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Article
Publication date: 2 May 2017

Damla Kuru and Sema Bayraktar

Previous studies generally focused on the definition of cybercrime and its effect on the market. Following Kesan’s study, this paper aims to analyse the relationship between cyber…

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Abstract

Purpose

Previous studies generally focused on the definition of cybercrime and its effect on the market. Following Kesan’s study, this paper aims to analyse the relationship between cyber insurance and social welfare and compare it among three countries, namely, USA, UK and Turkey. The paper also discusses the main obstacles that the cyber insurer has to deal with and its effect on social welfare. This paper answers two questions related to cyber insurance at an aggregate level. First, “what kind of contribution does cyber insurance make to social welfare?” Second,“What kind of problems do insurers and insured have to face?” Although the findings are similar to Kesan’s study, this study gives an opportunity to make a country-based study and interpret the results with a different perspective.

Design/methodology/approach

The calculation of utility is also important for interpreting social welfare in the market. Consumer behaviour under uncertainty constructs the background for this paper because the risks of malicious attacks are contingent and independent, which means that consumers have to make their decisions under uncertainty. Von-Neumann-Morgenstern utility function is used for interpreting consumer’s behaviour.

Findings

Basically, there are two important conclusions that can derive for cyber insurance. First, cyber insurance can be defined as a higher security investment when coupled with increased levels of safety and a robust IT infrastructure. Second, cyber insurance, as a high-security investment, would have a positive impact on social welfare by making the internet safer for all users. The results show that the problems that lead to market failure can be virtually eliminated with an accurate risk assessment that leads to appropriate premium levels for insured. These results are consistent with those of study by Kesan et al. (2006).

Research limitations/implications

Data availability for different industries have limited the ability to compare the impact of cyber-crime to different sectors.

Originality/value

Technological devices have become part of our daily life. Although they have brought us increasing access to all types of information, including opportunities for business, they have also increased the risk of malicious attacks and the risk of e-crime. By replicating the economic model used by Kesan et al. (2006), social welfare losses and insurance premiums are calculated for three countries: USA, UK and Turkey. Questions pertaining to contribution of cyber insurance to social welfare and problems faced by insurers and insured are addressed.

Details

Journal of Financial Crime, vol. 24 no. 2
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 28 March 2022

Serdar Simonyan and Sema Bayraktar

This paper examines the relationship between sovereign credit default swaps (CDS) and several macroeconomic factors in an asymmetric setting and distinguishes between short-run…

323

Abstract

Purpose

This paper examines the relationship between sovereign credit default swaps (CDS) and several macroeconomic factors in an asymmetric setting and distinguishes between short-run and long-run impacts. Country-specific factors (e.g. equity index, international reserves, interest rate and industrial production) and global factors (e.g. US stock volatility [VIX], geopolitical risk and oil price) are the main explanatory variables.

Design/methodology/approach

This analysis uses a nonlinear autoregressive distributed lag approach that enables us to study both long-run and short-run dynamics.

Findings

This study results show that two country-specific factors (equity index and international reserves) and two global factors (VIX and oil price) are the most important factors and affect CDS asymmetrically.

Research limitations/implications

The asymmetric relationships between sovereign CDS and variables in bull and bear markets can also be studied. Consideration of asymmetries in the variance could also be a fruitful step taken for further research.

Practical implications

The findings imply that investors and portfolio managers should design their investment and hedging decisions related to government bonds by taking into account the existence of an asymmetric relationship.

Social implications

Moreover, policymakers can benefit from this asymmetric information in the timing of debt issuance.

Originality/value

This paper examines the relationship between sovereign CDS and several macroeconomic factors in an asymmetric setting and distinguishes between short-run and long-run impacts.

Details

International Journal of Emerging Markets, vol. 18 no. 12
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 5 May 2015

Sema Bayraktar

This study aims to analyze how recent regulation changes, namely, Basel II and the New Turkish Commercial Code, affect small and medium-sized enterprises (SMEs) and the…

449

Abstract

Purpose

This study aims to analyze how recent regulation changes, namely, Basel II and the New Turkish Commercial Code, affect small and medium-sized enterprises (SMEs) and the relationship between SMEs and banks in Turkey through the eyes of SME managers. The author believes that the answers could differ for various types of SME.

Design/methodology/approach

In-depth interviews enabled a refined analysis of the effects of regulations in the eyes of firms’ representatives. The study was conducted for SMEs in the Anatolia Organized Industrial Zone.

Findings

One of the important conclusions of the paper is the fact that the loan approval process has been standardized and centralized. The results also show that regulations have different effects on larger and already stable firms than on smaller and/or start-up SMEs that do not have sufficient resources for the transformation required by regulations.

Originality/value

First, this study is a qualitative study that has the advantage of reaching richer and more plausible information that cannot be obtained by analyzing the numbers. Second, this study tries to analyze the perceptions of SMEs’ financial representatives rather than the perspectives of bank representatives. Finally, to the author’s knowledge, there has been no other study that analyzed a developing country on this topic.

Details

Qualitative Research in Financial Markets, vol. 7 no. 2
Type: Research Article
ISSN: 1755-4179

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