Date of Award
Economics and Finance
M. Kabir Hassan
William Hippler, III
The following dissertation contains two distinct empirical essays which contribute to the overall field of Financial Economics. Chapter 1, entitled “Financial Inclusion and Economic Development in OIC Member Countries,” examines whether the presence of Islamic finance promotes development and alleviates poverty. To do so, we estimate the influence of financial inclusion variables on development and poverty variables for OIC countries. Using data from the World Bank, we use dynamic panel analysis using methodology similar to Beck et al (2000) to study the effects of financial inclusion on economic development and use simple cross-sectional analysis similar to Beck et al (2004) to study the effects on poverty alleviation. We find that the countries with Islamic finance tend to outperform the rest of the world. We believe that the ability of financial institutions offering Shari’a compliant services to bring otherwise excluded people under the financial system plays a major role in increased development and reduced poverty in those countries. The results support our view that financial inclusion is causing development. Chapter 2 entitled, “Asymmetric Market Reactions to the 2007-08 Financial Crisis: From Wall Street to Main Street,” examines the impact of significant news events during the 2007 – 2008 financial crisis on the abnormal stock returns for portfolios of financial and real sector firms. We recognize 17 significant news events from 2007 and 2008 and create equity portfolios using daily CRSP data from January 1, 2006 to December 31, 2009. We estimate event announcement interval abnormal returns in the context of an asset pricing model similar to Fama and French (1993) and Carhart (1997). We document significant negative abnormal returns for the portfolio of non-financial firms, and the smallest firms exhibit the largest negative abnormal returns, an indication of a significant spillover of financial market news to real sector stock returns. Smaller financial firms also exhibit negative abnormal event returns, and these results are driven by broker-dealer, depository, holding-investment, and real estate firms. The results provide new evidence regarding the incorporation of news events into asset prices during financial crises.
Hossain, Shadiya T., "Financial Crisis, Inclusion and Economic Development in the US and OIC Countries" (2016). University of New Orleans Theses and Dissertations. 2274.