Battles fought by Ancient Greeks and their neighbors Essay

Fights battled by Ancient Greeks and their neighbors - Essay Example The all out weight of a hoplite's hardware and protective layer was 50-60 pounds. By and large, just the rich and upper-working class filled in as hoplites because of the significant expenses of the hardware. From the outset, the lances were around seven feet in length, and the arrangement was around six to seven positions profound. In battle the phalanx would move towards the foe as one, framing a thick mass of lances. At the point when two phalanxes battled, one would endeavor to either break the arrangement of the other or at times push the warriors in the contradicting phalanx over. In the long run some further developed strategies were grown, for example, unexpected assaults on a specific point in a phalanx. The phalanx was a solid arrangement that had high stun power and could protect against charging substantial mounted force. Be that as it may, the arrangement was additionally moderate, and it should have been set up before fight. Light infantry was additionally utilized frequently by Greek city-states. Kinds of light infantry included peltasts, or lance hurlers; toxophilite; and slingers. Peltasts were the most well-known kind of light infantry. They battled with blades and spears, and they wore just light defensive layer and shields. Bowmen conveyed a bow and bolt, and slingers conveyed a sling that could be utilized to fling little stones or lead slugs at a foe. The gear conveyed by the light infantry was less expensive than that conveyed by the hoplites, and numerous less fortunate residents battled as light infantry. While light infantry couldn't withstand a charge of overwhelming infantry on the off chance that it was caught, it was progressively portable, and could wear out the adversary from a remote place. Mounted force was additionally once in a while utilized by the Ancient Greeks. Initially light rangers that tossed lances was utilized, yet the Macedonians built up a sort of substantial mounted for ce known as The Companion Cavalry. These cavalrymen conveyed nine to twelve foot spears and wore overwhelming protective layer. Light rangers was utilized for surveillance and provocation, and the mates were utilized to make an unequivocal charge that would invade an adversary power and win the fight. Old Greek maritime powers utilized a sort of warship called the trireme. This boat was pushed by three lines of paddles. The rowers were slaves in numerous states, and poor residents in Athens. Triremes conveyed marines for boarding a foe transport, toxophilite, a battering ram and some little ballistae and launches. One normal strategy that was utilized was smashing, which is the place a boat would accelerate and attempt to slam into another boat with its battering ram so an opening would be broken in the other boat. The other significant strategies were boarding and a strategy where a boat would brush against another to attempt to break the paddles in the other boat. The primary significant fights that the Greeks battled against adversaries from outside Greece were in the Persian Wars. These wars endured from 499 BC to 448 BC. The Persians utilized unexpected strategies in comparison to the Greeks. Persian powers were for the most part comprised of light infantry that pre-owned bows, lances, and blades. Persian infantry had just light defensive layer and wicker shields. Persian strategies included the utilization of a lot of bows and arrows. Normally, just the front positions of the Persian infantry would take part in skirmish battle, while different positions gave the adversary bolts. The Immortals were a first class unit that comprised of simply the best warriors. Just Medians, Elamites, or Persians could serve in this unit. The Immortals consistently kept their quality at 10,000 men, and they filled in as the

Americas Violence Fixation Essay examples -- Media Violent Crime Essa

America's Violence Fixation Perhaps the most concerning issue today is viciousness. It is occurring all over the place, in the family units, out in the city, even in our schools. When we watch the news and see these demonstrations of savagery, we hear the fault be put to a certain something: amusement. Motion pictures and computer games are probably causing youthful individuals to act forcefully in the public eye, and possibly convincing them to execute. Some even accept that video rental stores ought to have arrangements, such as continually requiring an ID, and that some TV projects, films, and games extol weapons and savagery, just as the firearms themselves (center4policy.org). Valid, a few movies do depict murder and savagery as legitimate; movies, for example, Blade, in which the title character murdered vampires with an end goal to ensure mankind, or The Matrix, where the principle characters utilized savagery to liberate humankind from a fake insight. Computer games likewise have a lot of brutality in them also. The fundamental thought of Grand Theft Auto, one of the more famous video games, is to surpass a city, regardless of whether it implies utilizing viciousness. Players are permitted a different exhibit of weapons from slugging sticks to assault rifles to help them in missions. Appraisals are put on games, this specific one is appraised M for Develop. Retail locations are to check ID of clients all together for them to buy such games. Notwithstanding, that doesn't prevent youngsters from obtaining the games from others, or in any event, having clueless guardians purchasing them. The inquiry, be that as it may, is: Is diversion actually the reason for savagery? I have been influenced by and by the media's case that amusement causes brutality. One morning on the news program Good Morning... ...at certain individuals can't help contradicting a few structures and parts of diversion is splendidly fine; not every person will concur with some of it. Attempting to topple what the majority appreciate is a totally unique issue. As a race, we overlook the right to speak freely of discourse; one voice consistently must be stronger than the other. By and by, as far as Fabulous Theft Auto, Pokemon, and Harry Potter, individuals buy these in light of the fact that they appreciate them, they are engaged by them, why not simply let them do their thing? I assume those who blame these live such perfect, healthy lives. The base line is: there are things that are famous, individuals will get them, be engaged, have, fun, and it will pass. Let them appreciate it. Sources http://www.pegmusic.com/savagery in-amer.html http://www.center4policy.org/violencec.html http://www.davekopel.com/Media/Irmassag.htm

socially aware hacking, part 2

socially aware hacking, part 2 I wrote a little while ago about a hack on the Dot raising awareness of MITs partnership with/acceptance of money from Shell and other companies which are, uh, potentially accelerating the doom of our species not doing great on the climate change front. Heres another one by the same group (or same-named group, anyway) that went up in Building 66 on the 10th. Theres a very, very fancy portrait of David Koch in the first-floor lobby or, I guess, there was a fancy portrait. Now there is a very different kind of portrait. I have a few pictures below; the best ones are by Maxwell Yun 21, who, unlike me, actually owns a camera. Thanks Maxwell :) The statement reads, Tarnished Horizons Dedicated to the lives disrupted by climate change Tarnished Horizons is intended to pivot attention away from MIT’s exaltation of David H. Koch, and instead towards the spectre of his actions. Koch spent decades exploiting ecosystems and championing climate change denialism for the financial benefit of himself and his family company, the petrochemical giant Koch Industries. We strongly encourage the MIT administration to step away from embracing the patronage of the Koch family and the fossil fuel industry, and realign its values with MIT’s mission to brighten the horizons of humankind. Installation runs November 11th to 17th Commissioned by the MIT Committee on Climate Change

Essay on Microsoft Paul Allen and Bill Gates - 1875 Words

Throughout the history of the world there have been revolutions, martyrs, and innovations that have changed the course of mankind. As history has proven, one person can have an effect on many, one action can excite anything, and one invention can change the whole world. In the case of the developing world of technology, many tried, but only a few could get a stake in the fast moving industry and throughout it all one name has stamped their name on the PC business, Microsoft. It started with two teenagers who envisioned an endless world of possibilities for the world of computing at an early stage. Paul Allen and Bill Gates were two high school students who attended Lakeside their dreams of one day being computer moguls started with a word†¦show more content†¦Like Bill, Paul also attended Lakeside and spent most of his time playing with/programming the Teletype Model 33. Paul was more of an idealist and visionary as oppose to his counterpart best friend. Paul also considered a genius made a perfect score on the SAT and attended Washington University. Paul’s college career was marked short as Allen dropped out to pursue an opportunity that would soon make them him and Gates official computer technicians. The idea came from a magazine entitled, Popular Electronics, the plan was to make a basic language implementation for the program Altair 8800 which was created by MITS it efforts to eventually score a contract to where they would have breathing room to make more and better programs. The plan worked perfectly, as Allen flew to Albuquerque, New Mexico presented their work and won the contract. They both packed up and moved to New Mexico. There, they started Microsoft and at the end of 1973 revenues from their company totaled over $16,000. Microsoft wasnt a complete success yet though, with competition in literally every corner of the planet they had a lot of work to do before they could become the face of personal computing. With developing companies like Apple and Hewlett Packard making equivalently valuable progress in the programming industry Microsoft had toShow MoreRelatedMicrosoft Corporation Microsoft was founded by Bill Gates and Paul Allen on April 4, 1975 to1500 Words   |  6 PagesMicrosoft Corporation Microsoft was founded by Bill Gates and Paul Allen on April 4, 1975 to develop and sell BASIC interpreters for Altair 8800. Microsoft Corporation is an American multinational corporation headquartered in Redmond, Washington, that develops, manufactures, licenses, supports and sells computer software, consumer electronics and personal computers and services. Its best known software products are the Microsoft Windows line of operating systems, Microsoft Office suite, and InternetRead MoreMicrosoft began when two inspirational young men, Bill Gates and Paul Allen, to develop BASIC1800 Words   |  8 PagesMicrosoft began when two inspirational young men, Bill Gates and Paul Allen, to develop BASIC language software for ALTAIR 8800. Today, Microsoft is the world’s largest software company and an undeniable force in the computing world. Microsoft’s products are used across the world, from every age to every race. Microsoft is the parent company of the Windows operating syst em, Internet Explorer browser, the Office suite of programs, and the Xbox game system. The company has a revenue of $60.42 billionRead MoreAnalysis Of Bill Gates And Paul Allen1253 Words   |  6 PagesThe History of Microsoft Bill Gates and Paul Allen are both the cofounders of the Microsoft Company. The start of their boundless achievements started when they were in high school on one of the computer terminals. All of their free time and little money were spent working in that high school terminal. The development that really instated everything in the business sense was when they read an article in 1971, in the business magazine regarding Intel s 4004 chip. Soon they both got access about theRead MoreBill Gates : The Ultimate Pinnacle Behind The Success Of Our Society1105 Words   |  5 Pageshistory. One of the most successful businesses in the industry, Microsoft, was the absolute pinnacle behind the success of such advances today. Behind all of this as well was the philanthropist himself, Bill Gates. Bill Gates, one of the most successful and influencing men in all of human history, was a direct asset to the success of windows, and without him, the world we live could be much more different than it is now. Ever since Bill Gates was a young child, he had always loved computers and the wayRead MoreBill Gates Biography1171 Words   |  5 PagesBill Gates was born  October 28, 1955, in Seattle, Washington. He is famous for building through technological innovation, great business strategies and aggressive business tactics, the worlds largest software business, Microsoft. He is also well known for becoming the wealthiest person in the world in the process of building his company. Gates came from an upper middle-class family. His  family atmosphere was warm and close, and he and his two sisters were always encouraged to be competitive andRead MoreThe Legacy Of Bill Gates1304 Words   |  6 PagesHistory of Bill Gates Bill Gates made a lot of changes to the way the world operates through technology and made life at lot easier for other people around the world. Bill Gates (also known as William Henry III or Trey) is an American entrepreneur, business mogul, investor, philanthropist, and one of the most richest and influential people in the world. He was also known as the best businessman in the 20th century. In his years as a child, he had the attitude for math and science as well as showingRead MoreBill Gates : The World s Prime Software Business1606 Words   |  7 Pages William Henry Gates; who is well known as Bill Gates was born on 28th of Oct, 1955, in Washington. In age of 13 Gates started showing curiosity in computer programming when he was at Lakeside school and pursued his passion through college. Striking out on his own with his friend and business partner Paul Allen, Gates found himself at the right place at the right time. Through technological modernization, strong business strat egy and aggressive business tactics, he built the world s prime softwareRead MoreBill Gates : The Computer Industry1351 Words   |  6 PagesBill Gates is worth about 79.2 Billion US dollars, at his peak 101 Billion US dollars. Bill Gates is a computer programmer, entrepreneur who took the computer industry by storm. He formed the company Microsoft and made it a leading computer corporation within ten years of opening for business. Bill Gates later stopped working full time at Microsoft and focused on his Foundation called Bill and Melinda Gates Foundation. Bill Gates is an amazing and interesting person to know about. Bill GatesRead MoreBill Gates Essay1325 Words   |  6 PagesBill Gates We read books for a number of reasons but usually because we want to or we have to. When you pick up a book it falls into one of three types, dependent on whether it is a want to or a have to type of book. First theres the kind of book you pick up and like the look of but then the first chapter is so bad that you have to put it down because you are either too confused by the plot or you discover it has been written in some obscure untranslatable language. The second type is whereRead MoreEssay about Bill Gates869 Words   |  4 PagesBill Gates William Henry Gates, also known as â€Å"Bill†, has established himself as the richest man in the world. He is the youngest self made billionaire, and perhaps the best businessman in the world. As you read along, you will learn what Bill Gates’ accomplishments were, what his beliefs were, and why this topic is so important. Bill Gates is important because not only did he change the computer technology in America, he also became the biggest, strongest, richest and the most powerful company

Benefits Of Public Health Insurance - 1052 Words

reason behind the rise in private health insurance was to gradually expand the public health insurance programs for those who could not acquire coverage through the market. Similarly the Neupane 2 hospitals and medical coverage policies were developed during the first half of the 20th century. Even private health insurance is unaffordable or imply unavailable to many, including the poor, the unemployed, and elderly. Before 1965, only half of seniors had the health care coverage and they paid three times as much as younger adults pay in spite of having a low income source. Having health insurance is important†¦show more content†¦When medical insurance is provided to the poor people, they not only find regular checkups from doctors, but also feel better, are less depressed and are better to maintain financial stability, according to new, large-scale study that provides the first rigorously controlled assessment of the impact of Medicaid. A research was conducted and it says that â€Å"Being uninsured is incredibly stressful from a financial perspective, a psychological perspective, a physical perspective,† Dr. Baicker said. â€Å"It is a huge relief to people not to have to worry about it day in and day out.† Health insurance provides the opportunity to maintain health by providing a low cost way to attend the doctor visits and to buy affordable prescription drug if needed. Some peoples thought about insurance is different. Instead of having advantages, health insurance has lots of disadvantages. Being uninsured is safer than having insurance and have trouble financially. The main growing issue with insurance is cost. Health insurance seems to be very costly, even for those people who already are on plan. Another one is medical coverage, which may not be enough to sufficiently cover the cost of tests, surgeries and procedures that need to be done this leads the person to pay higherShow MoreRelatedThe Australian Healthcare System Has Been Evolving Since The Beginning Of The Colonisation Of Australia1596 Words   |  7 Pagesin this essay. Influencing Factors When Australia was first colonised, health services were considered to be an issue to be dealt with by local governments (Evolution of Government Involvement in Health Care, n.d.). In 1901, the Constitution made health care the responsibility of the state governments and stated that the Federal Government was only in charge of quarantine issues (Evolution of Government Involvement in Health Care, n.d; Hilless Healy, 2001). During colonisation, the Australian governmentRead MoreHealthcare Systems Vs. Healthcare1241 Words   |  5 Pagestechnological and scientific advancement have shaped the U.S healthcare system and still impact how health services are provided to the American population. In the U.S, the responsibility of healthcare is distributed between the government, employers, and individuals. Through the enactment of the Affordable Care Act (ACA) in 2010, federal and state programs under Medicare, Medicaid and Children’s Health Insurance Program (CHIP) are available t o low income populations. Australia In Australia, the GovernmentRead MoreGoals Of The Afforadable Care Act1601 Words   |  7 Pages 1.0 GOALS OF THE AFFORADABLE CARE ACT: According to the American Public Health Association(APHA) the three key goals of the Affordable Care Act are to expand healthcare coverage, to shift the focus of the healthcare delivery system from treatment to prevention, and to reduce the cost and improve the efficiency of healthcare. Expanding healthcare coverage - why did we need it? In 2010, the National Health Interview survey revealed that 16% of the American population were uninsured. FurthermoreRead MoreDescription Of A Purchaser And Provider1471 Words   |  6 PagesDescribe a purchaser/provider split and whether your country’s health system has a purchaser/provider split. Purchaser/ provider split is a situation whereby the entity that purchases health is managerially separated from the provider/ entity that delivers healthcare; usually by a third party entity/purchaser. It simply means that the service provider is not the same as the service purchaser. It can also be described as a situation whereby the duty of paying for care and delivery of care is separated;Read MoreHealth Insurance And Employers ( Rough Draft )1406 Words   |  6 Pages Health Insurance and Employers (Rough Draft) Jenry Martin ENG122: English Composition II Instructor: Brandon Bond January 22, 2016 Health insurance and employer’s providing insurance benefits for their employee’s has been a debate for a long time. Everyone is asking who should pay for it and who shouldn’t. From my point the employer should pay for health insurance. Why? It is simpleRead MoreSingle Payer System : Japan1302 Words   |  6 PagesSingle Payer System Japan is one of the countries that have a single payer system for their health care coverage. In Japan the cost for its citizens to have a health insurance is very cheap. Japan’s population is very healthy due to the fact that everyone in Japan has health care. In this country most insurance plans will include coverage for medical and dental care. People in Japan will less likely to get sick comparing to other countries. That is largely due to lifestyle factors, such as lowRead MoreGovernment Funded Healthcare Pl A National Public Health Insurance Program919 Words   |  4 PagesHealthcare in America is very complex and fragmented. There is no uniform health system and a lot of people still do not have insurance. Health insurance is purchased privately or provided by the government. The United States government funds two kinds of health plans – Medicare and Medicaid both of which began in 1965 and founded for the elderly, disabled, poor and young. The private health plan provides two types of health plans – Health management organization (HMO) and Preferred provider organizationRead MoreWelfare And Health Care Reform1527 Words   |  7 Pages Chapter 17 of the textbook We the People: An Introduction to American Politics covers the topic of social policy. The two main issues of social policy in today’s society are welfare and health care reform. They are considered the main issues because they require the most government spending, and are the two most controversial and debated parts of social policy in America. America has always had some sort of welfare state. Before the Great Depression, a time of great economic hardship inRead MoreThe Provisions Of The Affordable Care Act1319 Words   |  6 Pages3.0 PROVISIONS OF THE AFFORDABLE CARE ACT To Expand Health Care Coverage (a.) Expansion of Public Health Insurance Programs In order to decrease the amount of uninsured individuals one of the provisions of the ACA centered on expanding public health insurance programs namely Medicaid and Children’s Health Insurance Program(CHIP). Medicaid was expanded to include children, pregnant women, parents, and adults without dependent children up to 133% of the Federal Poverty Level (FPL). Medicaid expansionRead MoreThe German Health Care System949 Words   |  4 PagesOverview The German health care system is one of the best health system in the world. This evolved system distinguished in many perspectives. Those are the aspects of German health system that will be covered in this report: the structure and characteristics of the German health care system, comparison with the Australian health system, evaluation for the organization and administration of the health system, and policy development in Germany. Structure In the term of health care system structure

The Real Value of “E-Business Models” Free Essays

Summary Note: The real value of â€Å"e-business models† Research Questions Asked * What is the meaning of e-business model? * Do the e-Business model really matter to create a thriving e-firm? * Can only a good e-business model will give the strength to company to get success? * What are the real key factors determining the survival or failure of e-firm? The e-business model is a model used by the e-commerce company to better be organized for providing a product or service, generating revenues and, especially, creating and adapting to the new market and technologies. Summary This article suggests in a critical way how this important model could be applied to different types of company, distinguishing the model by categories. It pays attention how the particular model is not the only successful key of the company, but it will an important tool if the company understands the linkage between it, its core business and the marketplace environment. We will write a custom essay sample on The Real Value of â€Å"E-Business Models† or any similar topic only for you Order Now The article presents some cases of failure and success, and how it creates a thriving for the firm. Supply chain model Direct sales: the firm provides a product or services directly to a customer ( Dell, Cisco, Aol) * Intermediary: the firm sells goods from a third party (Amazon) * Electronic marketplace: make easier the direct communication between buyers and sellers (Autobytel) Revenue model * Income is generated directly from the customer transaction * â€Å"Free sires where the income is generated through advertising or sponsorship (Napster) Internet business can also be distinguished according to the markets they serve * B2B business to business * B2C business to consumer Click and mortar: relies on offline asset * Pure play model: purely net based Failure and key of success Odds of survival of different business models compared| E-tail vs direct sales | 0. 93:1| Portal vs direct sales| 0. 97:1| Marktplace vs direct sales| 1. 30:1| Pay vs free| 0. 80:1| Clicks/mortar vs pure N et | 11:01| * E-tail and portal sites are slightly less likely to survive than direct sales sites * Marketplace model are likely to survive that direct sales sites * Free sites are a little more likely to survive than pay sites * Clicks and mortar are 11 times more likely than pure Internet sites. Observation : * Firm that are part of group have a strategic advantages as brands, customers and suppliers relationship and cash * E-models are flexible and they enable rapid growth. Why some company in the same market will get success and some are not? * Logistic strategies – Case of eVineyards and Wine. com: the first decides to set up own retails store in each location generating a quicker and more reliable service. The second decided to outsource by relying on retail partners in various location, but it generated longer delivery times and out-of-stock problems Channel conflict: some firms have to cease trading via the Net owing to conflicts with existing channel partners (Starbucks, Levi Strauss, Reebok) * Free and pay web sites: the mass of users is attracted when the service is free * Lack of customer benefits is a common cause for the failure of the company * Network externalities: some firms focus on creating an high numbers of user, reeling in a large enough user base to make it attractive for the other users to join (eBay) * Level of utility and value added: to achieve a high target market penetration it may be necessary to be innovative (Priceline) What to take from it? * Each model raises particular issues * There is not a â€Å"perfect model† * Key factor is understanding and managing the particular problem inherent in their model * The chances to be successful are much higher when the firm is a part of a larger group Critique * It’s a bit old. * It does not tell us , how is perfect business model look like? Questions for class * Is necessary to have a business model? * What are the key drivers of success in the business model? * How will these change in the future? How to cite The Real Value of â€Å"E-Business Models†, Papers

Patrick Gibeau, 50917160, lab section A2 Essays - Otters, Fur Trade

Patrick Gibeau, 50917160, lab section A2 I believe that according to the data presented in tables 1 and 2 that sea otter predation on invertebrate abundance is in fact decreased by higher levels of rugosity up to a certain point. In table 1 we are given three different site with varying levels of rugosity. The first site having the lowest levels of rugosity, the second having the most and the third being medium, roughly in between site 1 and 2. The second table provides the abundance of snail, crab and mussel's in a radius of 100m2 in each of the three different sites; both in the absence of the Sea-Otters and after the presence of Sea Otters for three years. If our hypothesis (that the higher the rugosity, the more difficult it is for Sea-Otters to predate upon the invertebrates resulting in a higher abundance) is to be correct we should see a decline in invertebrate abundance in all three of the sites (since the presence of Sea Otters would cause a decline)but scaled so that the largest decline is in site 1 (having the lo west rugosity), the second largest decline in site 3 ( having the second lowest rugosity) and the lowest decline being in site 2 ( having the highest rugosity). Upon inspection of the table 2 we see a reduction in invertebrate population across the board in all three sites. We see a general trend that the most drastic reduction in Crab, Mussel and Snail abundance occurs in site 1 as predicted. Our hypothesis is further supported as table 2 shows that the Mussel and Snail abundance in site 3 is the second least impacted and site 2 is the least impacted. Although the Crab abundance in site 2 and site 3 is somewhat of an anomaly in our table, showing that site 3's crab population was least impacted by the predation of Sea Otters. It still is higher than that of site 1; meaning it still supports our hypothesis, but perhaps indicates that Crabs are less impacted by the Sea Otter's predation in areas with higher rugosity up until a certain point. At a certain point it is plausible that a rugosity that is too great impacts their mobility and prevents them from escaping. All in all, the data shown in both tables give concrete evidence supporting our hypothesis. In summary I believe that Sea Otter predation on invertebrate abundance is reduced by the presence of a higher rugosity, and the data in table 1 and two supports this claim.

Compare and Contrast Essay Sample on Cultural Diversity

Compare and Contrast Essay Sample on Cultural Diversity The traditional custom of female circumcision, also known as female genital mutilation (FGM) persists primarily in Africa but has occurrences in at least 28 countries (Morris, 1996, pg. 43). FGM is a collective term that describes several different traditional, not religious, rituals. It has been estimated that between 100 million and 140 million infants, toddlers, children and adolescent females have undergone a FGM procedure and that between 4-5 million of these procedures are performed yearly (Althaus, 1997, pg.1). FGM is most often performed between the ages of 4-10 years and is performed by the village physician (Althaus, 1997, pg. 2). Typically the procedure uses a variety of instruments, such as knives, broken glass, and fruit thorns (Morris, 1996, pg. 45). According to Rita Morris, PhD, the procedures are classified according to the severity of structural disfigurement. Type I, often known as clitorectomy, involves removal of the skin surrounding the clitoris, and may or may not include removal of the clitoris. Type II, or excision, is the removal of the clitoris and part of all of the labia minora. The excisions are sutured with catgut or fruit thorns. Type III, infibulation, is the most severe form of FGM. In infibulation, the entire clitoris and labia minora are removed and the labia majora are sewn together, leaving only a large enough opening in the vagina for urination and menstruation. There are many physical and psychosocial ramifications associated with all types of FGM. FGM has been performed on individuals from many cultures; however, the procedure is not indoctrinated or required by any specific faith or religion (JAMA, 1995, pg. 1714). It has been estimated that approximately 98% of all Somalian women, 94% of Mali women, and 82% of Sudanese women have undergone FGM (JAMA, 1995, pg. 1714). The cultures that uphold these customs do so to: uphold group identity, maintain cleanliness and health, preserve virginity and family honor, and to further marriage goals (Morris, 1996, pg. 47). If a woman is not circumcised, she is considered to be â€Å"unmarriable†. In some societies, uncircumcised women are regarded as unclean and are not allowed to handle food or water (Morris, 1996, pg. 47). Others believe that the clitoris is dangerous and that if during childbirth, the baby’s head touches the clitoris, the baby will die (Morris, 1996, pg. 47). Those women that have not undergone the procedure are shunned by the culture and are considered t o be dangerous (Morris, 1996, pg.47). The debate over medicalization of FGM is relatively recent. In 1996, the Congress of the United States enacted legislation to criminalize the performance of FGM by practitioners on females younger than 18 years of age and to develop educational programs about the harmful consequences of FGM (Althaus, 1997, pg. 2). The World Health Organization (WHO) considers that â€Å"the medicalization of the procedure does not eliminate harm and is inappropriate for two major reasons: genital mutilation runs against basic ethics of health care whereby unnecessary bodily mutilation cannot be condoned: and, it’s medicalization seems to legitimize the harmful practice† (JAMA, 1995. pg. 1715). In1997, the WHO, the United Nations Children’s Fund, and the United Nations Population Fund issued a statement noting that FGM is a deeply rooted cultural practice; culture is a dynamic state and is capable of change (Althaus, 1997, pg. 4). Much work is being done in the area of education and cultural sensitivity. Although the Western medical community believes that refusal to perform FGM may reflect an ethnocentric viewpoint, protection of physical and mental health should be of utmost concern (Althaus, 1997. pg. 48). Various approaches to education can be implemented: community education, alternative rituals, and support groups should be available. Upon reviewing the literature cited above, this researcher believes that this will be a very prevalent issue in her practice. Since Minnesota has quite a number of Somalian families, these issues will need to be addressed and in various settings and environments. This controversy may exist on an OB/GYN floor, a women’s unit, in labor and delivery, in an OR setting; in rural settings or in big cities. Since western medicine laws have been enacted, our practice of this procedure is very limited for those of varying cultures. It is a crime to perform these procedures on females under the age of 18 years and legislation does not regulate which types of FGM are available. It has been criminalized because the procedures have been viewed as a human rights violation and because the procedures are barbaric (Morris, 1996. pg. 46), however, the United States has a growing number of elective cosmetic surgeries each year, including labial reductions and genital reconstructions. Although th ese elective surgeries are legal, certain laws could be written to lessen the severity of FGM, yet still allow the culture to express itself. It is this researcher’s view that Western medicine allows our people to make a choice, but in the African culture, this procedure is not a choice. The procedures are severe in surgical nature and are performed in unsterile environments, using unclean techniques (Althaus, 1997, pg. 3). Our culture is aware of the sensitivity needed to ensure good quality and proper health care. This researcher believes that to guarantee the best health care experience, the client must be able to make their own decisions, thus adults should be allowed to make decisions for themselves, based on proper teaching, knowledge base, medical practice, and counseling.

Satire Essay Main Rules, Topics, Examples

Satire Essay Main Rules, Topics, Examples How To Write A Satire Essay This article will guide you on how to write a satire essay in detail and will explain what a satire essay is as well as show you some examples. The text uses satire to make you understand its main objective. Assignments on this topic are known to be the most challenging for most students. In these kinds of essays, students need to show their expertise in content and subject area. Similarly, they should use humor to point absurdities found in our real-life situations . Although satire essays are full of humor, there are those without or minimal instances of humor. Most of them are expressed in a serious tone which shows that readers should take them seriously. There are advantages of writing these kinds of essays more so to those individuals wishing to master the art of writing. Once you have learned how to infuse irony, humor, and hyperbole, you will discover them not only being fun but also easy to write. Learning your Task Its crucial for you to understand every aspect of your writing assignment. You should be in a position to point out the following: If your homework intends to satirize a given cultural topic The length of the essay Our formatting guide will help you select the right format to use while writing your assignment. You might be in a dilemma not knowing whether to write your paper in first, second or third person point of view. For those who have never read satire essays before, you should consider reading the work of Jonathan Swifts A Modest Proposal who is well known for these types of pieces. If you are wondering where to find them, then consider the site The Onion which usually deals with the topics in politics. While writing your assignment, incorporating satire enables you to write the essay in a first persons point of view. This makes you point out issues in the society especially those concerning society and culture. Using an example where this article points womens demeaning which is being explained by Trumps Hollywood tapes leaked information (Satire Essay, 2019). Meme proposing that female gender should not oppose what amen say suggest that they are annoyed by his utterances. This is clearly shown through the work of E.L. Jamess Fifty Shades of Gray showing a romantic relationship between female and male where the male is in total control and the woman is expected to submit to him. Topics of Satire Essay When writing a satire essay on any topics, its good to point out the significant events of culture and politics. The most common ideas you should consider while writing: Brexit Border Walls Hillary Clinton Mike Pence Donald Trump Barack Obama Tim Kaine Immigration reform A list of satirical topics is endless and if you are unsure of what to select contact our support team who are ready to help you any time. Brainstorming of Any Satirical Essay Any good essay writing process begins with brainstorming. Brainstorming is a useful tool for all essay writers that plays a significant role even in writing a satirical essay (Satire Essay, 2019). While there are familiar writing outlines employed in the initial stages of planning, there are other methods that work perfectly well when it comes to satire writing tasks. One of the tools that are commonly used and we like most is the use of a bubble map. A bubble map is a simple tool that would be used starting from elementary schools onwards. The tool associates words in line with your topic of interest. For instance, if you decide to write a bubble map for any prominent figure in the society say, Donald Trump, you will diversify and use words like businessman, father, married, adulterer, divorced, New York City, orange, billionaire, bombastic, real estate, and home alone. You can see from the above bubble map how those words bring out elements that are associated with Donald Trump. When it comes to descriptive essays on a dog, there would be some words in the middle like the name of that given dog (Satire Essay, 2019). When using the bubble map, you should be aware that the words you choose should not be your own words you decide to use while writing your essay. The words used should aid in exposing an issue and further directs on the ways of approaching it satirically. Thesis Statements in Satire Essays After deciding on the right topic, you should then come up with a good thesis statement for your essay. You may be wondering what a thesis statement is. Thesis Statement is merely a road map of your piece that is always one or two sentences. It helps your readers understand the primary objective of your essay. Regardless of your essay type, the structure of your thesis statement always remains the same except in satire essay where it differs slightly. In satire essays, it is different unlike situations when one is proposing a real idea. Below are some examples of Thesis Statements: To ensure the safety of your jewelry, you need to be conspicuous on it, ensure valuable jewelry is stored in a vault or deposit box that is safe, also, do not travel with excessive jewelry than (Author: Kim Kardashian-West) Having a successful marriage is extremely simple: you have to identify your second wife while married to your first wife and have more children with her before you get married. (Author: Brad Pitt) From the above examples, it is clear that the most satirical element in the essay is the individual writing it. Also, the target audience can be part of the satire. When Jimmy Carter wrote to Trump a letter informing him not to worry of offending women is satirical in a way since both Jimmy and Trump are respected figures in the United States of America.   The case of Bill Clinton is writing a letter to Barrack Obama to guide him on how to be a good husband while in the White House is Irony in itself. This is because Obama is well known for his excellence in family matters and he is perceived to be an excellent husband too. On the other hand, Bill had a lousy legacy as he had an affair outside marriage while in office. Finally, criticisms of Maddona of Lady Gaga of publicity or even Peter Rose Criticizing Tom utilize all aspects of double-satire. Resources for Satirical Essays A wide range of satirical essays is based on events happening in the current century. Though citing them directly may not be compulsory at the moment, it is essential for you to know the real facts and issues that are associated with a given situation (Satire Essay, 2019). It is even ironical for you to identify the satiric news sites. In this modern time, this would be much more difficult to notice concerning political context. To avoid all these troubles, you need to be careful while selecting your topic and ensure your sources are unbiased and academically reliable. It can be difficult finding a reliable source for your essay. To be sure you have the right sources, use the sources that are not more than three years old and from reputable publishers like newspapers, magazines, and .com and .org websites. However, you are free to use sources for more than three years old, but you should inform your readers of any change of information in the concerned period. Additionally, you might have been discouraged to use sources like Wikipedia, Britannica, and Encyclopedia while doing your writing assignments. The advice is good as these sources are not regarded as reliable sources in the scholarly world. However, do not allow the ban to prevent you from using the references (Satire Essay, 2019). They can give an excellent overview of your topic and give you resources you can research for further information.   Google scholar is another great search engine that gives you an opportunity to limit the kind of resources you want to look at. With the above search engine, you can find either academic or scholarly articles and would support you in finding the best academic and scholarly writing. Other generic sites like CNN, Fox News, and MSNBC are also good sources of information while writing satire essays. Also, you can make use of other local and major networks as they are good sources of news. The above news channels have programs that are not sources but are both social and political commentary. While using these shows, you need to be careful as they sometimes present information to the readers in a biased way or give unreliable information. As you write be aware of possible biased information especially when selecting your sources. Citing your Sources If you decide to incorporate all your resources in your satirical essay, you will have to cite all academic sources to back-up any claim you make on certain political styles. If your essay is based on actual dates, rare facts, and figures, you need to cite all your sources. In such cases, you will be directed on the formats to use, or you will have to decide on your own . The most commonly used academic citation styles for undergraduate students are the American Psychology Association (APA), modern language association (MLA), and Turabian or Chicago. Unless in your assignment there are clear instructions on the type of format to use, go for the writing style you understand best. Examples of Satire Essays As a student, its easy for you to digest a concept if you are given an example. Thus, our model will not only help you understand how you can write an amazing satirical essay but will also help you master how you can format your essays correctly. On our site, you will get an excellent satirical essay. Just fill in the order form. We hope that after reading our article on satire and using our provided examples, you will be more confident than before to confront any satire essay throughout your academic journey. Even after reading our article and examples you might still encounter challenges right from topic selection to completing your essay . Remember we are here for you. We have a complete team of tutors ready to help you in any challenge you encounter in your writing process from topic selection to writing a flawless piece. To get more insight, go to our website.

The C.I.A Research Paper Example | Topics and Well Written Essays - 750 words

The C.I.A - Research Paper Example so coincided with the alleged UFO crash in Roswell, New Mexico, causing many people to believe that the creation of the agency also had to deal with the probability of extra terrestrial visitors. The main task of the Central Intelligence Agency is to gather, process and analyze situations or people, both inside and outside of the United States, that can be threatening or harmful to the United States. If the agency comes upon any information that suggests that someone is doing something harmful at the expense of the United States, they take the proper actions to ensure that nothing comes of these actions and that the person is dealt with accordingly. The agency also looks for threats that may come to an interest that the United States has in the world. In essence, the Central Intelligence Agency seeks out threats and dangers to the United States and the world and does what need to be done to prevent both negative actions and the leaking of the threat to the general public. The CIA also monitors activities that have the potential of turning dangerous, such as a foreign country creating a new nuclear power plant to produce electricity. The CIA would monitor the progress of this plant to ensure that it really is being created for the intended purpose and not for something that can prove to be harmful. The Central Intelligence Agency, in their mission of protecting the United States and the places of interest throughout the world, also helps in making the important decisions surrounding national security. The agency does not make the policies, they simply provide foreign intelligence information for the agencies and groups that do make the policies based on the information provided (Weiner, 2008). At times the agency is allowed to suggest possible policies or changes to current policies as starting points for the groups actually able to make the changes. Their sole job is gathering the information needed to make the decisions that can help keep the United States and

Children on edge of care, and the role of social workers associated Essay

Children on edge of care, and the role of social workers associated with them - Essay Example The language used in describing the issue of child protection has undergone many transformations over the years, and has especially seen marked changes in the last 40 years. From 1960s medico-social perspectives that exposed and treated the ‘battered babies’ (Parton, 1991), to the modern day twenty-first century provisions for ‘child care’ by the UK government, represent the huge transition in the perspectives of the state and the society on the issue of child protection. â€Å"The primary focus of official concern has broadened considerably. While in the 1960s it was ‘battered babies’, in the 1970s ‘non-accidental in jury to children’, in the 1980s ‘child abuse’, and for much of the 1990s ‘significant harm and the likelihood of significant harm’, the focus of the new millennium is ‘safeguarding and promoting the welfare of the child’† (Parton, 2007, 9). ... that children need a secure and stable familial atmosphere within their homes, â€Å"in order to enable them to develop attachments and achieve the outcomes, to which we aspire, for all children. However, some children who are not able to form these attachments in their present living circumstances may need to be moved, which entails difficult judgements for all concerned†( Department for education and skills, 2006, 4). Protections for such children, were given a legal framework for the first time through the legislation of the Children Act 1989. Under section 31 of this 1989 act, children without stable and secure homes are liable to come under the overall care of the local authorities. ‘Children in care,’ however is a blanket term that covers all children that are being cared for by the local authorities, including â€Å"those subject to care orders under section 31of the children act 1989 and those looked after on a voluntary basis through an agreement with th eir parents† (Lall, 2007, 3). As per the Department of Education, the children that are placed for some reason under care of the local authorities in England /UK, form one of the most vulnerable social sections, in today’s context. â€Å"The majority of children in care are there because they have suffered abuse or neglect. At any one time around 60,000 children are looked after in England (of whom some 59 per cent are subject to care orders). Some 90,000 children are looked after at some point in any one year† (Department for Education, 2011). Children in care can be broadly divided into 3 basic types. These are: Any child placed under the care of the local authorities (LA). Children that are provisioned to a statutory care order under the rulings of section 31 of the Children Act 1989. Children place

Impact of Exchange Rate Misalignment on Capital Inflows

Impact of Exchange Rate Misalignment on Capital Inflows EXCHANGE RATE MISALIGNMENT AND CAPITAL INFLOWS: AN ENDOGENOUS THRESHOLD ANALYSIS FOR MALAYSIA ABSTRACT This study presents an attempt to investigate the impact of exchange rate misalignment on capital inflows in Malaysia. Specifically, a precise threshold value is estimated to examine when exchange rate misalignment suppresses capital inflows. To pursue these objectives, this study relies on the endogenous threshold analysis as of Hansen (1996, 2000). Results suggest that misalignment in terms of currency overvaluation, has a negative and significant effect when overvaluation is more than 15 percent. This estimate is consistent and robust despite the changes in the choice of explanatory variables. INTRODUCTION Foreign direct investment (FDI) has served as an important engine of growth via skills and technology transfer, creation of employment opportunities and expanding the capital stock in Malaysia. Since the 1997 Asian financial crisis, Malaysia is no longer the top 10 host for FDI. In fact, the rate of growth of FDI has dramatically decrease compared to that of the early 1990s. This is partly due to reverse investment (Mat Zin, 1999) and declining dependence on FDI to finance growth. However, this may also indicates the declining competitiveness of Malaysia in attracting FDI which warrants empirical research since it would be vital to investigate which factors that contributed to the deterioration of competitiveness. Since early 1980s, real exchange rate misalignment has become a standard concept in international macroeconomic theory and policy (Razin Collins, 1997). Hence, this study focuses on exchange rate misalignment as an indicator of capital inflow competitiveness in the case of Malaysia. Malaysia provides an interesting case as it is one of the largest recipients of FDI amongst its ASEAN counterparts. Another advantage of undertaking a single country study is the ability to delineate the assumption that countries are similar in terms of social, cultural, economic and political background (Sun et al., 2002). Therefore, only relevant economic determinants are accounted for to suit the Malaysian environment. The objective of this paper is to investigate the empirical relationship between capital inflows and exchange rate misalignment. Whilst existing literature focuses on the role of exchange rate, this study takes a step further to examine the impact of exchange rate misalignment on capital inflows. Specifically, we estimate a threshold value at which misalignment begins to significantly affect capital inflows. To the best of our knowledge, no published study has attempted to estimate a threshold value for exchange rate misalignment in Malaysia. Hence, this study intends to fill this gap. Based on the endogenous autoregressive threshold (TAR) model developed by Hansen (2000), we split the sample into high and low misalignment regimes. Results suggest that exchange rate misalignment due to overvaluation is detrimental to the influx of capital inflows. The next section provides a brief overview of FDI in Malaysia followed by a brief explication of the theoretical model and review of liter ature. The fourth section spells out the method pertaining to the objective. The penultimate section provides results and discussion and the final section concludes. CAPITAL INFLOWS IN MALAYSIA: RECENT TRENDS AND INCENTIVES The essence of export oriented-growth nexus somewhat depends on the inflow of foreign capital into the country. In the past, foreign direct investment has been the one of the major conduit for technology transfer, job creation and export-led growth to this country. To pursue this line of interest, the Malaysian government has designed various policies spanning the gamut of industrial specific incentives, taxation, and intellectual property protection to infrastructure support. The company tax rate for example has been reduced from 33 percent in 1987 to 27 percent in 2007 and 26 percent in 2008. Other tax incentives such as the investment tax allowance, tax relief for companies with pioneer status or high technology industries has continued until today with more industries be given the relevant status to reap the benefits of the incentives. Most recently, the government has liberalized bumiputera equity requirements for 27 sectors to further boost competitiveness. With reference to previous information, there was a surge in foreign direct investment (FDI) into Malaysia in the late 1980s and this trend continued until the onset of the 1997 Asian financial crisis. Another acute slump in the influx of FDI occured in 2001 when the economy was in a slight recession but picked up again in 2002 thereafter. With the recent burgeoning world recession following the American sub-mortgage crisis, it is expected that FDI will contract again (IMF, 2009). To capture a more vivid impact of misalignment on capital inflows, this study employs quarterly data from Bank Negara Malaysia (BNM – the central bank of Malaysia) instead of the UNCTAD data which are annual. Foreign capital inflows or investment inflows comprises three items: (i) equity investment, (ii) loans and (iii) real estate. Investment consists of equity investment in Malaysia by non-residents, loans obtained from non-residents and purchase of real estate in Malaysia by non-residents but excludes retained earnings (Source: Bank Negara Malaysia, Glossary, Monthly Bulletin Statistics January, 2009, p. 186-187). This study resorts to a specific measure of FDI, that is, foreign investment inflows. Data starts from 1991:Q1-2008:Q3, partly dictated by availability. THEORY AND REVIEW OF LITERATURE In this study, we rely on the portfolio balance approach to model the determinants of foreign capital inflows. This model has been successfully tested by Goh (2005) for Malaysia. Branson (1968) postulates that the proportion of foreign assets (Kf) in a given stock of wealth is a function of the domestic and foreign interest rates (i and i*), the measure of exchange rate expectation or risk (e) and the stock of wealth (w) expressed as: (1)Darby et al. (1999), augment this concept of exchange rate risk (e) into exchange rate volatility and exchange rate misalignment. Since this study focuses on the role of exchange rate misalignment, we substitute e with misalignment. Expressing the above equation at level yields, (2)Focusing on Z, the literature suggests a number of variables that determines capital flows. The enigmatic relationship between FDI and exchange rate nexus has been widely examined and most of the discussions root back to the work of Kohlhagen (1977), Cushman (1985), Froot and Stein (1991), Goldberg (1993) and Darby et al. (1999). The effect of exchange rate is less straightforward (Benassy-Quere et al., 2001). The mechanisms that exchange rate affects capital inflows can also be viewed via the wealth effect channel and the relative production cost channel (Xing, 2006). A devaluation of the currency of the host country makes local cost of production lower in terms of foreign currency, hence leading to higher returns from export-oriented industries. As for the wealth effect, a devaluation makes local asset cheaper which motivates investors to acquire more. Kohlhagen (1977) static model postulates that following depreciation in host countries, MNEs will increase their production capacity. In a two period dynamic model, Cushman (1985) suggests that adjusted expected real depreciation lowers the production cost which leads to increase in FDI flows. Similarly, Goldberg (1993) illustrates how sectoral profitability, location effects, and portfolio and wealth effects are important factors that determine investment an d their links with exchange rates. In her theoretical model, the direction of investment effects triggered by exchange rate movements is ambiguous, therefore, warrants empirical research. On contrary, in an imperfect information framework, Froot and Stein (1991) show that appreciation induces wealth effect of foreign investors, thus encouraging foreign investors to acquire more local assets. Empirically, there is quite a consensus that a depreciation of the exchange rate in the host country leads to a reduction of the FDI (Klein and Rosengren, 1994; Dewenter, 1995). There is however, a dearth of studies that empirically examine the relationship between FDI and exchange rate misalignment. Empirical attempts include Benassy-Quere et al. (2001) who advocate the benefits of depreciation may be offset by excessive volatility of the exchange rate. Blonigen (1997) illustrates how currency depreciation induces foreign firm to acquire firm-specific assets when markets are segmented. Hasnat (1999) study the impact of misalignment on FDI for five developed nations on annual data ranging from 1976-1995. All of these studies use misalignment as a control variable or a counterpart for exchange rate variability and is measured by a deviation from the purchasing power parity (PPP) values. Furthermore, most of these studies are based on the experiences of industrialized economies using panel data analysis framework. In short, a prolonged misalignment may affect long term business decisions as it affects costs. If the exchange rate is overvalued relative to the e stimated equilibrium level, investors may acquire more domestic assets for future capital gains in host country currency terms (Barrell and Pain, 1996). On the other hand, persistent overvaluation may reduce cost competitiveness of production in the host country, especially for export oriented products. Other traditional determinants of FDI can be demarcated into at least two categories – micro and macro determinants. The list of micro-determinants spans from market size, growth, labour costs, host government policies, tariffs to trade barriers. The macro-determinants include market size (Chakrabarti, 2001; Farrell et al., 2004; Kravis and Lipsey; 1992), openness (Edwards, 1990; Gastanaga et al. 1998; Hausmann and Fernandez-Arias, 2000; Aseidu, 2002), rate of inflation (Bajo-Rubia and Sosvilla-Rivero, 1994; Urata and Kawai, 2000), government budget, taxes (Gastanaga et al., 1998; Wei, 2000) and infrastructure (Wheeler and Mody, 1992; Urata and Kawai, 2000). Financial deepening is also another catalyst for FDI (Borensztein et al., 1998). Liquid liability, private credit and M3 serve as proxies. Increase in money supply fuels inflation which increases the cost of production in the host country rendering a negative relationship. However, increments in money supply supported by g rowth or higher productivity indicate increase in future purchasing power which can benefit market-seeking FDI. Finally, the degree of misalignment is computed based on the difference between the actual and the hypothetical equilibrium exchange rate. Accordingly, the estimation of the hypothetical equilibrium exchange rate relies on the theory advocated by Edwards (1994). This theory postulates that the real exchange rate is a function of several fundamental variables which includes the Balassa-Samuelson effect, trade openness, net foreign assets and government spending. Details are provided in Sidek and Yusoff (2009). METHODOLOGY AND DATA The question of when does misalignment begin to significantly affect capital inflows necessitate the existence of a non-linear relationship between these two variables. Thus, if such non-linear relationship exists, then it is possible to estimate an inflexion point, or a threshold value, at which the sign of misalignment may change or become significant. In the non-linear time series modelling, the threshold autoregressive model (TAR) is more popular since it offers a relatively simple specification, estimation and interpretation compared to other non-linear models. The origins of TAR models roots back to Tong (1980) where the main idea is to approximate a general non-linear autoregressive structure by a threshold autoregession with a small number of regimes. Hansen (1996, 2000) derives the asymptotic distribution of the ordinary least squares (OLS) estimates of the endogeneous threshold parameters which is used in this study. This section explains how equation (2) is estimated to incorporate threshold effect. According to Hansen (2000), threshold estimation is the act of splitting the sample into two regimes when the threshold value is unknown. One necessary precondition is that the threshold variable must be a continuous variable. In this study, the threshold estimation is carried out by splitting the sample into high misalignment and low misalignment regime. Since misalignment is a continuous variable, TAR model would be appropriate to engender the threshold value. Formally, the two-regime threshold regression model takes the form: where is the threshold variable which is used to split the sample into two regimes, is the threshold value which is unknown and must be estimated, denotes the dependent variable (capital inflow), represents a vector of explanatory variables and is the error term assumed to be white noise and i.i.d. Note that if the threshold value is greater than the threshold variable, equation (3) is estimated and vice versa. This allows the regression parameters to change with respect to . In order to write equations (3) and (4) in a single equation, a dummy variable is used which is defined as where {.} is the indicator function, with d=1 when and d = 0, if otherwise; and set , such that (3) and where and . Equation (5) allows all the regression parameters , and to be estimated and switch between the two regimes. The least square (LS) technique is used to estimate through minimization of the sum of squared errors function. To implement this, the model is expressed in matrix notation, hence, equat ion (5) is expressed as: (6) Define, (7) as the sum of squared error function. By definition the least squares estimators which is also the MLE when with i.i.d. , jointly minimize equation (7). This minimization process requires to be restricted to a bounded set . The concentrated sum of squared errors function is written as: (8) where is the value that minimizes . As takes values that is less than n, is uniquely described as: with (9) Focusing on the objective of this section, the first step is to examine whether there exist a threshold effect in the model. This requires the examination between the linear model vis-Ã  -vis the two-regime model, equation (5). The null hypothesis of no threshold effect is tested against an alternative hypothesis where threshold effect is present. Since TAR models have a non-standard distribution, Hansen (1997, 2000) develops a standard heteroscedasticity-consistent Langrange Multiplier (LM) bootstrap method to calculate the asymptotic critical value and the p-value. The second step is to examine whether the derived threshold value is statistically significant. This is done by differencing the confidence interval region based on the likelihood ratio statistic . Based on Hansen (2000), let C represent the desired asymptotic confidence interval (in this study at 95%) and be the C-level critical value and set . Assuming homoscedasticity, as , therefore, is the asymptotic C-level confidence region for . If the homoscedasticity condition is not fulfilled, then a scale likelihood ratio statistics of the residual sum of squared errors is defined as: (10)and the adjusted confidence region becomes such that is robust whether or not the heteroscedasticity condition holds. Simulation is set at 1000 replications as suggested by Hansen (2000). Also, is not normally distributed hence, the valid asymptotic confidence intervals of the estimated threshold values in the no-rejection areas defined as , where is a given asymptotic level; and the no- rejection region of the confidence interval is . If , than the null hypothesis of cannot be rejected. In addition, to examine the possibility of a second threshold value, the same exercise is repeated. Specifically, the empirical model to be tested which is based on equation (2) is defined as follows: (11) where K is capital inflows, Mis, R and M3 denote exchange rate misalignment, interest differentials and financial deepening, and Z represents the other control variables. Table 1 summarizes the description of data, measurement and sources used in this study. Table 1: Determinants of Capital Inflows (1991Q1-2008Q3) Variable Description Measurement Source I Foreign investment Total foreign investment inflow as a percentage of GDP BNM M3 Money supply M2 as a percentage of GDP IFS D Government deficit The difference between revenue and expenditure as a percentage of GDP BNM R Interest differential The difference between Malaysia and US 3-month T-Bill rates IFS T Taxation Government corporate tax revenue as a percentage of GDP BNM LL Liquid Liability Log International liquidity: banking institution liability, line. 7b.d IFS INFRA Infrastructure Log of spending on infrastructure as a percentage of GDP BNM IFS: International Financial Statistics, IMF, UNCTAD: United Nations Conference on Trade and Development, BNM: Bank Negara Malaysia Monthly Statistical BulletinDOS: Department of Statistics, Malaysia (various issues). RESULTS AND DISCUSSION Prior to time series analysis, we test for unit roots in order to avoid spurious regression. Three versions of unit root testing, namely the ADF, PP and KPSS tests are employed to examine whether the variables are stationary on level or otherwise. Table 3 indicates that the order of integration are mixed for a majority of variables. However, this study proceeds to examine the threshold effect by including lagged variables for I(1) variables in the OLS estimation. Moreover, equation (2) derived from the theory requires estimations at level. Table 2: Unit root test ADF PP KPSS Order of Integration Level 1st Diff Level 1st Diff Level 1st Diff I -3.7029* -7.9812* -3.5286* 14.00208 0.9008* 0.2305 I(0)/I(1) M3 -1.2741 -10.0951* -1.3334 -10.4699* 1.0229* 0.3588*** I(1) D -1.6297 -19.7087* -8.8219* -27.3774* 0.3649* 0.0894 I(0)/I(1) R -4.5405* -3.8179** -2.6509 -7.0649* 0.0711 0.0471 I(0)/I(1) INFRA -2.2527 -4.5270* -3.5053* -27.7776* 0.2234* 0.0813 I(0)/I(1) LL -3.0805 -6.5500* -2.4386 -6.7355* 0.1073 0.0607 I(0)/I(1) MIS -3.8075** -9.7442* -3.8076** -9.8483* 0.0662 0.0577 I(0) Note: *, ** and *** denote significance at 1%, 5% and 10% significant level. p-values are in parentheses. For ADF and PP test the null is no unit root (H0: Variable is stationary) whilst the null for the KPSS is the existence of unit root (H0: Variable is not stationary). The baseline regression constitutes the exchange rate misalignment, interest differential and a measure of financial development, M3. We present four additional models with different variables added to the baseline regression, namely liquid liability, government budget deficit, and infrastructure for sensitivity analysis. Hansen (2000) theoretical construct allows for two threshold effects, hence, the first step is to investigate the possible existence of such an effect. Prior to that, a threshold variable needs to be selected. Since the aim of this section is to examine at what percentage exchange rate misalignment actually hurts capital inflows, the appropriate threshold variable is the exchange rate misalignment. Upon choosing the appropriate threshold variable, the next step is to observe any evidence of a threshold effect and whether there exist one or more threshold by employing the heteroscedasticity-consistent Lagrange-multiplier (LM) test for a threshold based on Hansen (1996). To test under the null hypothesis of no threshold effect, p-values are calculated using a bootstrap analog which generates the dependent variable from the distribution , where is the OLS residuals from the estimated threshold model. With 1000 bootstrap replications, the p-values for the baseline threshold models (Table 3) using misalignment strongly suggest the existence of threshold effect at 0.000. Subsequently, this suggests that there is a sample split based on the effect of exchange rate misalignment. Table 3: Threshold Effects for the baseline model Model 1 First Sample Split F-Stats 51.4045 Bootstrap P-Value 0.000 Threshold Estimates -15.0260% 95% Confidence Interval -15.446% , -9.8360% Second Sample Split F-Stats 16.2171 Bootstrap P-Value 0.2890 Note: H0: No threshold effect. The threshold is based on the minimized sum of squared residuals. This illustrates the graph of the normalized likelihood ratio sequence as a function of the threshold in exchange rate misalignment. The estimated is the value which minimizes these graphs which range at =15.02-15.44%. The dotted lines on the graphs present the 95% critical values. For example, in model 1, the asymptotic 95% confidence interval set where crosses the dotted lines. The results suggest that there is ample evidence for a two-regime specification. Also, it is worth noting that 41 of the 71 observations fall into the 95% confidence interval, hence, requires an examination of the possible existence of a second sample split. Results in Table 3, show that second sample split renders insignificant bootstrap p-value thus, indicating no further regime split. Table 4 presents the results for baseline regression. For comparison purposes, this study provides the linear OLS model without the threshold effect and a two-regime model which accommodates the threshold effect. Basically, the variables confer the correct signs in line with the prediction of the theory. Misalignment has a negative and significant effect on capital inflows in regime 2. Interest differential is expected to confer a negative effect. Results indicate that interest differentials only affects capital inflows negatively in the regime 1 but is insignificant in the regime 2. Similarly, M3 has significant effect in both regime but is positive in the regime 1 but the sign switches in regime 2. Hence, splitting the sample gives a more indepth view of the effects of these basic variables on investment inflows. To reiterate, sample splitting allows the examination of whether the significant effect is present in both regimes or otherwise. The results show that below the threshold value of 15%, exchange rate misalignment may be negative but are not statistically significant. However, above the 15% threshold level, misalignment exerts both negative and significant impact on capital inflows. A 1% increase in misalignment (overvaluation) suppresses capital inflows by approximately 1.19%. The negative effect of exchange rate misalignment on capital inflows is consistent with the findings of Hasnat (1999). Barrel and Pain (1996) argue that an apparent currency misalignment persistent over some length of time may affect investment inflows decisions. A reasonable explanation is that the relative production costs may be higher as a result of such misalignment. If the ringgit is thought to be overvalued relative to its estimated equilibrium level, then foreign production may be discouraged by the prospect of future capital loss in home currency terms. Another issue which emerges after the 1997 financial crisis is that capital inflows must be managed since reversals are likely to cause severe damage to the economy. Reinhart and Reinhart (1998) calls for greater exchange rate flexibility which is meant to introduce two-way risks, therefore, discouraging speculative capital inflows. It is, however, only possible in the context of de facto peg or a tightly managed float. Furthermore, the effectiveness of this policy depends on how much policymakers are willing to allow the exchange rate to fluctuate. A large band denotes greater flexibility but risks having large nominal appreciation which connotes possible overvaluation of the currency. The result of this study suggests that overvaluation is detrimental to capital inflows if this band exceeds 15%. Hence, policymakers should keep exchange rate fluctuations well below this 15% threshold. Table 4: Baseline regression results on the effect of misalignment on capital inflows (1991:Q1-2008:Q3). Dependent variable is capital inflows. Model 1 Linear Model Threshold Model OLS without threshold Regime 1 Â £ 15.0259% Regime 2 > 15.0259% Misalignment -0.4267** (0.2115) -0.3186 (0.2573) -1.1955** (0.5712) Interest Differential -0.0250*** (0.0131) -0.0438* (0.01533) -0.0261 (0.0193) M3 0.2964* (0.0391) 0.2644* (0.0516) -0.5560* (0.1240) Constant 3.0468* (0.2779) 2.5394* (0.2593) 6.7313* (0.6099) No. of Observations 71 42 29 R2 0.3664 0.6484 0.4218 Notes: *, ** and *** denote 1%, 5% and 10% significance respectively. Standard errors in parentheses. Interest rate differential are consistently negative and significant in all specifications and in both regimes in majority of the threshold model. This stresses the role of interest rates in attracting capital inflows into Malaysia. Although the impact may be small, it is significant and the authorities should ensure that interest rates are kept at certain levels to maintain competitiveness of Malaysia as destination for capital investment. In this paper, the estimated impact of a 1% change in interest differential is expected to subdue foreign investment by 0.04 percentage point in the first regime and 0.03 percentage point in the second regime. The proxy for financial deepening, M3 is statistically significant in all models and in both regimes. Again, this signifies the importance of financial development in attracting capital investment into Malaysia. Interestingly, M3 is positive during the periods of low misalignment regime (regime 1) but becomes negative at higher misalignment regime (regime 2). During low misalignment, a 1% increase in M3 is expected to draw in 0.3 percentage point more investment inflow into Malaysia. This shows that in the lower regime, financial depth acts as an impetus to capital inflows. However, the situation reverse with 0.6 percentage point lower investment inflows is expected with a 1% increase in misalignment in the second threshold regime. Montiel (1999) explicitly explains this phenomenon where capital inflows increase reserves which then prompt an increase in the monetary base, M2 and M3. Such increases fuels further increments in domestic demand leading to real appreciation. Thus, any overvaluation of the currency may eventually have negative ramifications on capital inflows. Sensitivity analysis To check for the sensitivity of the estimated threshold value, Table 6 -7 and Figure 3 represents four other models which use different variables in addition to the baseline regression. The addition of taxes yields insignificant results without drastically changing the threshold value. Other additional variables such as government budget deficit and liquid liability are only significant in one of the two regimes . With the inclusion of additional variables, the estimated magnitude of each regressors differ slightly but maintains the same sign and significance level. For example a 1% increase in misalignment (overvaluation) suppresses capital inflows by 1.11-1.55 percentage point. The estimated impact of a 1% change in interest differential is expected to deter foreign investment by 0.04-0.05 percentage point in the first regime and 0.02-0.06 percentage point in the second regime. Similarly, during low misalignment, a 1% increase in M3 is expected to draw in 0.2-0.3 percentage point m ore investment inflow into Malaysia. An estimated 0.49-0.67 percentage point lower investment inflows is expected with a 1% increase in M3 in the second threshold regime. In view of the results, it seems evident that the exchange rate policy has important effect in attracting foreign capital inflows into Malaysia. Specifically, misalignment in terms of overvaluation should be kept lower than 15 percent to ensure that capital inflows remained unhurt. Table 5: Sensitivity Analysis: Threshold Effects Model 2 Model 3 Model 4 Model 5 First Sample Split F-Stats 71.1442 45.9364 53.3722 53.3722 Bootstrap P-Value 0.000 0.000 0.000 0.000 Threshold Estimates -15.4461% -15.0260% -15.0260% -15.0260% 95% Confidence Interval -15.446%, -15.025% -15.446%, -9.836% -15.446%, -0.0984% -15.446%, -0.0984% Second Sample Split F-Stats 16.4917 19.7585 22.9710 22.9710 Bootstrap P-Value 0.5310 0.3800 0.2420 0.2420 Note: H0: No threshold effect. The threshold is based on the minimized sum of squared residuals Table 6: Sensitivity Analysis for threshold estimates (1991:Q1-2008:Q3). Model 2 Linear Model Threshold Model OLS without threshold Regime 1 Â £ 15.4461% Regime 2 > 15.4461% Misalignment -0.4278*** (0.2216) -0.3497 (0.4143) -1.5593* (0.3135) Interest Differential -0.0250*** (0.0134) -0.0462* (0.0153) -0.0599* (0.0131) M3 0.2966* (0.0414) 0.2732* (0.0488) -0.5609* (0.0744) Liquid Liability -0.0029 (0.1709) -0.0634 (0.1932) 1.1843* (0.2615) Constant 2.9780* (0.2713) 2.5259* (0.2593) 6.1799* (0.3135) No. of Observations 71 41 30 R2 0.3842 0.6503 0.5986 Model 3 Linear Model Threshold Model OLS without threshold Regime 1 Â £ 15.0260% Regime 2 > 15.0260% Misalignment -0.4472** (0.2038) -0.3800 (0.2460) -1.1171*** (0.6229) Interest Differential -0.0254* (0.0126) -0.0505* (0.0140) -0.0237 (0.0221) M3 0.2844* (7.4922) 0.2521* (0.0472) -0.5391* (0.1477) Deficit -0.7655* (0.3059) -0.7380* (0.3099) -0.1841 (0.7174) Constant 3.0308* (0.2674) 2.5835* (0.2445) 6.6452* (0.7337) No. of Observations 71 42 29 R2 0.4285 0.6829 0.4230 Model 4 Linear Model Threshold Model OL S without threshold Regime 1 Â £ 15.0260% Regime 2 > 15.0260% Misalignment -0.2852 (0.2181) -0.2582 (0.2720) 1.2490** (0.5612) Interest Differential -0.0275** (0.0128) -0.0419* (0.0165) -0.0311 (0.0204) M3 0.3208* (0.0401) 0.2796* (0.0583) -0.5489* (0.1245) Tax 2.1899** (1.0761) 0.1283 (0.1457) 0.1260 (0.1720) Constant 3.0274* (0.4383) 2.2463* (0.4806) 6.5027* (0.7227) No. of Observations 71 42 29 R2 0.3665 0.6516 0.4300 Model 5 Linear Model Threshold Model OLS without threshold Regime 1 Â £ 15.0260% Regime 2 > 15.0260% Misalignment -0.3780*** (0.1977) -0.4495*** (0.2602) -1.3190** (0.6059) Interest Differential -0.0203 (0.0123) -0.0433* (0.0152) -0.0308 (0.0212) M3 0.2941* (0.0365) 0.2388* (0.0479) -0.6093* (0.1406) Infrastructure 3.0729* (3.3373) 0.0474** (0.0228) -0.0382 (0.0392) Constant 3.0709* (0.2569) 2.5698* (0.2346) 7.0433* (0.7173) No. of Observations 71 42 29 R2 0.4091 0.6815 0.4384 Notes: *, ** and *** denote 1%, 5% and 10% significance respectively. Standard errors in parentheses. CONCLUSION The objective of this chapter is to examine the impact of exchange rate misalignment on capital inflows. Results provide evidences of the negative impact of misalignment on capital inflows. To reiterate, overvaluation of the ringgit signals that Malaysia is less competitive vis-Ã  -vis other countries. In addition, this paper also estimates a specific threshold value; that is the degree of misalignment after which it begins to hurt capital inflows. By employing a recent technique by Hansen (1996, 2000), this study splits the sample into high misalignment and low misalignment regimes. This study shows that misalignments hurt capital inflows in the high misalignment regime or when misalignment is greater than 15 percent. This study also confirms the work of Goh (2005) who suggests that the portfolio balance model can capture the determinants of capital inflows in Malaysia. In particular, the results suggest that interest differential is an important determinant albeit, small, hence, p olicies should be direc Impact of Exchange Rate Misalignment on Capital Inflows Impact of Exchange Rate Misalignment on Capital Inflows EXCHANGE RATE MISALIGNMENT AND CAPITAL INFLOWS: AN ENDOGENOUS THRESHOLD ANALYSIS FOR MALAYSIA ABSTRACT This study presents an attempt to investigate the impact of exchange rate misalignment on capital inflows in Malaysia. Specifically, a precise threshold value is estimated to examine when exchange rate misalignment suppresses capital inflows. To pursue these objectives, this study relies on the endogenous threshold analysis as of Hansen (1996, 2000). Results suggest that misalignment in terms of currency overvaluation, has a negative and significant effect when overvaluation is more than 15 percent. This estimate is consistent and robust despite the changes in the choice of explanatory variables. INTRODUCTION Foreign direct investment (FDI) has served as an important engine of growth via skills and technology transfer, creation of employment opportunities and expanding the capital stock in Malaysia. Since the 1997 Asian financial crisis, Malaysia is no longer the top 10 host for FDI. In fact, the rate of growth of FDI has dramatically decrease compared to that of the early 1990s. This is partly due to reverse investment (Mat Zin, 1999) and declining dependence on FDI to finance growth. However, this may also indicates the declining competitiveness of Malaysia in attracting FDI which warrants empirical research since it would be vital to investigate which factors that contributed to the deterioration of competitiveness. Since early 1980s, real exchange rate misalignment has become a standard concept in international macroeconomic theory and policy (Razin Collins, 1997). Hence, this study focuses on exchange rate misalignment as an indicator of capital inflow competitiveness in the case of Malaysia. Malaysia provides an interesting case as it is one of the largest recipients of FDI amongst its ASEAN counterparts. Another advantage of undertaking a single country study is the ability to delineate the assumption that countries are similar in terms of social, cultural, economic and political background (Sun et al., 2002). Therefore, only relevant economic determinants are accounted for to suit the Malaysian environment. The objective of this paper is to investigate the empirical relationship between capital inflows and exchange rate misalignment. Whilst existing literature focuses on the role of exchange rate, this study takes a step further to examine the impact of exchange rate misalignment on capital inflows. Specifically, we estimate a threshold value at which misalignment begins to significantly affect capital inflows. To the best of our knowledge, no published study has attempted to estimate a threshold value for exchange rate misalignment in Malaysia. Hence, this study intends to fill this gap. Based on the endogenous autoregressive threshold (TAR) model developed by Hansen (2000), we split the sample into high and low misalignment regimes. Results suggest that exchange rate misalignment due to overvaluation is detrimental to the influx of capital inflows. The next section provides a brief overview of FDI in Malaysia followed by a brief explication of the theoretical model and review of liter ature. The fourth section spells out the method pertaining to the objective. The penultimate section provides results and discussion and the final section concludes. CAPITAL INFLOWS IN MALAYSIA: RECENT TRENDS AND INCENTIVES The essence of export oriented-growth nexus somewhat depends on the inflow of foreign capital into the country. In the past, foreign direct investment has been the one of the major conduit for technology transfer, job creation and export-led growth to this country. To pursue this line of interest, the Malaysian government has designed various policies spanning the gamut of industrial specific incentives, taxation, and intellectual property protection to infrastructure support. The company tax rate for example has been reduced from 33 percent in 1987 to 27 percent in 2007 and 26 percent in 2008. Other tax incentives such as the investment tax allowance, tax relief for companies with pioneer status or high technology industries has continued until today with more industries be given the relevant status to reap the benefits of the incentives. Most recently, the government has liberalized bumiputera equity requirements for 27 sectors to further boost competitiveness. With reference to previous information, there was a surge in foreign direct investment (FDI) into Malaysia in the late 1980s and this trend continued until the onset of the 1997 Asian financial crisis. Another acute slump in the influx of FDI occured in 2001 when the economy was in a slight recession but picked up again in 2002 thereafter. With the recent burgeoning world recession following the American sub-mortgage crisis, it is expected that FDI will contract again (IMF, 2009). To capture a more vivid impact of misalignment on capital inflows, this study employs quarterly data from Bank Negara Malaysia (BNM – the central bank of Malaysia) instead of the UNCTAD data which are annual. Foreign capital inflows or investment inflows comprises three items: (i) equity investment, (ii) loans and (iii) real estate. Investment consists of equity investment in Malaysia by non-residents, loans obtained from non-residents and purchase of real estate in Malaysia by non-residents but excludes retained earnings (Source: Bank Negara Malaysia, Glossary, Monthly Bulletin Statistics January, 2009, p. 186-187). This study resorts to a specific measure of FDI, that is, foreign investment inflows. Data starts from 1991:Q1-2008:Q3, partly dictated by availability. THEORY AND REVIEW OF LITERATURE In this study, we rely on the portfolio balance approach to model the determinants of foreign capital inflows. This model has been successfully tested by Goh (2005) for Malaysia. Branson (1968) postulates that the proportion of foreign assets (Kf) in a given stock of wealth is a function of the domestic and foreign interest rates (i and i*), the measure of exchange rate expectation or risk (e) and the stock of wealth (w) expressed as: (1)Darby et al. (1999), augment this concept of exchange rate risk (e) into exchange rate volatility and exchange rate misalignment. Since this study focuses on the role of exchange rate misalignment, we substitute e with misalignment. Expressing the above equation at level yields, (2)Focusing on Z, the literature suggests a number of variables that determines capital flows. The enigmatic relationship between FDI and exchange rate nexus has been widely examined and most of the discussions root back to the work of Kohlhagen (1977), Cushman (1985), Froot and Stein (1991), Goldberg (1993) and Darby et al. (1999). The effect of exchange rate is less straightforward (Benassy-Quere et al., 2001). The mechanisms that exchange rate affects capital inflows can also be viewed via the wealth effect channel and the relative production cost channel (Xing, 2006). A devaluation of the currency of the host country makes local cost of production lower in terms of foreign currency, hence leading to higher returns from export-oriented industries. As for the wealth effect, a devaluation makes local asset cheaper which motivates investors to acquire more. Kohlhagen (1977) static model postulates that following depreciation in host countries, MNEs will increase their production capacity. In a two period dynamic model, Cushman (1985) suggests that adjusted expected real depreciation lowers the production cost which leads to increase in FDI flows. Similarly, Goldberg (1993) illustrates how sectoral profitability, location effects, and portfolio and wealth effects are important factors that determine investment an d their links with exchange rates. In her theoretical model, the direction of investment effects triggered by exchange rate movements is ambiguous, therefore, warrants empirical research. On contrary, in an imperfect information framework, Froot and Stein (1991) show that appreciation induces wealth effect of foreign investors, thus encouraging foreign investors to acquire more local assets. Empirically, there is quite a consensus that a depreciation of the exchange rate in the host country leads to a reduction of the FDI (Klein and Rosengren, 1994; Dewenter, 1995). There is however, a dearth of studies that empirically examine the relationship between FDI and exchange rate misalignment. Empirical attempts include Benassy-Quere et al. (2001) who advocate the benefits of depreciation may be offset by excessive volatility of the exchange rate. Blonigen (1997) illustrates how currency depreciation induces foreign firm to acquire firm-specific assets when markets are segmented. Hasnat (1999) study the impact of misalignment on FDI for five developed nations on annual data ranging from 1976-1995. All of these studies use misalignment as a control variable or a counterpart for exchange rate variability and is measured by a deviation from the purchasing power parity (PPP) values. Furthermore, most of these studies are based on the experiences of industrialized economies using panel data analysis framework. In short, a prolonged misalignment may affect long term business decisions as it affects costs. If the exchange rate is overvalued relative to the e stimated equilibrium level, investors may acquire more domestic assets for future capital gains in host country currency terms (Barrell and Pain, 1996). On the other hand, persistent overvaluation may reduce cost competitiveness of production in the host country, especially for export oriented products. Other traditional determinants of FDI can be demarcated into at least two categories – micro and macro determinants. The list of micro-determinants spans from market size, growth, labour costs, host government policies, tariffs to trade barriers. The macro-determinants include market size (Chakrabarti, 2001; Farrell et al., 2004; Kravis and Lipsey; 1992), openness (Edwards, 1990; Gastanaga et al. 1998; Hausmann and Fernandez-Arias, 2000; Aseidu, 2002), rate of inflation (Bajo-Rubia and Sosvilla-Rivero, 1994; Urata and Kawai, 2000), government budget, taxes (Gastanaga et al., 1998; Wei, 2000) and infrastructure (Wheeler and Mody, 1992; Urata and Kawai, 2000). Financial deepening is also another catalyst for FDI (Borensztein et al., 1998). Liquid liability, private credit and M3 serve as proxies. Increase in money supply fuels inflation which increases the cost of production in the host country rendering a negative relationship. However, increments in money supply supported by g rowth or higher productivity indicate increase in future purchasing power which can benefit market-seeking FDI. Finally, the degree of misalignment is computed based on the difference between the actual and the hypothetical equilibrium exchange rate. Accordingly, the estimation of the hypothetical equilibrium exchange rate relies on the theory advocated by Edwards (1994). This theory postulates that the real exchange rate is a function of several fundamental variables which includes the Balassa-Samuelson effect, trade openness, net foreign assets and government spending. Details are provided in Sidek and Yusoff (2009). METHODOLOGY AND DATA The question of when does misalignment begin to significantly affect capital inflows necessitate the existence of a non-linear relationship between these two variables. Thus, if such non-linear relationship exists, then it is possible to estimate an inflexion point, or a threshold value, at which the sign of misalignment may change or become significant. In the non-linear time series modelling, the threshold autoregressive model (TAR) is more popular since it offers a relatively simple specification, estimation and interpretation compared to other non-linear models. The origins of TAR models roots back to Tong (1980) where the main idea is to approximate a general non-linear autoregressive structure by a threshold autoregession with a small number of regimes. Hansen (1996, 2000) derives the asymptotic distribution of the ordinary least squares (OLS) estimates of the endogeneous threshold parameters which is used in this study. This section explains how equation (2) is estimated to incorporate threshold effect. According to Hansen (2000), threshold estimation is the act of splitting the sample into two regimes when the threshold value is unknown. One necessary precondition is that the threshold variable must be a continuous variable. In this study, the threshold estimation is carried out by splitting the sample into high misalignment and low misalignment regime. Since misalignment is a continuous variable, TAR model would be appropriate to engender the threshold value. Formally, the two-regime threshold regression model takes the form: where is the threshold variable which is used to split the sample into two regimes, is the threshold value which is unknown and must be estimated, denotes the dependent variable (capital inflow), represents a vector of explanatory variables and is the error term assumed to be white noise and i.i.d. Note that if the threshold value is greater than the threshold variable, equation (3) is estimated and vice versa. This allows the regression parameters to change with respect to . In order to write equations (3) and (4) in a single equation, a dummy variable is used which is defined as where {.} is the indicator function, with d=1 when and d = 0, if otherwise; and set , such that (3) and where and . Equation (5) allows all the regression parameters , and to be estimated and switch between the two regimes. The least square (LS) technique is used to estimate through minimization of the sum of squared errors function. To implement this, the model is expressed in matrix notation, hence, equat ion (5) is expressed as: (6) Define, (7) as the sum of squared error function. By definition the least squares estimators which is also the MLE when with i.i.d. , jointly minimize equation (7). This minimization process requires to be restricted to a bounded set . The concentrated sum of squared errors function is written as: (8) where is the value that minimizes . As takes values that is less than n, is uniquely described as: with (9) Focusing on the objective of this section, the first step is to examine whether there exist a threshold effect in the model. This requires the examination between the linear model vis-Ã  -vis the two-regime model, equation (5). The null hypothesis of no threshold effect is tested against an alternative hypothesis where threshold effect is present. Since TAR models have a non-standard distribution, Hansen (1997, 2000) develops a standard heteroscedasticity-consistent Langrange Multiplier (LM) bootstrap method to calculate the asymptotic critical value and the p-value. The second step is to examine whether the derived threshold value is statistically significant. This is done by differencing the confidence interval region based on the likelihood ratio statistic . Based on Hansen (2000), let C represent the desired asymptotic confidence interval (in this study at 95%) and be the C-level critical value and set . Assuming homoscedasticity, as , therefore, is the asymptotic C-level confidence region for . If the homoscedasticity condition is not fulfilled, then a scale likelihood ratio statistics of the residual sum of squared errors is defined as: (10)and the adjusted confidence region becomes such that is robust whether or not the heteroscedasticity condition holds. Simulation is set at 1000 replications as suggested by Hansen (2000). Also, is not normally distributed hence, the valid asymptotic confidence intervals of the estimated threshold values in the no-rejection areas defined as , where is a given asymptotic level; and the no- rejection region of the confidence interval is . If , than the null hypothesis of cannot be rejected. In addition, to examine the possibility of a second threshold value, the same exercise is repeated. Specifically, the empirical model to be tested which is based on equation (2) is defined as follows: (11) where K is capital inflows, Mis, R and M3 denote exchange rate misalignment, interest differentials and financial deepening, and Z represents the other control variables. Table 1 summarizes the description of data, measurement and sources used in this study. Table 1: Determinants of Capital Inflows (1991Q1-2008Q3) Variable Description Measurement Source I Foreign investment Total foreign investment inflow as a percentage of GDP BNM M3 Money supply M2 as a percentage of GDP IFS D Government deficit The difference between revenue and expenditure as a percentage of GDP BNM R Interest differential The difference between Malaysia and US 3-month T-Bill rates IFS T Taxation Government corporate tax revenue as a percentage of GDP BNM LL Liquid Liability Log International liquidity: banking institution liability, line. 7b.d IFS INFRA Infrastructure Log of spending on infrastructure as a percentage of GDP BNM IFS: International Financial Statistics, IMF, UNCTAD: United Nations Conference on Trade and Development, BNM: Bank Negara Malaysia Monthly Statistical BulletinDOS: Department of Statistics, Malaysia (various issues). RESULTS AND DISCUSSION Prior to time series analysis, we test for unit roots in order to avoid spurious regression. Three versions of unit root testing, namely the ADF, PP and KPSS tests are employed to examine whether the variables are stationary on level or otherwise. Table 3 indicates that the order of integration are mixed for a majority of variables. However, this study proceeds to examine the threshold effect by including lagged variables for I(1) variables in the OLS estimation. Moreover, equation (2) derived from the theory requires estimations at level. Table 2: Unit root test ADF PP KPSS Order of Integration Level 1st Diff Level 1st Diff Level 1st Diff I -3.7029* -7.9812* -3.5286* 14.00208 0.9008* 0.2305 I(0)/I(1) M3 -1.2741 -10.0951* -1.3334 -10.4699* 1.0229* 0.3588*** I(1) D -1.6297 -19.7087* -8.8219* -27.3774* 0.3649* 0.0894 I(0)/I(1) R -4.5405* -3.8179** -2.6509 -7.0649* 0.0711 0.0471 I(0)/I(1) INFRA -2.2527 -4.5270* -3.5053* -27.7776* 0.2234* 0.0813 I(0)/I(1) LL -3.0805 -6.5500* -2.4386 -6.7355* 0.1073 0.0607 I(0)/I(1) MIS -3.8075** -9.7442* -3.8076** -9.8483* 0.0662 0.0577 I(0) Note: *, ** and *** denote significance at 1%, 5% and 10% significant level. p-values are in parentheses. For ADF and PP test the null is no unit root (H0: Variable is stationary) whilst the null for the KPSS is the existence of unit root (H0: Variable is not stationary). The baseline regression constitutes the exchange rate misalignment, interest differential and a measure of financial development, M3. We present four additional models with different variables added to the baseline regression, namely liquid liability, government budget deficit, and infrastructure for sensitivity analysis. Hansen (2000) theoretical construct allows for two threshold effects, hence, the first step is to investigate the possible existence of such an effect. Prior to that, a threshold variable needs to be selected. Since the aim of this section is to examine at what percentage exchange rate misalignment actually hurts capital inflows, the appropriate threshold variable is the exchange rate misalignment. Upon choosing the appropriate threshold variable, the next step is to observe any evidence of a threshold effect and whether there exist one or more threshold by employing the heteroscedasticity-consistent Lagrange-multiplier (LM) test for a threshold based on Hansen (1996). To test under the null hypothesis of no threshold effect, p-values are calculated using a bootstrap analog which generates the dependent variable from the distribution , where is the OLS residuals from the estimated threshold model. With 1000 bootstrap replications, the p-values for the baseline threshold models (Table 3) using misalignment strongly suggest the existence of threshold effect at 0.000. Subsequently, this suggests that there is a sample split based on the effect of exchange rate misalignment. Table 3: Threshold Effects for the baseline model Model 1 First Sample Split F-Stats 51.4045 Bootstrap P-Value 0.000 Threshold Estimates -15.0260% 95% Confidence Interval -15.446% , -9.8360% Second Sample Split F-Stats 16.2171 Bootstrap P-Value 0.2890 Note: H0: No threshold effect. The threshold is based on the minimized sum of squared residuals. This illustrates the graph of the normalized likelihood ratio sequence as a function of the threshold in exchange rate misalignment. The estimated is the value which minimizes these graphs which range at =15.02-15.44%. The dotted lines on the graphs present the 95% critical values. For example, in model 1, the asymptotic 95% confidence interval set where crosses the dotted lines. The results suggest that there is ample evidence for a two-regime specification. Also, it is worth noting that 41 of the 71 observations fall into the 95% confidence interval, hence, requires an examination of the possible existence of a second sample split. Results in Table 3, show that second sample split renders insignificant bootstrap p-value thus, indicating no further regime split. Table 4 presents the results for baseline regression. For comparison purposes, this study provides the linear OLS model without the threshold effect and a two-regime model which accommodates the threshold effect. Basically, the variables confer the correct signs in line with the prediction of the theory. Misalignment has a negative and significant effect on capital inflows in regime 2. Interest differential is expected to confer a negative effect. Results indicate that interest differentials only affects capital inflows negatively in the regime 1 but is insignificant in the regime 2. Similarly, M3 has significant effect in both regime but is positive in the regime 1 but the sign switches in regime 2. Hence, splitting the sample gives a more indepth view of the effects of these basic variables on investment inflows. To reiterate, sample splitting allows the examination of whether the significant effect is present in both regimes or otherwise. The results show that below the threshold value of 15%, exchange rate misalignment may be negative but are not statistically significant. However, above the 15% threshold level, misalignment exerts both negative and significant impact on capital inflows. A 1% increase in misalignment (overvaluation) suppresses capital inflows by approximately 1.19%. The negative effect of exchange rate misalignment on capital inflows is consistent with the findings of Hasnat (1999). Barrel and Pain (1996) argue that an apparent currency misalignment persistent over some length of time may affect investment inflows decisions. A reasonable explanation is that the relative production costs may be higher as a result of such misalignment. If the ringgit is thought to be overvalued relative to its estimated equilibrium level, then foreign production may be discouraged by the prospect of future capital loss in home currency terms. Another issue which emerges after the 1997 financial crisis is that capital inflows must be managed since reversals are likely to cause severe damage to the economy. Reinhart and Reinhart (1998) calls for greater exchange rate flexibility which is meant to introduce two-way risks, therefore, discouraging speculative capital inflows. It is, however, only possible in the context of de facto peg or a tightly managed float. Furthermore, the effectiveness of this policy depends on how much policymakers are willing to allow the exchange rate to fluctuate. A large band denotes greater flexibility but risks having large nominal appreciation which connotes possible overvaluation of the currency. The result of this study suggests that overvaluation is detrimental to capital inflows if this band exceeds 15%. Hence, policymakers should keep exchange rate fluctuations well below this 15% threshold. Table 4: Baseline regression results on the effect of misalignment on capital inflows (1991:Q1-2008:Q3). Dependent variable is capital inflows. Model 1 Linear Model Threshold Model OLS without threshold Regime 1 Â £ 15.0259% Regime 2 > 15.0259% Misalignment -0.4267** (0.2115) -0.3186 (0.2573) -1.1955** (0.5712) Interest Differential -0.0250*** (0.0131) -0.0438* (0.01533) -0.0261 (0.0193) M3 0.2964* (0.0391) 0.2644* (0.0516) -0.5560* (0.1240) Constant 3.0468* (0.2779) 2.5394* (0.2593) 6.7313* (0.6099) No. of Observations 71 42 29 R2 0.3664 0.6484 0.4218 Notes: *, ** and *** denote 1%, 5% and 10% significance respectively. Standard errors in parentheses. Interest rate differential are consistently negative and significant in all specifications and in both regimes in majority of the threshold model. This stresses the role of interest rates in attracting capital inflows into Malaysia. Although the impact may be small, it is significant and the authorities should ensure that interest rates are kept at certain levels to maintain competitiveness of Malaysia as destination for capital investment. In this paper, the estimated impact of a 1% change in interest differential is expected to subdue foreign investment by 0.04 percentage point in the first regime and 0.03 percentage point in the second regime. The proxy for financial deepening, M3 is statistically significant in all models and in both regimes. Again, this signifies the importance of financial development in attracting capital investment into Malaysia. Interestingly, M3 is positive during the periods of low misalignment regime (regime 1) but becomes negative at higher misalignment regime (regime 2). During low misalignment, a 1% increase in M3 is expected to draw in 0.3 percentage point more investment inflow into Malaysia. This shows that in the lower regime, financial depth acts as an impetus to capital inflows. However, the situation reverse with 0.6 percentage point lower investment inflows is expected with a 1% increase in misalignment in the second threshold regime. Montiel (1999) explicitly explains this phenomenon where capital inflows increase reserves which then prompt an increase in the monetary base, M2 and M3. Such increases fuels further increments in domestic demand leading to real appreciation. Thus, any overvaluation of the currency may eventually have negative ramifications on capital inflows. Sensitivity analysis To check for the sensitivity of the estimated threshold value, Table 6 -7 and Figure 3 represents four other models which use different variables in addition to the baseline regression. The addition of taxes yields insignificant results without drastically changing the threshold value. Other additional variables such as government budget deficit and liquid liability are only significant in one of the two regimes . With the inclusion of additional variables, the estimated magnitude of each regressors differ slightly but maintains the same sign and significance level. For example a 1% increase in misalignment (overvaluation) suppresses capital inflows by 1.11-1.55 percentage point. The estimated impact of a 1% change in interest differential is expected to deter foreign investment by 0.04-0.05 percentage point in the first regime and 0.02-0.06 percentage point in the second regime. Similarly, during low misalignment, a 1% increase in M3 is expected to draw in 0.2-0.3 percentage point m ore investment inflow into Malaysia. An estimated 0.49-0.67 percentage point lower investment inflows is expected with a 1% increase in M3 in the second threshold regime. In view of the results, it seems evident that the exchange rate policy has important effect in attracting foreign capital inflows into Malaysia. Specifically, misalignment in terms of overvaluation should be kept lower than 15 percent to ensure that capital inflows remained unhurt. Table 5: Sensitivity Analysis: Threshold Effects Model 2 Model 3 Model 4 Model 5 First Sample Split F-Stats 71.1442 45.9364 53.3722 53.3722 Bootstrap P-Value 0.000 0.000 0.000 0.000 Threshold Estimates -15.4461% -15.0260% -15.0260% -15.0260% 95% Confidence Interval -15.446%, -15.025% -15.446%, -9.836% -15.446%, -0.0984% -15.446%, -0.0984% Second Sample Split F-Stats 16.4917 19.7585 22.9710 22.9710 Bootstrap P-Value 0.5310 0.3800 0.2420 0.2420 Note: H0: No threshold effect. The threshold is based on the minimized sum of squared residuals Table 6: Sensitivity Analysis for threshold estimates (1991:Q1-2008:Q3). Model 2 Linear Model Threshold Model OLS without threshold Regime 1 Â £ 15.4461% Regime 2 > 15.4461% Misalignment -0.4278*** (0.2216) -0.3497 (0.4143) -1.5593* (0.3135) Interest Differential -0.0250*** (0.0134) -0.0462* (0.0153) -0.0599* (0.0131) M3 0.2966* (0.0414) 0.2732* (0.0488) -0.5609* (0.0744) Liquid Liability -0.0029 (0.1709) -0.0634 (0.1932) 1.1843* (0.2615) Constant 2.9780* (0.2713) 2.5259* (0.2593) 6.1799* (0.3135) No. of Observations 71 41 30 R2 0.3842 0.6503 0.5986 Model 3 Linear Model Threshold Model OLS without threshold Regime 1 Â £ 15.0260% Regime 2 > 15.0260% Misalignment -0.4472** (0.2038) -0.3800 (0.2460) -1.1171*** (0.6229) Interest Differential -0.0254* (0.0126) -0.0505* (0.0140) -0.0237 (0.0221) M3 0.2844* (7.4922) 0.2521* (0.0472) -0.5391* (0.1477) Deficit -0.7655* (0.3059) -0.7380* (0.3099) -0.1841 (0.7174) Constant 3.0308* (0.2674) 2.5835* (0.2445) 6.6452* (0.7337) No. of Observations 71 42 29 R2 0.4285 0.6829 0.4230 Model 4 Linear Model Threshold Model OL S without threshold Regime 1 Â £ 15.0260% Regime 2 > 15.0260% Misalignment -0.2852 (0.2181) -0.2582 (0.2720) 1.2490** (0.5612) Interest Differential -0.0275** (0.0128) -0.0419* (0.0165) -0.0311 (0.0204) M3 0.3208* (0.0401) 0.2796* (0.0583) -0.5489* (0.1245) Tax 2.1899** (1.0761) 0.1283 (0.1457) 0.1260 (0.1720) Constant 3.0274* (0.4383) 2.2463* (0.4806) 6.5027* (0.7227) No. of Observations 71 42 29 R2 0.3665 0.6516 0.4300 Model 5 Linear Model Threshold Model OLS without threshold Regime 1 Â £ 15.0260% Regime 2 > 15.0260% Misalignment -0.3780*** (0.1977) -0.4495*** (0.2602) -1.3190** (0.6059) Interest Differential -0.0203 (0.0123) -0.0433* (0.0152) -0.0308 (0.0212) M3 0.2941* (0.0365) 0.2388* (0.0479) -0.6093* (0.1406) Infrastructure 3.0729* (3.3373) 0.0474** (0.0228) -0.0382 (0.0392) Constant 3.0709* (0.2569) 2.5698* (0.2346) 7.0433* (0.7173) No. of Observations 71 42 29 R2 0.4091 0.6815 0.4384 Notes: *, ** and *** denote 1%, 5% and 10% significance respectively. Standard errors in parentheses. CONCLUSION The objective of this chapter is to examine the impact of exchange rate misalignment on capital inflows. Results provide evidences of the negative impact of misalignment on capital inflows. To reiterate, overvaluation of the ringgit signals that Malaysia is less competitive vis-Ã  -vis other countries. In addition, this paper also estimates a specific threshold value; that is the degree of misalignment after which it begins to hurt capital inflows. By employing a recent technique by Hansen (1996, 2000), this study splits the sample into high misalignment and low misalignment regimes. This study shows that misalignments hurt capital inflows in the high misalignment regime or when misalignment is greater than 15 percent. This study also confirms the work of Goh (2005) who suggests that the portfolio balance model can capture the determinants of capital inflows in Malaysia. In particular, the results suggest that interest differential is an important determinant albeit, small, hence, p olicies should be direc