Academic journal article IUP Journal of Applied Economics

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Academic journal article IUP Journal of Applied Economics

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Article excerpt

The issue consists of four research papers. In the first paper, "The Effect of Political Instability and Terrorism on Tunisian Financial Market", the authors, Hassen Kobbi and Mouna Abdelhedi, have attempted to investigate the effect of political instability and terrorism on Tunisian financial market using ARCH and GARCH models for the period 2005-2015. The findings reveal that there was a negative effect of informal political instability (assassinations and revolution), formal political instability (major government crises and a number of major constitutional changes) and terrorism on the Tunisian financial market. The study highlights assassination as a source of political risk, as it has more significant and greater effect on stock market returns as compared to other sources of political instability. The authors opine that the government should create a security system for all people and in particular for the members of the political parties to ensure the stability and performance of the Tunisian financial market.

In the second paper, "Pre-Acquisition Performance Analysis of Indian Target Firms", the authors, Gaurav Barick and Sheeba Kapil, have attempted to compare the pre-acquisition performance of 133 domestic and cross-border Indian target firms using multinomial logistic regression analysis for the period 2012-2015. The results indicate that the foreign acquirers select those target firms which have a viable product line, good network, and large asset size, but lack the ability to market their products due to low cash holdings or increased financing needs for additional capacity expansion. The findings also reveal that the target firms show significantly low promoter holdings than their industry peers and also have lower cash holdings in comparison to the non-target firms in the industry. The study further reveals that the domestic investors acquire those target firms which have high public holdings and generate handsome top line products in comparison to their industry peers but struggle to convert this top line into a reasonable bottom line.

In the third paper, "Equity Risk Exposure: A Case of Indian Banking Industry", the authors, Md. …

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