Stock price reactions to Sino-European joint ventures

Do European investments in China create shareholders’ value? The question is posed, but does not ask for a definite answer. Many factors have to be considered when analyzing the valuation effect of European direct investment in China and its determinants. The aim of this article is to better understand the real impact of the Sino-European joint venture announcements on the stock market value of the European partners. First of all, on the basis of an event study methodology, this article presents empirical observations of the share price reactions in different European stock markets to 68 Sino-European joint venture announcements.     

Stock market,credit market,and heterogeneous innovations

The relative importance of credit market development and stock market development in boosting innovation remains a long-standing debate issue. In this study, we document how different types of financial markets development affect heterogeneous innovations. Using a broad sample across 42 developed and emerging economies and a generalized difference-in-differences identification strategy, we find that stock market development leads to significantly higher substantive innovation, especially in young and small firms, but has negative impact on incremental innovation. Conversely, credit market development promotes incremental innovation, especially in mature and large firms, but has negative impact on substantive innovation. Further analyses indicate that stronger shareholder protection enhances the positive impact of stock market on substantive innovation, while stronger creditor rights enhance the promoting effect of credit market on incremental innovation, and even turn the negative impact of credit market on substantive innovation into positive. Our paper provides new insights into the heterogeneous effects of credit market and equity markets on the real economy.     

Greenium in the Chinese corporate bond market

This paper explores the pricing implications of green bonds in the Chinese corporate bond market. We document a large greenium in the Chinese green bond market, whereby green bonds are issued at lower offering yield spreads in the primary market and traded at lower yields in the secondary market. The magnitude of the Chinese greenium is substantially greater than other international green bond markets. Exploring the underlying mechanisms, we document convincing evidence that mitigation of information asymmetry and exposure to salient environmental stimuli such as air pollution are plausible explanations of the greenium.     

Stock market correlations between China and its emerging market neighbors

We examine interlinkages of stock return behavior for China and three emerging market neighbors from the Asia Pacific region from November 1993 to July 2008. Results are based on a VAR model. Impulse responses and vector decomposition of VAR are also utilized. Evidence suggests that the aggregate markets are mostly not interrelated. However, we observe relations between China and the other markets when foreign investor returns are specifically accounted for. In addition, a shock originating in China is significantly felt in the other equity markets. Stock market characteristics and macroeconomic conditions of these countries may help explain the observed relations.     

Emerging market corporate bond yields and monetary policy

I examine spillover of monetary policy on corporate bond yields. Emerging market corporate bond yields are positively associated with the federal funds rate. However, this positive relation is transmitted through the domestic policy rate. If domestic policy rates are held constant, the spillover of US monetary policy on corporate bond yields diminishes. This suggests that domestic policymakers face a tradeoff: if they leave their policy rate unchanged when the Fed hikes, this may have benign consequences for corporate bond yields. However, a higher US policy rate may lead to exchange rate depreciation for emerging market currencies and thus elevated debt burdens for their US dollar debtors. Alternatively, if the Fed hikes and policymakers follow suit, funding conditions for corporates worsen through higher yields.     

Overcoming corporate rigidities in the dynamic Chinese market

Companies often bring in what they believed and utilized in the past when they invest in the dynamic market of China, where changing environmental conditions often render existing beliefs and practices irrelevant. Over-generalizing from past situations could become a source of corporate rigidity, which results in a company's inability to anticipate the rapid changes that require evolution in its established systems, products, and market orientation. Companies must overcome corporate rigidities if they are to respond to the huge opportunities in China in a timely manner. In our research, we identified four distinct corporate rigidities—mindset rigidity, strategic rigidity, operational rigidity, and HRM rigidity—to help managers identify and assess the impact of rigidity on their China businesses. We provide four practical strategies for overcoming the four types of corporate rigidities.     

Consumer reactions to corporate tax strategies: The role of political ideology

This study contributes to research on how stakeholders react to corporate tax strategies (CTSs). In two experiments we show that consumers are more likely to react negatively to ‘aggressive’ rather than to reward ‘conservative’ CTSs. The impact of CTSs on consumer reactions is mediated by the perceived ethicality of the firm and moderated by individuals' political identification. Right-leaning consumers are less likely than left-leaning consumers to punish companies engaging in tax avoidance. This moderation depends on the personal connection customers have with a particular brand: both left-leaning and right-leaning consumers punish firms they feel close to when such firms engage in aggressive CTSs. The study extends our understanding of the benefits and risks associated with different CTSs. It contributes to debates on the morality of CTSs, showing that political ideology shapes individuals' perceived ethicality of corporations engaged in aggressive tax avoidance.     

中国股市、银行与经济增长

通过利用经济增长指标、股市指标和金融发展水平指标,对中国股市、银行业和宏观经济数据进行实证研究发现:我国银行业发展水平和贷款率指标,对于人均实际的GDP增长具有一定的正向推动关系,而且成交额比率与人均实际GDP的增长和储蓄存款存在着反向作用。从而得出的结论是,我国银行业的发展水平对宏观经济的影响要远远强于股市的影响作用。     

论市值

市值大小影响本国货币的币值,币值变化也要影响到市值.在成熟的股票市场,市值的表现应是相对稳定的.在市值能够稳定的基础上,市值才能够逐渐增升.正常的市值跌落是由于货币升值,不正常的市值跌落会进一步地推动货币贬值.当股票市场出现了不正常的市值跌落.可以迅速地膨胀某些人的财富.中国股市的市值终将要强劲增升,因为中国经济进入工业化腾飞阶段后的高速发展,会引起价格随之上涨,货币随之贬值,于是市值相应必然增升.     

Identifying risks in emerging market sovereign and corporate bond spreads

This paper investigates the systematic risk factors driving emerging market (EM) credit risk by jointly modeling sovereign and corporate credit spreads at a global level. We use a multi-regional Bayesian panel VAR model, with time-varying betas and multivariate stochastic volatility. This model allows us to decompose credit spreads and build indicators of EM risks. A key result is that indices of EM sovereign and corporate credit spreads differ because of their specific reactions to global risks (risk aversion, liquidity and US corporate risk). For example, following Lehman's default, EM sovereign spreads ‘decoupled’ from the US corporate market, whereas EM corporates ‘recoupled.’     

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.     

View from practice: Stock market reaction to sukuk credit rating changes in Malaysia

Documented evidence on conventional bond markets shows negative market reaction to bond credit rating downgrade and no reaction to credit rating upgrade. Despite the fact that sukuk issuances make up more than 58.8% of the value of outstanding bonds in the country and Malaysia issues at least half of the world's sukuk and is widely recognized as a leader in the sukuk space, there is no documented evidence on the stock market reaction to sukuk credit rating changes. This study analyzed the wealth effect of sukuk credit rating changes in Malaysia using 16 sukuk upgrades and 20 sukuk downgrades for the period 2000–2014. The evidence shows negative market reaction to downgrades and positive significant reaction to sukuk rating upgrade. This symmetrical market reaction to sukuk credit rating changes implies the market was indifferent between bonds and sukuk from the credit rating perspective. This finding supports the notion that the credit rating agencies are Shariah‐neutral when rating these capital market instruments.     

Internet-based corporate disclosure and market value: Evidence from Latin America

We examine the relationship between an Internet-based corporate disclosure index and firm value in the seven largest stock markets of Latin America. We find, after controlling for firms' characteristics, industry and country of origin, that an increase of 1% in the Internet-Based Corporate Disclosure Index causes an increase of 0.1592% in the Tobin's Q and an increase of 0.0119% in the firm's ROA. These findings are robust after considering the potential endogeneity of our regression variables. The evidence contributes to the literature suggesting that firms can differentiate themselves by self-adopting better financial and corporate disclosure measures using the Internet.     

中国股票市场行为与投资者情绪

The relationship among stock returns, market volatilities and individual investor sentiment is an important topic in behavioral economics and finance. This paper uses a unique data set—China’s newly opened stock trading accounts to test the relationships among stock returns, volatilities and individual investor sentiment in the Chinese stock market. It is found that there is a positive relationship between shifts in sentiment and stock returns, and that shifts in sentiment are negatively correlated with market volatility, that is to say, volatility increases (decreases) when investors become more bearish (bullish).      

Subverting sustainability: market maintenance work and the reproduction of corporate irresponsibility

ABSTRACT

While marketing’s potential to foster environmental sustainability has been acknowledged in sustainability marketing thinking, we still know little about the forms of organisational conduct through which sustainability recurrently fails to gain traction as a serious agenda in markets. Drawing on recent discussions on corporate irresponsibility and institutional work in markets, this article employs a discourse analysis to examine marketing managers’ strategies to legitimise food waste generation in the organisation of retail. The study highlights three interlinked strategies of institutional work for the subversion of sustainability and thus the reproduction of unsustainable excess production and consumption: the framing of environmental responsibility as risk, cost and consumer choice.     

PoLicies announced to boost modern agriculture in norcneast region

China state grain reserve released 8.6 million tonnes of grain on to the market from November 29 to December 3 to ensure market supply and stabilize prices, said the country＇s top economic planner on December 9.     

Experience-based corporate corruption and stock market volatility: Evidence from emerging markets

This paper reassesses how “experience-based” corporate corruption affects stock market volatility in 14 emerging markets. We match the World Bank enterprise-level data on bribes with a unique cross-country macroeconomics dataset obtained from the World Bank development indicators. It is found that wider coverage of “realized” corporate corruption in the emerging markets investigated reduces the stock market volatility, attributed to decrease in uncertainty about government policy with regard to the business environment, as implied by the general equilibrium model of Pastor and Veronesi (2012). Overall, our results suggest that stock price volatility decreases as the uncertainty about government policy becomes more predictable, which is consistent with the testable hypotheses of Pastor and Veronesi (2012).     

Stock market trading in the aftermath of an accounting scandal

In this paper, we study the impact of accounting fraud revelation on trading behaviour of investors. Using daily investor account holdings data from the National Stock Depository Limited (NSDL), the largest depository in India, we find that investors directly exposed to accounting fraud cash out almost 10.7 percentage points of their overall portfolio relative to investors not directly exposed. The cashing out is largely restricted to the bad stock. Over the period of a month, however, there is no difference in the trading behaviour of the treated and control investors.