We study the relationship between Bitcoin and commodities by assessing the ability of Bitcoin to act as a diversifier, hedge, or safe haven against daily movements in commodities in general, and energy commodities in particular. We focus on energy commodities because energy, in the form of electricity, is an essential input in the Bitcoin production. For the entire period, results show that Bitcoin is a strong hedge and a safe-haven against movements in both commodity indices. We further examine whether that ability is also present for non-energy commodities and our analysis show insignificant results when energy commodities are excluded from the general commodity index. We also account for the December 2013 Bitcoin price crash and our results reveal that Bitcoin hedge and safe-haven properties against commodities and energy commodities are only present in the pre-crash period, whereas in the post-crash period Bitcoin is no more than a diversifier. In addition to uncovering the time-varying role of Bitcoin, we highlight the dissimilarity in the dynamic correlations between the extreme downward and extreme upward movements.
KEYWORDS: Cryptocurrency, Bitcoin crash, commodities, energy commodities, diversifier, hedge, safe haven
Unlike the case of private hybrid organizational structures, the institutional dimension in a public–private partnership (PPP) is no longer exogenous to the decisions of the partners in a transaction. The public partner, in this type of contract, acts also as regulator and arbitrator when the regulatory bodies and the courts are subject to government influence. This article explores the impact of institutional quality on the expansion of PPP markets in developing countries. The analysis expands on Crocker and Masten’s construct for choosing an appropriate organizational structure for the provision of public services. Institutional quality becomes a source of transaction costs on a par with asset specificity and uncertainty, on one hand, and, on the other, it affects the magnitude of the impact of an exogenous unforeseen event. Panel regressions, on a sample of 83 developing countries for the period 1999–2011, provide evidence on the positive impact of judicial independence and regulatory quality in attracting private investors to PPP markets regardless of the degree of uncertainty in the exchange environment.
KEYWORDS: judicial independence, public–private partnerships, regulatory quality, transaction costs, uncertainty