The Role of Corruption in Explaining the Electoral Success of New Political Parties in Central and Eastern Europe

More than 20 years after the collapse of the Soviet Union, the electoral volatility in Central and Eastern Europe (CEE) is still remarkably high. A considerable part of the volatility derives from the votes for new political parties, since they are very often on the winning side of elections. This paper examines corruption as potential determinant of their electoral success. It argues that the effect of corruption is twofold: On the onehand, the historically-grown corruption level reduces the electoral success of new political parties due to strong clientelist structures that bind the electorate to the established parties. On the other hand, an increase of the perceived corruption above the traditional corruption level leads to a loss of trust in the political elite and therefore boosts the electoral success of new competitors. A statistical analysis of all democratic elections in CEE between 1996 and 2011 confirms these two counteracting effects.

Corruption and the Electoral Support of New Political Parties in Central and Eastern Europe

More than 20 years after the collapse of the Soviet Union, the electoral volatility in Central and Eastern Europe (CEE) is still remarkably high. A considerable part of the volatility derives from the votes for new political parties, since they are very often on the winning side of elections. This article examines corruption as a potential determinant of their electoral support. It argues that the effect of corruption is twofold: on the one hand, the historically derived corruption level reduces the electoral support for new political parties due to strong clientelist structures that bind the electorate to the established parties. On the other hand, an increase in perceived corruption above the traditional corruption level leads to a loss of trust in the political elite and therefore boosts the electoral support for new competitors. A statistical analysis of all democratic elections in CEE between 1996 and 2013 confirms these two counteracting effects.

Chemical studies of elements with Z ⩾ 104 in gas phase

Chemical investigations of superheavy elements in the gas-phase, i.e. elements with Z≥104Z≥104, allow assessing the influence of relativistic effects on their chemical properties. Furthermore, for some superheavy elements and their compounds quite unique gas-phase chemical properties were predicted. The experimental verification of these properties yields supporting evidence for a firm assignment of the atomic number. Prominent examples are the high volatility observed for HsO4 or the very weak interaction of Cn with gold surfaces. The unique properties of HsO4 were exploited to discover the doubly-magic even–even nucleus 270Hs and the new isotope 271Hs. The combination of kinematic pre-separation and gas-phase chemistry allowed gaining access to a new class of relatively fragile compounds, the carbonyl complexes of elements Sg through Mt. A not yet resolved issue concerns the interaction of Fl with gold surfaces. While competing experiments agree on the fact that Fl is a volatile element, there are discrepancies concerning its adsorption on gold surfaces with respect to its daughter Cn. The elucidation of these and other questions amounts to the fascination that gas-phase chemical investigations exert on current research at the extreme limits of chemistry today.

Does Exchange Rate Risk Affect Exports Asymmetrically? Asian Evidence

The effects of exchange rate risk have interested researchers, since the collapse of fixed exchange rates. Little consensus exists, however, regarding its effect on exports. Previous studies implicitly assume symmetry. This paper tests the hypothesis of asymmetric effects of exchange rate risk with a dynamic conditional correlation bivariate GARCH(1,1)-M model. The asymmetry means that exchange rate risk (volatility) affects exports differently during appreciations and depreciations of the exchange rate. The data include bilateral exports from eight Asian countries to the US. The empirical results show that real exchange rate risk significantly affects exports for all countries, negative or positive, in periods of depreciation or appreciation. For five of the eight countries, the effects of exchange risk are asymmetric. Thus, policy makers can consider the stability of the exchange rate in addition to its depreciation as a method of stimulating export growth.

An Experimental Study of Complex-Offer Auctions: Payment Cost Minimization vs. Offer Cost Minimization

A Payment Cost Minimization (PCM) auction has been proposed as an alternative to the Offer Cost Minimization (OCM) auction to be used in wholesale electric power markets with the intention to lower the procurement cost of electricity. Efficiency concerns about this proposal have relied on the assumption of true production cost revelation. Using an experimental approach, I compare the two auctions, strictly controlling for the level of unilateral market power. A specific feature of these complex-offer auctions is that the sellers submit not only the quantities and the minimum prices at which they are willing to sell, but also the start-up fees that are designed to reimburse the fixed start-up costs of the generation plants. I find that both auctions result in start-up fees that are significantly higher than the start-up costs. Overall, the two auctions perform similarly in terms of procurement cost and efficiency. Surprisingly, I do not find a substantial difference between less market power and more market power designs. Both designs result in similar inefficiencies and equally higher procurement costs over the competitive prediction. The PCM auction tends to have lower price volatility than the OCM auction when the market power is minimal but this property vanishes in the designs with market power. These findings lead me to conclude that both the PCM and the OCM auctions do not belong to the class of truth revealing mechanisms and do not easily elicit competitive behavior.

Dynamic Effects of Currency Depreciation on Stock Market Returns during the Asian Financial Crisis

The current international integration of financial markets provides a channel for currency depreciation to affect stock prices. Moreover, the recent financial crisis in Asia with its accompanying exchange rate volatility affords a case study to examine that channel. This paper applies a bivariate GARCH-M model of the reduced form of stock market returns to investigate empirically the effects of daily currency depreciation on stock market returns for five newly emerging East Asian stock markets during the Asian financial crisis. The evidence shows that the conditional variances of stock market returns and depreciation rates exhibit time-varying characteristics for all countries. Domestic currency depreciation and its uncertainty adversely affects stock market returns across countries. The significant effects of foreign exchange market events on stock market returns suggest that international fund managers who invest in the newly emerging East Asian stock markets must evaluate the value and stability of the domestic currency as a part of their stock market investment decisions.

Determinants and Effects of Maturity Mismatches in Emerging Markets: Evidence from Bank Level Data

Despite the extensive work on currency mismatches, research on the determinants and effects of maturity mismatches is scarce. In this paper I show that emerging market maturity mismatches are negatively affected by capital inflows and price volatilities. Furthermore, I find that banks with low maturity mismatches are more profitable during crisis periods but less profitable otherwise. The later result implies that banks face a tradeoff between higher returns and risk, hence channeling short term capital into long term loans is caused by cronyism and implicit guarantees rather than the depth of the financial market. The positive relationship between maturity mismatches and price volatility, on the other hand, shows that the banks of countries with high exchange rate and interest rate volatilities can not, or choose not to hedge themselves. These results follow from a panel regression on a data set I constructed by merging bank level data with aggregate data. This is advantageous over traditional studies which focus only on aggregate data.