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Asian Network for Scientific Information is a leading service provider to the publishers of Science, Technology and Medicine (STM) in Asia. Currently Asian Network for Scientific Information is serving more than 37 peer-reviewed journals covering a wide range of academic disciplines to foster communication among scientists, researchers, students and professionals - enabling them to work more efficiently and intelligently, thereby advancing knowledge and learning.

The International Journal of Applied Economics and Finance
eISSN: 2077-2149
pISSN: 1991-0886

Editor-in-Chief:  Gazi Mahabubul Alam
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Research Article
Published on June 15, 2016
Examining the Political-economy of Cocoa Exports in Nigeria
Taiwo A. Olaiya
Even though there was no coherent policy at the time Nigeria attained independence in 1960, agriculture was the economic mainstay with cocoa production taking the lead. However, the discovery of crude oil and the subsequent oil boom of the late 1970s provided a temporary respite for Nigeria’s political-economy from collapse of the commodity prices. This study examined the significance of cocoa exports as a veritable alternative revenue source to the Nigeria’s dwindling GNP. This study empirically assessed the trends in cocoa export by identifying variables that determine the aggregate cocoa output and export using the methods of functional-analytic framework. The Ordinary Least Square (OLS) analytical technique, using data spanning 1970 to 2010 from various relevant institutions, was utilised. Other analytical techniques employed were subjective descriptive statistics of tables, graph and trend analysis. The study revealed a continued marginal decline in the aggregate output of cocoa attributable to low capacity building and utilisation for controlling the economic and ecological variables affecting cocoa productions. Aggregate output of cocoa in Nigeria showed a strong positive relationship with management of the exchange rates and the utilisation of modern weather control mechanism for annual rainfall and pest control. The period of the liberalisation policy is also discovered to coincide with improvement in total annual income from cocoa, albeit marginally. The study concluded, among others, that the advantages inherent in economic liberalisation could be utilised for the crucial revenue diversification from oil through a sufficient government intervention of boosting cocoa exports in Nigeria.
Research Article
Published on June 15, 2016
Leasing in the Automobile Industry: Who Lease Cars
Arif Sultan
This study extends Kim model in a previous study of the used car market with asymmetric information to examine the possible impacts of leasing and warranty on adverse selection which affects the functioning of the car market by influencing the average quality of traded cars sold in the market. Kim model assumed that the quality of cars depends on the maintenance level. Like model by Kim and other previous studies assumed that the quality of cars depends on the maintenance level but the maintenance level is chosen when cars are still "new" cars i.e., after the warranty ends. This study assumes that consumers can buy or lease new cars, or they can buy used or Certified Pre-Owned (CPO) cars and the maintenance level for leased cars is specified in the leasing contract, while that of purchased cars is chosen by consumers after the warranty expires. The model implied that the average quality of traded cars can be either higher or lower than the average quality of non-traded cars which is partly because of leasing, warranty and CPO besides other factors, indicating that these institutions have improved the information mechanism between buyers and sellers of used cars which, in turn, has helped in reducing adverse selection and improving the average quality of traded cars in the market. The study also uses a modified version of a previous study in which lemon model used to test the quality of traded and non-traded cars in the market. To deal with the censoring problem in the data, a tobit model is used and sensitivity analysis is applied to check the robustness of the coefficients. The data is collected from "The Panel Study of Income Dynamics (PSID)" from the University of Michigan for this study. The results show that the average quality of traded cars is not significantly different than that of non-traded cars, all else equal, indicating that traded cars required same maintenance expenditures as non-traded cars of a similar age.
Case Study
Published on June 15, 2016
Traditional Investment Tools Using Backtesting Simulations: The Case of Colombian Stock Market for the Period 2007-2013
Orlando E. Contreras-Pacheco, Carlos E. Vecino-Arenas and Alejandra Barbosa Calderon
This study intends to prove the viability of the mean-variance portfolio methodology introduced by Harry Markowitz in 1950 as a traditional concept that modern retail investors could use to improve the performance of their investments, over and above that offered by the average actively managed or index equity fund. Likewise, represents a final dossier with several outputs obtained by the design and running of an optimization model, which was developed by using basic financial concepts. This algorithm which is based on a back testing analysis, simulated four investment strategies by taking into account historical data on the Colombian stock market. From this application, recommended portfolios for each strategy are obtained and ran for the period between 2007 and 2013, which are compared in terms of return and risk to the most representative Colombian stock index (IGBC) behavior. Results achieved indicate that the designed algorithm is effective, yet demonstrate a more superior integral performance than the market. Its main contribution is the model’s potential use for supporting actual investment decisions. It is believed there is sufficient evidence to support the use of traditional concepts and financial tools like the mean-variance optimization as a valid, value-adding mechanism for investors.
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