Segmented Capital Markets and the Cost of External Finance

2000 ◽  
Author(s):  
Matthew T. Billett ◽  
Jon A. Garfinkel
Keyword(s):  
Capital Markets ◽  
External Finance ◽  
The Cost

Governance Transparency and the Institutions of Capitalism

2014 ◽  
pp. 386-412
Author(s):  
Raj Aggarwal ◽  
John W. Goodell
Keyword(s):  
Transaction Costs ◽  
Capital Markets ◽  
Stock Markets ◽  
Corporate Ownership ◽  
Cost Of Equity ◽  
Financial Architecture ◽  
The Cost ◽  
Governance Transparency ◽  
Business Exchange ◽  
The Relationship

This chapter explores the relationship between governance transparency and institutions of capitalism. It considers two major components of governance transparency in a country: disclosure regarding self-dealing and disclosure regarding ultimate corporate ownership. It also examines the effects of governance transparency on some of the fundamental mechanisms of capitalism, including transaction costs and the institutions of business exchange. Some evidence of the importance of governance transparency in the structure of capital markets is presented. The chapter reviews how governance transparency is measured and how it influences the culture of equity, the cost of equity, participation in stock markets, and a nation’s financial architecture.

Mexican fiscal orthodoxy to be maintained amid crisis

2020 ◽  
Keyword(s):  
Capital Markets ◽  
Public Debt ◽  
Public Spending ◽  
Country Risk ◽  
Economic Recovery ◽  
International Capital ◽  
Content Type ◽  
International Capital Markets ◽  
The Cost ◽  
Spending Cuts

Significance Public finances have not so far deteriorated as dramatically as they might have done, considering the economic contraction caused by the COVID-19 pandemic. This is explained partly by public spending cuts and one-off revenues that will not be repeated next year. Impacts Fiscal orthodoxy will not be rewarded by international capital markets, as anti-investment moves have hit confidence. Perceptions of country risk will continue to worsen, pushing up the cost of refinancing public debt. A slow post-pandemic economic recovery and lingering unemployment could weigh on the government’s popularity.

The Determinants of Stock Market Development in Emerging Economies

2017 ◽  
pp. 114-125
Author(s):  
Sarah Newton
Keyword(s):  
Stock Market ◽  
Emerging Economies ◽  
Capital Markets ◽  
Emerging Market ◽  
Financial Systems ◽  
Stock Market Development ◽  
Market Economies ◽  
Regulatory Changes ◽  
Accelerate Growth ◽  
The Cost

“The chief concerns of EMEs (emerging market economies) in relation to their financial systems remain developmental rather than regulatory: increasing financial savings to accelerate growth and development, and deepening their financial system to develop long term funding instruments for infrastructure financing, absorb large inflows of capital to counter the uphill backwash from EMEs to AMEs, reduce the cost of capital and reduce the leads and lags in monetary policy transmission. Advanced market economies (AMEs), on the other hand, need major regulatory changes that inoculate them more effectively against the new risks their financial systems face.” As well as investigating these observations, this chapter is aimed at investigating the validity of Efficient Markets Hypothesis and Efficient Capital Markets Hypothesis in emerging economies – as contrasted with advanced market economies. In so doing, it aims to contribute to the extant literature on stock market liquidity and liquidity in capital markets.

scholarly journals Leverage and the Cost of Capital: Some Tests Using Nepalese Data

2007 ◽  
Vol 3 (1) ◽  
pp. 85-91 ◽  
Author(s):  
Hari Bahadur Khadka
Keyword(s):  
Capital Structure ◽  
Capital Markets ◽  
Cost Of Capital ◽  
Traditional Approach ◽  
Cost Of Equity ◽  
Business Studies ◽  
Interest Charge ◽  
The Cost ◽  
The Relationship ◽  
The Capital Structure

This paper is devoted to test the MM’s propositions about the relationship between leverage and cost of capital in the context of Nepalese capital markets. The main objective of the study is to determine whether the firms' overall cost of capital and cost of equity decline with the increasing use of leverage. The results showed a negative but insignificant beta value of the relationship between leverage and the overall cost of capital. Therefore the leverage may not be regarded as contributing variable to the cost of capital function for Nepalese firms. But finding contradicts with the traditional approach of the capital structure theories. It is further concluded that the cost of capital declines not only with leverage because of the tax deductibility feature of interest charge. The relationship between the cost of equity and leverage is also strongly negative. Besides leverage, the size, and D-P Ratio are other important variables that affect the cost of capital in Nepalese context.Journal of Nepalese Business Studies 2006/III/1 pp. 85-91

scholarly journals Corporate Liquidity, Acquisitions, and Macroeconomic Conditions

2019 ◽  
pp. 1-32 ◽  
Author(s):  
Isil Erel ◽  
Yeejin Jang ◽  
Bernadette A. Minton ◽  
Michael S. Weisbach
Keyword(s):  
Abnormal Returns ◽  
Cash Holdings ◽  
Consistent Pattern ◽  
Financing Constraints ◽  
Macroeconomic Factors ◽  
Macroeconomic Conditions ◽  
Corporate Liquidity ◽  
External Finance ◽  
The Cost

This paper evaluates how the relation between firms’ cash holdings and their acquisition decisions changes over macroeconomic cycles using a sample of 47,615 acquisitions from 36 countries between 1997 and 2014. Higher cash holdings and stronger macroeconomic conditions each increase the likelihood that a firm will make an acquisition. However, larger cash holdings decrease the sensitivity of acquisitions to macroeconomic factors, suggesting that cash holdings lower financing constraints during times when the cost of external finance is high. Announcement day abnormal returns for acquirers follow a consistent pattern: They decrease with acquirer cash holdings and with better macroeconomic conditions.

International Real Estate Review

2016 ◽  
Vol 19 (4) ◽  
pp. 435-492
Author(s):  
Kuang-Liang Chang ◽  
◽  
Nan-Kuang Chen ◽  
Charles Leung ◽  
◽  
...  
Keyword(s):  
Real Estate ◽  
Capital Markets ◽  
Predictive Power ◽  
Asset Returns ◽  
Macroeconomic Variables ◽  
External Finance ◽  
Simulation Based ◽  
Recent Developments ◽  
Competing Models ◽  
Imperfect Capital Markets

This paper revisits the relationships among macroeconomic variables and asset returns. Based on recent developments in econometrics, we categorize competing models of asset returns into different "Equivalence Predictive Power Classes" (EPPCs). During the pre-crisis period (1975-2005), some models emphasize that imperfect capital markets outperform an AR(1) for the forecast of housing returns. After 2006, a model that includes both an external finance premium (EFP) and the TED spread "learns and adjusts" faster than competing models. Models that encompass GDP experience a significant decay in predictive power. We also demonstrate that a simulation-based approach is complementary to the EPPC methodology.

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