Basel II capital requirements did not take into account the potential mark-to-market losses, or Credit Valuation Adjustment (CVA) risk, associated with deterioration in the credit worthiness of a counterparty. In addition to the default risk capital requirements for counterparty credit risk, Basel III Agreement, scheduled to be introduced in 2019, adds a capital charge to cover CVA risk. For this reason, CVA calculation is getting crucial for banks. This paper presents a closed-form formula to compute...

The results of research on the economic impact of military spending are mixed. Furthermore, no study has focused exclusively on arms exporting countries, especially in the 2000s. Therefore, this paper analyzes the relationship between military spending and the economic growth of arms exporting countries. Barro’s (1990) growth model and the generalized method of moments (GMM) estimators are employed to analyze data of 18 arms exporting countries over the time period 1970-2013. The study result shows...

This study collects stock prices from 23 countries in Asia, Europe and America to perform a thorough six month empirical analysis on pre- and post- Financial Tsunami and another six month empirical analysis on pre- and post- European Debt Crisis. Our findings are that: (1) The correlation coefficients between Taiwan and other countries after the Financial Tsunami are significantly higher than those before the Financial Tsunami. (2) Even though the interaction of the rate of the return between Taiwan...

In this paper I use simulation techniques to investigate the effects of fair value accounting (FVA) on bank financial stability in volatile market conditions. Using a sample of U.S. banks, assuming a constant asset mix and financial leverage, I find that banks reporting under FVA experience more financial instability (equity contraction) in volatile market conditions, including both temporarily overheated and temporarily distressed conditions. These findings raise questions about the soundness of...

Previous studies have conflicting results regarding the implications of earnings management using conventional measurements. Examining 8,723 firm-years from 2004-2010, this study develops a comprehensive measurement of earnings management from book-tax differences that incorporates both accruals management and taxable income related earnings manipulations. Using the new measure, we find executives exercise more stock options when earnings management is greater and time their stock option exercises...

The purpose of this study is to examine the relationships between online customers’ post-purchase behavior and online sellers’ reputation. Customer’s satisfaction based on the evaluation features are examined and discussed in the context of attention theory and consumer behavior. The data used in this study was collected from an online auction (eBay). Both the seller’s and customer’s data have been used to exam the effects of seller’s information and actions on the customer’s feedback...

Forming cross-border cooperation has become a popular strategy for companies to act successfully in today’s global marketplace. Despite their surging popularity, international cooperative arrangements are difficult to handle. Literature highlights that both mutual trust of business partners and control of the partner’s behavior contribute to the cooperation’s performance. So far, however, there is little empirical evidence on how both factors operate in different national business...

Research in computer-supported cooperative learning provides evidence that collaborative communication technology can enhance learning performance and increase the affective experience of students in the context of cooperative learning. Most studies, however, have examined learning performance only during the middle and end of the learning process. Thus, it is not clear how information technology can continuously facilitate and improve student performance and learning experience over time. The purpose...

The number of hospitals in Indonesia is rapidly increasing. To be able to survive in a highly competitive market, hospitals need to conduct knowledge sharing and innovation to improve their performance. The purpose of this research is to analyze factors affecting knowledge sharing, and the links between knowledge sharing, innovation capability, and performance in class C hospitals in Depok, West Java province of Indonesia. Questionnaires are distributed to 100 hospital supervisors and managers. Results...

Sustainable living is the awareness of utilising the earth’s natural resources wisely to meet the needs of future generations. Resources are limited regarding the effect of age towards living a sustainable life. This research investigated the influence of age on perceptions of 92 international students towards sustainable living in New Zealand. Quantitative results revealed a negative correlation between students’ perception towards sustainability and an increase in age. ...