The media are increasingly recognized as key players in financial markets. I investigate their causal impact on trading and price formation by examining national newspaper strikes in several ...countries. Trading volume falls 12% on strike days. The dispersion of stock returns and their intraday volatility are reduced by 7%, while aggregate returns are unaffected. Moreover, analysis of return predictability indicates that newspapers propagate news from the previous day. These findings demonstrate that the media contribute to the efficiency of the stock market by improving the dissemination of information among investors and its incorporation into stock prices.
Recent work on econometric detection mechanisms has shown the effectiveness of recursive procedures in identifying and dating financial bubbles in real time. These procedures are useful as warning ...alerts in surveillance strategies conducted by central banks and fiscal regulators with real-time data. Use of these methods over long historical periods presents a more serious econometric challenge due to the complexity of the nonlinear structure and break mechanisms that are inherent in multiple-bubble phenomena within the same sample period. To meet this challenge, this article develops a new recursive flexible window method that is better suited for practical implementation with long historical time series. The method is a generalized version of the sup augmented Dickey–Fuller (ADF) test of Phillips et al. ("Explosive behavior in the 1990s NASDAQ: When did exuberance escalate asset values?" International Economic Review 52 (2011), 201–26; PWY) and delivers a consistent real-time date-stamping strategy for the origination and termination of multiple bubbles. Simulations show that the test significantly improves discriminatory power and leads to distinct power gains when multiple bubbles occur. An empirical application of the methodology is conducted on S&P 500 stock market data over a long historical period from January 1871 to December 2010. The new approach successfully identifies the well-known historical episodes of exuberance and collapses over this period, whereas the strategy of PWY and a related cumulative sum (CUSUM) dating procedure locate far fewer episodes in the same sample range.
This study investigates the impact of both FDI inflows and stock market developments on clean energy use across 20 emerging market economies, spanning the period 1991–2012. It accounts for ...cross-sectional dependence and heterogeneity in the analysis and employs robust panel econometric techniques. The empirical results on long-run elasticities display that economic output, FDI inflows and stock market developments have all a significant positive impact on clean energy consumption. Finally, the results on heterogeneous panel non-causality tests indicate the presence of unidirectional causality running from FDI to clean energy consumption in the short-run. For robustness purposes, the paper also estimates long-run elasticities for individual countries, with the findings documenting that both FDI inflows and stock market developments have a considerable positive impact on clean energy uses. The findings urge that both policy makers and governments in these emerging market economies should initiate effective public-private-partnership investments in clean energy projects by providing lucrative incentives, which, in turn, will encourage both domestic and foreign investors to invest more in clean energy projects and, eventually, moving these economies towards sustainable economic growth.
•This study explores the impact of FDI inflows and stock market on clean energy use.•It uses 20 emerging market economies spanning the period 1991–2012.•It accounts for cross-sectional dependence and panel econometric methodologies.•Output, FDI inflows and stock markets positively impact clean energy consumption.•Policy makers should initiate effective investments in clean energy
Marketplaces are often small parts of large markets, and both markets and marketplaces come in many varieties. Market design seeks to understand what marketplaces must accomplish to enable different ...kinds of markets. Marketplaces can have varying degrees of success, and there can be marketplace failures. I’ll discuss labor markets like the market for new economists, and also markets for new lawyers and doctors that have suffered from the unraveling of appointment dates to well before employment begins. Markets work best if they enjoy social support, but some markets are repugnant in the sense that some people think they should be banned, even though others want to participate in them. Laws banning such markets often contribute to the design of illegal black markets, and this raises new issues for market designers. I’ll briefly discuss markets and black markets for narcotics, marijuana, sex, and surrogacy, and the design of markets for kidney transplants, in the face of widespread laws against (and broader repugnance for) compensating organ donors. I conclude with open questions and engineering challenges.
This article discusses some things we have learned about markets, in the process of designing marketplaces to fix market failures. To work well, marketplaces have to provide thickness, i.e. they need ...to attract a large enough proportion of the potential participants in the market; they have to overcome the congestion that thickness can bring, by making it possible to consider enough alternative transactions to arrive at good ones; and they need to make it safe and sufficiently simple to participate in the market, as opposed to transacting outside of the market, or having to engage in costly and risky strategic behaviour. I will draw on recent examples of market design ranging from labour markets for doctors and new economists, to kidney exchange, and school choice in New York City and Boston.
In markets where buyers and suppliers negotiate, supplier costs, buyer willingness to pay, and competition determine only a range of potential prices, leaving the final price dependent on other ...factors (e.g., negotiating skill), which I call
bargaining ability
. I use a model of buyer demand and buyer–supplier bargaining, combined with detailed data on prices and quantities at the buyer–supplier relationship level, to estimate firm-bargaining abilities in the context of the coronary stent industry where different hospitals (buyers) pay different prices for the exact same product from the same supplier. I estimate that (1) variation in bargaining abilities explains 79% of this price variation, (2) bargaining ability has a large firm-specific component, and (3) changes in the distribution of bargaining abilities over time suggest learning as an important channel influencing bargaining ability.
Data, as supplemental material, are available at
http://dx.doi.org/10.1287/mnsc.2014.2006
.
This paper was accepted by Bruno Cassiman, business strategy.
Platform envelopment Eisenmann, Thomas; Parker, Geoffrey; Van Alstyne, Marshall
Strategic management journal,
December 2011, Volume:
32, Issue:
12
Journal Article
Peer reviewed
Due to network effects and switching costs in platform markets, entrants generally must offer revolutionary functionality to win substantial market share. We explore a second entry path that does not ...rely upon Schumpeterian innovation: platform envelopment. Through envelopment, a provider in one platform market can enter another platform market, and combine its own functionality with that of the target in a multi-platform bundle that leverages shared user relationships. Envelopers capture market share by foreclosing an incumbent's access to users; in doing so, they harness the network effects that previously had protected the incumbent. We present a typology of envelopment attacks based on whether platform pairs are complements, weak substitutes, or functionally unrelated and we analyze conditions under which these attack types are likely to succeed.
This study proposes a hybrid energy trading scheme for peer-to-peer (P2P) energy trading in transactive energy markets. Market players can participate in different markets, including local markets, ...trading with neighbourhood areas, and traditional trading with the grid. In each local market, a community manager (CM) facilitates energy trading and negotiates with other CMs for neighbourhood trading. Based on the heterogeneous preferences of players of each community, each local market has a different price, which is different from market price for neighbourhood trading and trading with the grid. A distributed market clearing mechanism is presented that incorporates coordination among different markets. Also, a network utilisation charge function is defined to apply price signals to the market players to reflect network constraints in energy trading. These price signals are calculated based on the technical constraints in each market and are applied to the corresponding players based on their contribution to network constraints violation. Performance of the proposed trading scheme is evaluated against different market structures and through several case studies.
This book presents an economic survey of international capital mobility from the late nineteenth century to the present. The authors examine the theory and empirical evidence surrounding the fall and ...rise of integration in the world market. A discussion of institutional developments focuses on capital controls and the pursuit of macroeconomic policy objectives in shifting monetary regimes. The Great Depression emerges as the key turning point in recent history of international capital markets, and offers important insights for contemporary policy debates. Its principal legacy is that the return to a world of global capital is marked by great unevenness in outcomes regarding both risks and rewards of capital market integration. More than in the past, foreign investment flows largely from rich countries to other rich countries. Yet most financial crises afflict developing countries, with costs for everyone.
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