Currency Unions in Africa: Is the Trade Effect Substantial Enough to Justify Their Formation?

This paper evaluates the impact of trading locations on equity returns by examining the stock price behaviour of three Anglo-Dutch dual-listed companies which result from mergers where two corporations agree to function as a single operating business, but maintain separate identities. The shares of these stocks are traded not only in their home market but also on several US stock exchanges in the form of American Depository Receipts. Regressing the return differentials on these dual-listed and cross-listed stocks on the relative market index returns and currency changes provides evidence of an apparent violation of the Law of One Price. The regression results show that the return on each part of dual-listed companies is highly correlated with the market on which it is most intensively traded. Similarly, returns on cross-listed stocks have considerably higher co-movement with US market indices and considerably lower co-movement with home-market indices than their home-market counterparts. Market risk premium is not a significant explanatory variable of the location of trade effect.

Download Full-text

The imf Conditionality in the Age of Post-National Governance

International Organizations Law Review ◽

10.1163/15723747-18010004 ◽

2021 ◽

pp. 1-27

Author(s):

Vojtěch Belling ◽

Lukáš Kollert ◽

Martin Vojta

Keyword(s):

Member State ◽

Program Design ◽

Currency Union ◽

Currency Unions ◽

Monetary Unions ◽

Executive Board ◽

Member States ◽

Board Decision ◽

Supranational Institutions ◽

The Imf

Abstract The paper focuses on conditionality in imf programs for member states of monetary unions in light of the decision of the imf’s Executive Board on Program Design in Currency Unions (2018). Despite the growing importance of supranational institutions, the imf lacked until 2018 any explicit framework for imposing conditions on currency union bodies in cases where a member state of such a union requested an imf program. The aim of this paper is to assess the newly adopted imf approach to conditionality for currency union institutions based on the concept of “policy assurances” and to answer the question of whether the imf had authority to impose conditions on supranational institutions prior to the 2018 Board decision and whether the imf should in principle have such authority.

Download Full-text