Journal of Modern Economy

  • A Note on Statistical Arbitrage and Long Term market Efficiency

    Market efficiency is a central topic in finance. The notion of statistical arbitrage is a suitable instrument to investigate market efficiency without the need to specify an equilibrium model. We introduce a new definition of statistical arbitrage (named Strong Statistical Arbitrage, SSA in the following) modifying the original definition in an apparently infinitesimal way. We show that some simple investment strategies, recognized as statistical arbitrages by the standard definition, do not test positive for SSA. We discuss the relations between the proposed definition and common definitions of arbitrage and prove that SSA is compatible with deviations from market efficiency in a “short term frame.” The idea is that if market anomalies are small, the markets do not deviate significantly from efficiency, while an SSA requires time persistent anomalies on asset prices.

  • Research on the Impact of Chinese Science and Technology Finance on Entrepreneurial Efficiency

    This paper is based on panel data of 30 provinces and cities in China from 2008 to 2017, The convergence of innovation efficiency is tested by σ convergence and β convergence test, Using stochastic frontier model and principal component analysis to analyze the impact of Chinese science and technology finance on entrepreneurial efficiency. The study found: Venture capital investment is more flexible than the output of entrepreneurial man-power investment, technology finance has a significant positive impact on entrepreneurial efficiency, but there is a problem of regional development imbalance. Convergence and divergence analysis found, the gap in entre-preneurial efficiency between the central, eastern and western regions is gradually narrow; Factors such as social capital, economic development level and foreign direct investment also have a positive impact on entrepreneurial efficiency. Finally, this paper also puts forward some suggestions on improv-ing the efficiency of entrepreneurship from the perspectives of upgrading science and technology financial services, developing science and technology financial innovation and entrepreneurial environment.

  • Impacts of Infrastructure on One Country’s Trade An Analysis based on the new Eurasian Continental Bridge Economic Corridor along the One Belt One Road

    In nowadays context of global economic integration, China has proposed the “One Belt One Road” Strategy in 2014, which fits into the new changes in global economy and finds us a new growth in economy development. This article has selected the panel data of 23 countries along the “new Eurasian Continental Bridge Economic Corridor” in 2002-2016 and analyzed the influences of one country’s economic infrastructure and social infrastructure upon its national trades using the fixed effect model. The research result shows that the construction of energy infrastructure may produce less obvious negative effects on one country’s national trade while the influences of the railway and aviation infrastructure will be varied because of the different natural endowments of the country. And one country’s trade will increase as construction of communication infrastructure develops. For social infrastructure, the effects upon one country’s trade are not obvious from education infrastructure construction, scientific research infrastructure construction, medical infrastructure construction and environmental infrastructure construction.

  • Prospects and challenges of Good governance in the realm of service delivery

    The main objective of the study is to assess the report of the office of urban planning practice of good governance in shire Municipality located in Tigray regional state ,Ethiopia .Accordingly, transparency and responsiveness which are the main indicators of good governance had used to assess the governance situation in the public institutions’ of land administration office . The research design and strategy of the study was qualitative and quantitative. The study used 153 purposely selected sample respondents from the selected sub cities that are Ayder and Hawelti sub cities. In order to gather the necessary data from the sample respondents, Questionnaire and interview were used as data collection tools. In this regard descriptive statistics was employed to analyze the data obtained via questionnaire. The qualitative data was analyzed by making use of descriptions and interpretations. The findings of the study show that there is lack of accessibility of information, corruption and rent seeking behavior from the bureaucrats, delay of decisions, lack of openness and low satisfaction from the constituents and irresponsiveness are considered the main hindrances’ of good governance with regard to service delivery.

  • To Examine Audit and Non-audit Fees Disclosed in the Annual Reports by Company and Industry

    EachThis research aims to examine audit and non-audit fees disclosed in the annual reports by company and industry. Research questions are how audit and non-audit fees disclosed in German financial service companies? What are compositions of NAS fees in researched companies from 5 industries in 2015? What are trends of audit and non-audit fees in researched companies? And what are reasons behind trends? According to these questions, relative explanations and theories will be represented. The final research question is that are current regulations issued by the SEC, the PCAOB and the EC effective to eliminate adverse impacts of NAS? This research firstly examines how audit and non-audit fees disclosed in annual reports by company and industry, through investigating audit and non-audit fees in German financial companies and compositions of NAS fees in 61 companies from 5 industries in 2015, then observing trends of audit and non-audit fees in researched companies and exploring reasons behind trends. Finally trying to evaluate the effectiveness of regulations research issued by the SEC, the PCAOB and the EC. With regard to purposes to address these questions, since the topic of this research is about NAS, which cannot be comprehensively surveyed without the consideration of audit services, and they need to be compared with each other in the research process to arouse conclusions. Thus audit and non-audit fees are employed as the measurement of audit services and NAS provided by accountancy firms. Another important theme of this research is auditing regulations, as the final objective is to prove the justification of NAS, the effectiveness of legislations and regulations is evaluated, helping to get the conclusion.

  • Assessment of Good governance in Decentralized city Administration: Case of Mekelle Municipality

    This study was conducted to assess good governance practice by taking the variables responsiveness and transparency among the other good governance manifestations. For this rationale, the land administration and urban planning and development offices were purposively selected. Provision of effective, efficient and quality service to the constituents is manifestation of improving good governance practice. So, there is a need to ensure good governance practice in the realm of service provision in the offices of land administration and urban planning and development. The general objective of the study is to assess the practice of good governance in Mekelle city administration. Accordingly, transparency and responsiveness which are the main indicators of good governance had used to assess the governance situation in the public institutions’ of land administration and urban planning and development offices. The study used 153 purposely selected sample respondents from the selected sub cities that are Ayder and Hawelti sub cities and both qualitative and quantitative data analysis techniques were used accordingly. In order to gather the necessary data from the sample respondents, Questionnaire and interview were used data collection tools. In this regard descriptive statistics was employed to analyze the data obtained via questionnaire. The findings of the study show that there is lack of accessibility of information, limited Capacity (competence) of the offices and human power, discrimination, corruption and rent seeking behavior from the bureaucrats, delay of decisions, material and human resource, low level of skill and knowledge, lack of openness and low satisfaction from the constituents’, dishonesty, low level of motivation and commitment irresponsiveness are considered the main hindrances’ of good governance in the city administration in general and the selected public institutions in particular. So, transparency and responsiveness had compromised in the land administration and urban planning and development offices which are the most indicators of…

  • Impact of Monetary Policy on Growth and Poverty: Drastic Consequences of Government Intervention

    It is unfortunate that growing poverty and widening rich-poor gaps at the initial stage of globalization created several questions about the future of liberalization regime. The present world has been divided into two parts. The upcoming distribution is not geographical. Every region is silently being divided into masters and slavers. This study is mainly concerned with the role of monetary policy in determining the level of poverty in a country. It was concluded in this study that monetary expansion– either to finance the budget deficit or credit to private sector – will always lead the inflation. The increase in the supply of goods and services will be required to defuse the demand pull inflationary pressure. Consequently credit easing policies to boost the investment activities will be required. It indicates the complexities in intervention policies. One intervention requires further intervention to set off the side effects and tuning of the outcomes of policy measures. It was concluded in this study that a parallel qualitative easing is always required with the quantitative easing for tuning the rate of GDP growth, investment, inflation, unemployment and level of poverty.

  • Current Status and Future Prospects of China’s Peer-to-Peer Lending Regulation

    China’s peer-to-peer lending industry is now at a critical moment that the Draft Measures on P2P lending regulation has just been put forward, determining the industry’s future direction of development. This research is going to analyze the current status of China’s P2P lending market and its regulation first. Then comparing China with the US and the UK in terms of P2P lending business models and regulation. Finally combining China’s own features and the US & UK’s experiences to find out the problems with China’s P2P lending regulation and provide corresponding recommendations to solve the problems.