Country-Level Size Effects in International Asset Pricing

This paper investigates whether small markets offer higher risk-adjusted expected returns using a large set of developed and emerging markets over a time span of up to four decades. The results show that expected returns are significantly lower in larger markets, an effect more pronounced in emerging rather than developed countries. The relationship between size effects and the level of market segmentation in emerging countries is further explored in the context of financial market integration. The size premium is strong and persistent over time independently of the (fading) segmentation premium documented in the literature. Markets size effects remain statistically and economically significant in the presence of various control factors and account for up to 1% per year in terms of expected returns in emerging countries.

An Overview of International Capital Flows and Its Impact on Chinese Financial Market

With the acceleration of economic globalization and financial market integration, there has been a gradual increase in the amount of international capital and considerable global movement of capital flow. Due to its inherent uncertainty, immense capital flows, and complex structure, international capital flows have an enormous impact on international trade, finance flowing, and economic development for countries all over the world. This paper aims to provide a full overview of international capital flow, focusing on the internal fluctuation patterns and developing trends in the near future. Through the qualitative analysis of China’s capital flows, this paper also summarizes its major characteristics and multiple effects caused by international capital flows.

The interdependence between developing and developed stock markets: The case of the Macedonian, Belgrade, six Swiss and Euronext Paris stock exchange

The aim of the paper is to examine the level of interdependence between developing and developed stock markets. The correlation of the Macedonian (MBI10) stock exchange index with the Belgrade (BELEX15), the Six Swiss (SLI) and the Euronext Paris (CAC40) stock exchanges from November 2005 to October 2018 was studied. In order to assess the impact of the crisis on the interrelations between these equity markets, the analyzed period was we subdivided into three segments (pre-crisis, during crisis and post-crisis) and the data sets were subjected to linear regression analysis. The research results indicate an increased correlation of the Macedonian with Belgrade and Euronext Paris Stock Exchanges and decreased correlation with Six Swiss during the time of financial distress comparing to pre and post crisis periods. The findings of this study contribute to the overall picture of the relationship between stock markets in the time of Financial Crisis. Moreover, by investigating the interrelationship between developing and developed European stock markets, the results suggest that financial market integration is time-varying.

Prospects for Applying the Experience of Financial Cooperation within the ASEAN + Russia Framework

Aim. The presented study aims to summarize the experience of ASEAN countries in the harmonization of national legislations regulating the financial markets of the Association’s individual member states and to systematize approaches used by this regional bloc when building cooperation in the financial sector within the ASEAN + framework.Tasks. The authors analyze an association’s experience of coordinating a financial market regulation policy among a group of countries; examine the experience of ASEAN’s financial cooperation with other countries within the ASEAN + framework, primarily with the region’s leading countries — China, Japan, and the Republic of Korea; assess the current level of financial and trade interaction between Russia and ASEAN member states (ASEAN + Russia framework).Methods. This study uses general scientific methods of cognition to examine various aspects of the financial market integration policy of ASEAN member states, trends in the current state and development of the pursued policy, and major directions for its modernization.Results. ASEAN countries have devoted considerable time to building relations in the field of financial market integration. However, this process has not reached the level of development that would indicate a significant breakthrough in the convergence of financial regulation or progress in the harmonization of national legislations of ASEAN member states. At the current stage of development, the pace of financial integration is slowing down. ASEAN countries have developed a structure of international financial relations, where developed countries and multinational companies play a significant role. In these circumstances, key ASEAN partners have to compete in order to change the established relations. The current results of cooperation within the ASEAN + framework do not provide a clear indication of its effectiveness.Conclusions. Since Russia’s financial cooperation with ASEAN countries is currently at the stage of formation, obtaining results from its development requires more active efforts to create an institutional environment for cooperation and finding promising projects and junction points for its development.