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1 – 10 of over 47000Mian Sajid Nazir, Hassan Younus, Ahmad Kaleem and Zeshan Anwar
– The purpose of this paper is to investigate the relationship between uncertain political events and Pakistani Stock Markets from May 1999 to December 2011.
Abstract
Purpose
The purpose of this paper is to investigate the relationship between uncertain political events and Pakistani Stock Markets from May 1999 to December 2011.
Design/methodology/approach
Using the mean-adjusted return model and event study methodology and by comparing the market efficiency between the two government style, i.e. autocratic and democratic, the authors determined that how uncertain political events are affecting Pakistani Stock Markets.
Findings
The empirical result shows that political events have an impact on the Karachi Stock Exchange (KSE) returns. Moreover, the paper derives from the results that the KSE is inefficient for a short span of time, after 15 days KSE absorbs the noisy information. The political situation in Pakistan was more stable in autocratic government structure than in democratic structure but it is difficult to state that the stock markets are more efficient in Autocracy because only few events took place during an autocratic regime and magnitude of events was not same in the autocratic and democratic government structure.
Originality/value
This study is unique in its nature as it examines the effect of multiple political events on stock market returns in Pakistan simultaneously and is expected to contribute significantly in the capital market literature of Pakistan in particular.
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Over a short interval of time (i.e. 2011-2014), Egypt has experienced tectonic political shifts, including the toppling of a long-entrenched dictator, two presidential elections…
Abstract
Purpose
Over a short interval of time (i.e. 2011-2014), Egypt has experienced tectonic political shifts, including the toppling of a long-entrenched dictator, two presidential elections, and a military coup. The purpose of this paper is to provide an analysis of the impact of such events on the country’s equity market behaviour, both in terms of returns and volatility.
Design/methodology/approach
The data set is composed of daily stock index closing prices for the overall market and top eight most actively traded sectors. To assess the impact of the considered events on the market and sector returns, an event study approach is applied. On the other hand, a univariate VAR-EGARCH model is employed to explore whether, and to what extent, volatilities at the market and sector levels respond to such events.
Findings
The results suggest that political uncertainty has a profound impact on the risk-return profiles of almost all market sectors, with different degrees of intensity. By and large, the price and volatility effects are most pronounced in banks, financial services excluding banks and chemicals sectors, whilst food and beverages as well as construction and materials sectors are found to be the least responsive to these events. The 2013 military coup turns out to be the most pervasive event impinging on the market and sector-specific indices.
Practical implications
The results have a number of practical implications that could be of interest to many parties involved. More specifically, with political dysfunction overshadowing business and investment activities in Egypt, genuine democratic reforms, which entail proper regard for human rights and the rule of law, must have the highest priority of policymakers, in order to secure a positive investment climate and to foster investor confidence. Furthermore, in tandem with considering other relevant factors, multinational companies need to have a thorough assessment of Egypt’s future political course and to develop more robust contingency plans to effectively combat potential threats generated by political vicissitudes.
Originality/value
To the author’s best knowledge, this study is the first attempt to empirically examine the price and volatility effects of the recent presidential events in Egypt, thereby contributing to the relevant literature in this area.
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Elsa Pereira, Margarida Mascarenhas, Adão Flores, Laurence Chalip and Gustavo Pires
The purpose of this paper is to identify the strategic leveraging goals associated with a portfolio of small-scale events and to analyze their implementation process…
Abstract
Purpose
The purpose of this paper is to identify the strategic leveraging goals associated with a portfolio of small-scale events and to analyze their implementation process (actors/tactics: who did what?) in order to propose new leverage typologies through new empirical research evidence.
Design/methodology/approach
Three techniques of data collection conducted the fieldwork: qualitative interviewing, direct observation and documental research. Based on the principles of grounded theory and using qualitative data analysis software (Nvivo) data were inductively analyzed.
Findings
Results showed the coexistence of a plurality of strategic leveraging goals, namely: “strengthen political advantage”; “integrate and retain partners/sponsors”; and “develop sports dynamics”. There was a set of tactics and actions identified and successfully implemented due to the coordination of the network of organizations part of the events, which included local and external actors.
Research limitations/implications
Researchers realized that it was impossible to take a neutral research stand. In fact, in qualitative research, the investigator is the first instrument of data collection. In this sense, it was important for researchers to constantly reflect on their role, as Pelias (2011) says “reflexive writing strategies include indicating how the researcher emerged as a contaminant, how the researcher´s insider status was revelatory or blinding, and how the researcher is implicated in the problem being addressed” (p. 662). It is also considered that, when organizing events, the network of interactions is extremely complex, making it difficult to capture all the actors’ perspectives.
Practical implications
In relation to the practical implications, it is important that sports event managers have in-depth knowledge and skills on event leveraging; it is also important that managers understand the sports culture in order to recognize the multidimensionality of strategic leveraging in sporting events. The strategic dynamic should be developed and coevolved with community/local and external actors. The coordination between the actors is a key point to achieve successful leveraging.
Social implications
A theoretical implication related to the event leverage is the creation of a new strategic objective – “developing the sport dynamics”. The sport participation tactic among other tactics were found, namely “enhancing of the sports shows” and “tuning of skills in sports management”.
Originality/value
The dynamics and plurality of strategic goals associated with the leverage of an event portfolio, namely the actions that were developed and also the actors’ interaction in small-scale events. Another factor is the identification of the prominent role of the external event organization committee in the dynamics of event leveraging, as well as the deep analysis of the leveraging process supported by the observation of all the events.
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Abdullah Alfalah, Eamonn D’Arcy, Steffen Heinig and Simon Stevenson
The purpose of this paper is to examine the sensitivity of the Kuwait housing market to major local and regional geo-political and economic events.
Abstract
Purpose
The purpose of this paper is to examine the sensitivity of the Kuwait housing market to major local and regional geo-political and economic events.
Design/methodology/approach
This paper examines the market dynamics of the housing market in Kuwait. Kuwait provides an interesting market to consider owing to its position as a major oil producer, its sensitivity to geo-political events and its unusual demographic characteristics.
Findings
The error-correction model highlights that market is relatively volatile, with evidence of mean-reverting behaviour. Only when the data is smoothed are their more consistent findings with respect to underlying fundamentals. This paper also examines the response of the market to seven regional and local events. Of particular interest is that the one event that results in a consistent significant response is domestic legislation directly concerned with housing. This has a far greater impact than local or regional geo-political events.
Originality/value
Very few papers have considered how economic and political shocks directly impact housing markets using an event study approach. Given its geographic location and also its economic dependence on oil, Kuwait is an interesting market to consider.
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Terrorism, an important component of Political risk as a possible determinant of ADRs (American Depository Receipts) returns have received little attention in academic literature…
Abstract
Terrorism, an important component of Political risk as a possible determinant of ADRs (American Depository Receipts) returns have received little attention in academic literature. To address this issue and examine whether political risk is a major determinant of ADR returns of emerging market countries, this paper empirically examines market valuation of Indian ADRs around acts of terrorism. Using a sample of 52 such events in the sample period Jan 2003‐Dec 2003 we empirically analyze returns of Indian ADRs. The results from our study indicate a marginally negative significant effect, failing to indicate that event of terrorist attacks severely affect the Indian ADRs listed on the US stock market. This may be explained by a combined effect of; (a) the optimism of US investors towards emerging markets, and (b) market participants becoming more resilient and making informed choices around the “general” events of terrorism.
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Srinivas Nippani and Dror Parnes
This paper aims to analyze how political brinkmanship impacted Treasury yields during the debt ceiling debate in 2015. The results show that the resignation of the House Speaker…
Abstract
Purpose
This paper aims to analyze how political brinkmanship impacted Treasury yields during the debt ceiling debate in 2015. The results show that the resignation of the House Speaker John A. Boehner caused a significant decrease in Treasury bill yields of one- and three-month maturities. The authors robust analysis indicates that these lower yields have saved US taxpayers several billion dollars in extra tax expenses. This paper provides evidence that lack of political brinkmanship can be very advantageous for the taxpayers. This has considerable implications for lawmakers in this post-election year.
Design/methodology/approach
The authors examine the differences in yields between equal maturity short-term Treasury securities and commercial paper using t-tests, non-parametric tests and a robust regression model based on earlier empirical studies.
Findings
This study provides evidence indicating that between September 25, 2015, and up to October 30, 2015, relatively lower Treasury yields resulted from the lack of political brinkmanship, and this has saved the US taxpayers several billion dollars in interest expenses in 2015.
Research limitations/implications
The study showed that lower yields will result from a lack of political brinkmanship, and this resulted in savings of several billions of dollars in interest payments. Considering that both the White House and Congress will be controlled by the same political party, this gives lawmakers a unique opportunity to have less acrimonious debt ceiling debates. The limitation of the study is that it does not consider the impact on foreign exchange markets and other factors which could play a major role.
Practical/implications
Unlike earlier scenarios where default risk increased, followed by credit rating downgrades, there was a quiet confidence this time about a quick resolution. Markets were stable, and this allowed money market participants to invest more confidently even when an upcoming debt ceiling debate is on. Corporations that invested additional cash in money markets for short-term could do it more confidently at that time without fear of default or interest rate risk which could potentially harm the market value of their investments.
Practical/implications
It implies that there will be lower taxpayer costs because of debt ceilings and avoidance of shutdowns of the federal government. It also implies that there could be more confidence in the dollar.
Originality/value
Several earlier studies have examined Treasury default caused by political brinkmanship. This is the first study to examine an event where political brinkmanship appeared possible and then suddenly dissipated in a single day. Political brinkmanship is bad news because it increases taxpayer interest burden as seen from several of the studies above. Therefore, it should be considered good news if no disagreement is evident. This argument serves as our motivation for this paper. As an increase in the chances of default causes an increase in the yield of Treasury bills as earlier studies showed, a decrease in the chance of default caused Treasury bill yields to be that much lower based on the results of this study.
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Dirk Schiereck and Julian Trillig
The purpose of this paper is to determine the impact of political risk on the German solar energy industry. The authors analyze the period from 2006 to mid-2011, when the…
Abstract
Purpose
The purpose of this paper is to determine the impact of political risk on the German solar energy industry. The authors analyze the period from 2006 to mid-2011, when the technological development of this sector was remarkable while the whole industry is depending on political support and subsidies.
Design/methodology/approach
The authors apply an EGARCH model assessing potential changes in conditional volatility response of solar industry stock returns following political risk events.
Findings
The results document major changes in political support of the solar industry drive capital market risk. Whereby favorable political news significantly decrease volatility response and unfavorable political news do not affect volatility response. Moreover, the authors find that the volatility response varies with the exposure to political risk. Companies with higher exposure to political risk show more significant volatility response.
Practical implications
Political risk affects the cost of capital of companies in this sector. Thus, managers are able to time equity measures in a way that they can determine periods when the investor's required return is low due to a reduced risk premium. The authors suggest risk reducing public policy facilitates investments in those industries and thus fosters the development and diffusion of immature technologies.
Originality/value
The paper helps policy makers, managers, and investors to assess the impact of political risk on the overall risk of the German solar energy sector and in a broader view of immature or high-tech industries that depend crucially on governmental support.
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Ayesha Ashraf, M. Kabir Hassan, Khurram Abbas and Qamar Uz Zaman
This paper aims to examine the impact of general elections on the stock returns of the politically connected group affiliated firms of Pakistan.
Abstract
Purpose
This paper aims to examine the impact of general elections on the stock returns of the politically connected group affiliated firms of Pakistan.
Design/methodology/approach
This study uses the market model to assess the impact of political connections (PCs) on abnormal stock returns, before and after election events. We have used share price data of non-financial firms of Pakistan for the years 2008-2013.
Findings
It has been found that behavior of cumulative average abnormal returns (CAAR) is significantly different for standalone and politically connected group affiliated firms. The results reveal that CAARs of politically connected group affiliated firms have experienced less deviation as compared to stand alone firms. Therefore, it is argued that politically connected group firms may reduce the impact of political uncertainty on stock returns in comparison to stand alone firms.
Practical implications
This study is helpful for policy regulators of Pakistan to devise appropriate policies to maintain a level playing field for politically connected and standalone firms.
Originality/value
This study provides a new dimension to understand the role and association of PCs and general elections with stock markets returns.
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Pavlos Delias and Ioannis Kazanidis
The purpose of this paper is to present a methodology to reveal complex events structures in events’ occurrences by analyzing event databases, targeting to systematizing events’…
Abstract
Purpose
The purpose of this paper is to present a methodology to reveal complex events structures in events’ occurrences by analyzing event databases, targeting to systematizing events’ analysis and surpassing the need for idiographic approaches.
Design/methodology/approach
A process-oriented point of view is enabled by purposeful data transformations, and higher-order dependencies are discovered and exploited to capture the flows among the events.
Findings
Political events do not follow a linear movement that is implied by a sequence, but they occur in varying patterns that cannot be reflected accurately when assuming only first-order dependencies.
Originality/value
The methodology suggests a novel way to look and to analyze raw event data and it offers an accessible, practicable and supplementary tool as it does not disturb any of the established relevant research designs, and it does not require any additional data to be applied.
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Malek Sghaier, Hamida Skandrani and Julie Robson
This study aims to identify the responses required to repair political trust in Tunisia and the differences between two key stakeholder groups, namely, politicians and voters.
Abstract
Purpose
This study aims to identify the responses required to repair political trust in Tunisia and the differences between two key stakeholder groups, namely, politicians and voters.
Design/methodology/approach
A sequential mixed method study was adopted using two data sources: semi-structured interviews conducted with citizens and politicians; and media data from TV political talk shows. Data was collected over a three-year period following several key events that affected trust.
Findings
New responses were identified to repair political trust, and these were categorized using a trust repair framework. In addition to short- and long-term responses, a new category, swift response, was identified to resolve immediate political uncertainty. The role of the trustor (i.e. voters) in actively restoring trust was identified for the first time.
Research limitations/implications
This study focussed on trust repair responses suggested by voters and politicians and not necessarily responses that were implemented by government or political parties during the period of study. The effectiveness of the suggested responses in repairing trust was not evaluated.
Practical implications
Identification of the responses required to repair trust with voters, how these differ over time, and according to different trust violations will help Tunisian politicians rebuild trust more effectively during election and non-election periods. Notably, differences highlighted between the responses suggested by voters and politicians suggest that politicians may not understand how to repair voter trust.
Originality/value
Contrary to previous studies that assume a trustor (the voter) is a passive observer, this research identified the proactive role that citizens play in the trust repair process.
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