scholarly journals State capitalism and capital markets: Comparing securities exchanges in emerging markets

2021 ◽  
pp. 0308518X2110475
Author(s):  
Johannes Petry ◽  
Kai Koddenbrock ◽  
Andreas Nölke
Keyword(s):  
Emerging Markets ◽  
Capital Markets ◽  
Emerging Market ◽  
Institutional Setting ◽  
State Capitalism ◽  
State Involvement ◽  
Advanced Economies ◽  
Securities Exchanges ◽  
Comparative Institutional Analysis ◽  
The Relationship

Finance plays a major role in discussions about state capitalism in emerging markets, but the focus has so far been on banks. Capital markets have been neglected. Moreover, findings from the growing literature on financialization in emerging markets indicate that in some cases there is increasing state involvement in the development and functioning of capital markets. Hence, the relationship between the state and finance in these economies may be fundamentally different from the picture provided by liberal Western-centric perspectives. Instead of looking at capital markets as uniform entities, we propose to analyse them as variegated – while characterized by common financialization processes, they can be informed by different institutional logics, leading to very different market dynamics and outcomes. We explore to what extent these differences exist and how state-capitalist economies facilitate capital market development. Our comparative institutional analysis of securities exchanges as central parts of capital markets in six increasingly financialized emerging market economies – Brazil, China, India, Russia, South Africa and South Korea – focuses on the degree to which capital markets are integrated into state-capitalist institutions. Instead of mere platforms on which market transactions take place, we analyse exchanges as powerful actors which actively shape capital markets. While in most advanced economies exchanges are situated within an institutional setting informed by neoliberal institutional logic, we demonstrate that exchanges in emerging markets often organize capital markets to facilitate state objectives.

The Pricing of Country Funds from Emerging Markets: Theory and Evidence

1998 ◽  
Vol 01 (01) ◽  
pp. 111-143 ◽  
Author(s):  
Vihang Errunza ◽  
Lemma W. Senbet ◽  
Ked Hogan
Keyword(s):  
Emerging Markets ◽  
Capital Markets ◽  
Emerging Market ◽  
International Market ◽  
Policy Implications ◽  
Substitution Effects ◽  
Country Funds ◽  
Study Country ◽  
Emerging Capital Markets ◽  
The Relationship

This paper provides a theoretical and empirical analysis of country funds focusing on emerging economies whose capital markets are not readily accessible to outside investors. We study country fund pricing and the associated policy implications under alternative variations of international market structure segmentation. We show that country funds traded in the developed capital markets can be beneficial in promoting the efficiency of pricing in the emerging capital markets and in enhancing capital mobilization by local firms. These efficiency gains vary depending upon the degree to which the emerging market securities are spanned by the core or advanced market securities, and cross-border arbitrage restrictions. A country fund premium or discount arises in our framework owing to access and substitution effects characterizing the relationship between the host and emerging markets. We present some empirical evidence supporting our principal predictions. In particular, we investigate the issues of country fund pricing, relative influences of the home market, the international market, the global closed-end fund factor, and the behavior of fund premia/discounts.

Financialization and state capitalism in Hungary after the Global Financial Crisis

2021 ◽  
pp. 102452942110032
Author(s):  
David Karas
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Emerging Market ◽  
Active Role ◽  
The State ◽  
State Capitalism ◽  
Political Risks ◽  
Role Of The State ◽  
Advanced Economies ◽  
The Global Financial Crisis

Whereas the active role of the state in steering financialization is consensual in advanced economies, the financialization of emerging market economies is usually examined through the prism of dependency: this downplays the domestic political functions of financialization and the agency of the state. With the consolidation of state capitalist regimes in the semi-periphery after the Global Financial Crisis, different interpretations emerged – some linking state capitalism with de-financialization, others with coercive projects deepening it. Preferring a more granular and multi-dimensional approach, I analyse how different facets of financialization might represent political risks or opportunities for state capitalist projects: Based on the Hungarian example, I first explain how the constitution of a ‘financial vertical’ after 2010 inaugurated a new mode of statecraft. Second, I show how the financial vertical enabled rentier bargains between state and society after 2015 by deepening the financialization of social policy and housing in response to a looming crisis of competitiveness.

The impact of artificial intelligence (AI) finance on financing constraints of non-SOE firms in emerging markets

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jun Shao ◽  
Zhukun Lou ◽  
Chong Wang ◽  
Jinye Mao ◽  
Ailin Ye
Keyword(s):  
Emerging Markets ◽  
Emerging Market ◽  
Financing Constraints ◽  
Content Type ◽  
Emerging Market Countries ◽  
Finance Development ◽  
Cash Flow Sensitivity ◽  
The Impact ◽  
The Relationship ◽  
Practical Implications

PurposeThis study investigates the impact of AI finance on financing constraints of non-SOE firms in an emerging market.Design/methodology/approachUsing a sample of non-SOE listed companies in China from 2011 to 2018, this research employs the cash–cash flow sensitivity model to examine the effect of AI finance on financing constraints of non-SOE firms.FindingsWe find that the development of AI finance can alleviate the financing constraints of non-SOE firms. Further, we document that such effect is more pronounced for smaller firms, more innovative firms and firms in developing areas.Practical implicationsThis study suggests that emerging market countries can ease the financing constraints of non-SOE firms by promoting AI finance development.Originality/valueThis study, to the best of our knowledge, is the first one to explore the relationship between AI finance development and financing constraints of non-SOE firms in emerging markets.

scholarly journals Global Financial Cycles and the Exchange Rate Regime: A Perspective from Emerging Markets

2018 ◽  
Vol 108 ◽  
pp. 499-504 ◽  
Author(s):  
Maurice Obstfeld ◽  
Jonathan D. Ostry ◽  
Mahvash S. Qureshi
Keyword(s):  
Exchange Rate ◽  
Emerging Markets ◽  
Exchange Rate Regime ◽  
Emerging Market ◽  
Exchange Rate Regimes ◽  
Exchange Rate Flexibility ◽  
Macroeconomic Conditions ◽  
Financial Conditions ◽  
Advanced Economies ◽  
Financial Cycles

This paper examines the claim that exchange rate regimes are of little relevance in the transmission of global financial conditions to domestic financial and macroeconomic conditions. Our findings suggest that exchange rate regimes do matter, at least for emerging market economies. The transmission of global financial shocks to domestic variables is magnified under fixed exchange rate regimes relative to more flexible regimes. For advanced economies, however, the jury is still out, as the recent paucity of truly fixed regimes among these economies poses a challenge for estimating the effect of exchange rate flexibility.

How much does valuation model choice matter? Target price accuracy of PE and DCF model in Asian emerging markets

2017 ◽  
Vol 7 (1) ◽  
pp. 90-107 ◽  
Author(s):  
Samie Ahmed Sayed
Keyword(s):  
Emerging Markets ◽  
Emerging Market ◽  
Institutional Setting ◽  
Research Report ◽  
Target Price ◽  
Predictive Utility ◽  
Content Type ◽  
Valuation Model ◽  
Asian Emerging Markets ◽  
Dcf Model

Purpose The purpose of this paper is to focus on valuation practices applied by analysts to derive target price forecasts in Asian emerging markets. The key objective of this study is to understand valuation model preference of analysts and to compare the predictive utility of target price forecasts derived through heuristics-driven price-to-earnings (PE) model and theoretically sound discounted cash flow (DCF) model. Design/methodology/approach Each research report in the sample of 502 research reports has been studied in detail to understand the dominant valuation model (PE or DCF) applied by analyst to derive target price forecasts. These research reports have been issued on stocks trading in seven emerging markets including India, Malaysia, Indonesia, Taiwan, Philippines, Korea and Thailand during a six-year period starting 2008. Standard OLS and logit regression analysis has been performed to derive empirical findings. Findings The study finds that lower regulatory and reporting standards prevailing in emerging markets have no significant bearing on analyst choice of valuation model (PE or DCF). Time-series analysis suggests that emerging market analysts did not rely upon the usage of DCF model and preferred PE model during and immediately after the financial crisis of 2008. Multivariate regression results show weak evidence that PE model produces better results than DCF model after adjusting for the complexities associated with analyzing emerging market equities. The results imply that PE model, to some degree, is better equipped to capture market moods and sentiment in dynamic emerging markets rather than theoretically sound DCF model. Originality/value Most past studies on valuation model practices have focused on developed markets and this study provides a fresh perspective on analyst valuation model practices and performance in a new institutional setting of Asian emerging markets. The marginally better predictive utility of PE model as compared to DCF model is possibly a feature limited to Asian emerging markets.

scholarly journals Impact of Intellectual Capital on Mergers and Acquisitions: Evidence from Developed and Emerging Capital Markets

2020 ◽  
Vol 14 (2) ◽  
pp. 35-57
Author(s):  
Irina Skvortsova ◽  
Arina Sidelnikova
Keyword(s):  
Emerging Markets ◽  
Intellectual Capital ◽  
Capital Markets ◽  
Emerging Market ◽  
Performance Level ◽  
Relational Capital ◽  
Target Firm ◽  
Emerging Capital Markets ◽  
The Impact ◽  
A Performance

In this article, we analyse the influence of intellectual capital on M&A performance in developed and emerging capital markets with the use of the event studies and regression analysis methodologies. In contrast to previous research studies in this area, we assess the impact of the components of intellectual capital (human, structural, and relational capital) on firm value as a result of mergers and broaden the scarce level literature on this specific topic. We additionally present a comparative analysis of the influence of intellectual capital components on M&A performance vis-à-vis the performance of acquirers from developed and emerging capital markets.Our research sample consists of 194 cross-border deals closed in the period 2010–2018. We compare developed markets based on firms from USA, Canada, Germany, Great Britain, France, Italy and Japan and emerging markets based on firms from China, India, Brazil and Malaysia.Our findings contribute to the literature in several ways. Firstly, we document a positive and significant dependence between the level of intellectual capital of the target firm and the M&A performance level of the acquirer, irrespective of the market where the acquirer operates. We provide empirical support for the postulation that the higher the level of intellectual capital of the target firm, the higher M&A performance of the acquirer will be in both developed and emerging markets. Secondly, we empirically prove that each of the components of intellectual capital of the target firm increases M&A performance: the higher the level of human, structural or relational capital of the target firm, the higher the M&A performance level of the acquirer in both developed and emerging capital markets. Thirdly, we show that the level of impact of human capital on M&A performance is higher for emerging market acquirers, and the impact of structural capital is higher for developed market acquirers.

scholarly journals Moderating Role of Financial Market Development on the Relationship between Stock Liquidity and Dividend

2020 ◽  
Vol 16 (2) ◽  
pp. 77-99
Author(s):  
Mohd Ashari Bakri ◽  
Amin Nordin Bany-Ariffin ◽  
Bolaji Tunde Matemilola ◽  
Wei Theng Lau
Keyword(s):  
Emerging Markets ◽  
Financial Market ◽  
Emerging Market ◽  
Investment Strategy ◽  
Market Development ◽  
Stock Liquidity ◽  
Financial Market Development ◽  
The Relationship ◽  
Moderating Role

This article aims to investigate the relationship between stock liquidity and dividend across emerging market countries as well as examined the moderating role of financial market development on the relationship between stock liquidity and dividend. Data were obtained from the World Bank and DataStream databases. The study examined 3,258 listed firms from 22 emerging markets to be extrapolated in the emerging market context. To analyse the data, this article used the panel data Tobit model and panel logistic regression, both with random effects. The analysis revealed that financial market development has a positive moderating effect on the relationship between stock liquidity and dividend by improving local market liquidity and mitigating information asymmetry. The study findings provide information for managers to devise investment strategy in the emerging markets. This article provides new insights into the financial market development moderating role on the relationship between stock liquidity and dividend.

scholarly journals International Marketing Strategy in Emerging-Market Exporting Firms

2019 ◽  
Vol 27 (1) ◽  
pp. 20-37 ◽  
Author(s):  
Saeed Samiee ◽  
Suthawan Chirapanda
Keyword(s):  
Emerging Markets ◽  
Marketing Strategy ◽  
Emerging Market ◽  
International Marketing ◽  
Superior Performance ◽  
Market Conditions ◽  
Developed Markets ◽  
Advanced Economies ◽  
International Marketing Strategy ◽  
Emerging Market Firms

Unlike their counterparts in developed markets, emerging-market firms are characterized by limited resources, including international experience and access to relevant information, which are essential for developing suitable international marketing strategy (IMS). Under such circumstances, strategies are expected to produce suboptimal results, especially when targeting competitive markets in advanced economies. Prior IMS research has largely focused on developed markets. In contrast, the authors examine IMS of exporters in Thailand, an emerging market. Despite major differences in environments and processes in emerging markets, they establish that Thai exporters that match their IMS to local market conditions realize superior performance, as predicated by strategy coalignment. The authors validate these results and discuss emerging-market firms’ capacity to adapt their strategies and succeed in highly competitive advanced economies, despite relative inexperience, volatility, and information asymmetry at home. Exporting remains of critical importance to the economies of emerging markets, and the findings provide greater optimism for their firms’ ability to address host-market conditions in their marketing strategies, as well as pointing to the competitive threat posed by these emerging-market neophytes.

Effects of ownership structure on the relationship between multinationality and downside risk

2019 ◽  
Vol 26 (3) ◽  
pp. 401-421
Author(s):  
Chao Zhou
Keyword(s):  
Emerging Markets ◽  
Real Options ◽  
Ownership Structure ◽  
Emerging Market ◽  
Downside Risk ◽  
Publicly Traded ◽  
Data Set ◽  
Content Type ◽  
Real Options Theory ◽  
The Relationship

Purpose The purpose of this paper is to explore how multinationality affects multinational companies’ (MNCs) downside risk and the moderate effects of ownership structure in the setting of emerging markets based on Chinese publicly traded manufacturing MNCs. Design/methodology/approach The author derives hypotheses based on real options theory and agency theory, and tests hypotheses by using Tobit model and a unique data set of Chinese A-shared publicly traded manufacturing MNCs in the period of 2010–2016. Findings The empirical results suggest that multinationality is positively related to downside risk and this effect is subjected to ownership structure for firms in emerging markets. In particular, multinationality of MNCs with a high level of ownership concentration, managerial ownership and institutional ownership is more likely to reduce downside risk. Practical implications The main conclusion of this paper highlights the importance of ownership structure of MNCs in explaining the real options value of multinationality, and conveys to owners of MNCs in China and other emerging markets the need to strengthen firms’ governance if they want to maximize the benefits of multinational operations. Originality/value This study extends existing studies by taking ownership structure into consideration and highlighting the importance of agency problem in the examination of multinationality and downside risk, which provides a potential explanation for previous mixed evidence. This study also provides new evidence for the relationship between multinationality and downside risk by using a unique sample from China, an emerging market country.

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