Ender Demir

Evaluating the efficiency of nuclear energy policies: an empirical examination for 26 countries

The decarbonization of the global economy is an urgent concern. As a potential solution, it can be important to understand the efficiency of nuclear energy policies. For this purpose, the paper analyzes whether there is a unit root in nuclear energy consumption in 26 countries and it uses the unit root tests with two endogenous (unknown) structural breaks. The paper finds that nuclear energy consumption is stationary around a level and the time trend in 25 of 26 countries and nuclear energy consumption contains a unit root only in France. The paper also discusses the potential implications of the findings.

You Lose, I Feel Better: Rivalry Between Soccer Teams and the Impact of Schadenfreude on Stock Market

This study considers the game-related performance of two listed soccer clubs in Italy which share the same stadium: Roma and Lazio. We introduce the performance of the archrival in the analysis. The high level of rivalry in sports should lead to a feeling of pleasure at the suffering of another group (known in German as Schadenfreude) and we assume to see the satisfaction of investor fans with the defeat of the archrival. Likewise, the win of the archrival can have a negative impact on the mood of investors. This study shows that, when club supporters experience the negative performance of their team, the results of their archrival can affect their investment decisions. It is therefore proven that, at least in this respect, the investors (also widely represented by club supporters) are driven by the sentiments conveyed by rivalry which, considered to be a source of emotion, may be relevant to the market.

Capital Asset Pricing Model and Stochastic Volatility: A Case Study of India

ABSTRACT The existing literature demonstrates that under a general equilibrium model, the performance of the Capital Asset Pricing Model (CAPM) can be improved significantly by using conditional consumption and market return volatilities as factors. This article tests the validity of these factors explaining stock return differences using a less developed country (India) as a case study. While the earlier studies used panel data to test CAPM, we use portfolios sorted by size and book-to-market equity (BE/ME) ratio. We found that conditional volatility has a limited effect on firms with large capitalization but a significant impact on small-growth and small-value firms.

A Nonlinear Model of Military Expenditure Convergence: Evidence From Estar Nonlinear Unit Root Test

The paper builds a model to empirically test military expenditure convergence in a nonlinear set up. We assert that country A chooses a military strategy of catching up with the military expenditure of its rivals, subject to public spending constraints on public investments, including health and education, leading to decrease in long-term economic welfare. This implies nonlinear convergence path: only when the military expenditure gap between countries reaches the threshold level, will it provide incentives to catch up with rival’s military expenditures. We test this nonlinear catching up hypothesis for 37 countries spanning from 1988 to 2012. Results from individual nonlinear cross-sectionally augmented Dickey–Fuller (NCADF) regression indicate that 53% of countries converge to world’s average military expenditure: where 39% of countries converge to Germany; 33% of countries converge to China; 22% of countries converge to the USA, and 11% of countries converge to Russia. Interestingly, USA does not exhibit nonlinear military expenditure convergence toward world’s average level. For panel NCADF regression, the result suggests that on average, there is evidence for countries converging to USA’s military expenditure at 10% significance level. For the convergence to the world’s average, the statistical significance is at the 1% significance level.

The impact of economic policy uncertainty on stock returns of Turkish tourism companies

Economic policy uncertainty (EPU) has various implications for financial markets. This study examines the effects of EPU on stock prices of listed tourism companies in Turkey for the time period of 2002–2013. We show that EPU in Europe and Turkey has significant negative effects on tourism index returns. The finding reflects that stock returns of the Turkish tourism companies apparently depend on domestic and international economic uncertainty. Among the included macroeconomic variables, consumer confidence index is the only factor which has an impact on stock returns.

CONDITIONAL JUMP DYNAMICS IN STOCK RETURNS: EVIDENCE FROM MIST STOCK EXCHANGES

This paper applies a conditional jump model that was proposed by Chan and Maheu (2002) to examine the stock market dynamics of Mexico, Indonesia, South Korea, and Turkey (MIST). We find that the conditional jump intensity parameter estimates are statistically significant and change dramatically between two sample periods. We show that a high probability of jumps today predicts a high probability of jumps in the next period. The impact of a previous shock to the next periods jump intensity is found to be higher in Turkey compared to other MIST countries. Contrary to the previous literature, we discover that after a stock market crash, it is more likely to see a negative jump (drop) again in the stock exchanges of Mexico and Indonesia. Only in Turkey, it is more likely to see a positive jump after market crashes.

The Turkish handmade carpet industry: an analysis in comparison with select Asian countries

The main purpose of this paper is to analyze the Turkish handmade carpet industry and to compare it with select Far East countries. In particular, the Turkish handmade carpet industry is compared with the handmade carpet industries of Iran, India, China, Afghanistan, Pakistan, and Nepal. In this context, the determinants of handmade carpets in the US market are analyzed empirically. Our results show that the Turkish handmade carpet industry has been experiencing a period of recession in the past decade. Through the relative comparative advantage (RCA) index and the Kreinin–Finger similarity (KFS) index, we observed that the RCA index for Turkey indicates that Turkey’s RCA has been declining since 1992. However, despite this decline, the RCA of Turkey was above that of other countries until 1997. But after this, the advantage disappeared eventually and was gained by Iran. During this period, the other competitors of Turkey showed small increases. Furthermore, the empirical results from the gravity model suggests that a 10% real depreciation/appreciation of the US dollar against foreign currency leads to a 0.2% decrease/increase in imports. This finding suggests relatively low exchange rate import pass‐through in carpet commodity. The results also support the Linder hypothesis that countries with similar preferences and demand structures will tend to trade more.

The effects of the military in politics on the inbound tourism: evidence from Turkey

ABSTRACT In this paper, we analyze the effects of the military in politics on the number of tourist inflows from 71 countries to Turkey for the period from 1984 to 2014. We use the fixed-effects and the random-effects as well as the dynamic generalized methods of moments estimations. We find that a lower level of the relative military in politics (the difference between the source country and Turkey) positively affects the tourism inflows to Turkey. Specifically, one standard deviation reduction in the index of the relative military intervention in politics in Turkey leads to almost 7% increase in the tourism inflows.

When Stock Market Investors Breathe Polluted Air

The finance literature documents a strong relationship between mood effects and stock market returns. Air pollution is one of the factors affecting people both physiologically and mentally. This study examines the impact of air pollution sourced mood change on stock returns in Turkey. We find that lag of air pollution in the three most populated cities of Turkey where the majority of investors live is negatively related to stock returns, even when other variables are controlled. On the contrary, the relationship doesn’t exist for the air pollution in other cities of Turkey.

The determinants of Turkey's exports to Islamic countries: The impact of political risks

ABSTRACT Using the traditional gravity model, this paper aims to analyze the determinants of Turkish exports to 43 Islamic Development Bank member countries for the period from 1996 to 2015. The paper specifically investigates the effects of 12 political risk measures (bureaucracy quality, corruption, democratic accountability, government stability, internal and external conflict, investment profile, law and order, military in politics, religious and ethnic tensions, and socioeconomic conditions) in the importing countries on the total volume of exports of Turkey. After implementing various robustness checks, the paper finds that the government instability in the importing countries is negatively associated with the Turkish exports.