Theses supervised by Salih Katırcıoğlu
12 theses · Eastern Mediterranean University
The Role of Globalization and Country Risks in International Tourism Development: Evidence from Global Panel-Data Analysis
This study investigates the relationship between globalization, international country risks, and international tourism development. Different approaches of panel regression were applied to the panel data from a sample including 133 countries to determine if country risks and globalization indicators are linked with international tourism development. The findings present evidence that economic, social, and political globalizations are significant factors for tourism development. Thus, this study proves that economic, social, and political integration of countries are significant driving forces behind their tourism development. The findings also show that real exchange rate, overall population, and gross domestic product do also exert statistically significant effects on tourism development of the selected 133 countries. The results also indicate that country risks factors complied by ICRG are the other important determinants of international tourism development respectively. The country risk dimensions involving economic, political, and financial factors, all have a significant role in describing tourism development. The results reveal that, considering political factors, corruption, investment profile and government stability are the most important determining factors of tourism development. There is a negative association between tourism development and six political risks dimensions including corruption, ethnic tensions, military in politics, religious tension, internal and external conflict. It indicates that higher level of country risk related to these variables is noticeably associated with less tourism development and vice versa. Considering economic risk factors, current account as % of GDP and inflation are the most important defining factors. Considering financial risk factors current account as % of XGS and net international liquidity significantly and positively impacts on all tourism development. Exchange rate stability also positively impacts on tourism development. This study‟s outcomes have important implications for policymakers. Policy makers should consider the impacts of different dimensions of globalization and country risks while forecasting and planning strategies to improve tourism industry. Policy-makers should consider the negative effects of risks dimensions on tourism, as it has recently been one of the most vital sectors for development in many countries. Keywords: Globalization indicators, Country risks indicators, Tourism development, Dynamic Panel
The Impact of the 2008 Global Financial Crisis on Non-Financial Firms Profitability: A Case from the USA
No doubt USA has greatest economy on the globe and the 2008 global financial crisis originated from the US subprime mortgage market. As a consequence of the crisis, most of the countries in worldwide experienced financial and economy crisis. The essential objective of this thesis is to investigate the impact of the 2008 global financial crisis on the profitability of US non-financial firms as well as to examine the determinants of the profitability of US non-financial firms. To do so, panel data methodology has been implemented. The sample of 42 non-financial firms from 8 different sectors has been considered, the sample has been chosen from NYSE and NASDAQ listed companies. The time interval has been determined from 2004 to 2011. To run the two sample hypothesis tests for two different means, the period has been divided into two broad periods, pre-crisis from 2004 to 2007 and post-crisis from 2008 to 2011. Regarding the 1st, 2nd, and 3rd hypotheses to investigate the changes in the profitability of the sampled firms, the time interval considered as pre and post crisis. However, the hypothesis 4 to 8 of the study that investigates the impact of explanatory variables on the explained variable has been tested over the entire period of 2004-2011. The variables of this thesis are fetched from literature accordingly NI, ROA, and ROE are the profitability measurements and represent the dependent variables, on the other hand the explanatory variables are size, growth opportunity, liquidity, leverage, and tangibility of assets. Statistics and econometrics techniques that used in this research are descriptive statistics, two-sample hypothesis test, correlation matrix, multicollinearity, homoscedasticity, autocorrelation, panel unit root test, and OLS regression analysis with fixed effect. The study has shown that net income of non-financial firms has increased significantly after the crisis. However, return on assets of our sample decreased significantly after the crisis but the return on equity decreased by a big volume, however, this decrease is found to be not significant statistically. Findings also suggest statistically significant and negative effect of size and tangibility on the profitability. However, leverage is positively and significantly related to profitability. The study also proposes that liquidity and growth are positively but not significantly related to the profitability. Keywords: 2008 Global Financial Crisis, US Non-Financial Firms, Profitability, Determinants of Profitability
Dynamic Effects of Shadow Economy and Environmental Pollution on the Energy Stock Prices
This thesis aims to study the dynamic effects of shadow economies and environmental pollution on energy stock prices by empirically investigating the case of Turkey and the Organization for Economic Co-operation and Development (OECD) countries using Generalized Methods of Moments (GMM). The GMM analysis of Turkey has been done years from 2006 to 2014. The results of GMM analysis show that; negative link exists between shadow economies and the energy stock prices of Turkey. Therefore, an increase in shadow economies decreases the energy stock prices. Additionally, energy stock performance is not significantly related to environmental deterioration. Nevertheless, it is also found that the level of shadow economies rises with growth in energy consumption and emission levels. The analysis of OECD countries covers years from 2004 to 2014. The results of GMM analysis show a significant relationship exists between shadow economies, energy stock prices, and environmental pollution. Environmental pollution negatively affects energy stock prices even energy demand found positively linked with energy stock prices. On the other hand, U- shaped relationship found between energy stock prices and shadow economies, which means the response of energy stock prices to the volume of shadow economies is negative at the lower level of shadow economies; then beyond a trough point, this link turns to be positive with the higher level of shadow economies. Keywords: energy stock prices, shadow economies, environmental pollution, generalized methods of moments, Turkey, OECD.
Predicting Sectoral Stock Volatility in Amman Stock Exchange Using Various Approaches
There are a numerous number of methods that can be used in financial markets to forecast in the literature; the prominence of predicting is to give the investment community the ability to build their prospect vision decisions about the future expectations, assets allocation, portfolio management, assets pricing and other benefits. This study presents the Autoregressive Moving Average model, Generalized Autoregressive Conditional Hetroscedasticity models, and Vector Autoregressive model which are from the most important forecasting mechanisms that we can use, in financial time series data. The main aim of this study is to predict the volatility of Amman Stock Exchange as one of the emerging markets for the banking sector index volatility using ARIMA model, insurance sector using GARCH models, and the role of oil price in financial sectors performances in ASE by using VAR model. Firstly, we check the stationarity by using unit root test which indicates that there is a stationarity at level for all sectors banking, insurance, and financial sectors. Secondly, the resulted models for this study for banking sector volatility is: ARIMA (0, 0, 1), CGARCH model is the best for insurance sector volatility. Finally, there is no interaction between international oil prices and financial sectors in ASE according to VAR model. Keywords: Financial Markets, Volatility, ARIMA, GARCH, VAR
Interactions between business conditions, economic growth and crude oil prices
The aim of this thesis is to search for empirical relationship between business conditions and crude oil prices using time series analysis. Business conditions have been peroxide by real income and real industrial production as advised in the relevant literature. Results suggest that economic activity and industrial value added are in long term relationship with oil price movements in the selected countries. Gross domestic product and industrial production significantly are affected from oil prices worldwide. Real income and industrial value added converge to their long term paths significantly through the channel of oil price movements. Oil prices have negative impact on business activity in some countries while it has positive impact in some other countries. Therefore, the sign of coefficient of oil prices has been found mixed in this research study. Keywords: Business Conditions; Oil; Error Correction Model.
Does Financial Structure Matter for Economic Growth? The Case for 10 OECD Countries
In this study we aim to investigate the relationship between financial structure and economic growth in 10 OECD countries between the years 1993 and 2014 inclusively. The overall results for panel estimations were obtained using GMM estimator. For further analyses of evolutionary effects of financial structure, the sample then was split in to 4 different sub samples with time span of 5 to 6 years. Our findings indicate that a negative correlation exists between further promotion of financial market and economic growth. Furthermore, there is no optimal financial structure, and financial structure evolves through different economic conditions. Moreover financial development is positively correlated with economic growth and human capital and capital stock both affect the economic growth in a positive manner. This study provides useful thoughts for policymakers that can help them improve their policies; we recommend them to pay more attention policies that enhance the financial development and human capital in order to improve the economic conditions.
Venture Capital, Economic Growth and Innovation
The aim of the thesis is to investigate the relationships between the three concepts of venture capital (VC), economic growth, and innovation prospects in the European Union (EU) and European Free Trade Association (EFTA) member states. The research differs significantly from the existing literature in two ways. First, no studies up until now have considered that monetary integration differences exist in the European market. Due to this, interaction variables such as the Eurozone and meeting the European Exchange Rate Mechanism (ERM) criteria to be a Eurozone member are specifically used in Sections 5 and 6. Second, this study uses indexes extensively to represent findings, rather than independent secondary data. The relationships between the three aforementioned concepts are investigated with random effects (RE) and fixed effects (FE) models. Chapter 4 analyzes how primary economic variables affect Europe’s VC activity. Section 5 takes into account how post-secondary education, labor, goods, the financial market, market size, and innovation-boosting activities affect VC investments in high-income European states, with a specific focus on the Eurozone, opt-outs, and others. Section 6 investigates human capital and the innovation ecosystem, with the focus again on the Eurozone, opt-outs, and others. The findings in Section 4 outline how the private sector’s institutional quality, infrastructure, and primary education system are equally essential for strengthening VC activity within the continent. In Section 5, the results suggest that the effect is predominantly dependent on the specification tested. The general sample indicates that post-secondary education and innovation-related activities promote the performance of VC activity, but when the interaction variables for all the models are used, the story differs. Finally, Section 6 shows that human capital is essential for VC investments. For the whole sample, post-secondary education promotes VC. However, when the Eurozone and ERM interaction variables are applied, those countries show an adverse impact on post-secondary education while primary education and the healthcare system prove otherwise. For the remaining countries, the post-secondary education effect is significant. For the innovation ecosystem, it is found that for the general sample, technological readiness and innovation exert a strengthening impact on VC activity, while for Eurozone and ERM countries, innovation and exports both promote VC investments. Furthermore, technological readiness has a promoting effect on non- ERM countries while exports have harmful effects. Additionally, it is highlighted that sophisticated techniques in business are likely to adversely affect VC investment in Eurozone states.
Determinants of Working Capital Management of Real Estate Sector Evidence from Saudi Arabia
Working capital management refers to management of short-term capitals of the company at which includes the capital that companies are using in their daily operations. Moreover, management plays a vital role in maximization of shareholders wealth accordingly working capital management involves to major decisions regarding investment policy. To investigate the determinants of WCM, the panel data methodology has been employed that’s the sample of nine real estate firms that are listed in Saudi stock exchange (Tadawul) over six years from 2010 to 2015 are considered. OLS methodology implied to study the variation of the explanatory variables on the explained variable. The dependent variable of this study is cash conversion cycle which represents working capital management and the explanatory variables are profitability, size, sales growth, free cash flow and leverage. Findings reports a significant and negative association between profitability, size and leverage, and cash conversion cycle however the effect of sales growth and free cash flow on cash conversion cycle found to be positive but significant for sales growth and insignificant for free cash flow. Keywords: Working capital management, real estate firms, Saudi stock exchange (Tadawul). OLS.
Determinants of Capital Structure: The Case of Turkish Hotels from Tourism Industry
The aim of this study is to determine, investigate and describe the determinants of capital structure in the five major hotels, acting in the Tourism Industry of Turkey, over the period of 1998-2010. Different capital structure theories were probed with a view to establishing valid propositions concerning the determinants of capital structure of Turkish Hotels. The results have shown that size of the hotels, tangibility of their assets, risk level and non-debt tax shields can be considered as the major determinants of capital structure of hotels in Turkey. We found that the Trade-off theory seems to explain the choice of capital structure more appropriately, compared to other theories. Keywords: capital structure, determinants of capital structure, trade-off theory.
Geopolitical Risk Index, Inflation and Exchange Rate on Economic Growth: Does the Relationship matter Evidence from Turkey
In this study, we examine the impact of geopolitical risk index, inflation and exchange rate on economic growth in the case of Turkey. The geopolitical risk, inflation, exchange rate and economic growth nexus is not without ambiguity. Based on this proposition, this study investigate whether changes in geopolitical risk index, inflation and exchange rate would have significant impact on economic growth in the case of Turkey or not. We are of the opinion that increase/decrease in geopolitical risk index, inflation and exchange rate might influence changes in economic growth. In order to achieve study objective and provide answers to this study research questions as stated in chapter 1, we employ annual frequency data sourced from World Bank Development (online) over the periods of 1985-2017, using Autoregressive Distributed Lag model for estimates and Toda and Yamamoto (1995) for Granger non-causality analysis. In addition, we employ gross fixed capital formation to proxy for domestic investment for ceteris paribus purpose and control for omitted variable bias. Conclusively, based on the empirical results that an increase and/or decrease in geopolitical risk index and inflation have no impacts on economic growth in the case of Turkey. It appears economic growth/development of Turkey is immune to geopolitical risk and fluctuation in price level. Consequently, policymakers should pay more attention to pressing growth determinants that such as exchange rate and domestic investment for a rapid and sustainable economic growth both in the short-run and long run respectively.
The Vulnerability of Tourism Firms’ Stocks to Terrorist Incidents
This thesis aims to examine the effect of terrorist incidents on the performance of tourism, travel, and leisure firms in the world’s leading tourism countries namely China, France, Germany, Spain, Thailand, Turkey, United Kingdom, and the United States. This thesis, specifically, investigates the influences of terrorist incidents on the firm’s stock returns and volatility using event study and Generalized Autoregressive Conditional Heteroscedasticity family models. The novelty of this research is that not only it focuses on the relationship between terrorism and tourism stock performance and volatility but also uses an event study to examine this relationship. The findings of this study reports the significant effects of the terrorist attacks on tourism firms’ performance in France, Spain, Thailand, Turkey, the United Kingdom, and the United States. The significant effects of the terrorist attacks on tourism firms’ stock volatility, however, were only obtained for France, Thailand, and the United States. These effects were particularly long-lasting in Turkey, Germany, Spain, Thailand, the United Kingdom, and the United States. The overall panel event study analysis as well as the event study for individual countries illustrated the considerable adverse effects of terrorist attacks on firms’ performance in tourism, travel, and leisure industries. The findings of this study are consistent with the Efficient Market Hypothesis, while the results are expected to be of high importance for the financial managers, investors, and portfolio managers.
Interactions between Tourism, Services Trade and Economic Growth
The aim of this thesis is to search the role of services trade and tourism in economic growth. For this purpose, thesis is divided in three sections: the first section focuses on the role of services trade and tourism in economic growth of Turkey using time series analysis. Results confirm the long-term effects of tourism and trade in economic growth. The effects of tourism and trade sectors in economic growth are inelastic but positively significant. Results do also confirm that tourism and trade sectors are the promoters for macroeconomic activity; and foreign trade as control variable is also a promoter for international tourism in Turkey. Real exchange rates have been found as successful mediators between tourism, trade and growth; thus, this raises the importance of exchange rate policies in Turkey. Finally, a result of this study has raised the reality of import dependency of tourism development in Turkey which might contradict with exchange rate policies of the Turkish Central bank. In the second section, the role of oil price changes in the effects of services trade and tourism on real income growth in Turkey is examined. Time series analysis using the 1960-2017 annual period has been adapted with this respect. Results confirm the long-term impacts of tourism and services trade sectors on real income growth in Turkey. Tourism and trade (both services and manufacturing) exerts positively significant effects on the long-term performance of macroeconomic activity as measured by gross domestic product. Oil prices negatively impact on real income growth of Turkey. It is also found that oil prices negatively moderate the effects of foreign trade, services trade, and tourism on real income growth in Turkey. This finding reveals that significant effects of foreign trade, services trade, and tourism on real income are negatively influenced from oil price changes. In the third section, the focus is to search the role of services trade and tourism in real income growth of the European Union (EU) countries using panel data analysis. Results confirm the long-term effects of tourism and trade on economic growth. The effects of services trade on income levels are elastic and positively significant while the effects of tourism expansion are inelastic and of mixed outcomes as far as its sign of coefficients and significance are concerned. Results do not also show uniformity between panel and time series estimations of this nexus. Keywords: Tourism; Growth; Oil Prices; Services Trade; European Union; Turkey.