Valuation in Over-the-Counter Markets

We provide the impact on asset prices of search-and-bargainingfrictions in over-the-counter markets. Under certain conditions,illiquidity discounts are higher when counterparties are harderto find, when sellers have less bargaining power, when the fractionof qualified owners is smaller, or when risk aversion, volatility,or hedging demand is larger. Supply shocks cause prices to jump,and then "recover" over time, with a time signature that isexaggerated by search frictions: The price jump is larger andthe recovery is slower in less liquid markets. We discuss avariety of empirical implications.     

Business responsibility and effectuation in internationalized SMEs

International Entrepreneurship and Management Journal - Sustainability is a global trend that requires balancing environmental, social, and financial concerns. Issues related to social and...