Herd Behavior in Latin American Stock Markets

ABSTRACT

This article investigates the presence of herd behavior in Latin American stock markets using the methodologies proposed by Christie and Huang (1995 Christie , W. G. , &; Huang , R. D. ( 1995 ). Following the pied piper: Do individual returns herd around the market? Financial Analysts Journal , 51 ( 4 ), 31 – 37 .[Taylor &; Francis Online] , [Google Scholar]) and Chang, Cheng, and Khorana (2000 Chang , E. C. , Cheng , J. W. , &; Khorana , A. ( 2000 ). An examination of herd behavior in equity markets: An international perspective . Journal of Banking and Finance , 24 ( 10 ), 1651 – 1679 .[Crossref], [Web of Science ®] , [Google Scholar]). Daily closing prices and trading volumes from January 3, 2000 to September 15, 2010 from the stock markets of Argentina, Brazil, Chile, Mexico, and the United States were analyzed. The US market was studied in order to provide a reference for comparison. The shares for which data was collected in each country were those listed in the most representative stock index for each market. It was not possible to establish evidence of herd behavior in any of the five countries studied using the Christie and Huang (1995 Christie , W. G. , &; Huang , R. D. ( 1995 ). Following the pied piper: Do individual returns herd around the market? Financial Analysts Journal , 51 ( 4 ), 31 – 37 .[Taylor &; Francis Online] , [Google Scholar]) method. However, evaluating the data for the entire period using the method proposed by Chang, Cheng, and Khorana (2000 Chang , E. C. , Cheng , J. W. , &; Khorana , A. ( 2000 ). An examination of herd behavior in equity markets: An international perspective . Journal of Banking and Finance , 24 ( 10 ), 1651 – 1679 .[Crossref], [Web of Science ®] , [Google Scholar]) we detected herd behavior in the Chilean market. These results were not affected by the addition of additional exogenous variables representing the September 11 attacks of 2001 and the subprime crisis, or when the effect of the behavior of US shares on other countries was analyzed. Asymmetric herd behavior was detected in the Chilean, United States, Argentinean, and Mexican markets.     

How R&D is coordinated in Japanese and European multinationals

What are the suitable forms and mechanisms for the coordination of international R&D and innovation processes in multinational corporations? This paper sets out to answer this question by exploratory research and interviews in 18 European and Japanese companies. As a conceptual background, four different categories of coordination mechanisms are generated (‘structural’, ‘hybrid’, ‘informal’ and ‘internal markets’). The empirical results show that Japanese companies make intensive use of personal contacts, informal communication and socialisation whereas European enterprises rely more on internal markets in R&D.     

Context Effects on Older Consumers’ Cognitive Age: The Role of Hedonic versus Utilitarian Goals

This paper deals with older consumers’ cognitive age (i.e., the age they feel), which is self‐assessed as systematically lower than their chronological age (i.e., their actual age). Such a tendency would lead older consumers to display attitudes and purchasing behaviors, which are not typical of people of their real age. Two studies show that cognitive age is not an immutable construct but varies according to its context of reference, so that the same individual may feel different ages under different circumstances. Results demonstrate that the declared cognitive age is affected by the physical environment, the social references, and the product categories that the consumer is using when self‐assessing it. Furthermore, the tendency of older consumers to feel younger is stronger when these consumers are pursuing in these contexts hedonic rather than utilitarian goals. These findings provide novel inputs for the development of appropriate ways to measure cognitive age and to deal with it when targeting senior consumers and positioning hedonic versus utilitarian goods.     

Structure and Dynamics of Livestock Marketing in Rural Uganda: Constraints and Prospects for Research and Development

ABSTRACT

The projected global expansion in consumption of meat and other livestock products potentially offers sub-Saharan African small-holder farmers opportunities to escape from the poverty trap. A necessary condition for exploiting this potential is the establishment of marketing systems that provide farmers with reasonable incentives to participate in the market. In this study, the functioning of livestock markets in rural Uganda is analyzed based on a survey of 401 livestock keepers, complimented with focus group discussions with livestock traders and policy planners. The first part is dedicated to the empirical analysis of key organizational and institutional arrangements. Constraints along the marketing chain as well as potential institutional solutions are illuminated. The second part is dedicated to propositions of new areas where more work and new results are needed to improve the functioning of the livestock marketing chain. Empirical findings indicated the following institutional constraints: a poor market information system, lack of grades and standards, lack of trade finance, poor contract enforcement and dispute settlement, disorganized actors, high transaction risks, and poorly developed marketing infrastructure. The study recommends a structured approach to livestock marketing, market infrastructure development, and emphasis on arbitration systems as specific ways of improving the efficiency of livestock marketing in Uganda and other developing countries.     

JOB SEARCH WITH BIDDER MEMORIES*

This article revisits the no‐recall assumption in job search models with take‐it‐or‐leave‐it offers. Workers who can recall previously encountered potential employers in order to engage them in Bertrand bidding have a distinct advantage over workers without such attachments. Firms account for this difference when hiring a worker. When a worker first meets a firm, the firm offers the worker a sufficient share of the match rents to avoid a bidding war in the future. The pair share the gains to trade. In this case, the Diamond paradox no longer holds.     

Die Finanzkrise — im Kern eine Einlagenkrise der Schattenbanken

Die Ursachen der Finanzkrise werden in der wissenschaftlichen Debatte sehr unterschiedlich beschrieben. Der Autor vertritt die Auffassung, dass die Finanzkrise im Wesentlichen aus einem fundamentalen Mangel an „sicheren“ Aktiva resultiert. Schutzmechanismen für institutionelle Investoren im Geldmarkt, die wie die traditionelle Einlagensicherung funktionieren, k?nnten einen wesentlichen Beitrag zur Aufl ?sung der Finanzkrise leisten.     

Consequences of southward enlargement for EC-Latin American relations

Over the past two decades Latin America, due to both political and economic considerations, has been endeavouring to establish intensive cooperative relations with the European Community. For a variety of reasons this objective has so far only been achieved in part. The Falklands/Malvinas conflict subjected these relations to a serious strain, the results of which cannot as yet be estimated. Another factor, in the longer term, is the European Community's southward enlargement. Latin American assessments of the effects of this diverge: a fear of serious disadvantages to trade on the one hand is matched on the other by the hope that Spain and Portugal will become champions of Latin American interests in the European Community.