totality there has been positive growth in biofuel production and an upward trend in future is likely with increased demand consumption enforcement of mandates and realization of policy targets the biofuel development of these countries is motivated by several factors mainly their concerns for energy security e g to reduce the dependence of oil imports and socio economic development e g to increase income generating opportunities climate change is not the primary motive of these countries to pursue biofuel development however sustainable production of biofuels and reliance on second generation biofuels can provide opportunities for these countries to translate their growth potential into economic revenues under carbon finance and thus address greenhouse gas emissions and climate change concerns

stick to the fundamentals and discover your peers the use of industry as a criterion for selecting peers for multiples based valuation rests on the notion that companies operating in the same industry are more likely to share fundamental value drivers i e profitability growth and risk however such companies may not have similar characteristics in terms of these drivers and thus should not be traded at the same multiple we analyze this issue by developing the sum of absolute rank differences sard approach the sard approach can account for an infinite number of proxies for profitability growth and risk while remaining independent of industry classifications our results indicate that the sard approach yields significantly more accurate valuation estimates than the industry classification approach

fair value pension accounting abstract we compare the value and credit relevance of financial statements under fair value and smoothing sfas 87 models of pension accounting while fair value improves the credit relevance of the balance sheet it does not improve its value relevance further fair value impairs both the value and credit relevance of the income statement and the combined financial statements unless transitory gains and losses g l are separated from more persistent income components overall our results suggest there are no informational benefits to adopting a fair value pension accounting model

the future of asean energy mix a swot analysis this paper assesses competing outlooks for energy mix in the association of southeast asian nations asean highlighting the paradox of its fossil fuel dominated outlooks when contrasted with its aspirations to move toward a green energy mix and reviews green energy strategies using the strengths weaknesses opportunities and threats swot analysis method the paper argues that despite the looming brown outlooks due to the expected surge of coal the asean region has many advantages in providing cleaner energy for its green vision however reduction of co2 emissions has not been explicitly set in the region s policy agenda and thus green energy potential is underdeveloped to achieve a greener energy mix asean needs to make further efforts such as cleaner use and removal of subsidies of fossil fuels promotion of renewables and energy efficiency regional market integration and connectivity and execution of existing plans by nations ultimately each of these strategies will require sustained leadership political determination and concrete actions from stakeholders in particular national governments across the region