scholarly journals Information Asymmetries And Closed-End Funds

2011 ◽  
Vol 9 (3) ◽  
Author(s):  
Eric Higgins ◽  
Shawn Howton ◽  
Shelly Howton ◽  
Sophie Xiaofei Kong
Keyword(s):  
Information Asymmetry ◽  
Asset Markets ◽  
Asset Market ◽  
Information Asymmetries ◽  
Underlying Asset ◽  
Turnover Ratio ◽  
Long Run ◽  
Closed End Funds ◽  
International Fund

We examine the degree to which information asymmetries play a role in the closed-end fund seasoned offerings and introduce a new explanation for why funds with low information asymmetry also choose to issue. Interpreting turnover ratio as a proxy for information asymmetry, we test for differences in turnover across fund types and find that equity and international fund issuers generate significantly higher turnover than debt and domestic fund issuers respectively. We then investigate the motives for issuing funds with low information asymmetry and discover that they are good asset market timers, i.e. issue when underlying asset markets are relatively underpriced. By timing asset markets, such funds generate better long-run returns and maximize the interests of long-term investors.

scholarly journals Stock market development and investment growth in Nigeria

2020 ◽  
Vol 42 ◽  
pp. 99-117
Author(s):  
Idowu Daniel Onisanwa ◽  
◽  
Mercy Ojochegbe Adaji ◽  
◽  
Keyword(s):  
Stock Market ◽  
Stock Exchange ◽  
Investment Climate ◽  
Stock Market Development ◽  
Turnover Ratio ◽  
Long Run ◽  
Short Run ◽  
Market Capitalisation ◽  
Investment Growth

Aim/purpose – The poor investment climate is one of the reasons advanced for the slow pace of growth in Nigeria; evidenced by the absence or inadequate amount of investible funds in the productive sectors. While the money market in Nigeria provides very limited investment options, the underdevelopment and underutilisation of the Nigerian Stock Market constitute a drawback to the investment climate. However, any economy desiring sustainable development requires a long-term source of fund. Therefore, this study ascertains the perfor-mance of the stock market and investment growth nexus in Nigeria.Design/methodology/approach – The study is based on the neoclassical growth theory with a slight modification in the wake of Levine’s specification (2003), an augmented investment growth relationship was specified. This study utilises the Autoregressive Distributed Lag (ARDL) in establishing the co-integration relation between stock market development and investment growth. Gross capital formation was used as a proxy for investment growth while the stock market indicators are market capitalisation ratio, total value traded ratio and turnover ratio. The study utilises data covering 1981 to 2018, sourced from the Nigerian Stock Exchange annual reports and diverse publication of the Nigerian Bureau of Statistics.Findings – The market capitalisation ratio had a negative impact on gross capital for-mation both in the short run and the long run, but its significance is only evident in the short run. The turnover ratio had a negative and significant impact on investment growth. The total value traded ratio exerted a positive and significant impact on gross capital formation both in the short run and the long run. The coefficient of the error cor-rection term was negative and statistically significant. Research implications/limitations – The total value traded ratio enhanced investment growth in Nigeria. Both market capitalisation and turnover ratio dampen investment growth. The Stock Exchange is not efficient and does not possess the amount of liquidity required to finance long term investment need in Nigeria. Emphasis on measures geared towards increasing efficiency and liquidity should be intensified by the government. Mean-while, the sectorial analysis of the impact of stock exchange movements in Nigeria and the use of other estimation techniques may create room for more robust relationships.Originality/value/contribution – The study directly investigates the capability of the Nigerian stock market in driving investment, both in the short and long run.

scholarly journals ENDOGENOUS INEQUALITY OF NATIONS THROUGH FINANCIAL ASSET MARKET INTEGRATION

2010 ◽  
Vol 14 (3) ◽  
pp. 285-310 ◽  
Author(s):  
Volker Böhm ◽  
George Vachadze
Keyword(s):  
Steady State ◽  
Market Integration ◽  
Rational Expectations ◽  
Overlapping Generations ◽  
Absolute Risk ◽  
Sufficient Conditions ◽  
Asset Markets ◽  
Asset Market ◽  
Financial Asset ◽  
Long Run

The paper analyzes an endogenous mechanism leading perfectly symmetric economies to diverge in the long run after unifying their financial asset markets. The standard growth model with overlapping generations of consumers (OLG) is extended to include uncertainty and a financial asset. In the absence of an international asset market, the two autarkic economies converge to the same globally attracting steady state under rational expectations dynamics. When the two asset markets are unified internationally, additional asymmetric steady states appear, implying that the steady state with equal levels of capital becomes unstable, causing symmetry breaking. The paper derives general sufficient conditions for a saddle node bifurcation of the symmetric steady state. A numerical example shows that these effects occur, in particular when the production function and the function of absolute risk aversion are isoelastic.

scholarly journals Industrial Production and Monetary Shocks: Empirical Evidence from Pakistan

2020 ◽  
Vol 6 (3) ◽  
pp. 575-589
Author(s):  
Sadaf Shahab ◽  
Muhammad Tariq Mahmood ◽  
Azmat Fatima
Keyword(s):  
Interest Rate ◽  
Stock Market ◽  
Industrial Production ◽  
Structural Model ◽  
Asset Markets ◽  
Monetary Shocks ◽  
Policy Makers ◽  
Long Run ◽  
Short And Long Term

This study focuses on long run relationship between industrial production and financial markets through a restricted structural model. Conditional upon arbitrage between short and long term money market rates, we find an evidence of cointegration between output and the stock market. Statistical results indicate that positive long-run relation between the stock market and real output allows the identification of a demand shock as permanently affecting stock market. Similarly money supply and short-term interest rate shock permanently affect stock market while inflation affects negatively in long run. The results also indicate that the monetary reaction function is less responsive to inflation and the policy maker put more weight to output. Our results imply that due to cost-push nature of inflation, policy makers have some flexibility to target other sectors of the economy, such as investments in asset markets. A prudent central bank can use interest rate smoothing approach using arbitrage conditions.

Infrastructure mortgage in Russia: Opportunities and prospects

2019 ◽  
pp. 114-133
Author(s):  
G. I. Idrisov ◽  
Y. Yu. Ponomarev
Keyword(s):  
Federal Government ◽  
Public Debt ◽  
Budget Deficit ◽  
Expert Assessment ◽  
Inflation Expectations ◽  
Direct Impact ◽  
Long Run ◽  
Gdp Growth Rate ◽  
Negative Effect

The article shows that depending on the goals pursued by the federal government and the available interbudgetary tools a different design of infrastructure mortgage is preferable. Three variants of such mortgage in Russia are proposed, each of which is better suited for certain types of projects and uses different forms of subsidies. According to our expert assessment the active use of infrastructure mortgage in Russia can increase the average annual GDP growth rate by 0.5 p. p. on the horizon of 5—7 years. In the long run the growth of infrastructure financing through the use of infrastructure mortgage could increase long-term economic growth by 0.9 p. p., which in 20—30 years can add 20—30% of GDP to the economy. However, the change in the structure of budget expenditures in the absence of an increase in the budget deficit and public debt will cause no direct impact on monetary policy. The increase in the deficit and the build-up of public debt will have a negative effect on inflation expectations, which will require monetary tightening for a longer time to stabilize them.

PENGARUH INFRASTRUKTUR SECARA SPASIAL TERHADAP KONVERGENSI PERTUMBUHAN EKONOMI DI INDONESIA

INFO ARTHA ◽  
2017 ◽  
Vol 1 ◽  
pp. 17-28
Author(s):  
Anisa Fahmi
Keyword(s):  
Economic Growth ◽  
Regional Economics ◽  
Developed Countries ◽  
Road Infrastructure ◽  
Long Run ◽  
Catch Up ◽  
The Developed Countries ◽  
Positive Effect ◽  
Neoclassical Growth Theory

Motivated by inter-regional disparities condition that occurs persistently, this study examines the Indonesian economy in the long run in order to know whether it tends to converge or diverge. This convergence is based on the Solow Neoclassical growth theory assuming the existence of diminishing returns to capital so that when the developed countries reach steady state conditions, developing countries will continuously grow up to 'catch-up' with developed countries. Based on regional economics perspective, each region can not be treated as a stand-alone unit,therefore, this study also focuses on the influence of spatial dependency and infrastructure. Economical and political situations of a region will influence policy in that region which will also have an impact to the neighboring regions. The estimation results of spatial cross-regressive model using fixed effect method consistently confirmed that the Indonesian economy in the long term will likely converge with a speed of 8.08 percent per year. Other findings are road infrastructure has a positive effect on economic growth and investment and road infrastructure are spatially showed a positive effect on economic growth. In other words, the investment and infrastructure of a region does not only affect the economic growth of that region but also to the economy of the contiguous regions. 

From Help Giving to Helping Relations

2018 ◽  
pp. 464-488
Author(s):  
Arie Nadler
Keyword(s):  
Well Being ◽  
Psychological Research ◽  
Psychological Needs ◽  
Social Psychological ◽  
Significant Relationships ◽  
Long Run ◽  
Help Giving ◽  
Social Psychological Research ◽  
Practical Implications

This chapter reviews social psychological research on help giving and helping relations from the 1950s until today. The first section considers the conditions under which people are likely to help others, personality dispositions that characterize helpful individuals, and motivational and attributional antecedents of helpfulness. The second section looks at long-term consequences of help and examines help in the context of enduring and emotionally significant relationships. Research has shown that in the long run help can increase psychological and physical well-being for helpers but discourage self-reliance for recipients. The third section analyzes helping from intra- and intergroup perspectives, considering how its provision can contribute to helpers’ reputations within a group or promote the positive social identity of in-groups relative to out-groups. Help is thus conceptualized as a negotiation between the fundamental psychological needs for belongingness and independence. Theoretical and practical implications are discussed.

scholarly journals IPO’s Long-Run Performance: Hot Market versus Earnings Management

2021 ◽  
Vol 14 (3) ◽  
pp. 132
Author(s):  
Tsai-Yin Lin ◽  
Jerry Yu ◽  
Chia-Yi Lin
Keyword(s):  
Earnings Management ◽  
Information Asymmetry ◽  
Explanatory Power ◽  
Market Condition ◽  
Relative Importance ◽  
Long Run ◽  
Hot Market

One of the IPO-related anomalies that have been well-discussed in the finance literature is the IPO’s long-running underperformance. Two of the major explanations of that phenomenon are: “Hot market” and earnings management. This study investigates the relative importance of these two explanations to the IPO’s long-run underperformance. Our results show that although both hot market and earnings management play a role in explaining IPO’s long-run performance in their own rights, earnings management no longer exhibits significant explanatory power when the IPOs are issued in the cold market. While the IPOs that are issued in the hot market still tend to underperform in the long run even if the firms do not engage in earnings management. Our findings are consistent with the literature related to the information asymmetry in IPO market. And, because the information asymmetry is more severe in hot market condition, IPOs issued in hot market tend to exhibit poorer returns than those issued in cold market.

scholarly journals Shades between Black and Green Investment: Balance or Imbalance?

2021 ◽  
Vol 13 (9) ◽  
pp. 5024
Author(s):  
 Vítor Manuel de Sousa Gabriel ◽  
María Mar Miralles-Quirós ◽  
José Luis Miralles-Quirós
Keyword(s):  
Risk Factor ◽  
Oil Prices ◽  
Oil Price ◽  
Short Term ◽  
Environmental Indices ◽  
Long Run ◽  
Green Investment ◽  
Bounds Test

This paper analyses the links established between environmental indices and the oil price adopting a double perspective, long-term and short-term relationships. For that purpose, we employ the Bounds Test and bivariate conditional heteroscedasticity models. In the long run, the pattern of behaviour of environmental indices clearly differed from that of the oil prices, and it was not possible to identify cointegrating vectors. In the short-term, it was possible to conclude that, in contemporaneous terms, the variables studied tended to follow similar paths. When the lag of the oil price variable was considered, the impacts produced on the stock market sectors were partially of a negative nature, which allows us to suppose that this variable plays the role of a risk factor for environmental investment.

scholarly journals Sector Volatility Spillover and Economic Policy Uncertainty: Evidence from China’s Stock Market

Mathematics ◽  
2021 ◽  
Vol 9 (12) ◽  
pp. 1411
Author(s):  
Xiaqing Su ◽  
Zhe Liu
Keyword(s):  
Economic Policy ◽  
Stock Market ◽  
Asset Allocation ◽  
Policy Uncertainty ◽  
Volatility Spillover ◽  
Economic Policy Uncertainty ◽  
Long Run ◽  
Transmission Structure ◽  
Long Term Impact

Following generalized variance decomposition, we identify the transmission structure of financial shock among ten sectors in China. Then, we examine whether economic policy uncertainty (EPU) affects it through GARCH-MIDAS regression. We find that consumer discretionary, industrials, and materials sectors are systemically important industries during the sample period. Further research of dynamic analysis shows that each sector acts in a time-varying role in this structure. The results of the GARCH-MIDAS regression indicate that none of the selected EPU indexes has a significant long-term impact on the total volatility spillover of the inter-sector stock market in China. However, the EPUs do affect some sectors’ spillover indexes in the long run, and they are significantly heterogeneous. This paper can provide regulatory suggestions for policymakers and reasonable asset allocation and risk avoidance methods for investors.

scholarly journals Cross-section instability in financial markets: impatience, extrapolation, and switching

2021 ◽  
Author(s):  
Roberto Dieci ◽  
Xue-Zhong He
Keyword(s):  
Financial Markets ◽  
Cross Section ◽  
Asset Price ◽  
Asset Market ◽  
Long Run ◽  
Short Run ◽  
And Performance ◽  
Equilibrium Market ◽  
High Degree ◽  
Fundamental Price

AbstractThis paper presents a stylized model of interaction among boundedly rational heterogeneous agents in a multi-asset financial market to examine how agents’ impatience, extrapolation, and switching behaviors can affect cross-section market stability. Besides extrapolation and performance based switching between fundamental and extrapolative trading documented in single asset market, we show that a high degree of ‘impatience’ of agents who are ready to switch to more profitable trading strategy in the short run provides a further cross-section destabilizing mechanism. Though the ‘fundamental’ steady-state values, which reflect the standard present-value of the dividends, represent an unbiased equilibrium market outcome in the long run (to a certain extent), the price deviation from the fundamental price in one asset can spill-over to other assets, resulting in cross-section instability. Based on a (Neimark–Sacker) bifurcation analysis, we provide explicit conditions on how agents’ impatience, extrapolation, and switching can destabilize the market and result in a variety of short and long-run patterns for the cross-section asset price dynamics.

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