Search results

The purpose of this paper is to propose a new dynamic margin setting method for margin buying in China and evaluate the validity of its performance with the current margin system adopted by stock exchanges in extreme episodes.

This paper adopts the dynamic conceptual model of Huang et al. (2012) (which is based on Figlewski (1984)) but incorporates Markov chain to describe the data generation process of stock price changes. By applying the model to margin buying contracts for the period of March 16, 2018, to May 2, 2018 (baseline study) and June 15, 2015, to July 27, 2015 (robustness test), the model’s superiority to the current margin system adopted by stock exchanges is also tested.

The paper has several important findings. First, the margins derived by this system vary with market conditions, rising (declining) when stock prices go down (up), and are generally lower than the requirements imposed by stock exchanges. Second, this margin system induces lower overall percentage of costs than that adopted by stock exchanges. Third, parameter estimation plays an important role on shaping empirical results.

The primary limitation of this paper lies in the fact that it does not solve the issue of determining optimal parameters of the Markov chain model. On the implication of findings, policy-makers and regulators on supervising margin buying activities may need a tune-up on the current margin system which features static margin requirements. Dynamic margins that incorporate market factors are virtually useful to balance the trade-off between liquidity and prudence.

To the best of the authors’ knowledge, this study is the first of its kind to develop a dynamic margin setting method for margin buying in China, aiming to balance the trade-off between liquidity and prudence. It not only takes into account the uniqueness of Chinese markets but also allows for time variations in both initial and maintenance margins.

The purpose of this paper is to empirically analyze the impacts of short prohibitions on stock prices.

The authors adopt event study in this paper. First, the authors match each shortable stocks with one unshortable stocks by the propensity score matching method. Second, the authors check the performance difference between treatment group and control group after the event date. Third, the authors check the performance difference among sub-groups sorted by other factors associated with stock returns.

The authors find that stocks do not decline necessarily after removal of short prohibitions; only those heavily overpriced stocks, such as small stocks, lower B/M or P/E stocks and higher turnover stocks, decline significantly.

The media falsely stated that short selling lead to market crash; otherwise, short selling is beneficial for improving market efficiency as it is helpful for keeping overpriced stocks in line with the fundamental value.

This is the first paper showing that removal of short prohibitions only impacts heavily overpriced stocks significantly, which is valuable for policy making.

Important developments of China's securities markets within the last two years, namely, the Share Reform, the warrant market, the innovative listed open-end funds (and exchange-traded funds), corporate bonds with detachable warrants, exchange-traded asset-backed securities, are described. The discussion focuses on unique, innovative features of these products, as compared to their counterparts available in more mature markets (when applicable), and points to possible future research themes. The proposed rules with regard to stock index futures and credit trading are also discussed.

Retail success can be defined as achieving high gross margins and customer service levels (i.e. being in‐stock) with as little inventory as possible. Forecast accuracy, process lead‐time, offshore/local sourcing mix and up‐front/replenishment buying mix can have a significant impact on success in connection with sourcing seasonal products with a fashion content. Forecast accuracy depends on the characteristics of the product and supply lead‐time. Lead‐times are traditionally long and buying decisions are often made seven to eight months prior to the start of the selling season. Forecast errors lead to some of the items being liquidated at clearance prices while others stockout and lead to lost sales. As a result retailers often resort to higher mark‐up prices with fashion products. However, typical retail performance measures such as service level, lost sales, product substitute percentage, gross margin, gross margin return on inventory, sell‐through percentage and mark‐down rate mask the source of the problems. In this paper, we discuss these performance measures and propose a new one. Additionally, case study analysis of a group of Finnish department stores is presented.

Reviews the activities of large retailing companies during the period 1991‐93. Identifies their strategic and operational responses to the economic situation prevailing at that time. Conducts the review using a financial model of a typical retailing business, within which a number of strategic and operational scenarios are proposed. Concludes that expansion continued by those companies who remain confident in the acceptance of the “offer” and where the risk was contained. Retailers were also active in consolidation and productivity activities.

The study here examines how business actors adapt to changes in networks by analyzing their perceptions or their network pictures. The study is exploratory or iterative in the sense that revisions occur to the research question, method, theory, and context as an integral part of the research process.

Changes within networks receive less research attention, although considerable research exists on explaining business network structures in different research traditions. This study analyzes changes in networks in terms of the industrial network approach. This approach sees networks as connected relationships between actors, where interdependent companies interact based on their sensemaking of their relevant network environment. The study develops a concept of network change as well as an operationalization for comparing perceptions of change, where the study introduces a template model of dottograms to systematically analyze differences in perceptions. The study then applies the model to analyze findings from a case study of Norwegian/Japanese seafood distribution, and the chapter provides a rich description of a complex system facing considerable pressure to change. In-depth personal interviews and cognitive mapping techniques are the main research tools applied, in addition to tracer studies and personal observation.

The dottogram method represents a valuable contribution to case study research as it enables systematic within-case and across-case analyses. A further theoretical contribution of the study is the suggestion that network change is about actors seeking to change their network position to gain access to resources. Thereby, the study also implies a close relationship between the concepts network position and the network change that has not been discussed within the network approach in great detail.

Another major contribution of the study is the analysis of the role that network pictures play in actors' efforts to change their network position. The study develops seven propositions in an attempt to describe the role of network pictures in network change. So far, the relevant literature discusses network pictures mainly as a theoretical concept. Finally, the chapter concludes with important implications for management practice.