Search

We examine two forms of employment and asset restructuring: downsizing and upsizing. Guided by institutional theory, we focus on two important questions: (a) are the antecedents of restructuring common across downsizing and upsizing? and (b) are the performance consequences of such restructuring related to prior firm performance? To answer these questions, we use primary data from companies listed on the New York Stock Exchange over a 37-year period (1980–2016). Our results suggest that six key antecedents play a prominent role in both downsizing and upsizing, although they differ in magnitude and direction in how they affect each form of restructuring. However, in both instances they reflect efficiency considerations (company performance and managerial foresight), as well as institutional forces (the economy, political uncertainty, industry, and technology), just as neo-institutional theory suggests. In addition, prior performance plays a central role in restructuring decisions, in both the upsizing and downsizing of assets and employees. The evidence suggests that it is not just current-year performance but also the trend in company performance over the prior two years that forecasts subsequent firm performance; thus, our findings extend and refine institutional theory. [ABSTRACT FROM AUTHOR]

We assess the relationship between regime‐dependent volatility in S&P 500, economic policy uncertainty, the S&P 500 bull and bear sentiment spread (bb_sp), as well as the Chicago Board Options Exchange's VIX over the period 2000–2018. Our findings from two‐covariate GARCH–MIDAS (GM) methodology, regime switching Markov Chain, and quantile regressions suggest that the association of realized volatility and sentiment varies across high‐ and low‐volatility regimes and depends on investors' sensitivity toward incidents of market uncertainties under these regimes. The findings suggest that these indicators may not be useful in volatility forecasting, especially under high‐volatility regimes. [ABSTRACT FROM AUTHOR]

Futures contract switching in the weeks prior to expiration of the nearby contract produces some price and spread effects. An examination of daily and intraday prices in five commodity markets [...]

This article examines the impact of margin requirements on the gold and silver markets' trading activities by analyzing the role of time to contract-expiration in margin levels and trading activity relationships. The authors reveal the cost that markets impose on futures traders, the age of contract maturity is found to influence trading activity, small traders and speculators are found to be more vulnerability to margins, and margins increase following periods of volatility and decrease after stability.

Small company stocks have several behavioral characteristics that distinguish them from medium and large capitalization stocks. For instance, it is well documented that small stock returns have been higher than those predicted by the Capital Asset Pricing Model. This paper examines two other anomalies associated with the small-stock price behavior that should be of special interest to small firms on the threshold of a public offering. First, we demonstrate that small stock prices are more sensitive to the general market when the market is falling than when it is rising. We rule out the possibility that variance effects in small stock returns are a cause for this anomaly. Second, we demonstrate a relationship between the sensitivity of small stocks to the general market and the level of business risk: the betas of small stocks are found to be highly related to the spread between Baa rated and default-free bonds. In other words, we demonstrate that small capitalization stocks are especially sensitive to movements in the overall market when the market is most risky., INTRODUCTION The initial public offering (IPO) market for common stock has been both active and extremely cyclical over the past few decades. For instance, a study by Ibbotson, Sindelar, and [...]

Speculative trading does not cause stock market volatility, thus, heightened regulatory measures involving margin requirements and program trading restrictions are unjustified. Cash market volatility in the S&P 500 index has no direct correlation with futures commitments, number of speculators, and contract sizes made between the first quarter of 1986 to the third quarter of 1995. Therefore, the stock market could not be stabilized by securities regulation, although it remains to be seen whether this conclusion is applicable to commodity and other financial markets.

Data gathered by the Commodity Futures Trading Commission and the Commitment of Traders showing the periodic breakdown of the positions of commercial traders or large speculators, non-commercial traders and the small traders is analyzed to show how certain groups of traders have the capacity ot destabilize the current market. Results suggest that surges in the futures activities of small traders and large speculators can have an effect market destabilization and cash market volatility.

We examine the impact of crude oil price fluctuations on equity markets for four emerging Latin American markets, namely, Argentina, Brazil, Chile, and Mexico. We adopt an approach that examines this relationship in both a time and frequency domains. The co‐spectral analysis confirmed that most of the observable coherence between crude oil and equity returns occurred at relatively short frequencies. The structural vector autoregression (SVAR) results suggest that shocks to crude oil price directed all equity markets into negative territory, though they typically reversed course after approximately twenty‐four months. Although the decomposition of the prediction error variance showed that crude oil prices were weakly exogenous in the SVAR model, in most cases Brazil's equity market may have been responsible for the higher percentage of variations in the remaining indices. The nonlinear Granger causality tests reveal, with the exception of the Merval index, the equity markets under study were responsive to crude oil price shocks. [ABSTRACT FROM AUTHOR]