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.

Bond Markets in Africa

Abstract: African bond markets have been steadily growing in recent years, but nonetheless remain undeveloped. African countries would benefit from greater access to financing and deeper financial markets. This paper compiles a unique set of data on corporate bond markets in Africa. It then applies an econometric model to analyze the key determinants of African government securities market and corporate bond market capitalization. Government securities market capitalization is directly related to better institutions and interest rate volatility, and inversely related to the fiscal balance, higher interest rate spreads, exchange rate volatility, and current and capital account openness. Corporate bond market capitalization is directly linked to economic size, the level of development of the economy and financial markets, better institutions, and interest rate volatility, and inversely related to higher interest rate spreads and current account openness. Policy implications follow.

Modeling Structural and Temporal Variation in the Market's Valuation of Banking Firms

Abstract: Hidden capital exists whenever the accounting measure of a firm's net worth diverges from its economic value. Such unbooked capital has on-balance-sheet and off-balancesheet sources. This paper develops a model to estimate both forms of hidden capital and to test hypotheses about their determinants. In effect, the analysis expands the twoindex model by endogenizing the market and interest-rate sensitivities of any stock and decomposing each sensitivity into on-balance-sheet and off-balance-sheet elements. For a sample of banks during 1975-1985, the model finds considerable variation in both forms of hidden capital. To THE EXTENT THAT an accounting representation of a firm's net worth diverges from its economic value, the firm is said to have hidden capital. Two sources of hidden capital exist: accountants' misvaluations of portfolio positions that accounting principles designate as on-balance-sheet items and the systematic neglect of off-balance-sheet sources of value that these principles do not permit to be formally booked. This paper develops a model for estimating both types of hidden capital. The model makes direct use of accounting information on the bookable positions of a firm and separates bookable from unbookable sources of value. We use regression analysis to partition the market value of a firm's stock (i.e., its market capitalization, MV) into two components: recorded capital reserves and unrecorded (or hidden) net worth. Hidden capital is, in turn, allocated between values that are unbooked but bookable through asset turnover or writedowns on a historical-cost balance sheet under Generally Accepted Accounting Principles (GAAP) and values which GAAP currently designates as an unbookable offbalance-sheet item. We estimate the net unbooked value of on-balance-sheet positions by estimating an intermediate variation ratio, k. This variable expresses the ratio of the market value to the book value of the collected components of a firm's bookable

Stakeholders Management Systems: Empirical Insights from Relationship Marketing and Market Orientation Perspectives

Abstract: This paper explores the managerial aspects of the relationship with stakeholders, under the assumption that transfer of knowledge is being made from relationship marketing and market orientation perspectives. These marketing tools may prove useful to manage the relationship with other stakeholders, as has been the case with customers. This study focuses on a sample of Spanish companies representing 43% of listed companies with the largest market capitalization. Given that this is the first time that corporate relationship with stakeholders is analyzed in Spain, a qualitative technique (case analysis) was used. The main conclusion of the study is that most of the participant companies have a reactive position vis-a-vis stakeholders management systems. This attitude is reflected in their concern exclusively about ethical indexes managers.

The Value of Offshore Secrets – Evidence from the Panama Papers

Abstract: We use the data leak of the Panama Papers on April 3, 2016 to study whether and how the use of secret offshore vehicles affects firm value around the world. The data provide insights into the operations of more than 214,000 shell companies incorporated in tax havens by Panama-based law firm Mossack Fonseca. Using event study techniques, we find that the data leak erases US$135 billion in market capitalization among 397 public firms with direct exposure to the revelations of the Panama Papers, reflecting 0.7 percent of their market value. Tax aggressive firms and firms with exposure to perceptively corrupt countries are more adversely affected. This is consistent with the leak (i) reducing firms’ ability to avoid taxes and finance corruption, or (ii) increasing regulatory fines for past tax evasion and violations of anti-corruption regulations. Taken together, secret offshore vehicles are used for value-enhancing but potentially illegal activities that go beyond tax avoidance. Offshore intermediaries facilitate such activities.

The Effect of Macroeconomic Variables on Stock Market Returns in Developing Markets

Abstract: The relationship between stock market returns and fundamental economic activities in the United States have been well documented. However, the economic role of the stock markets in relatively less developed Asian countries is less clear. Specifically, how do these less developed markets respond to changes in its fundamental economic variables, when compared to the well developed, well organized, and more efficient markets like the U.S. stock market? The purpose of this study is to investigate the relationship between stock market returns and macroeconomic variables in the Korean stock market, using regression models. We have selected Korea as a case study for developing countries because of its impressive economic growth, liberalization of financial markets, and impending entry into the Organization for Economic Cooperation and Development(OECD). We find the Korean stock market incorporates information on macroeconomic variables in stock returns. The significant factors are the dividend yield, foreign exchange rate, oil price, and money supply. In summary, investors' perceptions of stock returns in the Korean market are quite different from those of U.S. and Japanese investors, suggesting that the Korean market is more sensitive to real economic activities rather than inflation or interest rate variables. INTRODUCTION The relationship between stock market returns and fundamental economic activities in the U.S. are well documented [Fama (1970, 1990, 1991)]. In recent years, numerous studies [Fama (1981), Huang and Kracaw (1984), Chen, Roll, and Ross (1986), Pearce and Roley (1988), Fung and Lie (1990), Chen (1991), and Wei and Wong (1992)] modeled the relation between asset prices and real economic activities in terms of production rates, productivity, growth rate of GNP, unemployment, yield spread, interest rates, inflation, dividend yields, etc. However, the economic role of the stock markets in relatively less developed Asian countries (e.g. Korea, Taiwan, Singapore, Hong Kong, Malaysia, China, etc.) is less clear. Specifically, how do these less developed markets respond to changes in its fundamental economic variables, when compared to the well developed, well organized, and more efficient markets like the U.S. stock market? During the last decade, the Korean stock market has experienced tremendous growth in both trading volume and market value in accordance with rapid economic development. The Korea Stock Exchange (KSE) is one of the most rapidly growing markets in the Pacific Basin and has become the eighth largest stock exchange in the world in terms of market capitalization as of 1990. However, the development of the financial sector in Korea has lagged far behind the real sector of the economy. Recently, numerous institutional investors and researchers have been focusing their attention on the capital market of the Pacific Basin Countries. The Korea Stock Exchange(KSE) provides an attractive investment opportunity to foreign investors and will play a major role in a global financial market. Moreover, this market has been almost ignored until recently by financial researchers. With the recent government disclosure of financial market opening which will fully abolish ceilings on investments in securities for foreigners by December 2000 , research on the Korea Stock Market is both meaningful and timely for a global financial market. Since the structure of the Korean stock market differs from that of the U.S., KSE price movements may be different. Even though the KSE is growing rapidly, the market capitalization of the Korean market is much smaller than the U.S. market. Hence, the KSE may be more subject to speculative activities, manipulations, and especially government interventions than the U.S. market. Due to different investor perceptions, is it possible that the KSE responds to economic variables differently than the U.S. market? The main purpose of this study is to test whether current economic activities in Korea can explain stock price variability. …