Market capitalization

About: Market capitalization is a research topic. Over the lifetime, 3583 publications have been published within this topic receiving 77288 citations. The topic is also known as: market cap & market value.

Active investment manager portfolios and preferences for stock characteristics

Abstract: The present study investigates the stock characteristic preferences of institutional Australian equity managers. In aggregate we find that active managers exhibit preferences for stocks exhibiting high-price variance, large market capitalization, low transaction costs, value-oriented characteristics, greater levels of analyst coverage and lower variability in analyst earnings forecasts. We observe stronger preferences for higher volatility, value stocks and wider analyst coverage among smaller stocks. We also find that smaller investment managers prefer securities with higher market capitalization and analyst coverage (including low variation in the forecasts of these analysts). We also document that industry effects play an important role in portfolio construction.

The determinants of corporate loan liquidity

Abstract: Most empirical research on the liquidity of financial assets has focused on the determinants of bid-ask spreads. However, most real assets and many financial assets are illiquid in that no one makes a market and thus relatively large search costs are associated with trades. Marketmakers greatly reduce such costs and may reduce transaction costs, especially where dealers or exchanges compete. Little is known about the characteristics of financial assets that determine whether markets are made, but intuition suggests such characteristics should influence market-makers’ revenues and costs, just as bid-ask spreads are influenced by revenues and costs. Stoll (1978) and much empirical evidence about bid-ask spreads suggest that revenues are a function of order flow from uninformed traders (basically, of the volume of the asset outstanding, e.g. market capitalization), while costs may be divided into fixed, inventory, and adverse selection costs. An inventory of volatile stocks is more expensive to maintain because dealers by nature hold undiversified portfolios, and thus

Stock Market Development and Economic Growth in Nigeria: A Time Series Study for the period 1980-2007

Abstract: This research empirically examines the relationship between stock market development and economic growth in the context of Nigeria. The question guiding this study is focused on whether the development of the stock market has had an impact on economic growth in Nigeria. The thesis examines the long run causal relationship between the stock market and economic growth. It uses one bank and three measures of stock market development: the loans to deposit ratio of banks, Market capitalisation ratio, value traded to market capitalisation ratio as well as value traded to GDP ratio. Essentially the study uses the endogenous growth theory as a basis of its theoretical foundation. The study exploits time series analysis techniques to test for the existence of a relationship and, where one is found to exist, the casual nature of that relationship. The study particularly applies Multivariate vector autoregressive models (VAR) and Vector Error Correction Models (VECM) in testing for the existence of a relationship. The evidence obtained from the study shows the existence of co-integration between the stock market development and economic growth in the short as well as the long run. This suggests that stock market development has impacted on economic growth in Nigeria. The Granger causality test findings indicate the presence of a bi-directional relationship between stock market development and economic growth. The findings of the study support the view that stock market development and economic growth in Nigeria are complementary and any improvements in the stock market would have a positive impact on economic growth in Nigeria. The findings also support the hypothesis of endogenous growth models that financial development causes higher economic growth. The contribution of this study lies in the fact that it provides additional evidence on the ongoing debate of the impact stock markets on the economic growth process within a specific country.