Financial Integration Among the ASEAN 5 ＋ 3 Stock Markets： A Preliminary Look at the First 10 Years of the New Millenium

The purpose of this study is to investigate the financial integration of the stock markets of the ASEAN 5 ＋ 3 countries. These countries include Indonesia, Malaysia, Philippines, Singapore, Thailand, China, Japan, and South Korea. The research determined the stock return volatility for each country＇s index during the first decade of the new millennium. The findings showed that there is the presence of integration and co-integration with Philippine index＇s return with the index＇s returns of the following countries： Indonesia, Singapore, and Thailand. Furthermore, there is evidence of volatility clustering in these stock markets. The study concluded with the policy implications of greater integration in light of the planned cross trading among four ASEAN bourses, namely, Philippines, Singapore, Thailand, and Malaysia by 2012.

Equity-Based Sukuk： Robust Performance of Musharakah and Mudharabah Contract

The purpose of this study is to analyze the robust performance of equity-based sukuk in Malaysia, that is, Musharakah and Mudharabah contract. Accounting and Auditing Organization for Islamic Financial Institutions （AAOIFI）, as an international standard-setting organization for Islamic finance, raised an issue that 85% issuances of Musharakah and Mudharabah sukuk have breached the shariah rulings and do not comply with Islamic principles （AAOIFI, 2002）. Consequently, the performance of equity-based sukuk in Malaysia was affected. This study used a secondary data for size of issuances which are gathered from Bank Negara Malaysia （BNM）＇s Bond Info website and Securities Commission （SC） website. The performance of equity-based sukuk, either Musharakah or Mudarabah, is robust in the study year period of 2000-2012 as regards their sizes of issuances.

Implications of Climate Change on Streamflow of a Snow-Fed River System of the Northwest Himalaya

Air temperature and snow cover variability are sensitive indicators of climate change. This study was undertaken to forecast and quantify the potential streamflow response to climate change in the Jhelum River basin. The implications of air temperature trends （＋0.11℃decade） reported for the entire north-west Himalaya for past century and the regional warming （＋0.7℃/decade） trends of three observatories analyzed between last two decades were used for future projection of snow cover depletion and stream flow. The streamflow was simulated and validated for the year 2007-2008 using snowmelt runoff model （SRM） based on in-situ temperature and precipitation with remotely sensed snow cover area. The simulation was repeated using higher values of temperature and modified snow cover depletion curves according to the assumed future climate. Early snow cover depletion was observed in the basin in response to warmer climate. The results show that with the increase in air temperature, streamfiow pattern of Jhelum will be severely affected. Significant redistribution of streamflow was observed in both the scenarios. Higher discharge was observed during spring-summer months due to early snowmelt contribution with water deficit during monsoon months. Discharge increased by 5%-40% during the months of March to May in 2030 and 2050. The magnitude of impact of air temperature is higher in the scenario-2 based on regional warming. The inferences pertaining to change in future streamflow pattern can facilitate long term decisions and planning concerning hydro-power potential, waterresource management and flood hazard mapping in the region.

The Influence of the Foreign Companies in Developing the Technological Absorption Capacity of the Romanian Economy During the Current Financial Crisis

Creating companies abroad, in ex-socialist countries of Central and Eastern Europe, has experienced a strong progression, following the amplification process of globalization of world markets, intensification of international trade and technological development. We are witnessing a regional disparity regarding the volume of foreign investments in this area, which is due to the difference of attractiveness of host countries economy. The attractiveness of these economies is conditioned, in its turn, by the importance of economic factors and the quality of existing infrastructures, which is at their turn facing an increasing complexity of technology. Business relocation of foreign investors is influenced also by the institutional environment, because foreign investors hope to capitalize on the collateral effects offered by the investment environment in the host country, such as research laboratories and existing infrastructure, without neglecting the benefits of a highly qualified workforce at reduced costs, some geopolitical advantages, etc.. After EU accession, the attractiveness index of business environment in Romania has increased from （-59%） in 2005 to 66% （2008）, and Romania was considered among the most attractive economies in Central and Eastern Europe, along with Russia where the attractiveness index increased from 63% （2007） to 72% （2008） and Ukraine which has seen an increase in the attractiveness index of the business environment from 56% （2007） to 67% （2008）. This paper aims to highlight the positive effects induced by international business companies in assessing technological absorption capacity of the Romanian economy and to provide economic analysis of the ＂cause-effect＂ link between the attractiveness of the Romanian economy-governance--the intake of foreign investment straight to the active processing export of Romania under the impact of the overall effects of international financial crisis.

Financial System Design and Firm Investment in Malaysian Listed Firms

This paper investigates the impact of financial system design on investment. It is aimed to provide additional empirical evidence based on the original paper by Demirguc-Kunt and Maksimovic （2002）. The firm-level data of Malaysian companies between 2000 and 2007 are used. This paper also extends the previous literatures by using a panel data methodology, applying a random-effects estimator. The findings show that： First, the growth investment of firms are positively related to the development of the banking system but negatively related to the capital market. These firms substitute equity for debt associated with an increase in stock market activity （more long-term financing） and debt for equity in the presence of an increase in banking activity （less long-term financing）. Second, the internal growth financing, short-term growth financing and long-term growth financing have shown a significant impact on growth investment by firms. It implies that these financing constraints are complements to the development of banking system and stock market activity. Therefore, well-developed stock markets facilitate long-term financing, whereas a well-developed banking sector facilitates short-term financing. It is recommended that policy makers stress more on banking system for short-term financing and capital market for long-term financing.