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The purpose of this paper is to study the pricing efficiency of convertible bonds and arbitrage opportunities between the convertible bonds and the underlying stocks thus improve market efficiency.

Using nonparametric fixed effect panel data model, the authors build pricing model of convertible bonds and obtain fitted value for them. Then the authors constructs simultaneous confidence band for the smooth function to identify mispricing and study the pricing efficiency and arbitrage opportunities of convertible bonds.

Result shows, convertible bonds’ prices largely depend on stock prices. Pricing efficiency does not improve during the past few years as there are quite a few trading opportunities. Arbitrage opportunities increase as the stock prices approach it maxima, and selling opportunities for convertible bonds surpass buying opportunities which indicates that investors use market neutral strategies to arbitrage. Pricing efficiencies varies a lot and it is affected by the features of the stocks and convertible bonds. Index stocks eligible for margin trading with high liquidity enjoy higher pricing efficiency.

The study does not take into account trading cost and risk management measures.

Arbitrage between the underlying and the convertible bonds is profitable and contributes to pricing efficiency therefore should be encouraged. The regulator should pay attention to the extreme mispricing of the underlying and convertible bonds which cannot be corrected by the market as there might be manipulation.

Since traditional pricing methods are based on the framework of non-arbitrage equilibrium with the assumption of balanced and perfect market, there are many restrictions in the pricing process and the practical utility is somewhat limited, and the impractical assumptions lead to model risk. This study uses nonparametric regression to study the pricing of convertible bonds thus circumvents the problem of model risk. Simultaneous confidence band for smooth function identifies mispricing and explicitly reflects the variation of pricing efficiency as well as signalizes trading opportunities. Application of nonparametric regression and simultaneous confidence band in derivative pricing is advantageous in accuracy and simplicity.

This study aims to integrate entrepreneurship theories and acculturation perspectives into a unified lens to understand opportunity development by transnational entrepreneurs (TNEs).

This study uses a conceptual method, considering how acculturation strategies of TNEs influence cross-cultural arbitrage.

We develop six propositions that define how acculturation strategies relate to different levels of cultural embeddedness of transnational entrepreneurs and ultimately influence the process by which the entrepreneur engages in cross-cultural arbitrage.

We are one of the first to integrate the sociology of immigrants with entrepreneurship to better understand how TNEs engage in cross-cultural arbitrage.

The knowledge economy (KE) which provide for an alternative to production-based economy and brick and mortar economy has a tremendous opportunity. KE has emerged due to the advent of skill concentration in nation states. However, the traditional production economy provides individual arbitrage opportunity which acts as a sideline for growth of the economy. In the modern economy, the higher the ability to create an edge for price for the knowledge, the greater will be the ability of the nation state to create and arbitrage process. Any economy which is driven by an innovative education system, appreciates, and adopts knowledge is the one which becomes successful in the knowledge process and a developed KE. Information technology forms a major component of knowledge process but is not the entire gamete of knowledge. Hence, it should not be confused that KEs are information industry driven alone. This paper tries to develop a model to check whether KE has the ability to support arbitrage process. Here the probability rate of growth in GDP is taken as the key element for the purpose of solving the theoretical proposition. The result shows that there are positive probabilities of the KE in providing arbitrage premium for individual which can fire the growth of the economy.

The purpose of this paper is to investigate the strategy that a turnaround in the USA will portend a turnaround in the UK's economy and property market. For this strategy to operate, it is assumed that the capital and property markets in and between the two nations are highly integrated with endogenous pricing functions.

Given the endogenous assumptions of the conjectured research statement, tests of integration (or segmentation) between two capital and property markets are conducted. Correlation, tracking error analysis, and a multiple systematic risk factor model are used to test the pricing relationships. The methodological form employs variant macroeconomic variable pricing models (MVM) of alternative combinations of systematic affects operating across and between the national markets.

Pricing integration is noted between the UK and US capital markets, while the property markets are economically and statistically segmented. Opportunities for arbitrage based on different prices/returns for equivalent risk exposures are statistically observed between the UK and USA. The effect is that systematic pricing between the two markets cannot be addressed solely by diversification options. This infers a potential for arbitrage (statistically, strategically or in practice) is possible, given that systematic risk exposures between the two markets are not equivalently priced across cyclical phases. In this context it is inferred that the probable measure of pricing differences across the two markets is more than a cyclical lag effect.

The paper delineates the degrees of integration/segmentation in the UK and US property and capital markets as a function of systematic risks in changing economic conditions. These differences support the existence of statistical arbitrage and the specification of investment behaviour as a function of differencing pricing expectations. These findings can assist in the formulation of investment and hedging strategies to assist in managing international portfolios subject to cyclical market exposures. This paper contributes to an understanding of and foundation for testing the nature and impact of cycles on property investment performance as a function of pricing changes.

The paper aims to examine the practical importance of the finding of Mayers and Smith, that underinvestment is a problem when debt exposed to bankruptcy is part of the financial structure.

The paper examines critically the assumptions underlying the Mayers and Smith paper.

The necessary assumption of deterministic arbitrage in the market for productive properties used by Mayers and Smith in their model is found to be unrealistic. Even if that assumption were valid, however, the result of Mayers and Smith establishes that raising exposed debt is a negative net present value project for the investor and hence that form of financing would not be found in practice.

The existence of exposed debt does not explain the demand or commercial insurance.

The paper challenges the results of Mayers and Smith that have been used to examine the effect of debt on insurance demand for almost 20 years with mixed results.

This paper aims to provide an overview of different issues related to jurisdictional arbitrage found in general regulatory arbitrage literature and their projection to the specific area of cryptoasset regulation.

By distinguishing any parallel, analogous and neighbouring concepts, this paper attempts to clarify the notion of jurisdictional arbitrage. By discussing certain aspects and effects of three regulatory regimes, BitLicense, 5th Anti-Money Laundering Directive (AMLD5) and the European Commission’s Proposal for a Regulation on Markets in Crypto-assets (MiCa), it makes clear that national/State/regional policymakers have already failed to create arbitrage-proof regulatory frameworks by acting exclusively within their jurisdictional limits. Against this background, this paper discusses briefly regulatory competition and international harmonisation as alternative solutions to inappropriate and ineffective national/regional legislative approaches.

Based on a structured theoretical analysis, this paper reaches three important findings. First, academics, international bodies and other commentators use inaccurately the general concept of “regulatory arbitrage” to refer to the specific problem of jurisdictional arbitrage creating in this way an interpretative confusion; second, commentators confuse jurisdictional conflicts with jurisdictional arbitrage; third, the solutions to this regulatory problem can actually be found in its underlying causes.

To the best of the author’s knowledge, this is the first specific-issue paper on jurisdictional arbitrage in the context of cryptoasset regulation and aims to trigger further academic discussion on this evolving phenomenon and inform the development of future cryptoasset regulation combatting this problem.

This paper aims to examine the myriad linkages between cross‐border migration and international business activity through a conceptual framework of international arbitrage.

While labour is internationally the least integrated of the various markets (capital, product, labour) the increasing co‐movement of both tasks and workers has created opportunities for the arbitrage and exploitation of differences between national labour markets. Because national labour markets typically display the two characteristics of separation and price discrepancy it is possible to utilise the principle of arbitrage and within this framework examine cost, intellectual, knowledge and employment arbitrage.

The discussion suggests that international business offers valuable insights into migration processes and effects which have been dominated by the research approaches of other disciplines. It is found that migrants can help reduce transaction costs for bilateral trade, contribute to nostalgic trade, encourage outsourcing and foreign direct investment through referrals and performance signalling, assist country of origin development through remittances and return migration and provide valuable knowledge to their employers in the country of residence.

The paper is a conceptual one which offers no new empirical results but does provide a context for the interpretation of the more specialised studies that appear in this special issue. There is a need for research on this topic to be firmly grounded in the contemporary context of an increasingly integrated global economy. It also suggests a number of specific areas where further work would be useful.

The key contribution of the paper is in developing a comprehensive conceptual framework – that of labour market arbitrage – which enables a clearer understanding of the complex impacts of international migration on international business activity. It also distinguishes between direct and indirect effects.

This study aims to examine the cross-market efficiency of the FTSE/MIB index options contracts traded on the Italian derivatives market (IDEM) during a period including the financial crisis between 1st October 2007 and 31st December 2012 using daily option prices.

Two fundamental no-arbitrage conditions were tested: the lower boundary condition (LBC) and the put–call parity (PCP) condition while taking into account the role of transaction costs in mitigating the number of violations reported. Ex post tests of LBC and PCP revealed a low incidence of mispricing in this market. Furthermore, to check the robustness of the results obtained by the ex post tests, ex ante tests were applied to PCP violations occurring within a one-day lag.

The results showed a significant drop in the number of profitable arbitrage strategies. The findings obtained from all these tests generally support the cross-market efficiency of the Italian index options market during the sample period, though some violations were occasionally reported. Overall, the number and monetary value of the violations reported declined during the post-financial crisis period compared to those during the financial crisis period.

This study can be extended to test the relationships between arbitrage profitability and other factors such as the moneyness (in the money, out of the money, at the money) of options and the maturity of options. Options market efficiency tests can be conducted such as call and put spreads, box spreads and put/call convexities (butterfly spreads).

There are several factors that influenced the decision to test the Italian index options market. First, the limited number of studies conducted on this market. Second, the fact that the two main studies on this market are relatively old, which makes it interesting to test the efficiency of this market with respect to a new set of data, taking into account the introduction of the Euro and the impact of the recent financial crisis on this market and whether the market efficiency hypothesis holds during the period of crisis. Third, it is important to consider the effect of the new rules applied to this market.

This paper makes attempt to test the firm‐level long‐term asset growth (LAG) effects in returns by examining the cross‐sectional relation between firm‐level LAG and subsequent abnormal stock returns. The purpose of this paper is to investigate whether limits‐to‐arbitrage can explain this asset growth anomaly in Chinese stock market.

Empirical research was carried out.

The empirical results show that asset growth anomaly in A‐share stock market is significant and robust. The conclusion provides more evidence for the existence of asset growth anomaly. Additionally, arbitrage risk indicated by idiosyncratic risk cannot explain the anomaly, arbitrage risk indicated by accounting information transparency can partly explain the anomaly, and arbitrage cost proxied by Amihud's measure of illiquidity indicator can completely explain the asset growth anomaly in A‐share stock market.

The results of this paper imply that strengthening the disclosure of firm information and improving the liquidity of the market are important to improve the efficiency of the A‐share stock market.

The paper selects the sample of non‐financial listed companies in A‐share stock market to research the asset growth anomaly and investigates whether limits‐to‐arbitrage can explain this anomaly. This paper proves the existence of asset growth anomaly in A‐share stock market and is a good reference for further researches.

The present research identifies a total of nine factors influencing tax avoidance under the international taxation regime of the developing countries and establishes a hierarchical relationship through modeling of the identified factors using modified-total interpretive structural modeling (M-TISM).

Due to “scale without mass” properties of the digital economy, businesses reduce their physical presence in the countries of economic activities. Aided with digital features, multinational enterprises (MNEs) avoid, abolish, or adopt flexible tax burden in the developing nations through by-passing the permanent establishment condition for company taxes or the income characterization prerequisite for royalty taxation. The present research endeavors to identify the drivers of tax avoidance in the developing countries, especially exacerbated due to digital technologies (economy). In addition, the authors also examine the hierarchical relation between the extracted drivers of tax avoidance.

This research presents a considerable driving force of elements like historical foundation of tax-treaties, dominance of the developed countries, influence of trade bodies in policy matters and finally information and communications technologies (ICTs).

Identified elements drive the actors like professional enablers, tax havens, international organizations, and intangible assets in the form of intellectual properties (IPs) which act upon tax arbitrage situations both under the domestic and treaty regulations, finally culminating into profit shifting, tax manipulations or avoidance.