Buy-Side Competition and Momentum Profits Hoberg, Gerard; Kumar, Nitin; Prabhala, Nagpurnanand
The Review of financial studies,
01/2022, Letnik:
35, Številka:
1
Journal Article
Recenzirano
Abstract
We show that a new measure of buy-side competition explains momentum profits. The momentum quintile spread is 1.11% when competition is low and negligible when competition is high. Better ...alphas are attained with superior Sharpe and Sortino ratios, with no negative skewness, and in more investible strategies featuring value-weighted portfolios and large capitalization stocks. Stock characteristics traditionally related to momentum do not explain our results. Tests based on long-term reversals, the trading patterns of funds, their style peers, distant funds, and retail investors suggest that slow information diffusion explains the large momentum spreads and momentum reversals in low competition markets.
Over three decades after market-oriented structural reforms termed "Washington Consensus" policies were first implemented, we revisit the evidence on policy adoption and the effects of these policies ...on socio-economic performance in sub-Saharan African countries. We focus on three key ubiquitous reform policies around privatization, fiscal discipline, and trade openness and document significant improvements in economic performance for reformers over the past two decades. Following initial declines in per capita economic growth over the 1980s and 1990s, reform adopters experienced notable increases in per capita real GDP growth in the post–2000 period. We complement aggregate analysis with four country case studies that highlight important lessons for effective reform. Notably, the ability to implement pro-poor policies alongside market-oriented reforms played a central role in successful policy performance.
Profitability and drug discovery Işık, Enes; Orhangazi, Özgür
Industrial and corporate change,
08/2022, Letnik:
31, Številka:
4
Journal Article
Recenzirano
Odprti dostop
Abstract
Pharmaceutical firms are highly profitable due to high markups enabled by high drug prices. This is justified by the argument that high profits provide incentives for innovation and help ...fund high research and development (R&D) costs. We investigate the link between past profitability and drug discovery for large publicly-listed pharmaceutical firms between 1980 and 2018. Our sample includes 118 firms with 2534 firm-year observations and in terms of sales corresponds to 55% of the global spending on drugs. By merging three data sets on firm financials, new patent applications, and new drug approvals, we show that pharmaceutical firms’ markups and profitability are consistently higher than average nonfinancial firm profitability, with secularly increasing trends since 1980. Whereas R&D spending has also increased, the number of new drug approvals has not increased at the same pace and the productivity of R&D spending has been declining. In statistical analysis, we fail to identify any strong positive relationship between profitability and new drug discovery. Results are broadly in line with the earlier findings of research on the pharmaceutical industry and provide a contribution to the discussion on the link between profitability and innovation as well as on formulating policies for increasing drug innovation and ensuring the provision of essential drugs while keeping their costs low.
African countries have over the years experienced persistent current account deficits. The role of asymmetries in explaining the response of trade balance to exchange rate movement has not received ...adequate attention as linear models dominate extant empirical literature. In this paper, we examined the impact of exchange rate on the trade balance in five African countries using both linear and nonlinear autoregressive distributed lag models to analyze data for the period 1980-2018. The linear model revealed that the J-curve holds in Uganda in the short run, whereas evidence of long-run J-curve effect was found only in Algeria. However, the nonlinear analysis showed that the short-run J-curve holds for South Africa and Uganda whereas a long-run J-curve effect was found in Algeria and Uganda. The results make a case for modeling asymmetries as the nonlinear model performed relatively better. An important policy implication is the need to address structural imbalances in the economy to leverage on the exchange rate and trade policies to improve trade outcomes.
This study was aimed at investigating the asymmetric effect of oil revenue on government expenditures in developing oil‐exporting countries, as most previous studies on the subject had presumed a ...symmetric oil revenue–government expenditure nexus. Thus, a non‐linear panel ARDL was employed to determine how government expenditures respond to positive and negative shocks to oil revenue. Regression estimates indicated that both total and health government expenditures respond asymmetrically to positive and negative changes in oil revenue in the long run, while the responses are symmetric in the short run. The results bespeak the limitation in modelling long‐run oil revenue–government expenditure nexus models symmetrically and the need to consider asymmetry when modelling the relationship between the two variables. The findings also bring to the fore the need for developing oil‐exporting countries to diversify their economies in order to extend their revenue sources, as such would greatly reduce the susceptibility of government expenditure, especially health expenditure to oil revenue busts. Furthermore, stabilisation funds from oil revenue booms if used and properly managed can help to moderate the negative impact of oil revenue busts in these countries.
International migration and remittances from oil‐exporting Gulf countries are important sources of employment, income and foreign exchange for Pakistan. This study investigates the asymmetric impact ...of oil prices on remittances to Pakistan from GCC countries, over the period 1980 to 2018, by employing the recently advanced non‐linear panel pooled mean group (PMG) model. The findings show that oil prices and remittance are asymmetrically associated. The increasing oil prices have a significant positive effect only in the long run, whereas reducing oil prices reveal a significant negative effect only in the short run. Findings of other explanatory variables show that the economic condition in host countries, exchange rate, and trade relations have positive effects only in the long run, whereas the economic condition in the home country has significant negative effects in the long run and positive effect in the short run. This study urges oil exporters to stabilise oil supply and prices, and Pakistan to enhance trade relations, exchange rate adjustments and financial development.
Seeking Urban Transformation. Alternative Urban Futures in Zimbabwe tells the stories of ordinary people’s struggles to remake urban centres. It interrogates and highlights the principle conditions ...in which urban transformation takes place. The main catalysts of the transformation are social movements and planning institutions. Social movements pool resources and skills, acquire land, install infrastructure and build houses. Planning institutions change policies, regulations and traditions to embrace and support a new form of urban development driven by grassroots movements. Besides providing a comprehensive analysis of planning and housing in Zimbabwe, there is a specific focus on three urban centres of Harare, Chitungwiza and Epworth. In metropolitan Harare, the books examines new housing and infrastructure series to the predominantly urban poor population; vital roles played by the urban poor in urban development and the adoption by planning institutions of grassroots-centered, urban-planning approaches. The book draws from three case studies and in-depth interviews from diverse urban shapers i.e. representatives and members of social movements, urban planners, engineers, surveyors, policy makers, politicians, civil society workers and students to generate a varied selection of insights and experiences. Based on the Zimbabwean experience, the book illustrates how actions and power of ordinary people contributes to the transformation of African cities.
We construct measures of industry performance and welfare in the U.S. car and light truck market from 1980-2018. We estimate a differentiated products demand model for this market using product level ...data on market shares, prices, and product characteristics, and consumer level data on demographics, purchases, and stated second choices. We estimate marginal costs under the conduct assumption of Nash-Bertrand pricing. We relate trends in consumer welfare and markups to industry trends in market structure and the composition of products, like the rise of import competition, the proliferation of SUV's, and changes in vehicle characteristics. We find that although prices rose over time, concentration and market power decreased substantially. Consumer welfare increased over time due to improving product quality and falling marginal costs. The fraction of total surplus accruing to consumers also increased.
China and Africa’s economic relations have evolved over time, from the tentative commercial engagements characteristic of the early 1980s to the comprehensive infrastructure loans and increased ...foreign direct investment being pursued across all sectors today. Expanding economic ties have been accompanied by changing debates as to the nature of China–Africa engagement and its significance for their respective development aspirations. South–South cooperation, for instance, framed the approach in this first phase of intensifying economic relations and reflected the combination of technical assistance, grant aid, and concessional loans negotiated by Chinese and Africans in exchange for access to the continent’s abundant resources. As African economies came to demonstrate sustained patterns of higher rates of growth and two-way trade with China grew proportionally, the debates shifted decidedly towards one that focused on economic complementarities between them and Africa’s integration into global value chains. Furthermore, as the African industrialization process intensifies in economies like Ethiopia, China’s key role in development finance and its sectoral experience put it in a crucial position to promote this new phase of development on the continent.
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