The road to a market economy

The ongoing conversion of the economies of former socialist countries into market economies has so far suffered from the lack of a theory of system transformation (policy) which indicates the means of achieving the desired objectives and makes it possible to evaluate the transformation policies of individual countries. The following article outlines the essential aspects of such a theory.     

The informal venture capital market: Aspects of scale and market efficiency

Risk capital is a resource essential to the formation and growth of entrepreneurial ventures. In a society that is increasingly dependent upon innovation and entrepreneurship for its economic vitality, the performance of the venture capital markets is a matter of fundamental concern to entrepreneurs, venture investors and to public officials. This article deals with the informal venture capital market, the market in which entrepreneurs raise equity-type financing from private investors, (business angels). The informal venture capital market is virtually invisible and often misunderstood. It is composed of a diverse and diffuse population of individuals of means; many of whom have created their own successful ventures. There are no directories of individual venture investors and no public records of their investment transactions. Consequently, the informal venture capital market poses many unanswered questions.The author discusses two aspects of the informal venture capital market: questions of scale and market efficiency. The discussion draws upon existing research to extract and synthesize data that provide a reasonable basis for inferences about scale and efficiency.Private venture investors tend to be self-made individuals with substantial business and financial experience and with a net worth of $1 million or more. The author estimates that the number of private venture investors in the United States is at least 250,000, of whom about 100,000 are active in any given year. By providing seed capital for ventures that subsequently raise funds from professional venture investors or in the public equity markets and equity financing for privately-held firms that are growing faster than internal cash flow can support, private investors fill gaps in the institutional equity markets.The author estimates that private investors manage a portfolio of venture investments aggregating in the neighborhood of $50 billion, about twice the capital managed by professional venture investors. By participating in smaller transactions, private investors finance over five times as many entrepreneurs as professional venture investors; 20,000 or more firms per year compared to two or three thousand. The typical angel-backed venture raises about $250,000 from three or more private investors.Despite the apparent scale of the informal venture capital market, the author cites evidence that the market is relatively inefficient. It is a market characterized by limited information about investors and investment opportunities. Furthermore, many entrepreneurs and private investors are unfamiliar with the techniques of successful venture financing. The author's scale and efficiency inferences, coupled with evidence documenting gaps between private and social returns from innovation, prompt questions about public as well as private initiatives to enhance the efficiency of the informal venture capital market.The article concludes with a discussion of Venture Capital Network, Inc. (VCN), an experimental effort to enhance the efficiency of the informal venture capital market. VCN's procedures and performance are described, followed by a discussion of the lessons learned during the first two years of the experiment.     

The capital market spillover effect of product market advertising: Evidence from stock price synchronicity

We analyze whether product market advertising has a spillover effect on stock price synchronicity by transmitting firm-specific information to the capital market and attracting more investor attention. Using a sample of Chinese listed firms from 2009 to 2017, we find that firms with greater advertising expenditures have lower stock price synchronicity. The results are robust after we address endogeneity concerns. In accord with our hypothesis that product market advertising increases the amount of firm-level information capitalized into stock prices through the information channel, we find that the impact of advertising on synchronicity is more pronounced for firms with a higher degree of information asymmetry and firms in the consumer-product industry. Further tests show that product market advertising enhances the ability of current period returns to reflect future earnings, and thus rules out that the negative relationship between advertising and synchronicity is driven by noise trading. Our results imply that product market advertising plays an informative role and improves information efficiency in a capital market.     

Diffusing market orientation to drive marketing capital: evidence from Vietnam

Although Vietnam’s transition to a market-oriented economy has produced stunning results, the economy is still lacking qualified marketers. This study investigates underlying factors that are fundamental drivers of Vietnam’s economic renaissance, including the role of market orientation at the marketer level (i.e. marketers’ market orientation) in marketing capital pool, and subsequently, marketers’ occupational commitment. Based on data collected from 351 marketers working for various firms in Ho Chi Minh City, the study finds that marketers’ market orientation has a positive impact on marketing capital pool. Further, marketing capital pool invested by marketers has a positive impact on their occupational commitment. Finally, firm ownership moderates the relationship between marketers’ market orientation and marketing capital pool, and gender moderates the relationship between marketing capital pool and marketers’ occupational commitment. Implications for Vietnam and other transitioning economies are discussed.     

资本市场:门开坎多

近期《关于外商转让上市公司国有和法人股有关问题的通知》、《合格境外机构投资者境内证券投资管理暂行办法》接连出台,中国资本市场大门虽已实质性对外洞开,但其中的坎仍不少,断言外资会大规模进军为时尚早。     

中国资本市场股权融资偏好原因分析

融资理论重点研究企业股权融资与债务融资之间的构成比例,近年来融资优序理论与权衡理论逐渐成为企业融资理论的主流.然而各研究表明,我国上市公司存在与传统融资优序理论相悖的现象,融资顺序体现了极强的股权融资偏好.本文从筹资者、投资者和宏观环境三个方面进行了分析,提出完善我国上市公司的融资结构相关对策建议.     

Cost of capital and market power: The effect of size dispersion & entry barriers on market equilibrium

A market power explanation for the observed empirical fact that large firms in a given industry pay less for their capital than small is developed. Larger firms in an industry are shown to pay less for their capital than small because they have more control over the market and the riskiness of their divided stream is correspondingly smaller. More firms in an industry with a given size dispersion raises the cost of capital to the incumbents, but proportionately more to smaller firms. However, the most significant result is that a greater dispersion of sizes will reduce the riskiness of the dividend stream of the larger firm and increase the riskiness of the smaller firm, causing an increase in the dispersion of capital costs. Hence product market power enhances capital cost efficiencies.     

Impact investing and sustainable market transformations: The role of venture capital funds

Impact investors often know their financial return on investments, but are less certain about their impact. This article frames impact as their contribution to sustainable market transformation. A sustainable market transformation consists of inception, first movers, critical mass, and institutionalization phases. Given the nature of such transformations, the impact is effectuated at different moments and toward various market actors. Based on an exploratory research design with semi-structured expert interviews, this article aims to create an overview of the roles of impact venture capital funds in sustainable market transformations. The results suggest that the view that the capitalization of start-ups is the only impact of impact investors is a misconception. The needs of companies with sustainability value propositions change over time and consequently impact investors perform various roles. For example, exiting an investment while upholding social and environmental objectives communicates to mainstream business that the start-up is ready to create a greater impact. Further, impact investors fulfill external roles that change the perspectives of institutional actors toward sustainable investments. Based on an overview of the different roles that impact investors fill, this article proposes a future research agenda to strengthen our knowledge about the impact return of investments.     

The corporate governance behavior and market value of Russian firms

I examine the relationship between corporate governance behavior and market value for a sample of 21 Russian firms. I use (1) fall 1999 corporate governance rankings for these firms, developed by a Russian investment bank, and (2) the ‘value ratio’ of actual market capitalization to potential Western market capitalization for these firms, determined independently by a second Russian investment bank. The correlation between ln(value ratio) and governance ranking is striking and statistically strong: Pearson r=0.90 (t=8.97). A worst (51 ranking) to best (7 ranking) governance improvement predicts a 700-fold increase in firm value. These results are tentative because of the small sample, but they suggest that corporate governance behavior has a powerful effect on market value in a country where legal and cultural constraints on corporate behavior are weak.     

浅析次贷危机对中国资本市场的影响及启示

2007年爆发次贷危机后,全球金融市场都受到很大的影响,我国的资本市场亦然.而我国作为新兴市场国家,资本市场亟待建设和完善,有必要从这次次贷危机中汲取发达国家资本市场的经验和教训.     

Islamic finance and market segmentation: Implications for the cost of capital

This paper considers the impact of full Islamic shari’ya compliance on developing stock exchanges in their effective provision of development capital. Evidence from a unique study focussing on the Sudan telecommunications company and its listings on the Khartoum as well as Arabian Gulf stock exchanges reveals that costs of capital are considerably higher in the former than latter markets. While there are firm governance benefits arising from Islamic finance monitoring costs are substantial and the banking system is better placed to administer financing arrangements. Larger firms are better placed to circumvent this segmentation through cross-listing on regional exchanges.     

Mexico's integration into the North American capital market

We explore a model of time varying regional market integration that includes three factors for the North American equity market, the local Mexican equity market and the peso/dollar exchange rate. We argue that a useful instrument for the degree of integration is the sovereign yield spread. Applying our methodology to Mexico over the 1991–2002 period, we show that the degree of market integration was higher at the end of the period than at the beginning but that it exhibited wide swings that were related to both global as well as local events. We also discover that Mexico's currency risk is priced. Further, the currency returns process reveals strongly significant asymmetric volatility that is strongly related to the asymmetric volatility of the Mexican equity market returns process. A plausible reason for these results is that currency devaluations in emerging markets like Mexico can cause default-risk crises in local banking systems that mismatch local-currency assets and hard currency liabilities, whereas appreciations produce no such problems. Devaluations that destabilize banking systems are, therefore, more likely than appreciations to increase the volatilities of both the currency's and the equity market's returns.     

Measuring intellectual capital and its effect on financial performance: Evidence from the capital market in Taiwan

This paper studies intellectual capital in companies in Taiwan, China. Intellectual capital is an invisible, yet important resource for companies. The first aim of this paper is to provide a systematic investigation on how to measure intellectual capital. Results show that the coefficient of value-added intellectual capital is positively related to return on assets and market capitalization in both fix and random effects. Similar results are also obtained with dynamic panel data. Furthermore, innovation variables such as research and development expenditure are more accurate than structural capital in measuring intellectual capital. The author thus suggests that companies need to keep a close track of their intellectual capital and focus on internal information delivery to gain competitive advantage.     

Dynamic return predictability in the Russian stock market

This paper explores whether the relevance of a conditional multifactor model and autocorrelation in predicting the Russian aggregate stock return fluctuates over time. The source of return predictability is shown to vary considerably with information flow. In general, predictability of the Russian stock market return is at a high level. Autocorrelation increases during periods of low information flow. During periods of high information, conditional exposure to the local market risk and changes in oil price influence the expected return on the Russian stock market. The lagged global stock market factor and currency returns have insignificant influence.     

20 years,From Birth to Backbone

CCPIT is a professional promo- tion in international business exchange.We draw this con- clusion not only because of its vast geography coverage by 16 overseas representative offices,50 provincial     

20 years,From Birth to Backbone

CCPIT is a professional promotion in international business exchange.We draw this conclusion not only because of its vast geography coverage by 16 overseas representative offices,50 provincial sub-councils and over 600 county-level branches, but also for its industry coverage. From 1988, when the first 5 industrial sub-councils claimed their establishment at the Great Hall of the People, now it has come to the 20 years anniversary for industrial sub-councils this year. Since then to now, 22 industrial sub-councils have been established in CCPIT system, covering every main sector in China. Through the past 20 years, industrial sub-councils have grown from a seed to a big tree.