Modelling of Corporate Exposure at Default (EAD) in Emerging Financial Markets: The Case for Counters Listed on the Zimbabwe Stock Exchange (ZSE) in the Dollarization Era

Purpose This paper aims to assess the relationship between a knowledge-based economy and fraudulent financial reporting. Design/methodology/approach The study is descriptive-correlation based on published information from enlisted firms on the Tehran Stock Exchange during 2013–2019 with a sample of 178 firms (1,246 observations). The method used for hypothesis testing is linear regression using the panel data. Findings The results show that a knowledge-based economy is associated negatively and significantly with financial reporting. Moreover, robust testing has also examined the hypotheses (including fixed effects, OLS and t + 1) that confirmed the study’s preliminary results. Originality/value As the study was carried out in the emergent financial markets, like Iran, to figure out the relationship between knowledge-based economy and financial reporting, it can provide helpful information for the practitioners in this field.

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The effect of auditor narcissism on audit market competition

Management Research Review ◽

10.1108/mrr-08-2020-0517 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Hojat Mohammadi ◽

Mahdi Salehi ◽

Meysam Arabzadeh ◽

Hassan Ghodrati

Keyword(s):

Financial Markets ◽

Significant Relationship ◽

Design Methodology ◽

Audit Quality ◽

Stock Exchange ◽

Market Competition ◽

Competitive Pressure ◽

Content Type ◽

Listed Firms ◽

Audit Market

Purpose This paper aims to assess auditor narcissism’s effect on audit market competition (auditor concentration, clients’ concentration and competitive pressure). Design/methodology/approach This paper’s method is descriptive-correlational based on published information from listed firms on the Tehran Stock Exchange from 2012 to 2018 using a sample of 188 firms (1,310 observations). The method used for hypothesis testing is linear regression using panel data. Findings The results show a negative and significant relationship between auditor narcissism and audit market competition and its indices, including auditor concentration, clients’ concentration and competitive pressure. Moreover, a positive and significant relationship was observed between audit quality and audit market competition and its indices, including auditor concentration, client concentration and competitive pressure. Originality/value To analyzes competition indices in the audit market (auditor concentration, clients’ concentration and competitive pressure). The variable is assessed once more using the exploratory factor analysis of the so-called three variables single variable, named audit market competition. So the central question of the study is investigated within a broader sense. Moreover, as the present study is carried out in the emergent financial markets with extremely competitive audit markets to figure out the effect of auditors’ intrinsic characteristics on such markets’ competitiveness, it can provide useful information in this field.

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Market reaction to the Karachi stock exchange floor imposition

South Asian Journal of Global Business Research ◽

10.1108/sajgbr-06-2014-0039 ◽

2015 ◽

Vol 4 (2) ◽

pp. 275-291 ◽

Cited By ~ 1

Author(s):

Saqib Sharif

Keyword(s):

Financial Markets ◽

Market Reaction ◽

Stock Exchange ◽

Price Volatility ◽

Price Limits ◽

Content Type ◽

Market Intervention ◽

Price Floor ◽

Price Freeze ◽

Regulatory Intervention

Purpose – The purpose of this paper is to investigate the market reaction to the decision made by the management of the Karachi Stock Exchange (KSE) to impose a price floor that resulted in trading curbs in 2008. The paper analyzes if regulatory intervention helped in restoring investor confidence. Design/methodology/approach – The paper examines the effect of enforcement of a price floor and trading curbs by splitting the time period studied into two periods: pre-floor and post-floor period. The parametric t-statistics and non-parametric Mann-Whitney test are used to compare the abnormal returns (ARs), abnormal trading volume, bid-ask spread, Amihud illiquidity ratio, and price volatility between the two periods. Event study was conducted to observe the behavior of market returns surrounding market-wide price floor. Finally, multivariate regression analysis was also applied by controlling for factors that might influence valuation, liquidity, and volatility. The standard errors have been corrected for cross-sectional clustering due to market-wide restrictions. Findings – The study found an adverse impact of price freeze and trading curb in the KSE, following the relaxation of floor (resumption of active trading). First, the price of securities (or ARs) significantly declined following the relaxation of the price freeze. Second, the market liquidity deteriorated following the relaxation of the price floor. Third, the price volatility increased in the post-floor period. It seems that the decision made by the KSE’s board to implement lower cap on prices for an extended period was ineffective. Practical implications – Market intervention by regulators to bring calm in the financial markets have negative consequences across the globe. The results presented in this paper suggest that implementing price floor brought inefficiency in the market and prevented firms from raising capital to finance their future investments. The author believe this study will add to the knowledge base of regulatory intervention and its impact on the performance of financial markets. Originality/value – There is no empirical evidence on the impact of price limits on volatility in emerging markets. The author selected Pakistan as a case study, where we particularly focus upon impact of the enforcement of a price floor around the peak of Global Financial Crisis (or market intervention) in Pakistan. This study also documents the effect of trading curb on liquidity and volatility in an emerging market, given that a majority of research on trading halt/price limits is based on developed markets.

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Financial contagion: The impact of the volatility of global stock exchanges on the Lima-Peru Stock Exchange

Economía & Negocios ◽

10.33326/27086062.2019.1.896 ◽

2020 ◽

Vol 1 (1) ◽

pp. 13-27

Author(s):

Pedro Pablo Chambi Condori

Keyword(s):

Stock Market ◽

Financial Markets ◽

Stock Exchange ◽

Market Volatility ◽

Financial Contagion ◽

Stock Market Volatility ◽

Important Indicator ◽

Dynamic Correlation ◽

High Volatility ◽

The Impact

What happens in the international financial markets in terms of volatility, have an impact on the results of the local stock market financial markets, as a result of the spread and transmission of larger stock market volatility to smaller markets such as the Peruvian, assertion that goes in accordance with the results obtained in the study in reference. The statistical evaluation of econometric models, suggest that the model obtained can be used for forecasting volatility expected in the very short term, very important estimates for agents involved, because these models can contribute to properly align the attitude to be adopted in certain circumstances of high volatility, for example in the input, output, refuge or permanence in the markets and also in the selection of best steps and in the structuring of the portfolio of investment with equity and additionally you can view through the correlation on which markets is can or not act and consequently the best results of profitability in the equity markets. This work comprises four well-defined sections; a brief history of the financial volatility of the last 15 years, a tight summary of the background and a dense summary of the methodology used in the process of the study, exposure of the results obtained and the declaration of the main conclusions which led us mention research, which allows writing, evidence of transmission and spread of the larger stock markets toward the Peruvian stock market volatility, as in the case of the American market to the market Peruvian stock market with the coefficient of dynamic correlation of 0.32, followed by the Spanish market and the market of China. Additionally, the coefficient of interrelation found by means of the model dcc mgarch is a very important indicator in the structure of portfolios of investment with instruments that they quote on the financial global markets.

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Interdependence of stock exchange indices from leading capital markets: USA, Germany and Japan Stock Market

Bizinfo Blace ◽

10.5937/bizinfo2101015m ◽

2021 ◽

Vol 12 (1) ◽

pp. 15-28

Author(s):

Milena Marjanović ◽

Ivan Mihailović ◽

Ognjen Dimitrijević

Keyword(s):

United States ◽

Financial Markets ◽

Capital Markets ◽

Stock Exchange ◽

Impulse Response Function ◽

The United States ◽

Causality Test ◽

Vector Autoregressive ◽

Equilibrium Relationship ◽

The Us

In the context of globalization, due to the accelerated process of economic integration of countries and financial markets, the interdependence of the world's leading financial markets is more than obvious. This paper investigates the interdependence of stock exchange indices from leading capital markets in the world: USA, European Union and Asia. Our intention is to determine the direction of causality between the observed capital markets, as well as whether and in what way shocks in one market are transmitted to other markets. Research methodology includes stationarity testing, the existence of cointegration, the application of the Vector Autoregressive Model (VAR) which is complemented by the Granger causality test and the Impulse Response Function (IRF) analysis. The results of the research are as follows. Johansen's cointegration test showed that there is no long-term equilibrium relationship between the observed markets, while Granger's test showed that there is mutual causality between the capital markets of Germany and the United States. As for the Japanese index, previous events in Germany and the United States are statistically significant, but previous events on the Tokyo Stock Exchange cannot explain movements in Germany and the United States. According to the results of the IRF analysis, shocks that may occur in the US market have an almost identical impact on all observed markets. On the other hand, disturbances on the Japanese market are not transmitted to the German and American market, i.e. remain in Japan.

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Survey of Trading Systems for Individual Investors

Information Systems for Global Financial Markets - Advances in Finance, Accounting, and Economics ◽

10.4018/978-1-61350-162-7.ch008 ◽

2011 ◽

pp. 157-176 ◽

Cited By ~ 1

Author(s):

M. Kersch ◽

G. Schmidt

Keyword(s):

Financial Markets ◽

Stock Exchange ◽

Point Of View ◽

Individual Investors ◽

Individual Investor ◽

Trading System ◽

Trading Systems ◽

Trading Decisions ◽

The Individual

Trading decisions in financial markets can be supported by the use of trading algorithms. To evaluate trading algorithms and to generate orders to be executed on the stock exchange trading systems are used. In this chapter, we define the individual investors’ requirements on a trading system, and analyze 17 trading systems from an individual investor’s point of view. The results of our study point out that the best alternative for an individual investor is not one single trading system, but a combination of two different classes of trading systems.

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The Relationship between Non-financial Reporting, Environmental Strategies and Financial Performance. Empirical Evidence from Milano Stock Exchange

Administrative Sciences ◽

10.3390/admsci8040076 ◽

2018 ◽

Vol 8 (4) ◽

pp. 76 ◽

Cited By ~ 9

Author(s):

Simone Pizzi

Keyword(s):

Financial Markets ◽

Financial Reporting ◽

Stock Exchange ◽

Rapid Development ◽

Financial Economic ◽

Socially Responsible ◽

Responsible Investment ◽

Listed Firms ◽

Information Tools ◽

The Relationship

The CSR theme has taken on an increasingly central role within financial markets. In fact, the last decade has been characterized by a rapid development of “socially responsible” investment, conventionally known as SRI. In this sense, an increasing number of listed firms have reported their non-financial information to the purpose to favor the interaction with their stakeholders. The relevance of these information tools stems from the need to protect investors against companies operating through greenwashing mechanisms. The aim of this research is to assess the effect of CSR on financial economic performance. As already happened within similar studies concerning economic entities different from Italy, the study assesses how the ability to generate income, and, thus, to distribute value towards the shareholder, are influenced by the orientation of companies in the field of sustainability accounting and the aptitude to check the environmental risk associated with the exercise of business activity.

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Could Mergers Become More Sustainable? A Study of the Stock Exchange Mergers of NASDAQ and OMX

Sustainability ◽

10.3390/su12208581 ◽

2020 ◽

Vol 12 (20) ◽

pp. 8581

Author(s):

Wenjing Xie ◽

João Paulo Vieito ◽

Ephraim Clark ◽

Wing-Keung Wong

Keyword(s):

Sustainable Development ◽

Stock Market ◽

Financial Markets ◽

Stock Markets ◽

Stock Exchange ◽

International Treaties ◽

National Policies ◽

The Sustainable Development ◽

Long Run ◽

Stock Market Investors

This study investigates whether the merger of NASDAQ and OMX could reduce the portfolio diversification possibilities for stock market investors and whether it is necessary to implement national policies and international treaties for the sustainable development of financial markets. Our study is very important because some players in the stock markets have not yet realized that stock exchanges, during the last decades, have moved from government-owned or mutually-owned organizations to private companies, and, with several mergers having occurred, the market is tending gradually to behave like a monopoly. From our analysis, we conclude that increased volatility and reduced diversification opportunities are the results of an increase in the long-run comovement between each pair of indices in Nordic and Baltic stock markets (Denmark, Sweden, Finland, Estonia, Latvia, and Lithuania) and NASDAQ after the merger. We also find that the merger tends to improve the error-correction mechanism for NASDAQ so that it Granger-causes OMX, but OMX loses predictive power on NASDAQ after the merger. We conclude that the merger of NASDAQ and OMX reduces the diversification possibilities for stock market investors and our findings provide evidence to support the argument that it is important to implement national policies and international treaties for the sustainable development of financial markets.

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THE DEVELOPMENT OF THE BANKING SYSTEM IN POLAND DETERMINED BY THE PROCESSES OF ADJUSTMENT TO THE NORMATIVE AND TECHNOLOGICAL STANDARDS OF THE EUROPEAN UNION AND CONTEMPORARY PROCESSES OF ECONOMIC AND INFORMATIONAL GLOBALIZATION

International Journal of Legal Studies ( IJOLS ) ◽

10.5604/01.3001.0013.0022 ◽

2018 ◽

Vol 4 (2) ◽

pp. 339-367

Author(s):

Jan Grzegorek ◽

Dariusz Prokopowicz ◽

Adrian Chojan ◽

Mirosław Matosek

Keyword(s):

Financial Markets ◽

Capital Flows ◽

Banking Sector ◽

Stock Exchange ◽

International Monetary System ◽

Banking System ◽

Economic Transformation ◽

The European Union ◽

Market Institutions ◽

Main Determinants

The current processes of economic and information globalization are mainly related to the successively progressing integration of financial markets, the development of ICT and Internet technologies. The liberalization of capital flows, progressing since the 1970s, was determined by many economic and political factors, including the modification of the international monetary system. The main determinants of economic and information globalization include such processes as liberalization of capital flows, deregulation of international financial markets and progress in the field of ICT. These processes constituted favorable conditions for the reconstruction of the market financial system, including the banking sector in Poland in the 1990s. Since the beginning of the systemic and economic transformation that has been taking place in Poland since 1989, the banking system and capital market institutions have been rebuilt. It referred to the Warsaw Stock Exchange market institutions, taking into account the opening of the economy to foreign capital. Foreign financial corporations taking over domestic banking entities in Poland have introduced their modern transactional and teleinformation technologies and new standards for entering into financial transactions. These processes were the main determinants of economic and information globalization that has been made in Poland since the 1990s.

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A Qatar solution is unlikely at the Gulf summit

Emerald Expert Briefings ◽

10.1108/oxan-db226241 ◽

2017 ◽

Keyword(s):

Saudi Arabia ◽

Financial Markets ◽

United Arab Emirates ◽

Stock Exchange ◽

Content Type ◽

Face To Face ◽

Self Sufficiency

Significance As the primary mediator in the dispute between Qatar and three of its GCC neighbours, Kuwait is seeking the first face-to-face meeting of the countries’ leaders since Saudi Arabia, the United Arab Emirates (UAE) and Bahrain launched their boycott of Qatar in June. Since then, both sides’ positions have become more entrenched. Impacts Whatever happens with the boycott, Qatar will focus on developing greater self-sufficiency and security through direct imports. A breakthrough deal would likely boost Gulf financial markets, particularly Qatar’s stock exchange, which is at a six-year low. The outcome of the summit will influence wider regional geopolitics, including Gulf rivalry with Iran in Yemen, Iraq and Lebanon.

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