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.

Evolutionary dynamics of the cryptocurrency market.

Abstract: The cryptocurrency market surpassed the barrier of $100 billion market capitalization in June 2017, after months of steady growth. Despite its increasing relevance in the financial world, a comprehensive analysis of the whole system is still lacking, as most studies have focused exclusively on the behaviour of one (Bitcoin) or few cryptocurrencies. Here, we consider the history of the entire market and analyse the behaviour of 1469 cryptocurrencies introduced between April 2013 and May 2017. We reveal that, while new cryptocurrencies appear and disappear continuously and their market capitalization is increasing (super-)exponentially, several statistical properties of the market have been stable for years. These include the number of active cryptocurrencies, market share distribution and the turnover of cryptocurrencies. Adopting an ecological perspective, we show that the so-called neutral model of evolution is able to reproduce a number of key empirical observations, despite its simplicity and the assumption of no selective advantage of one cryptocurrency over another. Our results shed light on the properties of the cryptocurrency market and establish a first formal link between ecological modelling and the study of this growing system. We anticipate they will spark further research in this direction.

Struggling to Understand the Stock Market

Abstract: Economists are as perplexed as anyone by the behavior of the stock market. Figure 1 shows a broad measure of stock-market value in relation to GDP from 1947 through 2000. In addition to saw-tooth movements including the contraction in late 2000, the value of the stock market has large, low-frequency swings, moving upward from 1950 to 1965, then downward to 1982, and upward until early 2000. I entertain the hypothesis that these large movements are the result of rational (if not accurate) appraisal of the cash likely to be received by shareholders in the future. The hypothesis receives some support from work by financial economists showing that irrational markets create profit opportunities for active traders and that passive traders consistently earn higher returns. Most of my discussion will be complementary to the work of financial economists—I will look at the fundamentals underlying stock-market values. The lecture considers three potential contributors to the big movements shown in Figure 1:

Impact of macroeconomic indicators on stock market performance: The case of the Ghana Stock Exchange

Abstract: Purpose – The study aims at examining how macroeconomic indicators affect the performance of stock markets by using the Ghana Stock Exchange as a case study.Design/methodology/approach – Quarterly time series data covering the period 1991‐2005 were used. Cointegration and the error correction model techniques are employed to ascertain both short‐ and long‐run relationships.Findings – Findings of the study reveal that lending rates from deposit money banks have an adverse effect on stock market performance and particularly serve as major hindrance to business growth in Ghana. Again, while inflation rate is found to have a negative effect on stock market performance, the results indicate that it takes time for this to take effect due to the presence of a lag period; and that investors benefit from exchange‐rate losses as a result of domestic currency depreciation.Originality/value – The single most important contribution of this study is its emphasis on macroeconomic variables and stock market performance i...

Asset Pricing in China's Domestic Stock Markets: Is There a Logic?

Abstract: China's stock markets have grown rapidly since their inception and have become an increasingly important emerging market for international investors. However, there are few systematic studies on how asset prices are formed in Chinese domestic equity markets; popular financial media even depict the market as irrational. In this paper, we study the asset pricing mechanism in the nascent Chinese stock markets, with the objective of identifying variables that capture the cross-sectional variation in average stock returns. We focus on the effects of various market imperfections in China. We find that while the market risk (beta) is not priced, there is a significantly negative relationship between firm-specific risk and expected returns. Chinese investors are willing to pay a significant premium for more liquid stocks or for dividend-paying stocks. Furthermore, investors value local A-shares more if there are offshore counterparts (e.g., B- and H- shares) for foreigners, implying that a Chinese firm with a foreign shareholder base has a lower cost of capital, ceteris paribus. Lastly, as with U.S. and other mature markets, firm size and the book-to-market ratio are systematically related to stock returns. Given market imperfections, stocks are priced rather rationally in China, despite the widespread perception to the contrary.