Isabel Vieira

The EU Ban on Uncovered Sovereign Credit Default Swaps: Assessing Impacts on Liquidity, Volatility, and Price Discovery

During the recent financial crisis, regulatory authorities banned short positions in various financial markets in attempts to moderate pressure from what were felt to be unfavorable, unwarranted, and largely speculative, price changes. Suppression of undesirable price moves was extended to the realm of sovereign debt in November 2012, when the European Union prohibited “naked” purchases of credit default swaps (CDSs) on sovereign bonds. Buying CDS protection is deemed to be naked if the buyer is not doing so to protect an existing long position in the underlying bonds. Academic theory, and empirical evidence from similar bans on short sales in other markets, suggests that such interference in a competitive financial market generally doesn’t work very well: Market participants find ways around the rule; liquidity is reduced in the constrained market; information flow is degraded and prices can become biased because investors with unfavorable beliefs are eliminated from the market; and volatility may increase. Using a “diff-in-diffs” strategy of contrasting the effect on CDS spreads in the 28 affected countries with those in the 56 unconstrained countries as this regulation went into effect, Silva, Vieira, and Vieira show that credit-spread volatility was reduced by the ban, but liquidity was hurt as bid–ask spreads widened and open interest declined. They also find that price informativeness was reduced, in particular by lengthening the time it took for negative information to enter CDS spreads.

What Drives University Applications? An Attempt to Explain Aggregate Demand for Higher Education.

Low educational attainment is frequently pointed out as a barrier to social and economic development and most governments aim at increasing participation in higher education. However, effective strategies to increase aggregate demand require information on its most relevant determinants, which is difficult to obtain because applications to higher education are usually not organised at the country level. In this study, we utilise a large sample of data on applications available in Portugal to estimate a model of aggregate demand for higher education. Our estimates suggest that the economic context is relatively less relevant than policy orientations, and thus that sustaining or increasing higher education participation may be more dependent on political choice than on economic circumstances. The only relevant economic determinant in the model is unemployment which contradicting some previous research appears to exert a negative impact upon aggregate demand.

Distance and academic performance in higher education

ABSTRACT This paper examines whether one of the determinants of academic performance in higher education is the geographical distance separating the place of study and the place of family residence. Twelve years of data on students from a public university are utilized to estimate a model of relative academic performance, with an instrumental variables two-stage least squares estimator to account for possible endogeneity bias. The results indicate that distance is a negative determinant of academic performance and provide a new factor to take into account in reflexions over the impact of the spatial organization of higher education institutions.

EQUITY MARKETS INTEGRATION IN ASIA

This study explores the Asian Emerging and Frontier equity markets, integrated regionally or globally. In undertaking the empirical analysis, data from twelve Asian equity markets indices are utilize. The study employed residual based co-integration test proposed by Gregory and Hansen (1996) and Detrended Cross Correlation Analysis (DCCA). Findings indicate, most of the Asian emerging equity markets integrated with global market, whereas most of the frontier markets integrated with the regional market. However, the results from DCCA are more explanatory. The results also reveal that integration in Asia region is not complete. Asia region has an economically potential and fastest growing in the world. However, there is still so much to unlock the full potential, and the one way to achieve this growth is to continue on the road of financial integration.

How far is too far? An analysis of students’ perceptions of the impact of distance between university and family home on academic performance

Abstract Transition to university is a challenging phase in youngsters’ lives. The literature indicates that geographical distance separating the places of study and of family residence adds to the difficulties of transition and adjustment to university. Recent evidence suggests that it also negatively impacts students’ grades. Despite important work done by economists, geographers and psychologists, sociology has devoted scarce interest in understanding this topic. This article seeks to bridge this gap, specifically exploring the reasons justifying the largely ignored effect of distance between the university and family home in academic performance. The study draws on data on undergraduate students of a Portuguese public university, collected through an online survey. Two dimensions, one more related to practical life occupations and another more linked to personal feelings and activities, are examined. It is argued that the negative impact of distance is mainly due to homesickness and to the time spent traveling home. Results from such analysis are twofold socially relevant: of the utmost importance for families, academics and students’ support services, deserve to be seriously considered by policy makers deciding on the territorial distribution of higher-education institutions.

Modelling demand for higher education: A partial least-squares analysis of Portugal

Recognizing the strategic relevance of higher education, various countries have established ambitious objectives for the percentage of graduates in their population by 2020. In some cases, without effective policies aimed at increasing domestic rates of participation in higher education, such goals will not be met. However, successful measures are difficult to design and to implement when the phenomena they target are complex and encompass many personal, cultural, social and economic variables. Such is the case of aggregate demand for higher education. Therefore, a precise knowledge of its more likely influences is indispensable to perform the forecasting exercises required to inform the process of policy design and, subsequently, to monitor its success. In this paper, we employ the partial least-squares regression, which allows modelling with many variables even with relatively few observations, to identify the most relevant determinants of aggregate demand for higher education in Portugal. Our choice of country is dictated by the availability of adequate data but our results, suggesting that the most important factors are policy dependent, and may thus be managed to support strategic educational objectives, may be useful in other national contexts.