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The purpose of this paper is to examine two novel theories that concern the relationship between stock market development (SMD) and foreign direct investment (FDI). The authors focus on Greece that was demoted to the emerging market category in 2013–2014 in the international lists.

This study is based on the period 1988–2014 that includes the sub-periods 1988–2001 (emerging market) and 2002–2014 (developed market). The authors adopt cointegration methods examining, on the one hand, if the relationship between SMD and FDI is positive or negative and, on the other hand, if it is long run or short run. The authors complete the analysis using the Markov Switching regression model for the test of robustness.

The results exhibit a weak positive and symmetric long-run relationship for the full period. In the first sub-period, the relationship is strong but in the second sub-period it is not significant. The results are confirmed by the Markov Switching regression model.

The precise definition of a theoretical framework that is tested by a compact empirical methodology leads to a novel suggested policy that will upgrade the Greek market to developed market as soon as possible.

This paper presents an integrated overview of the empirical literature on the impact of all forms of unconventional monetary policy on macroeconomic variables and on markets.

This survey covers the findings concerning portfolio rebalancing, signaling, liquidity, bank lending and confidence channels.

The positive effect of QE announcements on stock and bond prices seems to be unified across studies. A contagion effect from US QE to other emerging markets is identified, while currency devaluation is present in most cases for the country that its central bank adopted such policies. Moreover, impacts of non-conventional practices on GDP, inflation and unemployment are examined. The studies presenting weak instead of strong positive effects on inflation are more, and these studies, also, present weak positive effects on GDP growth.

Based on the large body of research on non-conventional action taking, this is the first survey including effects of each country that adopted quantitative easing (QE) measures and that provides results from every methodology employed in order to estimate unconventional practices' impacts.

This paper employs three months of observations sampled at 60‐second intervals to analyze the behavior of two basket indices from the emerging Athens Stock Exchange: the General Index of the Main (Listed) Securities Market and the Index of the Secondary (Unlisted) Securities Market. The empirical analysis employs robust regression using dummy variables to uncover a rich variety of time‐of‐day regularities in the first four moments of the distribution of returns, the tail behavior, and the dynamic and cross‐dynamic behavior of the two markets. Markets tend to behave differently during their opening and closing, while results are invariably sensitive to outliers. Overall, the results are comparable to those reported for developed equity markets. However, in contrast to other studies, we find no conclusive evidence of long‐memory in either the mean or variance process. ARMA models of seasonally differenced absolute returns were used as a simple but effective way of dealing with the strong regularity in volatility.

This paper aims to examine the impact of corruption and bureaucracy on economic growth in Greece as measured by the growth rate of per capita GDP. Also, using the mean per capita GDP of the EU as a benchmark, it seeks to investigate the convergence timing of Greece with the EU.

The empirical approach taken is based on beta convergence theory.

The results confirm the negative impact of bureaucracy and corruption on economic growth. However, the corruption exerts a more significant influence on growth than bureaucracy. Also, the timing of convergence of Greece with the EU is found to be 37 years.

The robustness of these results is based on the use of a relatively new econometric method which is the Markov conditional bootstrap.

For over two decades numerous studies have provided evidence on the predictive ability of the yield spread for real economic growth. While all this large literature has focussed on how well the spread helps predict real activity, none of these has given an answer on why the spread predicts. The purpose of this paper is to deal with this issue by trying to find an answer on the reason and the economic conditions under which the spread proves to be so powerful predictor of economic activity.

The authors examine whether the explanation of spread’s predictive ability lies behind interest rate volatility supposing that the economy oscillates between high- and low-volatility regimes. For this reason the authors nest GARCH models into Markov regime switching models.

When the authors assume that the economy simply oscillates between different regimes, interest rate volatility does not explain the spread’s predictive ability. However, the authors obtain a very interesting result when the authors augment the conditional variance with a level effects term. This ensures that in an environment with high levels of interest rates – in which the rational agents expect the economy to slow down – there is a greater possibility for the economy to switch to a high-volatility regime. Under these economic conditions, interest rate volatility appears to be the reason of spread’s predictive power from one up to three years.

This study contributes to the relevant literature by providing an explanation on the reason and the economic conditions under which the spread proves to be so powerful predictor of economic activity.

The authors aim to investigate the cointegrating relationship of the government bond yields, driven by the common money factors in European Monetary Union (EMU).

By adopting a dynamic ARDL transformation, the paper provides short-/long-term estimates of bond yields convergence before the burst of the current debt crisis. It also investigates how the degree of convergence between bond yields, driven by money factors, is affected in short/long runs.

The findings indicate that the introduction of the common currency has not a uniform effect on the bond yields, and there is a nominal convergence between EMU bond yields based on money market determinants.

The current financial crisis indicates that the EMU bond market convergence was temporary and it can be highly affected by an exogenous shocks and the sentiment of international investors. The findings imply the necessity for a common monetary and fiscal policy in Euro zone countries.

The purpose of this paper is to show how the influence of the diffusion speed of a financial innovation (FI) increases the operational risk (OR) in any business line with different rate.

A stochastic model is considered presenting the influence of diffusion speed of FIs in order to validate the OR, without taking into consideration any external factors that create OR. Under specific hypotheses, the model presents the variance and the fluctuation of total OR in time and internal business lines of a financial institute because of the influence of an FI with a random degree of access (r).

FIs and OR and, their role in various financial organizations, are examined. The model suggests that an FI is more likely to occur and spread in production lines that have a great cross‐correlation with an increasing OR, without taking into consideration the external environment.

The originality of the paper is the stochastic relation between FIs and OR and the way that OR increases in any business line because of the influence of the diffusion speed of an FI.

The purpose of this paper is to present an innovative model to evaluate the fair price of a subset of structured products for a hypothetical US structured bond.

The authors assume that interest rates dynamics are described by the Cox–Ingersoll–Ross process. They conduct robustness checks by stress testing against parameter and model uncertainty.

The fair value of the bond is robust under any parameter or model misspecification. In addition, a change in the price seems to be more sensitive to long-term yields rather than short-or mid-term yields. The authors provide a better understanding of the relationship between bond prices and business cycles: a slight change in the current structure would have a significant effect on the bond price only during economic expansions.

The recent global financial crisis has led policymakers and the financial press to blame financial innovation through accusations of structured products being highly complex. Much of the criticism is based on the fact that investors were not able to properly price and fully understand the risks of their investments. Regulators should ensure proper pricing of these products to protect both the investors and the system. Fair pricing is important for bond issuers, governments or corporations to design their product at an attractive price for investors.

This paper fills a gap in the extant literature by providing an innovative model based on an Euler–Maruyama Monte Carlo scheme to price structured products.

To investigate whether acquiring firms listed in the Athens Stock Exchange, that completed mergers and acquisitions during the period 2001‐2003, tend to manipulate accounting earnings upward prior to the initiation and completion of the transaction.

The focus is on discretionary accruals as a measure of managers' earnings manipulation. To estimate discretionary and non‐discretionary components of total accruals the time series Jones model is adopted.

Results provide weak evidence of biased accruals reported by managers in the year preceding the announcement and the completion of the deal. The results seem to agree with those of Erickson and Wang who found no evidence of pre‐merger earnings management by a sample of acquiring firms that were involved in cash mergers.

The model applied, even if it is considered effective in discriminating abnormal from normal accruals, has been shown to have certain deficiencies, while simultaneously the time series data and number of firms used here could be considered as small. Within the aforementioned limitations further research could examine the effect of mergers and acquisitions in the stock price of the acquiring of target firms and the possibility of earnings management by target firms, since target managers may have different incentives to manipulate earnings.

Findings are of particular interest to Greek regulators for policy‐making purposes as well as to investors in the Greek capital market.

To the best of one's knowledge this is the first study to examine earnings management by acquiring firms in the European capital market context.

The purpose of this paper is to consider the impact of the drachma's replacement by the euro on the quality of accounting information published by Greek listed firms.

The authors examined how the adoption of the euro currency impacted on the timeliness of income recognition and the relevance of accounting information during the pre and post euro adoption periods using a sample of 176 listed firms over the period 1995‐2008.

Convincing evidence was found that the euro contributed to a decrease on the value relevance of accounting information, an increase in the conservatism of financial statements and finally a reduction in the earnings management behavior of managers.

By considering the impact of the common currency on the quality of accounting information, analysts are more able to provide accurate estimates on firms' future prospects, thus contributing to less information asymmetries among stock market participants.

The results could be proved useful to regulators since they indicate that financial accounting information prepared after the adoption of the euro currency has inferior value relevance. Therefore, if regulators want to develop an efficient financial market they need to address this effect by developing relative legislation that promotes the quality of accounting information.

The majority of studies on the issue of the euro have focused on matters of macroeconomic stability, corporate investments and valuation and market integration. No research until now has studied the impact of euro adoption on the quality of accounting information and how accounting quality is perceived by market participants during the pre and post‐euro adoption periods.