Narrow Results

We investigate the relationships among credit default swap (CDS), government bond yield, foreign investors’ ownership, and exchange rate by conducting Vector Error Correction Model and Vector Auto Regression. We compare the relationships in the period of 2008 to 2013 and in the sub period when financial crisis happened in 2008. Using daily data from April 28, 2008 to December 31, 2013 in Indonesian government bond market, we find government bond yield plays a significant role; and drives the movement of the other variables. However, during the 2008 crisis, the yield loses its dominance and tends to follow the movement of CDS.

While Malaysia has fulfilled expectation of a highly liberalized market since 2009, however, her stock market is still far from fully integrated with the world market. Existing literature by far has not provided any insight on market integration of such highly liberalized yet not perfectly integrated stock market. This paper explores whether such non-perfect market integration is due to some implicit factor at firm level. Based on Errunza, V and E Losq (1989). Capital flow controls, international asset pricing, and investors’ welfare: A multi-country framework. The Journal of Finance, 44(4), 1025–1037 asset pricing framework, we employed a multivariate GARCH-M model to estimate the monthly market integration level of Malaysia stock market with the world over a period from January 2009 to September 2016. Subsequently, we examine whether the three firm-level implicit factors, i.e., ownership concentrations, foreign ownership and firm price delay affect the Malaysia stock market’s world integration. These firm-level factors are aggregated from firm-level data while price delay was also aggregated from estimates of weekly data at firm level. In short, we found that price delay and ownership concentrations have significant negative effects on the market level integration, with the latter having a nonlinear $U-$shape effect where ownership concentration will have a positive effect passing the threshold of 52.2%. Last but not least, foreign ownership has a significant positive effect.

Management practices are important drivers of firm productivity (Bloom et al., 2019). While differences in the formalisation and sophistication of management practices are evident in comparisons of foreign multinationals and domestic firms (Bloom et al., 2012, Bloom and Van Reenen, 2007a, Bloom and Van Reenen, 2010), a striking omission from many studies is the failure to distinguish between domestic firms and domestically-owned multinationals (McDonnell et al., 2014). We merge the World Management Survey with the FAME dataset to examine the influence of firm ownership (standalone domestic firms; domestic groups; domestic owned multinationals; foreign owned multinationals) across a broad range of management practices. Foreign owned multinationals exhibit the highest formalisation and sophistication of management practices compared to all other firm types. However, significant asymmetries exist between different management practices across firm ownership. This is important as it raises questions as to whether there is sufficient learning and transfer of practices taking place across firms.

This study provides an overview of the characteristics of stockholdings of foreign and local investors in terms of firm sizes, price levels and liquidity. There are four key findings. First, the IDX is a highly concentrated market and foreign investors dominate the ownership of high market capitalization stocks. Second, foreign investors trade less frequently than domestic counterparts. Third, small, illiquid lower priced stocks dominate this market with domestic individual investors holding most of the stocks with these characteristics. Finally, the paper profits of foreign institutional and domestic individual investors are found to be higher than those of domestic institutional investors.

It is nearly two decades since economic transformation of the former socialist economies of Eastern and Central Europe and the Baltic states (ECE) began and today most of these countries have joined the European Union (EU). In this paper we analyze characteristics of the banking sector that emerged through the arduous transition process. In many aspects, this sector is similar to that of other countries of the EU but it also varies in significant ways. The very high share of foreign bank ownership is the hallmark of ECE banking. Despite the relative rapid restructuring of the old socialist enterprise financing system, so far the financial depth of ECE countries has remained significantly below the level of other EU members and also below the average of developing countries at a similar income level. Further government policy measures need to address supply and demand conditions so that access to credit is improved both for the aggregate economy and particularly for the small and medium scale sectors.

This is the first study of the link between internationalization and firm survival during the 2008–2009 crisis in Germany, a country which was hit relatively lightly compared to other countries. Moreover, it is the first study which looks at the role of importing, exporting and FDI simultaneously in the context of a global economic recession. We use a tailor-made representative data set that covers all enterprises from the manufacturing sector with at least 20 employees. Our most striking result is to demonstrate the disadvantage of exporting for the chances of survival of a firm during the crisis in Western Germany. Importing instead reveals a positive correlation with survival and firms that both export and import do not show a different exit risk relative to non-traders. A plausible explanation is that in a global recession, deteriorating markets abroad cause demand losses for exporters and improved conditions on factor markets which result in an advantage for firms sourcing from factor markets abroad. Two-way traders do not show a link with exit risk, supporting the idea that they were able to outweigh their losses from exporting with their gains from importing, in what could be called an export–import hedge. Furthermore, we cannot support the hypothesis that foreign multinationals are more volatile during times of economic crisis.