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1 – 10 of over 7000Tazeen Arsalan, Bilal Ahmed Chishty, Shagufta Ghouri and Nayeem Ul Hassan Ansari
This research paper aims to analyze the stock exchanges of developed, emerging and developing countries to investigate the volatility in stock markets and to evaluate the rate of…
Abstract
Purpose
This research paper aims to analyze the stock exchanges of developed, emerging and developing countries to investigate the volatility in stock markets and to evaluate the rate of mean reversion.
Design/methodology/approach
The stock exchanges included in the research are NASDAQ, Tokyo stock exchange, Shanghai stock exchange, Bombay stock exchange, Karachi stock exchange and Jakarta stock exchange. Secondary daily data from Bloomberg are used to conduct the research for the period from January 2011 to December 2018. Generalized autoregressive conditional heteroskedasticity (GARCH) (1,1) model was applied to examine volatility and the half-life formula was used to calculate mean reversion in days.
Findings
The research concluded that all the stock exchanges included in the research satisfy the assumptions of mean reversion. Developing countries have the lowest volatility while emerging countries have the highest volatility which means that the rate of mean reversion is fastest in developing countries and slowest in emerging countries.
Research limitations/implications
Future studies can determine the reasons for fastest rate of mean reversion in developing countries and slowest rate of mean reversion in emerging countries.
Practical implications
Developing countries show the lowest mean reversion in days while the emerging countries show the highest mean reversion in days indicating that developing countries take less time to revert to their mean position.
Originality/value
The majority of previous studies on univariate volatility models are mostly on applications of the models. Only a few researchers have taken the robustness of the models into account when applying them in emerging countries and not in developed, developing and emerging countries in one place. This makes the current study unique and more rigorous.
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Arpita Agnihotri and Saurabh Bhattacharya
Leveraging signalling theory and institutional environment theory, this study aims to examine how the entrepreneurial orientation of emerging market firms impacts initial public…
Abstract
Purpose
Leveraging signalling theory and institutional environment theory, this study aims to examine how the entrepreneurial orientation of emerging market firms impacts initial public offering (IPO) performance.
Design/methodology/approach
The authors conduct regression analysis based on archival data from 312 firms’ IPOs in India.
Findings
The results in the Indian context suggest it differs from IPO performance in developed markets. In an emerging market context, the findings suggest that only competitive aggressiveness is valued by investors in IPOs. The findings further show that proactiveness and autonomy negatively influence IPO underpricing.
Research limitations/implications
The research propositions imply that, owing to institutional voids in emerging markets, investors’ risk propensity and, hence, rewarding a firm’s entrepreneurial orientation differ from those in developed markets.
Originality/value
Extant literature has given limited attention to the dynamics of entrepreneurial orientation and the effect of each dimension of entrepreneurial orientation on IPO performance in emerging markets.
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Hammad Bin Azam Hashmi, Ward Ooms, Cosmina L. Voinea and Marjolein C.J. Caniëls
This paper aims to elucidate the relationship between entrepreneurial orientation, reverse innovation and international performance of emerging economy multinational enterprises…
Abstract
Purpose
This paper aims to elucidate the relationship between entrepreneurial orientation, reverse innovation and international performance of emerging economy multinational enterprises (EMNEs).
Design/methodology/approach
The authors analyze archival data of Chinese limited companies between 2010 and 2016, including 11,230 firm-year observations about 1708 firms. In order to test the study’s mediation hypotheses, the authors apply an ordinary least square (OLS) regression.
Findings
The authors find evidence that the entrepreneurial orientation of EMNEs has a positive effect on reverse innovations. Furthermore, the authors find positive effects of reverse innovation on the international performance of EMNEs. This pattern of results suggests that the relationship between entrepreneurial orientation and international performance is partially mediated by reverse innovation.
Practical implications
The study’s findings help managers in EMNEs to promote reverse innovation by building and using their entrepreneurial orientation. It also helps them to set out and gauge the chances of success of their internationalization strategies. The findings also hold relevance for firms in developed economies as well, as they may understand which emerging economy competitors stand to threaten their positions.
Originality/value
The strategic role of reverse innovations – i.e. clean slate, super value and technologically advanced products originating from emerging markets – has generated considerable research attention. It is clear that reverse innovations impact the international performance of EMNEs. Yet how entrepreneurial orientation influences international performance is still underexplored. Thus, the current study clarifies the mechanism by examining and testing the mediating role of reverse innovation among the entrepreneurial orientation–international performance link.
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Sergio Enrique Robles-Avila and Md Nazmus Sakib
The improper disposal of potentially harmful products is a problem that affects both developed and emerging countries. Using the Values-Beliefs-Norms (VBN) theory, this research…
Abstract
Purpose
The improper disposal of potentially harmful products is a problem that affects both developed and emerging countries. Using the Values-Beliefs-Norms (VBN) theory, this research attempts to uncover the key differences and similarities between both contexts and to extend the theory to include trust-in-government (TIG) as a moderating variable.
Design/methodology/approach
The data used in this study were drawn from two samples: Mexicans and Americans by administering a paper and pencil survey. To test the conceptual model and to contrast the results, partial least squares (PLS-SEM) and multigroup analysis were used.
Findings
This research finds that consumers in emerging countries like Mexico are less likely to act on their beliefs to engage in protesting behaviors when confronted with an environmental problem such as the improper disposal of potentially harmful products. Consumers on both sides of the border are more likely to engage in consumer activism behaviors if social economic norms (SEN) are considered. Furthermore, the multi-group analysis revealed that US consumers' TIG moderates the relationship between awareness of consequences (AC) and consumer activism intention (CAI) contrasting with Mexican consumers where such moderating relationship does not exist.
Originality/value
This research makes a significant contribution to the literature by evaluating TIG as an important predictor of consumer activism behaviors. TIG can significantly affect consumer activism behaviors in the United States, but not in Mexico. It also demonstrates that SEN rather than social benefit norms (SBN) can trigger CAI in both samples.
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Ijaz Younis, Imran Yousaf, Waheed Ullah Shah and Cheng Longsheng
The authors examine the volatility connections between the equity markets of China and its trading partners from developed and emerging markets during the various crises episodes…
Abstract
Purpose
The authors examine the volatility connections between the equity markets of China and its trading partners from developed and emerging markets during the various crises episodes (i.e. the Asian Crisis of 1997, the Global Financial Crisis, the Chinese Market Crash of 2015 and the COVID-19 outbreak).
Design/methodology/approach
The authors use the GARCH and Wavelet approaches to estimate causalities and connectedness.
Findings
According to the findings, China and developed equity markets are connected via risk transmission in the long term across various crisis episodes. In contrast, China and emerging equity markets are linked in short and long terms. The authors observe that China leads the stock markets of India, Indonesia and Malaysia at higher frequencies. Even China influences the French, Japanese and American equity markets despite the Chinese crisis. Finally, these causality findings reveal a bi-directional causality among China and its developed trading partners over short- and long-time scales. The connectedness varies across crisis episodes and frequency (short and long run). The study's findings provide helpful information for portfolio hedging, especially during various crises.
Originality/value
The authors examine the volatility connections between the equity markets of China and its trading partners from developed and emerging markets during the various crisis episodes (i.e. the Asian Crisis of 1997, the Global Financial Crisis, the Chinese Market Crash of 2015 and the COVID-19 outbreak). Previously, none of the studies have examined the connectedness between Chinese and its trading partners' equity markets during these all crises.
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Patrick Amfo Anim, Emmanuel Arthur and George Kofi Amoako
This study examines the role of social media adoption (SMA), opportunity recognition (OR) and opportunity exploitation (OE) in mediating the relationship between entrepreneurial…
Abstract
Purpose
This study examines the role of social media adoption (SMA), opportunity recognition (OR) and opportunity exploitation (OE) in mediating the relationship between entrepreneurial orientation (EO) and the performance of newly established small and medium-sized enterprises (SMEs) in emerging economies, with a particular emphasis on Ghana.
Design/methodology/approach
This study adopts a post-positivist philosophical stance and uses a quantitative approach and a survey design. A purposive sampling technique was used to select 336 SME owners and managers from Ghana’s manufacturing, trading and service sectors. Questionnaires were administered to source the empirical data for this study. Structural equation modelling (SEM) was used to analyse the proposed hypotheses.
Findings
The results reveal that EO positively and significantly influences the performance of new-born SMEs. SMA, OR and OE partially mediated this relationship.
Practical implications
This study is a wakeup call to policymakers, practitioners, managers and owners of recently established businesses. Policymakers should provide support and resources for newly established SMEs to adopt effective social media marketing strategies, bolstering their online presence and customer engagement. Simultaneously, they should invest in entrepreneurship education and create an environment conducive to innovation to cultivate an entrepreneurial mindset among fresh SMEs. Business owners and managers should proactively monitor market trends and consumer preferences, adapting their strategies to identifying and seizing emerging opportunities.
Originality/value
This study introduces a significant novelty to previous literature and one of the first to employ the dynamic capability theory to examine the interplay between EO, SMA, OR and OE in influencing the performance of new SMEs in the context of emerging markets. Furthermore, it extends the scope of understanding of the mechanisms through which SMEs can prosper in these dynamic environments. This unique combination of theoretical framework, comprehensive variables and contextual focus sets this study apart from existing research, enriching the literature on SME performance in emerging markets.
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Lumengo Bonga-Bonga and Salifya Mpoha
This paper contributes to the literature on exchange rate exposure by assessing the extent to which exchange rate risk is priced in both African emerging and developed equity…
Abstract
Purpose
This paper contributes to the literature on exchange rate exposure by assessing the extent to which exchange rate risk is priced in both African emerging and developed equity markets. It examines whether this risk leads to a premium or discount in market returns. The study uses the United States and South Africa as representatives for developed and emerging economies, respectively.
Design/methodology/approach
The paper employs two-factor and three-factor conditional CAPM approaches with a two-stage estimation process. In the first stage, time-varying risk exposures are derived using the ICAPM model estimated through rolling regression. In the second stage, the impact of these risk exposures, particularly exchange rate risk exposure, is assessed on stock market returns using Generalized Linear Model (GLM) regression.
Findings
Unlike previous studies that suggest exchange rate risk is not necessarily priced in the equity market due to hedging, this paper finds that exchange rate risk is indeed priced in both African and developed equity markets, albeit to different extents. The African equity market demands a higher premium compared to the developed equity market.
Practical implications
The findings of this paper have significant implications for policymakers, asset managers, and investors. They provide insights for making more informed decisions, implementing effective risk management strategies, and fostering a more stable and appealing investment environment.
Originality/value
To the best of our knowledge, this is the first study to evaluate the degree of exchange rate exposure in environments characterized by high currency volatility versus those with low volatility, all within the context of the conditional ICAPM model.
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The present research study aims to explore the impact of the most recent Israeli–Palestinian conflict, which unfolded in October 2023, on global equity markets, including a wide…
Abstract
Purpose
The present research study aims to explore the impact of the most recent Israeli–Palestinian conflict, which unfolded in October 2023, on global equity markets, including a wide range of both emerging and developed markets (as per the Morgan Stanley Capital Investment country classification).
Design/methodology/approach
The market model of event study methodology, with an estimation window of 200 days and 28-day event window (including event day, i.e. October 7, 2023), has been employed to investigate the event’s impact on the stock markets of different countries, with 24 emerging countries and 23 developed countries. The daily closing prices of the prominent indices of all 47 countries have been analyzed to examine the impact of the conflict on emerging markets, developed markets and overall global equity markets. Additionally, cross-sectional regression analysis has been performed to investigate the possible explanations for abnormal returns.
Findings
The findings of the study suggest the heterogeneous impact of the selected event on different markets. Notably, emerging markets and the overall global equity landscape exhibited substantial negative responses on the event day, as reflected in average abnormal returns of −0.47% and −0.397%, respectively. In contrast, developed markets displayed resilience, with no significant negative impact observed on the day of the event. A closer examination of individual countries revealed diverse reactions, with Poland, Egypt, Greece, Denmark and Portugal standing out for their positive or resilient market responses. Poland, in particular, demonstrated significantly positive cumulative abnormal returns (CARs) of 7.16% in the short-term and 8.59% in the long-term event windows (−7, +7 and −7, +20, respectively), emphasizing its robust performance amid the geopolitical turmoil. The study also found that, during various event windows, specific variables had a significant impact on the CARs.
Practical implications
The study suggests diversification and monitoring of geopolitical risks are key strategies for investors to enhance portfolio resilience during the Israeli–Palestinian conflict. This study identifies countries such as Poland, Egypt, Greece, Denmark and Portugal with positive or resilient market reactions, providing practical insights for strategic investment decisions. Key takeaways include identifying resilient markets, leveraging opportunistic strategies and navigating market dynamics during geopolitical uncertainties.
Originality/value
As per the authors’ thorough investigation and review of the literature, the present study is the earliest attempt to explore the short-term and long-term impact of the 2023 Israeli–Palestinian conflict on equity markets worldwide using the event study approach and cross-sectional regression analysis.
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Abed Al-Nasser Abdallah, Wissam Abdallah, Youssef Bassam, Ullas Rao and Mohsen Saad
This study aims to examine stock price synchronicity during the COVID-19 crisis using 32,452 firms from 61 countries. This paper explores the impact of government effectiveness on…
Abstract
Purpose
This study aims to examine stock price synchronicity during the COVID-19 crisis using 32,452 firms from 61 countries. This paper explores the impact of government effectiveness on synchronicity while distinguishing between developed and emerging markets.
Design/methodology/approach
The research analysis employs ordinary OLS pooled regression analysis.
Findings
This paper presents worldwide evidence that stock price synchronicity was significantly higher during February and March 2020. This paper shows that synchronicity increased with the intensity of the crisis. In addition, the government's role reduced the COVID-19 impact on synchronicity, which was stronger in developed markets than in emerging markets.
Originality/value
The novelty of the study lies in documenting the impact of the COVID-19 pandemic on stock price synchronicity. The findings add to a deeper understanding of market behavior amid significant disruptive shocks.
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This paper investigates the global financial integration of the Gulf Cooperation Council markets, which is important for financial economists, global investors and policymakers.
Abstract
Purpose
This paper investigates the global financial integration of the Gulf Cooperation Council markets, which is important for financial economists, global investors and policymakers.
Design/methodology/approach
The first step is to estimate a benchmark one-factor model and multifactor models over the entire sample period to obtain the time-invariant global integration estimates for the Gulf Cooperation Council markets. Because the global integration of the Gulf Cooperation Council markets may be time varying, the second step is to use 24-month rolling regressions to estimate the time-varying integration estimates. To explicitly test for structural breaks in global integration, this study applies a supremum Wald test to endogenously search for structural breaks.
Findings
Empirically, consistent evidence suggests that the Gulf Cooperation Council markets are increasingly integrated with international equity markets at different levels of financial development and from different regions. However, compared to other emerging and frontier markets, the global integration of the Gulf Cooperation Council markets is still relatively low, suggesting that these markets still offer significant diversification benefits for global investors.
Originality/value
This study contributes to the literature by systematically investigating the global integration of the Gulf Cooperation Council markets with monthly data (to account for the gradual information diffusion in international equity markets) and a longer sample period (to more robustly identify the trend in the global integration).
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