Risk Aversion, Wealth and International Capital Flows

Clark, Ephraim; Jokung, Octave

doi:10.1111/1467-9396.00121

Cited by 9 publications

(8 citation statements)

References 8 publications

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“…Turkey: the CG framework La Porta et al (1997, 1998 rede ned the analytical framework for comparative research on corporate governance by introducing an integrated approach to law and nance. La Porta et al's (1998) anti-director rights index aggregates six different shareholder rights and ranges from 0 to 6, where a higher score indicates better protection (proxy voting, cumulative voting, proportional representation of minorities on the board, oppressed minorities mechanisms, below 10 percent shareholding threshold to call for an extraordinary meeting, pre-emptive rights to shareholders which can be waived only by a shareholder's vote and non-existence of any need for shareholders to deposit their shares ahead of shareholders meeting).…”

Section: Corporate Governance: De Nition Issues and Reformmentioning

confidence: 99%

Corporate governance in Turkey: an overview and some policy recommendations

Ararat¹,

Uğur²

2003

Corporate Governance

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Both international and domestic developments have combined to bring the corporate governance (CG) debate to the fore in Turkey. Given this increased interest in CG matters and the signi cance of Turkey as an emerging market, we provide an overview of the Turkish CG framework with two objectives in mind: (i) contributing to the growing CG literature by presenting the main aspects of the CG practice in Turkey, and (ii) locating the Turkish CG reform agenda within the global debate-especially as it relates to the practice in emerging markets. We begin with a review of the CG debate as it relates to emerging markets. We then provide an account of the socioeconomic environment within which the Turkish CG debate is unfolding. This is followed by an examination of the external (market-related) and internal (rm-related) dimensions of the Turkish CG framework. Finally, we summarize the main ndings and offer some recommendations for a successful reform initiative in Turkey.

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Section: Corporate Governance: De Nition Issues and Reformmentioning

confidence: 99%

Corporate governance in Turkey: an overview and some policy recommendations

Ararat¹,

Uğur²

2003

Corporate Governance

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“…An extant set of studies documents that risk and uncertainty shocks originating from the political system affect the business cycle (Belo et al ., 2013; Born and Pfeifer, 2014; Kelly et al ., 2016; Mueller et al ., 2017). Risks arising from the political system influence not only profitability but also asset prices (Pástor and Veronesi, 2010; Dimic et al ., 2015; Huang et al ., 2015a; Lehkonen and Heimonen, 2015), international capital flows and investment decisions of firms (Levi, 1977; Clark and Jokung, 1998).…”

Section: Literature Reviewmentioning

confidence: 99%

Firm‐level political risk and Shari’ah compliance: equity capital cost and payouts policy

Karimov

Balli

et al. 2020

Accounting & Finance

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Using a novel Economic Policy Uncertainty (EPU) firm‐level political risk index as a measurement for political risk corporations face, we examine the impact of firm‐level political risk on the cost of equity capital (COE) and dividend payouts policy of firms. The paper aims to shed light on adaptation implications of Shari’ah compliance (SC) on firms exposed to firm‐level political risk. We analyse if adoption of Shari’ah compliance requirements (SCR) mitigates firm‐level political risk and impacts the cost of equity and dividend policy. Our benchmark results show that a 1 percent increase in exposure to political risk contributes to a rise in the COE by 0.1 percent and in dividend payout by 5 percent. We find that SC eventually leads to a fall in the COE and in dividend payouts, despite exposure of the firm to political risk. Our findings have important policy implications that are relevant to Shari’ah‐compliant equities and beyond.

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“…In mean‐variance space a capital flight provoking shift in a country's risk/return profile will also be one dimensional as all investors reduce the proportion of their portfolios held in the country[1]. Clark and Jokung (1998) resolve the apparent paradox of domestic capital flight in the face of simultaneous inflows of foreign direct investment by showing that investment preferences can be reversed at different levels of wealth for utility functions with positive absolute risk aversion and positive absolute prudence. They do not, however, shed any light on the ultimate composition of the portfolio between domestic and foreign assets or on the direction of net capital flows.…”

Section: Review Of the Literaturementioning

confidence: 99%

The role of population and wealth in international capital flows

Clark

Jokung²

2006

Studies in Economics and Finance

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PurposeSeeks to analyze the role of population and wealth in determining capital movements between countries.Design/methodology/approachBy applying the Clark‐Jokung 50 percent portfolio theorem, considers the specific case of a two country world where the cumulative conditional expected outcome on the asset in one country is greater than or equal to that in the other country.FindingsSpecifically, lower population and wealth ratios (poor/rich) increase net capital flows to the poor country.Originality/valueSo far most of the literature on cross‐border capital flows has generally neglected the role of population and underestimated the role of wealth. This study addresses the gaps left by these deficiencies.

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Risk Aversion, Wealth and International Capital Flows

Cited by 9 publications

References 8 publications

Corporate governance in Turkey: an overview and some policy recommendations

Corporate governance in Turkey: an overview and some policy recommendations

Firm‐level political risk and Shari’ah compliance: equity capital cost and payouts policy

The role of population and wealth in international capital flows

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