Narrow Results

Understanding the impacts of transparency in capital markets is important for determining the trading mechanism and for evaluating market efficiency and market fairness. The recent reforms covering trade transparency on the Taiwan Stock Exchange give us an opportunity to address and examine the relevant arguments. Evidence from this study indicates that increasing trade transparency may create a more efficient market due to decreased effective spreads compared with before the event. Asymmetric information also declines after transparency is liberalized. However, the movement direction of the realized spread does not seem obvious or pronounced. The implication from our results is that the exact effects from trade transparency may be dependent on the stock market's structure itself.

We examine the impact of iceberg orders on the price and order flow dynamics in limit order books. Iceberg orders allow traders to simultaneously hide a large portion of their order size and signal their interest in trading to the market. We show that when market participants detect iceberg orders they tend to strongly respond by submitting matching market orders consistent with iceberg orders facilitating the search for latent liquidity. The greater the fraction of an iceberg order that is executed, the smaller is its price impact consistent with liquidity rather than informed trading. The presence of iceberg orders is associated with increased trading consistent with a positive liquidity externality, but the reduced order book transparency associated with iceberg orders also creates an adverse selection cost for limit orders that may partly offset any gains.

The event of Chicago Mercantile Exchange’s (CME) negative oil clearing price on April 20, 2020, in which commodity futures traded in a negative range, is significant to the financial community worldwide. Through discussions of the so-called “best practice” rule for professional behaviors in practice with a number of examples and standards established by professional organizations, it seems that a better option for CME’s execution would have been to first seek feedback from stakeholders internationally within a reasonable transition period before implementing the proposed new trading (or updating) rule that came into effect in the month of April 2020.

The last few decades have seen the transformation of the modern supply chain from a simple (inflexible, linear, and reactive) to a complex (flexible, multi-echelon, and proactive) supply chain. The supply chain encompasses a global network of third-party service providers (Logistic, IT, Customer support, Warehousing), practicing numerous procedures and policies. The complex management of retailers, buyers’ and suppliers’ relations are susceptible to quite a few challenges (transparency, trust, security). Blockchain is an advanced technology with features like distributed notes, storage mechanism, consensus algorithm, decentralized structure, smart contracting, and asymmetric encryption, which helps to ensure supply chain network prominence, security, trust, and transparency. Blockchain technology turbocharges the profitability and efficiency of the supply chain. The level of security like physical management is complemented by process enhancements and technological leverages. Blockchain provides shared ledgers with error-free decentralized digital records, while every participating member act as a catalyst, by maintaining his data set for the transaction. Digitalization eliminates the need for traditional third-party verification; participants may self-verify the transactions. The information once entered is inconvertible and can never be obliterated. Transacted data is stored in time-stamped blocks and serves as the data structure. Blockchain technology serves flawlessly with features like storage mechanism and storage nodes, smart contract, consensus algorithm, and asymmetric encryption. Blockchain technology is successfully implemented in various sectors like finance, banking, IoT, and forex transactions. Current research focuses on providing abridged details of blockchain and serves to introduce its innumerable applications emphasizing the potential to transform supply chain provenance, business process reengineering, to security enhancement for the success of omnichannel retail supply chain.

Extant studies and my own work show that in US listed corporations, the presence of a firm’s founder adds value to the firm. The incremental value increases with the extent of decision rights controlled by the founder. Furthermore, the value addition is higher if the founder CEO is younger at the time of the initial public offering and decreases with the founder’s tenure in the firm. Further investigation reveals that the founders add value by improving operating performance and being more transparent than similar non-founder firms. Moreover, the founders are more focused on the strategic positioning of the firm in improving operating performance — they improve profit margins in differentiated firms while improving efficiency in firms with cost-leadership strategy. Analysts and investors can benefit by incorporating these insights into their analysis.

How does the sovereign credit ratings history provided by independent ratings agencies affect domestic financial sector development and international capital inflows to emerging countries? We address this question utilizing a comprehensive dataset of sovereign credit ratings from Standard and Poor’s from 1995–2003 for a cross-section of 51 emerging markets. Within a panel data estimation framework, we examine financial sector development and the influence of sovereign credit ratings provision, controlling for various economic and corporate governance factors identified in the financial development literature. We find strong evidence that our sovereign credit rating measures do affect financial intermediary sector developments and capital flows. We find that: (i) long-term foreign currency sovereign credit ratings are important for encouraging financial intermediary development and for attracting capital flows; (ii) Long-term local currency ratings stimulate domestic market growth but discourage international capital flows; (iii) Short-term ratings (both foreign and local currency denominated) retard all forms of financial developments and capital flows. There are important implications in this research for policy makers to encourage the provision of longer-term credit ratings to promote financial development in emerging economies.