scholarly journals Noise Trading and Single Stock Futures: Modifying Sentana & Wadhwani’s Model

2020 ◽  
Vol 9 (1) ◽  
pp. 59-85
Author(s):  
Imran Riaz Malik ◽  
Attaullah Shah
Keyword(s):  
Stock Markets ◽  
Trading Volume ◽  
Positive Impact ◽  
Empirical Studies ◽  
Noise Traders ◽  
Modified Model ◽  
Noise Trading ◽  
Underlying Stocks ◽  
Single Stock Futures

Derivatives,and their influence on the dynamics of underlying stock markets,is an interesting topic of debate, which predates their introduction. The unresolved influence of derivatives on their underlying stock markets still intrigues many. In this regard, researchers/stake holders are still curious about the (de)stabilizing influence of derivatives on the overall market. In disposition of these observations, two contradicting hypothesis have been studied widely and have remained the focus of attention in several theoretical and empirical studies. These hypotheses are explained in several ways. Among many, one explanation refers to the destabilizing influence of derivatives,due to the enhanced involvement of noise traders, after the introduction of derivatives.This aspect remains the topic of discussion for this study. After the formal introduction of the SSFs (Single Stock Futures) in Pakistan, this topic became a cause of concern for the stakeholders of this market as well. Hence, this study attempts to tap into this aspect of the de(stabilization) debate,by proposing a modified version of the famous Sentana & Wadhwani (1982)model. In order to tap the potential shortcomings of the S&W model, this study contributes to the extant literature in several ways: 1) It adds the feature of trading volume in the model to analyze and study the potential movement of noise traders from spot to futures market,due to the ease of trading that the futures markets offer, 2) the new, modified model adds a lagged term for returns in order to tap the potential asynchronous inefficiencies, 3) it considers the Generalized Error Distribution (GED) instead of the Gaussian Distribution, in order to realize the fact that returns are not normally distributed. Generally speaking, the modified version of the model not only extends the original model in terms of its explanation, but also empirically tests this aspect in the Single Stock Futures (SSFs) market of Pakistan. This model tested whether SSFs promote,or inhibit the noise trading post-SSFs. After putting it to test, the newer model did not report any negative or positive impact of the introduction of SSFs on the underlying stocks. This may conclude that the proclaimed (de)stabilizing role of the SSFs,in the context of Pakistan,is not justified.

The Impact of Regulatory Standards, Interest Rates and Trading Volume on Volatility Transmission between Cross-Listed European Equities

2009 ◽  
Vol 10 (1) ◽  
pp. 89-105
Author(s):  
Koulakiotis Dasilas ◽  
Tolikas Molyneux
Keyword(s):  
Interest Rates ◽  
Stock Markets ◽  
Trading Volume ◽  
Positive Impact ◽  
Stock Exchanges ◽  
Volatility Transmission ◽  
Volatility Spillovers ◽  
Regulatory Standards ◽  
European Stock Markets ◽  
The Impact

This paper investigates the relationship between volatility transmission and stock market regulatory structures, interest rates and trading volume for European securities which are cross-listed on stock exchanges of higher, lower or similar regulatory standards compared to their home stock markets. The empirical results suggested that the regulatory environment has a significant impact on volatility spillovers and the level of interest rates and trading volume have a positive impact on the magnitude and persistence of these volatility spillovers. These findings have potentially important implications for both regulators and investors who are concerned with the effectiveness of legislation aiming to harmonise the European stock markets and the effects of volatility transmission on investment positions across European stock markets.

scholarly journals Mediation in Germany and Other Western Countries

2017 ◽  
Vol 4 (4) ◽  
pp. 5 ◽  
Author(s):  
HELMUT KURY ◽  
ANNETTE KUHLMANN
Keyword(s):  
Positive Impact ◽  
Empirical Studies ◽  
European Countries ◽  
Historical Background ◽  
The Past ◽  
Alternatives To Incarceration ◽  
Western European ◽  
Positive Results ◽  
Limited Usefulness

Empirical studies over the past decades have repeatedly shown the limited usefulness of harsh punishment in reducing crime. In response to these research results, historical approaches to crime reduction, such as mediation and restorative justice, have regained prominence, especially in Germany and other western European countries. The women’s movement and the growing role of victimology have contributed to the increased use of these methods as alternatives to incarceration. The debates across these countries vary depending on the historical background of the penal climate in these states, which particularly explains the differences between Eastern and Western European countries in this regard. Empirical studies show the positive impact of mediation on offenders as well as victims. Yet in spite of these results, in most countries, including Germany, the use of mediation remains limited, especially in regard to adult offenders. At the same time, the uses of mediation in non-criminal conflict settings, such as schools, family or work disputes have increased significantly with positive results.

scholarly journals The Role of Zakat in Establishing Social Welfare and Economic Sustainability: The Case of Saudi Arabia

2020 ◽  
Vol 11 (6) ◽  
pp. 196
Author(s):  
Aysha N. Al-Salih
Keyword(s):  
Saudi Arabia ◽  
Social Welfare ◽  
Social Life ◽  
Positive Impact ◽  
Empirical Studies ◽  
Welfare Economic ◽  
Economic Sustainability ◽  
Main Theme ◽  
The Social

Much recent literature has studied the role of Zakat in establishing social welfare and economic sustainability. It is believed that Zakat is among the most important systems for Muslims: indeed, it enables the wealthy and rich to purify their hearts from greed by giving a part of their wealth to the needy. Therefore, Zakat redistributes income and wealth, plays an important role in poverty alleviation, and contributes to social welfare and economic sustainability. This study discusses the role of Zakat in establishing social welfare and economic sustainability by reviewing theoretical and empirical studies. This prior research is then extended by examining the historical development of Zakat and the structure of Zakat accounting method in Saudi Arabia. This study is significant in creating awareness about Zakat’s role and its impact on the social life of a society. The researcher employs qualitative research methods, reviewing traditional and contemporary Islamic sources to explicate the significance of Zakat as an institution, and elaborate its impact on social life in line with the main theme of the study. The topic of Zakat is one that has received increased attention by researchers interested in Muslim values, social welfare, economic sustainability, and accounting. However, little research has been produced on the intersections of these four topics in the specific context of Saudi Arabia. The overall findings show that Zakat has a positive impact on social welfare and economic sustainability in Saudi Arabia.

Does innovation capability improve SME performance in Malaysia? The mediating effect of technology adoption

2021 ◽  
pp. 146575032110489
Author(s):  
Muhammad Farhan Jalil ◽  
Azlan Ali ◽  
Rashidah Kamarulzaman
Keyword(s):  
Technology Adoption ◽  
Structural Equation ◽  
Positive Impact ◽  
Empirical Studies ◽  
Mediating Effect ◽  
Innovation Capability ◽  
Performance Technology ◽  
Mediating Role ◽  
Innovation Model

SMEs still need innovation to boost their performance in the age of globalisation and fierce market rivalry. Previous studies have identified that innovation capability is an essential driver in manufacturing industries for their survival. Yet, the featuring role of innovation capability has been considered theoretically in developed economies whereas empirical studies in emerging economies are still lacking. Therefore, the purpose of this study to examines the importance of innovation capability towards SME performance and the mediating role of technology-adoption. Structured questionnaires were used to collect the data from a sample size of 611 SMEs operating in the developing market of Malaysia. Derived hypotheses were verified through Structural Equation Modelling (SEM) using AMOS 21. The findings of the study indicated that innovation capability has a significant positive impact on SME performance. Technology- adoption partially mediates the relationship between innovation capability and SME performance. SMEs are required to generate an operative innovation model to gain sustainable performance and competitive advantage in the Malaysian market.

scholarly journals Single Stock Futures Trading and Stock Price Volatility: Empirical Analysis

2009 ◽  
Vol 48 (4II) ◽  
pp. 553-563 ◽  
Author(s):  
Safi Ullah Khan ◽  
Syed Tahir Hijzi
Keyword(s):  
Stock Market ◽  
Trading Volume ◽  
Price Volatility ◽  
Futures Contracts ◽  
Sufficient Evidence ◽  
Spot Price ◽  
Return Volatility ◽  
Futures Trading ◽  
Underlying Stocks ◽  
Single Stock Futures

This study examines impact of the introduction of single stock futures contracts on the return volatility of the SSFs-listed underlying stocks. The study documents a significant decrease in return volatility for the SSFs-underlying stocks following the introduction of single stock futures contracts on the Karachi Stock Exchange. The multivariate analysis in which the spot trading volume, the futures trading volume and open interest were partitioned into news and informationless components, the estimated coefficient of expected futures volume component is statistically significant and negatively related to volatility, suggesting that equity volatility is mitigated when the expected level of futures activity is high. The findings of the decreased spot price volatility of the SSFs-underlying stocks associated with large expected futures activity is important to the debate of regarding the role of equity derivatives trading in stock market volatility. These empirical results for the Pakistan’s equity market support theories implying that equity derivates trading improves liquidity provision and depth in the equity markets, and appear to be in contrast to the theories implying that equity derivates markets provide a medium for destabilising speculation. Finally, the SSFs-listed stocks were grouped with a sample of non-SSFs stocks to examine cross-sectional data for comparing changes in return volatility. After controlling for the effects of a number of determinants of volatility, sufficient evidence is found to support that, this multivariate test, like the previous analysis, provides no evidence that the volatility of the SSFsunderlying stocks is positively related to the introduction of the single stock futures trading in the Pakistan’s stock market.

scholarly journals Behavioural errors and stock market investment decisions: recent evidence from Pakistan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kashif Rashid ◽  
Yasir Bin Tariq ◽  
Mamoon Ur Rehman
Keyword(s):  
Stock Market ◽  
Trading Volume ◽  
Rational Expectation ◽  
Positive Impact ◽  
Investment Decisions ◽  
Negative Sign ◽  
Positive Sign ◽  
Positive Role ◽  
Content Type

PurposeThis study examines the role of behavioural factors, such as confidence, optimism, pessimism and rational expectation, in affecting investment decisions in the Pakistani stock market.Design/methodology/approachUsing daily trading data of KSE-100 index from January 2012 to December 2015, different regression models, including descriptive statistics and stationarity tests, are performed.FindingsResults indicate that stock market trading has suffered from pessimistic behaviour of investors. In the first model, the authors find a positive sign of confidence and negative sign of optimism with the trading volume. The second model shows a positive role of confidence and rational expectations in affecting the trading volume in daily, Monday and Friday samples. The results of the third model show a negative sign of both optimism and rational expectation with the trading volume. Furthermore, the next model shows a negative sign of confidence combined with pessimism while testing their relationship with the trading volume. Finally, results of the final model suggest that optimism negatively affects the trading volume, and on the other hand, pessimism has a positive impact on the trading volume.Research limitations/implicationsThe method and empirical testing of behavioural biases and their relationship with economic variable used in this study seem to be a promising way to better understand the role of psychology in deriving financial decisions for academics and policymakers.Originality/valueThis study uses secondary data for measuring behavioural biases and decomposes the effect between rational expectation and behavioural biases.

Internet Banking and Online Trading

2011 ◽  
pp. 181-196
Author(s):  
Bin Chang ◽  
Shantanu Dutta
Keyword(s):  
Trading Volume ◽  
Business Models ◽  
Positive Impact ◽  
Empirical Studies ◽  
Banking System ◽  
Internet Banking ◽  
Web Based ◽  
Market Participants ◽  
Banking Business ◽  
Online Trading

In the recent past, online or Internet based banking has become quite common. Banks have also realized the potential of Internet banking and have recognized that it is necessary to integrate the customers’ new lifestyle and Web based activity preferences with their business models. Most of the empirical studies have reported positive impact of Internet banking on bank performance. Adoption of Internet banking leads to cost reduction and hence likely to increase banks’ profitability. Introduction on internet banking has brought unprecedented speed in banking system and has been playing a major role in the globalization of banking system. As Internet banking makes inroads to banking business, market participants have also started to use Internet for security trading activities. Online trading has led to an upward trend in trading frequency, trading volume, and turnover ratio.

BUSINESS MODEL INNOVATION AND SMEs PERFORMANCE — DOES COMPETITIVE ADVANTAGE MEDIATE?

2018 ◽  
Vol 22 (07) ◽  
pp. 1850057 ◽  
Author(s):  
MUHAMMAD ANWAR
Keyword(s):  
Competitive Advantage ◽  
Business Model ◽  
Structural Equation ◽  
Positive Impact ◽  
Emerging Market ◽  
Empirical Studies ◽  
Business Model Innovation ◽  
Superior Performance ◽  
Mediating Role

In the era of globalisation and dynamic market, firms look for competitive advantage and survival using different sources and resources. Prior studies have indicated that Business Model Innovation (BMI) is a core driver for firm’s survival and superior performance especially in growing industries. However, the role of BMI has been discussed theoretically and exploratory while empirical studies are still lacking. Hence, this study examines the importance of BMI in SME performance and the mediating role of competitive advantage. Data were collected through structured questionnaires using a sample size of 303 manufacturing SMEs operating in the emerging market of Pakistan. Hypotheses were tested through Structural Equation Modelling (SEM) using AMOS.21. The results indicate that BMI has a significant positive impact on competitive advantage and SME performance. Competitive advantage partially mediates the relationship between BMI and SME performance. Firms are required to create an effective business model to acquire competitive advantage and superior financial performance. Implications for practice have been discussed.

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