Berna Kirkulak

The impact of FDI on air quality: evidence from China

Purpose - This paper seeks to examine the impact of foreign direct investments (FDI) on air pollution in China using 286 cities from 2001 to 2007. It is a particular interest of this paper to observe the relationship between FDI and air pollution in particular after China joined to World Trade Organization in 2001. This paper provides a better understanding of economic growth and foreign investment while maintaining a sustainable environment. In order to achieve this task, this paper tests whether or not FDI inflow has impact on environmental deterioration in particular on air quality. Design/methodology/approach - Since the data are both cross-sectional and time series, panel data analyses (fixed effects and random effects) were applied. In order to detect the presence of serial correlation of error term, Durbin-Watson test was used. As serial correlation problem was determined, generalized least square (GLS) using Ar(1) model was used to overcome serial correlation. Findings - The findings show that FDI has no negative impact on the air quality in China. Contrary to expectations, the presence of FDI reduces the air pollution. This result can be attributed by the role of FDIs in the economy that FDIs are perceived as main sources of advanced technology in China. One of the striking findings of the paper shows that FDI has no significant impact on air quality in the central and western cities. The reason is that low level of FDI inflows to cities located in the Center and West. The findings are robust under both panel data (fixed effects and random effects) and GLS estimations. Practical implications - The results provide a wide array of information useful to practitioners, policy makers. Since the paper shows that FDI has no negative impact on the air quality, this result is crucial in attracting FDI to China. Originality/value - This paper provides the largest sample including 286 cities all over China from 2001 to 2007. Considering the distribution of FDI across China, the sample is divided into three regions. Making sub-samples of the FDI distribution allowed us to examine how the impact of FDI differs on air quality in the East, Central and West regions.

Are Dividends Disappearing or Shrinking? Evidence from the Istanbul Stock Exchange

This paper examines the dividend payment decision of publicly owned firms listed on the Istanbul Stock Exchange (ISE) from 1991 through 2006. There is a decline in the percentage of net dividend payers, accompanied by a decline in the aggregate level of net real dividends paid. Contrary to the situation in developed markets, earnings and dividends concentration have declined over the sample period. The first mandatory dividend payment regulation pushed some firms to collect the distributed dividends back through rights issues and this resulted in low net dividend payments. One of the striking findings of this paper reveals that a majority of ISE firms prefer dividend omissions rather than dividend reductions. Once a firm keeps paying dividends, it puts much effort into increasing dividend payments rather than reducing them. Further, dividend payment and reduction decisions are affected by the current earnings of the firm and financial crisis significantly explains both the dividend payment and dividend reduction decisions.

The initial and long-run returns of Japanese venture capital-backed and non-venture capital-backed IPOs

Purpose - The purpose of this paper is to examine initial and long-run returns of Japanese IPOs in particular venture capital (VC)-backed and non-VC-backed. The main research focus is on the performance of VC-backed companies. Design/methodology/approach - This paper presents a comprehensive long-run performance analysis. As such, it provides evidence using two performance methods: cumulative abnormal returns (CARs) and buy-and-hold return (BHARs). This paper uses updated data from 1998 through 2001 and presents a deeper understanding for the long-run returns of Japanese IPOs. Findings - The findings show that there is no statistically significant difference in the initial returns of VC-backed and non-VC-backed companies. The evidence is inconsistent with the VC certification hypothesis that venture capitalists certify the true value of the firm and therefore reduce underpricing. Further, Japanese IPOs underperform in the long-run. The fads hypothesis is applicable to explain the poor long-run performance. The results suggest that although VC-backed companies have high initial returns, they perform significantly worse over a three-year time horizon than non-VC-backed companies. Research limitations/implications - An examination of the lock-up agreements is necessary to understand negative returns. The results of this paper provide a good starting point for such a study. Practical implications - This paper highlights the stock returns of VC-backed and non-VC-backed companies. It is hoped that investors and academics will benefit from the outcome of the current paper. Originality/value - To date, there is no comprehensive study on the Japanese IPO market applying both CAR and BHAR long-run measurements. This paper applies both measurements. Further, this is the first study of the long-run performance of Japanese firms going public in Mothers and in Hercules stock markets.

Information Arrival and Volatility: Evidence from the Saudi Arabia Stock Exchange (Tadawul)

This paper investigates the validation of the Mixture of Distributions Hypothesis (MDH) using trading volume and number of trades as contemporaneous proxies for information arrival in 15 sector indices of the Saudi Stock Exchange (Tadawul) using the TGARCH model. Findings provide strong evidence for the validity of the MDH for the Saudi market. Volatility persistence decreases when the trading volume and the number of trades are included in the conditional variance equation. The most striking finding is that contemporaneous number of trades is a better proxy for information arrival than trading volume, interacting with volatility in a manner anticipated under the MDH. This can be attributed to the unique characteristic of the Saudi equity market where only domestic investors are allowed to execute trade transactions. Further, the results reveal that the leverage effect was amplified, indicating a more pronounced asymmetric effect of bad news on volatility.

Dividend collectors and negative cash dividends: evidence from Istanbul Stock Exchange

This paper examines the dividend-collecting firms and negative dividend payers listed on Istanbul Stock Exchange (ISE) from 1991 through 2006. Turkey used to be a unique country in terms of 50% mandatory cash dividend payment application, and this policy pushed some firms to create other ways to overcome liquidity problems. Among the dividend-paying firms, some dividend payers collected the distributed dividends back through rights issues. In some cases, the amount of rights issues exceeded the distributed dividends. Hence, this resulted in negative dividend payments. This paper provides a solid empirical basis to examine dividend-collecting firms and negative dividends. The findings of this paper show that dividend collectors, in particular negative-dividend-paying firms, started to decrease after the suspension of mandatory cash dividend payment policy in 1995. The results suggest that large firms with low earnings are likely to become negative dividend payers. Further, firms with high investment potential and higher short-term debt constraints tend to collect more dividends back.

Corporate Social Responsibility and Ethics in Real Estate: Evidence from Turkey

Many countries have experienced real estate bubbles due to unethical appraisal practices and a limited base of real estate industry skills. Since the real estate industry is subject to a series of uncertainties and therefore speculation, a responsible method of real estate appraisal reduces the risk involved in property transactions. In the absence of a credible real estate appraisal method, investors are prone to experience swings in property values and suffer as a result.

Türk firmalarının işletme sermayesi yönetimi uygulaması: 2001 ekonomik krizi sonrası

Bu calisma, enflasyonun goreceli olarak dusuk oldugu 2003-2004 yillarinda Istanbul Menkul Kiymetler Borsasi’nda (IMKB) islem goren firmalarin isletme sermayelerini nasil yonettiklerini ele almaktadir. Isletme sermayesi yonetiminin uc ogesi olan ticari alacaklar, ticari borclar ve stoklarin isletme kârliligi uzerindeki etkisi arastirilmistir. Arastirma, 2001 ekonomik krizi sonrasi isletme sermayesi yonetimini etkileyen faktorlerin incelemesi bakimindan onemlidir. Arastirmanin sonuclarina gore, isletmeler bu donemde satislarini arttirmak icin musterilerine ticari kredi saglamislar ve kendilerini borclanarak finanse etmislerdir. Buna ek olarak, isletmelerin parasal degerlerini enflasyona gore nasil yonettiklerini gosteren net parasal pozisyon kâri (zarari) kalemi ile faaliyet kâri arasindaki iliski anlamli ve pozitiftir. Net parasal pozisyon kâri yuksek olan ve stok maliyetleri dusuk olan isletmeler daha kârlidir.