Topic
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: In this article, the role of stock markets as a channel through which foreign capital flows could promote economic growth in recipient developed and developing countries was investigated, and the results indicated that stock markets might be a significant channel or leading institutional factor through which capital flows affect economic growth.
157 citations
TL;DR: In this article, the authors examined the impact of stock liquidity on firm bankruptcy risk using the Securities and Exchange Commission's decimalization regulation as a shock to stock liquidity, and established that enhanced liquidity decreases default risk.
Abstract: This paper examines the impact of stock liquidity on firm bankruptcy risk. Using the Securities and Exchange Commission’s decimalization regulation as a shock to stock liquidity, we establish that enhanced liquidity decreases default risk. Stocks with the highest default risk experience the largest improvements. We find two mechanisms through which stock liquidity reduces firm default risk: through improving stock price informational efficiency and facilitating corporate governance by blockholders. Of the two mechanisms, the informational efficiency channel has higher explanatory power than the corporate governance channel.
157 citations
TL;DR: Wang et al. as mentioned in this paper investigated the pricing of initial public offerings of A-shares sold to domestic investors and B-share sold to foreign investors in China and found that risk is strongly and positively associated with the underpricing of A shares and high government and legal entity shareholdings are also associated with under-pricing B shares.
157 citations
TL;DR: In this paper, the authors show that the stock market has large, low-frequency swings, moving upward from 1950 to 1965, then downward to 1982, and upward until early 2000.
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:
157 citations