Using two-step system-GMM on an unbalanced panel data of 105 economies over the period 1987–2016, we present formal statistical evidence that federalism is a strong predictor of greater income inequality in developing economies. Moreover, federalism does not predict lower poverty incidence and severity in countries on average, but it may predict higher poverty severity in developing economies. Thus, for a developing economy such as the Philippines, federalism might constitute a leap from the frying pan into the fire of even greater income inequality and poverty incidence.

Keywords: federalism, poverty, inequality
JEL Classification: D3, I3, O1

One of the most anticipated data releases of the Philippine statistical system is the quarterly real gross domestic product. This all-important variable provides the basis of establishing the economic performance of the country on a year-on-year basis. Official publication of this statistic, however, comes at a significant delay of up to two months, upsetting the planning function of various economic stakeholders. Under this backdrop, data scientists coined the term “nowcasting” which refers to the prediction of the present, the very near future, and the very recent past based on information provided by available data that are sampled at higher frequencies (monthly, weekly, daily, etc.). This study aims to demonstrate the viability of using a state-of-the-art technique called MIDAS (Mixed Data Sampling) regression to solve the mixed frequency problem in implementing the nowcasting of the country’s economic growth. Different variants of the MIDAS model are estimated
using quarterly Real GDP data and monthly data on inflation, industrial production, and Philippine Stock Exchange index. These models are empirically compared against each other and the models traditionally used by forecasters in the context of mixed frequency. The results indicate the relative superiority of the MIDAS framework in accurately predicting the growth trajectory of the economy using information from high-frequency economic indicators.

Keywords: Nowcasting, MIDAS Regression, Mixed Frequency Problem, Temporal Aggregation, Ragged Edge Problem,
Bridge Equations
JEL Classification: C13, C52, C53, E17

A Markov-switching model was used to analyze the monthly return of the Philippine Stock Exchange, based on data from January 2000 to July 2017, to estimate the regime-switching behavior of the equity market. The study identified two states of the market: one characterized by positive mean return and low volatility, and another with negative mean return and high volatility. The high-volatility periods of the exchange were linked to various political and economic events. Results showed that the Philippine stock market reacted to domestic political issues that changed or challenged the country’s leadership. Economic events such as the Asian financial crisis, the country’s rapid currency depreciation, and the global financial crisis also prompted the local bourse to switch to a high-volatility state.

Keywords: Markov switching, stock return volatility
JEL classification: G10; G14

In the present situation speculation is the most significant in everybody’s life. The financial specialists dependably lean toward the venture roads as indicated by their reasonableness, hazard and the arrival in light of the fact that there are diverse speculation roads accessible in the market. Thus, the present study focuses on the relationship between the behavioral biases and risk tolerance of the investors and the relationship between the behavioral biases and the investment decisions of the investors. The data was collected from 500 investors who invest through LSC Securities Ltd. in Punjab by using a structured questionnaire. Multiple regression test was applied through SPSS to test the significance of relationship among variables and SPSS Process Macro by Andrew. F. Hayes was used to test the mediation among behavioral biases and investment decisions. The study found the relationship between risk tolerance, behavioral biases and investment decisions to be statistically significant.

Keywords: Behavioral Biases, Investment Decisions, Multiple Regression, Relationship, Risk Tolerance.
JEL Classification: G11, G41, J11

This research focuses on the behavior of cash holdings of business group-affiliated firms in Indonesia from 2004 to 2013. We find that business group-affiliated firms hold more cash than that of stand-alone firms. Size of business group, cash holdings of other firms in the same business group, age of the business group, and the degree of diversification of business group have a positive influence on cash holdings of the business group-affiliated firms. However, the correlation of growth opportunities among the same group-affiliated firms has limited effects on the cash holdings of the firm.

Keywords: Cash holdings, business group, Indonesia
JEL Classification: G32, G34, G39

This study tests the effects of an individual’s ethical orientations and the effectiveness of short-term ethics training on prosocial behavior in the prisoner’s dilemma and the dictator economic games. Ethical orientations are classified based on the levels of idealism and relativism that an individual possesses; whereas ethics training is a module that was introduced to bring about awareness of ethical dilemmas in economic games. The experiment, which was conducted with 156 participants from Thailand, resulted in prosocial behavior which contradicts expected economic predictions based on the assumptions of rationality and self-interest. Although an individual’s ethical orientations are not a reliable determinant of ethical behavior, a short-term training module on ethics can be effective in helping to trigger a prosocial outcome. This has important implications as it illustrates the benefits of teaching business ethics through economic games, which can be applied across a wide range of scenarios.

Keywords: ethical orientations, ethics training, Prisoner’s Dilemma game, Dictator game
JEL Classifications: C72, C91, D64, M53

Anthropomorphism is the tendency to attribute human-like characteristics to non-human objects. We propose that anthropomorphizing nature object in green ad could trigger individual concern toward nature. This research, which consists of two studies using the experimental method, aims to examine the effect of anthropomorphic green ad on advertising attitude, brand attitude, green behavior, and intention to donate in green cause-related marketing program. The results of Study 1 showed that green advertising, which delivered anthropomorphism is able to create more positive attitudes toward brands and attitudes toward green cause-related marketing. Anthropomorphic green ad in the form of text or images, designed using human appearance and characteristics generate more positive response than the ad with no human element. Furthermore, the result of Study 2 indicates that anthropomorphic green ad also has a positive effect on the consumers’ green behavior.

Keywords: anthropomorphism, green advertising, brand attitude.
JEL classification: M31, M37, C91.

Prior studies have documented that the complementary functions of audit committees (ACs) with respect to audit quality (AQ) is complex and goes beyond a direct relationship. This paper aims to propose a framework consistent with the complementary hypothesis to show the mediating effect of AQ on the relationship between AC attributes and financial reporting quality (FRQ). To achieve this, we reviewed the literature regarding ACs, AQ, and FRQ and found that studies on AC and FRQ presented mixed results. We also found that there was little evidence regarding the influence of legal experts and AC public accounting expertise in ACs. Consequently, this warrants further research. There is a need for future studies to examine our proposed framework further. Future research should also explore the effects of internal audits and whistle-blowing policy on firms’ ACs and FRQ.

Keywords: Audit committees, Audit fees, Big 4 auditors, Financial reporting quality, Audit quality
JEL Classification- M41, M42, M49

The revaluation of non-current assets under IAS-16 has now turned into a usual practice in Pakistan. The obvious reason is to give additional significant information to various stakeholders around an organization’s balance sheet. Besides, the management inducement behind this revaluation of assets may differ. The aim of this research is to study the essential management incentives that arise due to the upward revaluation of non-current assets of firms listed on the Pakistan Stock Exchange for the period 2008–2017. Logistic regression and Mann Whitney U-test were used to analyze the data. It was hypothesized that firms take revaluation decisions to reduce the contracting cost, political cost, and the information asymmetry cost. It is concluded that there is a significant relationship between political cost (firm size) and some portion of information asymmetry cost (intensity non-current assets and stock dividend) with the dependent variable. Other variables like information asymmetry cost and growth were found to be insignificant and did not show any significant relationship with the revaluation of non-current assets. Contracting cost was not found to be significantly linked with upward revaluation. It is finally concluded that firms with a larger size, more intensity ratio, and less declaration of the stock dividend will have more chances to do a continual revaluation of non-current assets under IAS-16. This paper especially looks at whether revaluation of non-current assets is connected with the size of a firm and whether firms revalue their assets with an end goal to strengthen their financial position and prospects. Practically, in the light of this study, accounting regulatory bodies must define some preconditions for revaluation policy to stop the usage of creative and abusive reporting. Policymakers should encourage researchers to investigate the impact of revaluation policy on the financial performance of the companies.

Keywords: Information asymmetry, Leverage, Non-Current Assets, Political costs, Revaluation
JEL Classification: M20, M40, M41

An emerging paradigm shift has been pervading the work climate of many contemporary organizations—the gradual reconfiguration of hierarchical work teams to self-managed work teams or SMWTs (Cohen, Ledford, & Spreitzer, 1996; Manz, 1992). Being a “loosely coupled” system, SMWTs are characterized by autonomous decision-making (Hollenbeck & Spitzmuller, 2012). This autonomy facilitates the decision-making process within the team and leads to gains in performance. Despite the growing popularity of SMWTs throughout the years, there is a paucity of research that examined the relative effectiveness of this new form of team structure than its traditional counterpart in producing high-performing work teams. A cross-sectional study investigated the team-based performance of newly implemented SMWTs versus the existing hierarchical work teams that performed the same type of work in an electronics manufacturing company in Cebu, Philippines. The findings revealed that team performance is significantly greater among process engineers in SMWTs than among process engineers in hierarchical work teams. Nonetheless, causal inferences cannot be drawn due to the cross-sectional nature of the study design. Together, insights are offered to elucidate the benefits entailed of this organizational transition from hierarchical work teams to SMWTs in enhancing team performance.

Keywords: hierarchical work teams, loosely coupled systems, self-managed work teams, team performance
JEL Classifications: L25, M10, N65