Amidst a backdrop of global economic challenges and shifting market dynamics, this study highlights the transformative role of data elements in enhancing enterprise performance within capital ...markets, particularly focusing on China’s leading position in the digital economy as a model with implications for global markets. This study utilized a panel data set consisting of 10,493 observations from 2687 listed enterprises in Shanghai and Shenzhen A-shares from 2015 to 2023. An econometric analysis was conducted using a two-way fixed effects model to explore the impact of enterprise data elements on capital market performance in the digital economy and its underlying mechanisms. The research reveals that the digitization of enterprise production factors can significantly enhance performance in the capital market. The study further suggests that enterprise innovation and enterprise value play a crucial role in mediating this effect. This paper introduces a new concept called “data elements”, which expands the definition and assessment methods of enterprise data capabilities. It goes beyond just digital transformation at the application level and includes data governance at the basic ability level. This approach provides a more accurate and comprehensive understanding of the different elements of data. Moreover, the research expands the research scope of microeconomic entities’ economic benefits, thereby extending the value contributed by enterprise data elements to their performance in the capital market. Additionally, this study reveals the relationship between enterprise data elementization and capital market performance through intermediary analysis of enterprise innovation performance and enterprise value, which unveils the “black box” and clarifies the transmission pathway. The findings of this research hold considerable theoretical value and have far-reaching practical implications for government policies concerning data elements and the development of high-quality enterprises, suggesting pathways for global markets to leverage data for enhanced enterprise performance and economic resilience. The results are particularly useful for policymakers, enterprise managers, and scholars in understanding and implementing data-driven strategies in capital markets.
This paper shows that incentives created by the impending turnover of local politicians can accelerate the pace of initial public offering (IPO) activity in certain politicized environments. Focusing ...on China, we exploit a research setting where politicians are rewarded for capital market development, firms rely on political connections for access to capital, rent-seeking behavior is rampant, and the objectives of the state might not be to maximize capital market efficiency. We find that the rate of exchange eligible firms engaging in an IPO temporarily increases in advance of impending political promotion events. This effect holds for both state-owned and non-state-owned entities. For state-owned firms, the effect is strongest in those provinces where the politicians are more likely to be rewarded for market development activity. For non-state-owned firms, the temporary increase in IPO activity appears to be (rationally) opportunistic in nature, with the effect stronger around events more likely to disrupt the firms' political connections. Promotion period IPOs underperform non-promotion period IPOs in terms of both future financial performance and long-run stock returns, have controlling shareholders who retain a larger fraction of the company, and are more likely to divert proceeds away from their intended use after the offering.
Financial reporting fraud and other forms of financial reporting misconduct are a significant threat to the existence and efficiency of capital markets. This study reviews the literature on financial ...reporting misconduct from the perspectives of law, accounting, and finance. Our goals are to establish a common language for researchers interested in this line of research, describe the main findings and challenges in these literatures, and provide directions for future research. Although research on financial reporting misconduct faces challenges, those challenges provide significant opportunities to advance the literature, as the answers to many questions on financial reporting misconduct remain unsettled.
This research compares modeling and forecasting the volatility of the IHSG, N225, and BSESN30 capital market indices using the GARCH variation model against the GARCH-fractional cointegration ...variation. The data used is secondary data obtained from www.investing.com from 01/01/2012 to 04/30/2023. Based on the performance measurement using the sMAPE criterion, the best model for forecasting the period 05/01/2023 to 05/31/2023 is the std-ALLGARCH (1,2)-fractional cointegration model for IHSG, the std-ALLGARCH(1,1) model for N225, and the sstd-ALLGARCH (1,2) model for BSESN30. This empirical finding means that the Japanese and Indian capital markets affect the volatility of the Indonesian capital market.
A growing body of research has analysed the variegation of financialization processes and the role of states as important actors therein. Contributing to this literature, this paper argues that more ...than important actors facilitating financialization, states can also (partially) exert control over, actively manage and shape financialization. In the context of China's variegated financialization process, this paper analyses the crucial role of securities exchanges in the development of China's capital markets since the global financial crisis 2007-2009. These state-owned exchanges act as intermediaries between the Chinese state, society and finance by shaping the infrastructural arrangements of capital markets. Thereby, they facilitate the authorities' ability to control markets and direct their outcomes towards state policies. Financialization is thereby decoupled from a neoliberal policy paradigm, and rather than a break with China's authoritarian capitalism, exchanges facilitate state control within and through financialization.
Foreign directors can affect firm value through their advising and monitoring functions. However, the demand for these directors, as well as their effect on firm performance is likely to be ...influenced by firm- and country-level characteristics. In a large sample of non-US firms, we find that foreign directors are more likely to be associated with firms that have more foreign operations and an international shareholder base, and firms that are located in countries with a limited supply of potentially qualified domestic directors – countries with a smaller, less welleducated populace and lower levels of capital market development. We also find that the association between foreign directors and firm performance is more positive in countries with lower quality legal institutions, and when the director comes from a country with higher quality legal institutions than the firm's host country. Our study highlights the importance of considering national demographic factors and levels of capital market development when modeling the supply and demand for foreign directors, and also underscores the importance of institutional quality in the foreign director's home and host country when assessing the effect of that director on firm performance.
The study examines tax revenue, capital market performance and foreign direct investment (FDI) in Nigeria. The broad objective of this study is to find out the relationship between tax revenue, ...capital market performance and FDI in Nigeria. The study adopted a longitudinal research design and covers a period of 1994-2021. Secondary data were obtained from annual report and bulletins of the Central Bank of Nigeria. This study employed the ADF and Philips-Perron (PP) unit root test, panel Johansen cointegration test, VAR model, dynamic ordinary least square regression, full modified ordinary least regression and pairwise granger. The findings amongst others revealed that; value added tax has a bidirectional relationship with foreign direct investment in Nigeria; company income tax has no significant relationship with foreign direct investment in Nigeria; custom and exercise duty has a unidirectional relationship with foreign direct investment in Nigeria; stock market capitalization has no significant relationship with foreign direct investment in Nigeria. Based on the findings, the study recommended amongst others that policy makers should concentrate effort on long run policies that will stimulate capital market development in Nigeria, Also, a healthier and more robust friendly foreign investment policies should be created and maintained and the government should partners with foreign investors to enhance capital market development in Nigeria.
The Real Effects of Short-Selling Constraints Grullon, Gustavo; Michenaud, Sébastien; Weston, James P.
The Review of financial studies,
06/2015, Letnik:
28, Številka:
6
Journal Article
Recenzirano
We use a regulatory experiment (Regulation SHO) that relaxes short-selling constraints on a random sample of U.S. stocks to test whether capital market frictions have an effect on stock prices and ...corporate decisions. We find that an increase in short-selling activity causes prices to fall, and that small firms react to these lower prices by reducing equity issues and investment. These results not only provide evidence that short-selling constraints affect asset prices, but also confirm that short-selling activity has a causal impact on financing and investment decisions.
Intelligent transformation plays a crucial role in advancing sustainable development in manufacturing while also enhancing the information environment. This study examines the role of intelligent ...transformation in China’s manufacturing sector, spanning theoretical and empirical dimensions and being anchored in the context of capital market information efficiency. The theoretical framework highlights how intelligent transformation mitigates information asymmetry, aligning a firm’s valuation with its intrinsic value, thereby elevating the information efficiency of capital markets. Leveraging annual reports from China’s A-share manufacturing firms, this study employs textual analysis to construct indicators assessing the extent of intelligent transformation across these entities. The empirical findings of this study harmonize with the theoretical constructs. Notably, intelligent transformation emerges as a pivotal driver in enhancing information efficiency in capital markets, substantiated by a negative correlation between intelligent transformation and stock price synchronicity within the manufacturing domain. This correlation withstands a battery of robustness tests and endogeneity treatment. The mechanism driving this transformative impact lies in intelligent transformation’s ability to enhance productivity and magnify market attention, thereby positively influencing capital market information efficiency. The insights not only provide empirical support but also offer practical guidance for improving real-world company operations and developing high-quality capital markets.
We develop a dynamic agency model in which payout, investment, and financing decisions are made by managers who attempt to maximize the rents they take from the firm, subject to a capital market ...constraint. Managers smooth payout to smooth their flow of rents. Total payout (dividends plus net repurchases) follows Lintner's (1956) target adjustment model. Payout smooths out transitory shocks to current income and adjusts gradually to changes in permanent income. Smoothing is accomplished by borrowing or lending. Payout is not cut back to finance capital investment. Risk aversion causes managers to underinvest, but habit formation mitigates the degree of underinvestment.
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