Trade Size Preference of Informed Traders in Indian Equity Markets

This study utilized high frequency transactions data to analyze the trade size preference of informed traders in Indian equity markets. It is observed that informed traders at an aggregate level adopt stealth trading strategy, wherein they prefer medium sized trades over large sized trades in order to camouflage their private information. However, the stealth trading behavior varies across stocks, wherein informed traders prefer more large sized trades on firms that are part of an index compared to non-index firms. Trading behavior also varies across other market conditions. It has been noted that informed traders prefer large sized trades during periods of high market thickness, negative returns, and low volatility. This study also provides a rationale for such varied behavior of informed traders.     

Building the BoP Producer Ecosystem: The Evolving Engagement of Fabindia with Indian Handloom Artisans

Recent research on the base of the pyramid (BoP) has called on firms to initiate market‐driven interventions directed at the BoP population with the objective of identifying and pursuing mutually profitable means of attaining meaningful poverty alleviation outcomes. In response, firms as well as scholars have engaged at length with the creation of new products and services for the BoP consumer but paid far less attention to the BoP producer—a member of the BoP population who creates value by producing goods and services for sale in nonlocal markets. Additionally, extant studies have largely focused on snapshot views of BoP interventions by firms, thereby limiting our understanding of the emergence of meaningful poverty‐alleviating outcomes over time from these interventions. This paper seeks to redirect attention toward the dynamic of the long‐term engagement between the firm and the BoP producer. Using rich qualitative data from Fabindia—an Indian handloom retailer—this paper examines how the engagement between Fabindia and communities of handloom artisans in India has persisted over a period of five decades. We found that, even as it encountered changes in the external environment and pursued newer organizational goals, Fabindia repeatedly renewed its engagement with handloom artisans and facilitated progression in poverty‐alleviation outcomes. Building on the insights from the case study, this paper presents a process model that highlights the role of innovative management practices in sustaining engagements between firms and BoP producers over time. Additionally, this paper proposes the concept of the “bridging enterprise”—a business enterprise that originates at the intersection of specific BoP communities and the corresponding nonlocal markets—as an interpreter and innovator reconciling the interests of stakeholders across the pyramid.     

Issues in the estimation and application of latent structure models of choice

Our paper provides a brief review and summary of issues and advances in the use of latent structure and other finite mixture models in the analysis of choice data. Focus is directed to three primary areas: (1) estimation and computational issues, (2) specification and interpretation issues, and (3) future research issues. We comment on what latent structure models have promised, what has been, to date, delivered, and what we should look forward to in the future.     

U.S.-China trade war and competitive advantage of Vietnam

China has been losing international competitiveness in labor-intensive industries due to various factors, including the trade war with the United States and globalization. Vietnam, however, has rapidly expanded its labor-intensive exports. The paper proposes to explore the future of labor-intensive industries in Vietnam due to the U.S.-China trade war. The paper examines export performance data from United Nation Comtrade for 10 specific labor-intensive industries that serve the U.S. market between 2000 and 2020 to assess the possibility of Vietnam overtaking China's position as the world's largest manufacturer. Using situation analysis, the paper compares the competitive advantage of Vietnam in labor-intensive industries due to the U.S.-China trade war. The paper found that China's competitiveness was negatively impacted for the final two periods, while Vietnam's competitive advantage increased.     

EMERGING EQUITY MARKETS: GROWTH, BENEFITS, AND POLICY CONCERNS

Since the mid-1980s, stock market activity has increased substantiallyin many developing countries. This article first examines themain characteristics of emerging stock markets and illustratesthe evolution of equity prices in these markets during the lastdecade. It then discusses the reasons for the markets' growthand assesses the extent to which they have been affected bydomestic policies and external factors. The authors discussthe likely benefits of these markets, the effects any abruptcorrection in stock prices could have for the economy, and theways in which these markets can be made more efficient.      

The Effect of SEC-Ordered Suspensions on Returns, Volatility, and Trading Volume

This study evaluates the effect of SEC-ordered suspensions on securities' returns, volatility, and trading volume during 1963–1987. It is found that there is a permanent devaluation of these securities during the suspension. This result, however, is sensitive to the announced reason for the suspension. Both the variance and the trading volume are found to be substantially higher than normal in the presuspension period. This trend continues in the immediate postsuspension period. The variance and volume levels return to more normal levels only at a much later date. We conclude that trading suspensions are not associated with the immediate elimination of unusual market activity.     

Traffic law enforcement in Hyderabad, India

The aim of the study was to understand traffic law enforcement (TLE) carried out by the police to reduce non-compliance with traffic laws on the roads of Hyderabad city in India for 2001-2003. The Traffic Police database of citations issued to drivers who violated traffic laws in Hyderabad was analysed for the years 2001-2003 to describe the TLE activities of the police, to describe and compare the TLE activities for the different types of vehicles and to compare the TLE activities for the 3 years. The violations were classified in five categories - those related to driving, parking, vehicle, document and others; and TLE into safety and other TLE. A total of 646 161 traffic-law violations were registered in 2001, 904 447 in 2002 and 964 275 in 2003 for Hyderabad. Driving and parking violations were the most common violations registered in all 3 years, with parking violations slightly higher in 2001 (43.5%) and driving violations slightly higher in 2002 (35%) and 2003 (36.4%). Auto-rickshaws (three-wheel commercial passenger vehicles) accounted for the highest violations registered in 2001 (41.4%) whereas motorized two-wheelers had the highest registered violations in 2002 (35.5%) and 2003 (33.2%). Safety TLE activity (detecting and registering driving violations) was only one-third of all the TLE activity performed by the police in the 3 years, and disobeying traffic signals was the most common violation registered under safety TLE. Indian rupees 50 (US$1.1) were collected by way of a fine in 87% of the cases registered. Age and gender of the violators were not recorded in the database. These data can be used for planning, monitoring and evaluating TLE in Hyderabad. These can help identify traffic control and human factors that could lead to traffic noncompliance, and help identify priorities for improving road safety. These data indicate a need to enhance the safety TLE activity of the police, to make TLE more visible in Hyderabad, and to assess the effectiveness of the current legal action as deterrence to improve road safety. Recommendations to enhance TLE within the given resources of the police are made. More effort is needed towards systematic collection and analysis of data on TLE in India to facilitate long-term improvements in TLE for safer roads.     

Strategies to fight low-cost rivals

Companies find it challenging and yet strangely reassuring to take on opponents whose strategies, strengths, and weaknesses resemble their own. Their obsession with familiar rivals, however, has blinded them to threats from disruptive, low-cost competitors. Successful price warriors, such as the German retailer Aldi, are changing the nature of competition by employing several tactics: focusing on just one or a few consumer segments, delivering the basic product or providing one benefit better than rivals do, and backing low prices with superefficient operations. Ignoring cutprice rivals is a mistake because they eventually force companies to vacate entire market segments. Price wars are not the answer, either: Slashing prices usually lowers profits for incumbents without driving the low-cost entrants out of business. Companies take various approaches to competing against cut-price players. Some differentiate their products--a strategy that works only in certain circumstances. Others launch low-cost businesses of their own, as many airlines did in the 1990s--a so-called dual strategy that succeeds only if companies can generate synergies between the existing businesses and the new ventures, as the financial service providers HSBC and ING did. Without synergies, corporations are better off trying to transform themselves into low-cost players, a difficult feat that Ryanair accomplished in the 1990s, or into solution providers. There will always be room for both low-cost and value-added players. How much room each will have depends not only on the industry and customers' preferences, but also on the strategies traditional businesses deploy.     

Do Short Sellers Target Firms with Poor Earnings Quality? Evidence from Earnings Restatements

We study the behavior of short sellers around earnings restatements. We find that short sellers accumulate positions in restating firms several months in advance of the restatement and subsequently unwind these positions after the drop in share price induced by the restatement. The increase in short interest is larger for firms with high levels of accruals prior to restatement. We document that heavily shorted firms experience poor subsequent performance and a higher rate of delisting. Overall, these results suggest that the motive for short selling is, at least in part, related to suspect financial reporting and that short sellers pay attention to information being conveyed by accruals.