International Journal of Economics and Financial Research

Online ISSN: 2411-9407
Print ISSN: 2413-8533

Quarterly Published (4 Issues Per Year)


Volume 7 Number 3 September 2021

Implications of Water Tariff Structures on Water Demand in Santa Cruz Island (Galapagos Archipelago)

Authors: Maria F. Reyes
Pages: 132-142
The island of Santa Cruz, located in the Galápagos Archipelago has experienced a significant increase in tourism with consequent growth of the local population over the past two decades. The rapid increase in the number of hotels and restaurants raised pressure on the water demand needed to satisfy the customers’ needs.  The municipality of Santa Cruz has not been capable of coping with current expansion rates in order to provide good quality water services. Financial constraints, limited personnel, and tariff structures are the main reasons that restrict the capacity of the Department of Potable Water and Sanitation (DPWS) to manage the water supply system. There are two main settlements on the island are Puerto Ayora and its suburb, Bellavista, with a total population of approximately 14,500 and independent water supply systems. Puerto Ayora has a fixed-priced tariff per month, for categories established by the municipality.  On the other hand, Bellavista has a metered system, with fixed consumer costs Yet, approximately 32% of water meters are faulty. Consequently, water demand in these two settlements varies significantly, which is likely influenced by the difference in tariff structures.  This manuscript assesses the difference in tariffs between the two settlements. Furthermore, the impacts on revenues due to faulty meters (Bellavista) and fixed tariffs (Puerto Ayora) are quantified. In addition, several scenarios have been developed and analyzed in order to examine the benefits. Finally, the information regarding overdue bills and willingness to pay by the different categories of users has been examined.  Results show that the revenues from water supply vary extensively between the two settlements. Due to the fixed tariffs in Puerto Ayora, the estimated cost per cubic meter of water varies depending on the specific category and estimated quantities of water used. In the case of Bellavista, water meters should be managed better and have regular maintenance. The high percentage of faulty meters gives an extra deficit to the municipality.

Crisis Management Strategy in Handling Financial Sector Scandals in the Digital Transformation Era

Authors: Wenjing Wang ; Arthur S. Guarino
Pages: 115-131
This paper provides empirical evidence of how scandals could affect financial institutions in terms of market stock price, yearly returns, and the length of time it took to regain the public’s trust and ultimately recover in the long run. Moreover, we carefully examine the importance of dealing with crisis management in the digital transformation era’s financial service sector. We specialize in crisis management, which aims to mitigate the destruction of companies’ public crises in existence. Finally, based upon investigating scandals in public and private financial sectors in the United States, we list 21 strategic crisis management plans at the end of the paper to handle financial services sector scandals in the digital transformation era.

A Method for Deriving High-Priority Financial Data Items that Must be Improved to Increase Market Capitalization

Authors: Yoshioka Tsuyoshi
Pages: 109-114
Market capitalization is one of the most important indicators for gauging the value of a company. Normally, improving financial data increases market capitalization. However, because there are numerous financial data, it is important to derive high-priority financial data items whose improvement can increase market capitalization. To achieve this, in this study, a method was developed using a remodeled customer satisfaction analysis model with financial data of the companies that make up the Nikkei 225. A graph was created with the correlation coefficient on the horizontal axis and the deviation value of each financial data item on the vertical axis, and then the financial data items plotted in the lower right corner of the graph were extracted. Using this method, it is possible to derive high-priority financial data items to increase market capitalization from numerous financial data.

Estimating the Market Power of Traders in the Arabica Coffee Value Chain in Lam Dong, Vietnam

Authors: Nguyen Thi Tuoi ; Nguyen Phu Son ; Pham Le Thong
Pages: 102-108
Although some studies have assessed the market power of advanced degrees in Vietnam’s agricultural sector, this research only focuses on analyzing the level of market concentration through CR4 or HHI indexes. The stochastic cost frontier can estimate market power using the Lerner ratio when input price data are not available and with or without constant returns to scale. Thus, the stochastic cost frontier with a maximum likelihood approach of Kumbhakar et al. (2012) is used to assess the market power of traders in the coffee value chain in Lam Dong province, Vietnam. The estimated market power and Lerner rate results are 0.0001. This index shows that the local coffee market is a market with perfect competition. So the traders do not have market power. Thus, there is no collusion between coffee traders to lower the purchase price for farmers or increase the price for processors and exporters. An RTS ratio of 0.96 (less than one) shows that the return to scale for traders is decreasing. This number proves that the degree of competition in the local coffee market among traders is very high.

Does Brexit Have a Bullish or Bearish Effect on the Taiwan Stock Market?

Authors: Jing Long Yu ; Tse Mao Lin ; Xin Hui Wu
Pages: 90-101
Using the event study method to analyze one year of daily trading data of formal and Over-The-Counter (OTC) stocks in Taiwan, this study investigates whether the Brexit referendum led to abnormal returns, as well as the financial characteristics of the stocks, and the influential financial variables. The Taiwan stock market had negative abnormal returns on the day of the Brexit referendum. The high-abnormal return group was more significantly affected than the low-abnormal return group. The book-to-market ratio, price-to-earnings ratio, yield rate, average foreign shareholding ratio, and stocks overbought and oversold had a more significant impact on the low-abnormal return group. Abnormal returns were generated mostly in the OTC (Over-The-Counter) market. This event affected financial stocks more significantly than electronics and information technology stocks. The effects on formal stocks, OTC (Over-The-Counter) stocks, and the overall market were the most significant for the turnover rate and stocks overbought and oversold, yield rate, and turnover rate and book-to-market ratio, respectively. The results confirm that the model of the impact of a special event on the behavioral response in the Taiwan stock market can be used to predict changes in stock market prices when a special event occurs in the future.

The Relation Between Trading Volume Concentration and Stock Returns

Authors: Chen-Chang Lo ; Yaling Lin ; Jiann-Lin Kuo ; Yi Ting Wen
Pages: 82-89
The Taiwan Stock Exchange discloses data on daily trading volume across brokerage firms for each listed stock. Market practitioners suggest that the concentration of trading volume contains information on the trading behaviors of big players. We use the Gini Coefficient to measure the degree of concentration, upon which a trading strategy is proposed. We conduct an event study to examine whether such a strategy will yield abnormal returns. Our sample contains 375 listed companies with events identified during the sample period from February 2020 to August 2020. The empirical results show that the trading signal based on the Gini coefficient is informative and that most of the average abnormal returns after the event date are significantly positive with the cumulative average abnormal returns increasing almost monotonically up to the end day of the event window. Consistent with prior studies in which different measures of concentration are utilized, our findings provide additional evidence that the Gini Coefficient could help investors to develop profitable stock selection and market timing strategies.