Search results for "markets"
showing 10 items of 332 documents
The network of global corporate control.
2011
The structure of the control network of transnational corporations affects global market competition and financial stability. So far, only small national samples were studied and there was no appropriate methodology to assess control globally. We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player. We find that transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic “super-entity” that raises new important issues both for researchers and policy make…
Sector identification in a set of stock return time series traded at the London Stock Exchange
2005
We compare some methods recently used in the literature to detect the existence of a certain degree of common behavior of stock returns belonging to the same economic sector. Specifically, we discuss methods based on random matrix theory and hierarchical clustering techniques. We apply these methods to a portfolio of stocks traded at the London Stock Exchange. The investigated time series are recorded both at a daily time horizon and at a 5-minute time horizon. The correlation coefficient matrix is very different at different time horizons confirming that more structured correlation coefficient matrices are observed for long time horizons. All the considered methods are able to detect econo…
Tick size and price diffusion
2010
A tick size is the smallest increment of a security price. It is clear that at the shortest time scale on which individual orders are placed the tick size has a major role which affects where limit orders can be placed, the bid-ask spread, etc. This is the realm of market microstructure and there is a vast literature on the role of tick size on market microstructure. However, tick size can also affect price properties at longer time scales, and relatively less is known about the effect of tick size on the statistical properties of prices. The present paper is divided in two parts. In the first we review the effect of tick size change on the market microstructure and the diffusion properties…
PRODUCTION FLEXIBILITY AND ADAPTING TO MARKET CHANGES
2007
Abstract This paper describes those situations when a company, an organization, in its search for minimum costs, including those involved by investment, and production flexibility, manages to adapt to those changes that ensure survival on the market. Economies of scale are an attraction for any firm and thus globalized, huge firms emerge, conquering continuously developing markets. However, smaller firms face market changes that are usually dangerous in terms of sustainability. The paper highlights those market components that provide information on adapting production through flexibility.
How markets slowly digest changes in supply and demand
2008
In this article we revisit the classic problem of tatonnement in price formation from a microstructure point of view, reviewing a recent body of theoretical and empirical work explaining how fluctuations in supply and demand are slowly incorporated into prices. Because revealed market liquidity is extremely low, large orders to buy or sell can only be traded incrementally, over periods of time as long as months. As a result order flow is a highly persistent long-memory process. Maintaining compatibility with market efficiency has profound consequences on price formation, on the dynamics of liquidity, and on the nature of impact. We review a body of theory that makes detailed quantitative pr…
Availability of alternative financial resources for SMES as a critical part of the entrepreneurial eco-system: Latvia and Italy
2015
Abstract The importance of non-traditional alternative/innovative financing is gaining recognition in both developed and emerging economies throughout the world (OECD, 2012; EC, 2013; ECB, 2013; ECB, 2014). SME financing in Europe remains primarily bank based, in spite of the many policies proposed to develop alternative financing instruments (e.g. adopting directives on venture capital, improving the transparency and visibility of SMEs on capital markets, etc.) The paper aims at understanding the availability of alternative resources for SMEs by analyzing them rigorously, understanding the obstacles for the development of non-bank finance and developing recommendations to overcome them. Th…
How Financial Freedom and Integration Change Public Debt Impact on Financial Development in the Asia-Pacific: A Panel Smooth Transition Regression Ap…
2018
This study investigates the non‐linear effect of fiscal policy (measured by total domestic public sector debt) on the level of financial development, using a balanced panel of 22 economies in the Asia‐Pacific region. Governments in less developed financial institutional infrastructure (for instance, emerging markets) tend to abuse their power by intervening in the domestic debt market. This study shows that better financial institutional infrastructure helps to discipline governments. The results suggest a negative effect of domestic public sector debt on financial development, but only at low level of financial freedom and integration. Higher financial freedom and financial integration wou…
Risk Taking by Banks in the Transition Countries
2007
The banking sectors of the transition countries have progressed remarkably in the last 15 years. In fact, banking in most transition countries has largely shaken off the traumas of the transition era. At the start of the 21st century banks in these countries look very much like banks elsewhere. That is, they are by no means problem free but they are struggling with the same issues as banks in other emerging market countries. There have been a surprisingly large number of studies that have told us about the performance of these banks but we know very little about their risk taking behaviour and how the banking environment influences it.
Equity-worthiness and equity-willingness: key factors in private equity deals
2014
While access to private equity funds (PEFs) provides a unique opportunity for firms to set up sturdy growth paths, how PEFs select companies is an unknown process to entrepreneurs and business owners. This study aims to offer insights regarding the private equity market to entrepreneurs searching for external capital. We analyzed a novel dataset of 240 pre-deal negotiations between small- and medium-sized Italian companies and a closed-end fund. Results indicate that the successful closing of a deal depends on more than just the target firm's equity-worthiness (i.e., the company's ability to meet the expectations of a private equity investor). In fact, there is another dimension: the target…
Effects of Behavioural Finance on Emerging Capital Markets
2014
Abstract A recent common view of finance experts is that it is becoming increasingly difficult to understand how the economy as a whole works. Although the efficient market theory might be considered an ideal model enabling the interpretation of market behavior, it has begun to lose ground, and the rationality hypothesis failed to explain the excessive volatility of the returns and trading volume recorded on both developed capital markets and emerging ones. Adding the behavioral finance perspective to the equation can help us to understand better how market agents will react. In this article, we investigate the factors that may explain the trading volume evolution on two emerging capital ma…