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.

The Relationship Between R&D and Company Performance

Abstract: OVERVIEW:In setting RD a number of companies have shown that this boosts the relative advantage of the company's products and services and hence leads to increased sales and market capitalization in the subsequent upturn.

Australian Takeovers: Capital Market Efficiency and Shareholder Risk and Return:

Abstract: This paper explains the share market's response to Australian takeover bids. Both successful and unsuccessful bids are considered. Two issues are addressed. Firstly, takeovers are viewed in terms of corporate investment decisions; the profitability of these decisions to the offeree and to the offeror are investigated. Secondly, takeover bids are seen as a valuable source of information relevant to the determination of a firm's share market capitalisation. The adjustment of share prices to this information source is studied within the context of the Efficient Markets Hypothesis. The results indicate that offeree shareholder returns are normal or below normal prior to a bid; whereas offerors exhibit above average returns. When a bid is made, offeree shareholders typically receive significant positive excess returns; whereas offeror shareholders gain no additional benefit. Australian share markets are confirmed to be semi-strong efficient in the Fama sense, namely that information made public during takeover...

Spatial linkages in international financial markets

Abstract: Spatial dependency has been studied in several research areas, such as environmental criminology, economic geography, environmental sciences, and urban economics. However, it has essentially been overlooked in other subfields of economics and in the field of finance as a whole. A key element at stake is the definition of contiguity. In the context of financial markets, defining a metric distance is not a simple matter. In this article, we explore the notion of spatial dependency by formulating a spatial version of the capital asset pricing model (S-CAPM). Such a model specification makes it possible to account for alternative measures of distance between firms, such as market capitalization, the market-to-book, and other financial ratios. Our model is tested on a panel of 126 Latin American firms. In addition, we derive Value-at-Risk (VaR) measures from our S-CAPM formulation. We complement our discussion with Monte Carlo simulations aimed at quantifying the benefits of diversification in terms of VaR red...

The impact of share price on seasonality and size anomalies in Australian equity returns

Abstract: Given the high correlation between a firm's stock price and market capitalisation, it is possible that the well-documented size anomaly is masking a share-price effect. Using a seemingly unrelated regression model to accommodate contemporaneous correlation between portfolios, we estimate the separate effects of firm size and share price on returns to Australian equity portfolios. The analysis is also extended to estimate seasonal components of size and price effects. Our major findings are: (i) firm size and share price have significant and independent effects on portfolio returns averaged over all months, (ii) the familiar negative relation between size and returns is confirmed across all months, and (iii) the relation between share price and returns is negative in July and positive in all other months (with the exception of January where no price effect occurs). These findings, which are consistent across sub-periods and robust to method variations, highlight the need for future research to provide an economic foundation for the relation between average returns, size and price.

Who controls East Asian corporations, and the implications for legal reform

Abstract: This Note reports an analysis of ultimate control in nearly 3,000 publicly traded companies in December 1996-before the financial crisis-in nine East Asian economies: Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, the Philippines, Singapore, Taiwan (China), and Thailand. The analysis shows that the ten largest families in Indonesia, the Philippines, and Thailand control half the corporate sector (in terms of market capitalization), while the ten largest in Hong Kong and Korea control about a third (figure 1). More extreme, in Indonesia and the Philippines ultimate control of about 17 percent of market capitalization can be traced to a single family. While the analysis shows that ownership concentration in these countries is in keeping with levels in other developing and some industrial countries, its findings shed light on the viability and vulnerability of corporate governance structures in East Asia. The concentration of corporate wealth and the tight links between corporations and government may have impeded legal and regulatory development, directly or indirectly. To create incentives for better governance, East Asian governments may have to promote more competition, even by breaking up conglomerates, and curtail related party lending by restricting ownership of banks.