China-U.S. Trade Frictions, Opinion Divergence, and Stock Volatilities

China-US economic relation is of particular significance to the world economy. This paper aims to investigate how trade frictions influence Chinese stock market volatilities. Overall, trade frictions significantly increase large stocks' volatilities, whereas influences the SMEs differently before and after the 301 investigation. For the big caps (SSE50), opinion divergence has a partial mediation effect between trade frictions and market volatilities. Trade frictions lead to higher opinion divergence, and opinion divergence reduces market volatility before the 301 investigation and increases market volatility in Stages IV and V. This result is robust after controlling the endogeneity of opinion divergence. For the small caps (SMEs), the mediation effect has not been founddetected, but opinion divergence significantly influences stock volatility, negative before the Section 301 investigation, whereas positive after that.

Divergences of Opinion and Long Term Performance of Post Stocks Initial Public Offerings at Indonesia Stock Exchange

This study examines and analyzes the effect of divergence of opinion on long-term performance of stock post IPO with initial return control variable, firm size, offering size, reputation of underwriter and return on equity. The study was conducted using 2004-2013 data, with 157 IPO companies in Indonesia capital market. The test is done by using multiple linear regression. The results of this study found that the divergence of opinion has a positive effect on the long-term performance of post-IPO shares. This occurs in the long-term performance period of post-IPO shares with an abnormal cumulative measurement of return12 months, 24 months. The result of opinion divergence regression and variable of all control with long term performance of stock post IPO revealed significant result at period of 12 months and 36 months. By measuring the buy and hold of abnormal returns, the opinion regression divergence with the long-term performance of post-IPO shares is significant in the 12-month period. The regression result of opinion divergence and all control variables with long-term performance of post-IPO shares is significant in the period of 12 months and 24 months. Variable characteristics of companies that are considered by investors in IPO stock transaction are firm size, initial return, offer size and reputation of underwriter. The implication of this study shows that risk factors play an important role in long-term performance of post-IPO shares.