Ultrafast optical manipulation of magnetic order
Summary (3 min read)
1. Introduction
- A key theme in restructuring economies in the developing world is opening stock markets to foreign portfolio investment.
- Furthermore, the scrutiny of foreign investors, foreign equity analysts, and foreign stock listing standards can help resolve agency problems, effectively transmitting higher quality reporting and governance standards to developing-country firms (Obstfeld 1998, Stulz 1999).
- More generally, an entire capital market may be thought of as submitting to the demands of foreign investors from higher-quality environments when it loosens restrictions on foreign equity investors.
- Roll (1988) suggests that low r-squared coefficients from regressing individual stock returns on common economic factors represent private firm-specific information.
3. Data
- The authors begin with the names of the component firms of the Standard and Poor’s Emerging Markets Database (EMDB).
- They represent significant firms from a cross-section of over forty emerging economies.
- Data restrictions, as discussed in subsequent sections, limit the number of countries the authors are able to use.
- The lack of sufficient Datastream or I/B/E/S records for such countries as Bahrain, Egypt, Morocco, Nigeria, Oman, Saudi Arabia, and Zimbabthe authors leads us to exclude them from their sample.
- The authors use as many countries, firms, and time periods as possible, and, as detailed below, some tests check for robustness over different subsamples of the available data.
3.1 Proxies for openness to cross border portfolio flows
- The authors compute three proxies for the openness of a particular developing country to foreign portfolio investment.
- As previously discussed, classic theories suggest that such events can ease access to the local stock market by foreign investors, and a variety of studies associate such events with decreases in the cost of capital.
- The authors restrict this new set of events to major liberalizations involving the stock market or affecting the ability of foreigners to buy and sell local equities.
- Table 1 displays their five sets of liberalization and openness events.
- The authors third type of openness measure is computed from the size of portfolio flows between a particular developing country and the U.S. U.S. investors represent a significant fraction of the portfolio capital flows to and from emerging markets.
3.2 Proxies for the information environment
- The authors create several measures of the information environment faced by the emerging market firms in their sample.
- This confirms their interpretation of the firm-specific variance as a measure 7.
- What remains is trading volume generated by differential informed judgment (or difference in opinions), and it is reflected in the regression intercept.
- This estimate of “disagreement” around earnings releases is their final information environment indicator.
- Again, the trade-off between greater precision and greater disagreement as a result of an enhanced information environment could cause either decreases or increases in their disagreement measure with greater openness.
4. Empirical results
- The authors have several measures of the information environment: firm-specific return volatility, number of analysts, forecast dispersion, forecast error, and abnormal market responses to earnings.
- The authors have three types of measures of openness: dates of liberalization, cross listings, closed end country fund listings, and breakpoints in net portfolio flows; the fraction of capitalization available to foreigners; and the flow of portfolio capital to and from the U.S.
- The authors report results of a variety of tests relating changes in openness to changes in the information environment.
4.1 Summary statistics
- Table 2 contains univariate summary statistics (mean, median, standard deviation, nobs) on the country openness measures and firm-specific volatility (Panel A) and the earnings-related information variables (Panel B).
- Furthermore, earnings-related information variables are available only once per firm-year so their summary statistics are computed on annual observations.
- Taiwan is a particularly interesting case as it features low investibility but high U.S. equity portfolio flows.
- The relatively developed Korean market features a median of only 7 analysts per firm.
- First, return volatility at earnings release shows strong positive correlation with most other information variables (number of analysts, forecast error and dispersion, abnormal volume).
4.2 “Before versus after” tests
- The authors sample of explicit (liberalization, cross listing, and country fund) and implicit (estimated portfolio flow breakpoints) events imply distinct “before” and “after” periods.
- It indicates that firm-specific volatility is generally lower prior to liberalization events.
- These results suggest that firm-specific volatility increases significantly after various liberalization events.
- F-tests confirm that equality of “before” and “after” dummy coefficients is strongly rejected, except for abnormal trading volume.
- It suggests that while there is some evidence of increase in “disagreement” component of trading volume around earnings releases after liberalization events, the change is not statistically significant.
4.3 Regressions relating information environment to time-series openness measures
- Recall that their second and third openness measures, the proportion of market cap available to foreigners and the flow of capital between the U.S. and a particular country, are monthly time series.
- The necessity of running regressions with annual medians, as described previously, may facilitate this: one lag of an openness variable provides a window of a year for gradual responses of information variable.
- This indicates that increased availability of a country’s equities to foreigners is associated with substantial changes in the information environment.
- In contrast, larger market cap is sensibly associated with a larger number of analysts.
- It may be the case that, upon becoming more open to foreign investment, an emerging market quickly draws foreign attention to immediate, specific earnings events while coverage of a more general nature takes time to develop.
4.4 A closer look at a cross section of individual firms from one country
- The authors tests to this point largely feature variables that have been aggregated across firms and months within a year.
- Second, the Korean market is a major target of foreign portfolio investors, ranking third among their sample countries in terms of U.S. portfolio investment.
- Specifically, the authors use the Korea Securities Research Institute (KSRI) database for stock returns and the Listed Company Database of the Korean Listed Companies Association for financial statements and ownership information.
- To study individual Korean firms, the authors parallel Tables 7 and 8 (based on country median data) and run regressions of individual firm volatility on openness variables and firm characteristics.
- This yields approximately 400 to 500 firms for each sample year.
4.5 In which direction does causality run?
- The authors earlier work shows that information variables often relate to contemporaneous and lagged values of their two time-series openness measures, investibility and total U.S. portfolio flow.
- This interpretation implies that liberalization and other acts of increasing access have a beneficial effect on the information environment, in addition to the decreased cost of capital documented by previous authors.
- As more information about firms in an emerging market becomes available, foreign demand for local stocks increases and puts pressure on local authorities to loosen access.
- In contrast, the causality between number of analysts and portfolio flow is bi-directional, with stronger causality from number of analysts to portfolio flow.
5. Summary and conclusions
- The authors have uncovered interesting associations between the state of the information environment and the degree of openness to foreign equity investment across a sample of emerging markets.
- When foreign equity investment is impeded, many aspects of the information environment recede.
- This suggests that different facets of the information environment respond differently to changes in the degree of openness and the actual extent of foreign equity flows across an emerging economy’s borders.
- An increase in preannouncement forecast dispersion may indicate that there are more analysts grappling with greater quantity and quality of information.
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Cites background from "Ultrafast optical manipulation of m..."
...Although interesting results on laserinduced magnetization dynamics in antiferromagnets, ferromagnetic semiconductors, and insulators have been reported [Kirilyuk et al., 2010], studies to date focus on bulk materials....
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Frequently Asked Questions (14)
Q2. What future works have the authors mentioned in the paper "Ultrafast optical manipulation of magnetic order" ?
Regarding these potential applications, for that it will be essential to extend the present state of optical manipulation and control of magnetic order toward smaller nanoscale dimensions. Given the rapid developments in nano-optics and plasmonics, such possibilities do not seem to be too far fetched.
Q3. What is the role of the hot electron gas in the demagnetization of metals?
The hot electron gas plays the role of a thermal bath for spins and thus facilitates both an intensification of spin-flip processes and the demagnetization.
Q4. Why should an observation of circular or linear birefringence be accompanied by similar effects?
Because of the Kramers-Kronig relations, an observation of circular or linear birefringence in a certain spectral range should be accompanied by similar effects of polarization-dependent absorption in another spectral domain.
Q5. Why are these domains suitable for stroboscopic pump-probe experiments?
Because of the coercivity, these magnetic domains are sufficiently stable in time and thus suitable for stroboscopic pump-probe experiments.
Q6. Why is the spin flip in the ground state due to the fact that the light mixes a?
In other words, the spin flip in the ground state is due to the fact that circularly polarized light mixes a fraction of the excited-state wave function into the ground state Pershan et al., 1966 .
Q7. What is the significance of the details of the magnetic structure for the understanding of these results?
Recent results that show that even linearly polarized laser pulses can lead to similar effects have indicated the importance of the details of the magnetic structure for the understanding of these optomagnetic results.
Q8. What is the temperature dependence of the precession frequency and the Gilbert damping parameter?
The observed strong increase in the precession frequency and the Gilbert damping when the temperature approaches TA is ideal for ultrafast ringing-free precessional switching in magnetic and magneto-optical recording.
Q9. What is the use of metallic magnets in various applications?
At the same time, metallic magnets are used in numerous applications, from power transformers and sensors to data storage and spintronics.
Q10. What is the role of the bandwidth in the classification of metallic magnets?
To make a classification, the role of the bandwidth may be invoked: narrowband materials, such as insulators, oxides, and to some extent also f metals can be excited much more selectively than the broadband transition metals.
Q11. How can a laser pulse control the precession of antiferromagnetic spins?
circularly polarized light can control the precession of antiferromagnetic spins in the terahertz domain see Fig. 40 .
Q12. Why is the effect of a femtosecond pump pulse different?
Because of the fundamental differences in the magnetic and transport properties of metals and insulators, the effect of a femtosecond pump pulse on these two types of magnetic material is different.
Q13. How can a laser-induced spin flip process be coherently stimulated?
such a laser-induced spin-flip process can be coherently stimulated if both frequencies 1 and 2 are present in the laser pulse see Fig. 2 .
Q14. What is the way to model the ultrafast laser-induced spin dynamics in a metallic?
Another approach to modeling ultrafast laser-induced spin dynamics in a metallic magnet is to use the LLG equation on the atomic level Chubykalo-Fesenko et al., 2006; Kazantseva, Nowak, et al., 2008 .