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Stock exchange

About: Stock exchange is a research topic. Over the lifetime, 39566 publications have been published within this topic receiving 612044 citations.


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TL;DR: Demirguc-Kunt and Levine as mentioned in this paper studied the relationship between stock market size, liquidity, concentration, and volatility, of institutional development, and international integration, and found that the level of stock market development is highly correlated with the development of banks, nonbank financial institutions (finance companies, mutual funds, brokerage houses), insurance companies, and private pension funds.
Abstract: The three most developed stock markets are in Japan, the United Kingdom, and the United States, and the most underdeveloped markets are in Colombia, Nigeria, Venezuela, and Zimbabwe. Markets tend to be more developed in richer countries, but some markets commonly labeled emerging (for example, in Malaysia, the Republic of Korea, and Thailand) are systematically more developed than some markets commonly labeled developed (for example, in Australia, Canada, and many European countries). World stock markets are booming. Between 1982 and 1993, stock market capitalization grew from $2 trillion to $10 trillion, an average 15 percent a year. A disproportionate amount of this growth was in emerging stock markets, which rose from 3 percent of world stock market capitalization to 14 percent in the same period. Yet there is little empirical evidence about how important stock markets are to long-term economic development. Economists have neither a common concept nor a common measure of stock market development, so we know little about how stock market development affects the rest of the financial system or how corporations finance themselves. Demirguc-Kunt and Levine collected and compared many different indicators of stock market development using data on 41 countries from 1986 to 1993. Each indicator has statistical and conceptual shortcomings, so they used different measures of stock market size, liquidity, concentration, and volatility, of institutional development, and of international integration. Their goal: To summarize information about a variety of indicators for stock market development, in order to facilitate research into the links between stock markets, economic development, and corporate financing decisions. They highlight certain important correlations: In the 41 countries they studied, there are enormous cross-country differences in the level of stock market development for each indicator. The ratio of market capitalization to GDP, for example, is greater than 1 in five countries and less than 0.10 in five others. There are intuitively appealing correlations among indicators. For example, big markets tend to be less volatile, more liquid, and less concentrated in a few stocks. Internationally integrated markets tend to be less volatile. And institutionally developed markets tend to be large and liquid. The three most developed markets are in Japan, the United Kingdom, and the United States. The most underdeveloped markets are in Colombia, Nigeria, Venezuela, and Zimbabwe. Malaysia, the Republic of Korea, and Switzerland seem to have highly developed stock markets, whereas Argentina, Greece, Pakistan, and Turkey have underdeveloped markets. Markets tend to be more developed in richer countries, but many markets commonly labeled emerging (for example, in Korea, Malaysia, and Thailand) are systematically more developed than markets commonly labeled developed (for example, in Australia, Canada, and many European countries). Between 1986 and 1993, some markets developed rapidly in size, liquidity, and international integration. Indonesia, Portugal, Turkey, and Venezuela experienced explosive development, for example. Case studies on the reasons for (and economic consequences of) this rapid development could yield valuable insights. The level of stock market development is highly correlated with the development of banks, nonbank financial institutions (finance companies, mutual funds, brokerage houses), insurance companies, and private pension funds. This paper - a product of the Finance and Private Sector Development Division, Policy Research Department - is part of a larger effort in the department to study stock market development. The study was funded by the Bank's Research Support Budget under the research project Stock Market Development and Financial Intermediary Growth (RPO 678-37).

821 citations

Journal ArticleDOI
TL;DR: In this paper, the behavior of competing dealers in securities markets is analyzed and the conditions for interdealer trading are specified, and the equilibrium distribution of dealer inventories and equilibrium market spread are derived.
Abstract: The behavior of competing dealers in securities markets is analyzed. Securities are characterized by stochastic returns and stochastic transactions. Reservation bid and ask prices of dealers are derived under alternative assumptions about the degree to which transactions are correlated across stocks at a given time and over time in a given stock. The conditions for interdealer trading are specified, and the equilibrium distribution of dealer inventories and the equilibrium market spread are derived. Implications for the structure of securities markets are examined. IN THIS PAPER the behavior of competing dealers in security markets is examined. Much of the theoretical work on dealers (Demsetz [6], Tinic [18], Garman [8], Stoll [16], Amihud and Mendelson [1], Ho and Stoll [11], Copeland and Galai [3], Mildenstein and Schleef [13]) has recognized that dealers may face competition from other dealers or investors placing limit orders, but nonetheless has analyzed only a single (representative) dealer. This approach is quite reasonable for the New York Stock Exchange specialist who has a quasi-monopoly position, but it is less applicable when considering other markets such as the over-thecounter market where there are several dealers with equal access to the market. Similarly the empirical studies of dealer bid-ask spreads (Demsetz [6], Tinic [18], Tinic and West [19], Benston and Hagerman [2], Stoll [17], Smidt [15]) have either been based on models of a single dealer or have lacked a theoretical foundation based on the microeconomics of the dealer. This paper develops a theoretical model of equilibrium in a market with competing dealers and provides a basis for empirical work that would distinguish competing and monopolistic dealer markets. The paper is concerned with the behavior and interaction of individual competing dealers and with the determination of the market bid-ask spread. Markets with several dealers, several stocks and several periods are considered. Dealers bear risk arising not only from uncertainty about the returns on their inventories but also from uncertainty about the arrival of transactions. Each dealer also recognizes that his welfare depends on the actions of other dealers and each sets bid and ask prices to maximize his own expected utility of terminal wealth. A recent paper by Cohen, Maier, Schwartz and Whitcomb [5] examines similar issues in the context of an auction market in which the market spread is determined by limit orders. However, unlike the model of this paper, their analysis is not based as clearly on a model of individual traders' maximizing behaviors nor are the costs of placing * Financial support of the Dean's Fund for Faculty Research at the Owen Graduate School of

818 citations

Journal ArticleDOI
TL;DR: This article applied recent developments in the analysis of panels with a small-time dimension to estimate vector autoregressions for a set of 47 countries with annual data for 1980-1995, and showed leading roles for stock market liquidity and the intensity of activity in traditional financial intermediaries on per capita output.
Abstract: The rapid expansion of organized equity exchanges in both emerging and developed markets has prompted policymakers to raise important questions about their macroeconomic impact, yet the need to focus on recent data poses implementation difficulties for econometric studies of dynamic interactions between stock markets and economic performance in individual countries. This paper overcomes some of these difficulties by applying recent developments in the analysis of panels with a small time dimension to estimate vector autoregressions for a set of 47 countries with annual data for 1980–1995. After describing recent theories on the role of stock markets in growth and considering a pure cross-sectional empirical approach, our panel VARs show leading roles for stock market liquidity and the intensity of activity in traditional financial intermediaries on per capita output. The findings underscore the potential gains associated with developing deep and liquid financial markets in an increasingly global economy.

815 citations

Journal ArticleDOI
TL;DR: In this paper, the authors find that customer satisfaction, as measured by the American Customer Satisfaction Index (ACSI), is significantly related to market value of equity and that satisfied customers are economic assets with high returns/low risk.
Abstract: Do investments in customer satisfaction lead to excess returns? If so, are these returns associated with higher stock market risk? The empirical evidence presented in this article suggests that the answer to the first question is yes, but equally remarkable, the answer to the second question is no, suggesting that satisfied customers are economic assets with high returns/low risk. Although these results demonstrate stock market imperfections with respect to the time it takes for share prices to adjust, they are consistent with previous studies in marketing in that a firm's satisfied customers are likely to improve both the level and the stability of net cash flows. The implication, implausible as it may seem in other contexts, is high return/low risk. Specifically, the authors find that customer satisfaction, as measured by the American Customer Satisfaction Index (ACSI), is significantly related to market value of equity. Yet news about ACSI results does not move share prices. This apparent inco...

814 citations

Journal ArticleDOI
T. E. Cooke1
TL;DR: In this paper, the extent of disclosure in the corporate annual reports of Swedish companies is investigated and an assessment is made as to whether there is a significant association between a number of independent variables and the extentof disclosure.
Abstract: Sweden is of interest because of the rapid growth in the Stockholm stock exchange and because of the country's disproportionate number of multinational enterprises. This paper reports on the extent of disclosure in the corporate annual reports of Swedish companies. An assessment is made as to whether there is a significant association between a number of independent variables and the extent of disclosure.

796 citations


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Performance
Metrics
No. of papers in the topic in previous years
YearPapers
20232,414
20225,944
20211,840
20202,645
20192,535
20182,413