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Testing for bubbles in the Stock Exchange Market

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The regression was estimated for each sector separately by applying the logit model:

where denotes the speculative bubble dates for sector i, which is equal to one if there is a bubble, and to zero otherwise; FPI is foreign portfolio investment;  CDS is Sovereign Credit Default Swaps for Turkey; EX is foreign exchange rate (dollar/lira); VIX is CBOE Volatility Index; ∆ is the difference operator;  are vectors of parameters to be estimated, and  is an i.i.d. error term.

Hypothesis 1: The possibility for the existence of speculative bubbles in assets increase with higher Sovereign Credit Default Swaps (CDS), holding other variables constant.

Hypothesis 2:  An increase in foreign exchange rate leads to speculative bubbles, holding all other independent variables constant. 

Hypothesis 3:  Foreign portfolio investment is associated with an increased probability of speculative bubbles, holding other variables constant.

Hypothesis 4: A lower CBOE Volatility Index (VIX)  reduces thechance of the speculative bubble in stock market, holding the effect of the other variables fixed. 

I need the interpretation of the following table (LOGIT (MARGINAL EFFECT) model results). How independent variables impact the probability of speculative bubble for each sector? I need some details like what are the reasons behind that conclusion?

I mean one unit or one per cent change in VIX index cause ….% change in the probability of bubble in Y sector, this is because…..(give me some logical explanation).

Table. The Estimation Results of Marjinal Effects

    Portfolio CDS EX VIX
BIST XUAll -0.217**  -0.306*** -0.038 0.008
  BIST XU100 -0.166**  -0.312*** -0.064 0.033
  BIST XU50 -0.221** -0.087 -0.596 -0.071
  BIST XU30      -0.046 -0.047 0.189 -0.003
BIST Financial -0.098 -0.140 0.126 0.035
  BIST Banks 0.012 0.024 0.017 -0.005
  BIST Holding -0.040 -0.068 -0.047 0.024
  BIST Leasing -0.0416 -0.010 0.043   -0.310***
  BIST Insurance -0.205* -0.279* 0.676 -0.229*
  BIST Real Est. -0.158**  -0.207** -0.268 0.105**
BIST Industrial -0.675 -0.088 -0.913* 0.079
  BIST Food Bev. -0.008   -0.488*** 0.070 0.149*
  BIST Wood Paper 0.033 0.062 0.187 -0.116*
  BIST Metal Prod. -0.038 -0.163 0.027 -0.151
  BIST Chemical -0.143 -0.167 0.717  -0.292***
  BIST Basic Metal 0.178 0.042 0.621  -0.405***
  BIST Textile Le. -0.015   -0.530*** 0.252 0.020
  BIST Non-Metal   -0.401***   -0.495*** 0.365 0.026
BIST Services -0.151 -0.141*** -0.593 0.047
  BIST Telecom. 0.025   -0.028 -0.239 0.033
  BIST Trade  -0.431*** -1.046*** 0.006 0.213*
  BIST Transport.  0.481*** -0.411***   3.050*** 0.017
  BIST Tourism 0.165*   -0.101 -0.207 -0.063
         
  BIST Inf. Tech. 0.169    -0.161* 0.126 0.121
           

Notes: ***, **, and * denote significance levels at 1 per cent, 5 per cent and 10 per cent, respectively.

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