Stock exchange

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

Impact of Ownership Structure and Corporate Governance on Capital Structure of Pakistani Listed Companies

Abstract: This paper explores the relationship between corporate governance and capital structure of listed companies in an emerging equity market, Pakistan. The study covers the period 2002 to 2005 for which firm level data for 58 randomly selected non-financial listed companies from Karachi Stock Exchange has been examined by using multivariate regression analysis under fixed effect model approach. Measures of corporate governance employed are board size, board composition, and CEO/Chair duality. Impact of shareholding on financing decisions has also been examined by using managerial shareholding and institutional shareholding. Similarly influence of controlled variables like firm size and profitability on firms’ financing mechanism is also investigated. Results reveal that board size and managerial shareholding is significantly negatively correlated with debt to equity ratio. However corporate’s financing behavior is not found significantly influenced by CEO/Chair duality and the presence of non-executive directors on the board. However, control variables firm size and return on assets are found to have a significant effect on capital structure. No temporal effects are observed. Therefore results suggest that corporate governance variables like size and ownership structure and managerial shareholding play important role in determination of financial mix of the firms.

An application of variance ratio test to the Korean securities market

Abstract: The efficient market hypothesis (EMH) has recently been under attack as a result of the methodology employed in the early tests of the theory. More recent evidence has shown that the traditional tests of random walks are susceptible to errors because of spurious autocorrelation induced by non-synchronous trading which is characteristic of stock markets in developing countries This is the first study to apply the recently introduced Lo-MacKinlay variance ratio test to the Korean Stock Exchange (KSE). The KSE is chosen because it represents a typical emerging stock market. The results show that under the assumption of homoscedastic error term, the random walk hypothesis is rejected. However, with heteroscedastic stochastic disturbance term, we could not reject the hypothesis of random walk for daily data. When the test is applied to longer horizons such as weekly, monthly, 60-day and 90-day interval data, we could not reject the random walk hypothesis. There is also evidence that suggests the presence of spurious autocorrelation and heteroscedasticity in the market. These could be due to official intervention and nonsynchronous trading in the market.

Ownership Structure and Earnings Management in Malaysian Listed Companies: The Size Effect

Abstract: According to the agency theory, separation of ownership and control gives rise to manager’s incentives to select and apply accounting estimates and techniques that can increase their own wealth. This issue has become more important in recent years as more firms are listed on stock exchanges as public firms. This study examines the association between the level of managerial ownership and earnings management activities, represented by the magnitude of discretionary accounting accruals in Malaysian listed firms. The results show that managerial ownership is negatively associated with the magnitude of accounting accruals. However, this study finds that managerial ownership is less important in large-sized firms compared to small-sized firms. This finding suggests that large-sized firms demand and use better corporate governance mechanisms due to higher agency conflicts, and, therefore, less managerial ownership is needed for control. As part of the ownership structure, this study also examines the roles of block and foreign ownerships in relation to the magnitude of discretionary accounting accruals.

Effect of exchange rate volatility on the Ghana Stock Exchange

Abstract: The study looked at the relationship between Stock Markets and Foreign Exchange market, and determined whether movements in exchange rates have an effect on stock market in Ghana. The Exponential Generalised Autoregressive Conditional Heteroskedascity (EGARCH) model was used in establishing the relationship between exchange rate volatility and stock market volatility. It was found that there is negative relationship between exchange rate volatility and stock market returns - a depreciation in the local currency leads to an increase in stock market returns in the long run. Where as in the short run it reduces stock market returns. Additionally, there is volatility persistence in most of the macroeconomic variables; current period’s rate has an effect on forecast variance of future rate. It was also revealed that an increase (decrease) in trade deficit and expectation in future rise in trade deficit will decrease (increase) stock market volatility. In addition, the consumer price index has a strong relationship with stock market volatility. This means that an increase in consumer price will lead to a rise in stock market volatility. Finally, there is the presence of leverage effect and volatility shocks in stock returns on the Ghana Stock Exchange.