Frankie Chau

Job search on the internet and its outcome

Purpose – This paper aims to estimate the impact of job search on the internet on the probability of re‐employment and the duration of unemployment spells.Design/methodology/approach – The study uses national panel datasets from Germany (SOEP 2003‐2007) and South Korea (KLIPS 1996‐2006) to estimate probit and Hausman‐Taylor IV models of the impact of job search on the internet on the probability of re‐employment. The study also explores duration analysis with the aim of estimating the impact of internet job search on the duration of unemployment.Findings – In Germany and South Korea job seekers who used the internet had a 7.1 and 12.7 percentage point higher probability, respectively, of being re‐employed in the next 12 months. Furthermore, job seekers who used the internet had a shorter duration of unemployment in both Germany and South Korea.Practical implications – Over the past decade, internet penetration rates and use of the internet in job search have risen sharply across the world. The internet ha...

International financial reporting standards and noise trading : evidence from central and eastern European countries.

Purpose - The purpose of this paper is to examine whether the mandatory adoption of International Financial Reporting Standards (IFRS) has produced an impact on the level of noise trading and volatility dynamics in three major central and eastern European (CEE) markets. Design/methodology/approach - The paper employs the theoretical framework proposed by Sentana and Wadhwani to allow the existence of both rational investors and trend-chasing traders in examining the extent to which mandatory IFRS adoption affects the level of noise trading and volatility in the market place. Findings - The results show that noise trading was mostly significant prior to the IFRS introduction, with its significance dissipating following the implementation. Moreover, the paper finds that the level and persistence of stock return volatility has greatly decreased after the implementation of IFRS. Research limitations/implications - These findings are important in understanding the effect of IFRS adoption on the information environment and market dynamics and bear some important implications for the corporate managers, accounting professions and policy makers. For instance, the documented dissipation in noise trading post-IFRS implies that the activity in the sample markets is dominated by rational fundamental investors for whom financial reports constitute part of their decision-making input. Thus, it is crucial that the enforcement of IFRS constitutes a key priority of local authorities as a contributing factor to the efficiency and transparency of the market environment. Practical implications - The finding that moving towards the international accounting standards helps to improve the quality and stability of financial markets should provide a useful reference for many other countries which have recently introduced and/or been considering switching to IFRS as their mandatory accounting standards. Originality/value - This paper provides the first investigation of the effect of accounting standards’ harmonization upon the level of noise trading and volatility of three major transition markets (the Czech Republic, Hungary, and Poland) in the CEE area.

Causes of Global Imbalances: A Global VAR Analysis

We develop a Global VAR (GVAR) model for current account analysis. The model includes major economies involved in global imbalances and a few key macro variables to comprehensively examine the relations between these economies and the causality of the variables. We estimate the GVAR model based on current account data. Our approach improves panel regression on the causes by detecting both long-run relationship and short-run dynamics. We further apply the model to illustrate the evolution of the current account balance under different sources of shocks. Contemporaneous effects and variance decomposition are used to complement our findings from the impulse responses to the shocks. We find strong support for the low interest rate of the US as the main driving force of the current account imbalances. In particular, long-term interest rate decrease provides consistent mimic of the surpluses in China and Japan, and the deficit of the US. Undervaluation of yen is also evident, but the dynamics of the current account under renminbi depreciation do not consistently capture the stylized facts observed. The effects of real GDP growths and oil price on the imbalances are also mixed and thus not conclusive. Our variance decomposition confirms our findings by detecting substantial contribution of both US interest rates and yen/dollar exchange rate.