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Global Financial Markets (global + financial_market)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	83%

Selected Abstracts

Why Adopt Codes of Good Governance?

CORPORATE GOVERNANCE, Issue 1 2008
A Comparison of Institutional, Efficiency Perspectives
ABSTRACT Manuscript Type: Empirical Research Question/Issue: Given the global diffusion and the relevance of codes of good governance, the aim of this article is to investigate if the main reason behind their proliferation in civil law countries is: (i) the determination to improve the efficiency of the national governance system; or (ii) the will to "legitimize" domestic companies in the global financial market without radically improving the governance practices. Research Findings/Insights: We collected corporate governance codes developed worldwide at the end of 2005, and classified them according to the country's legal system (common or civil law). Then, we made a comparative analysis of the scope, coverage, and strictness of recommendations of the codes. We tested differences between common law and civil law countries using t-tests and probit models. Our findings suggest that the issuance of codes in civil law countries be prompted more by legitimation reasons than by the determination to improve the governance practices of national companies. Theoretical/Academic Implications: The study contributes to enriching our knowledge on the process of reinvention characterizing the diffusion of new practices. Our results are consistent with a symbolic perspective on corporate governance, and support the view that diffusing practices are usually modified or "reinvented" by adopters. Practitioner/Policy Implications: Our results support the idea that the characteristics of the national corporate governance system and law explain the main differences among the coverage of codes. This conclusion indicates the existence of a strong interplay between hard and soft law. [source]

Where is the risk in global financial markets?

ECONOMIC OUTLOOK, Issue 3 2007
Article first published online: 6 AUG 200
First page of article [source]

Finance organizations, decisions and emotions

THE BRITISH JOURNAL OF SOCIOLOGY, Issue 1 2002
Jocelyn Pixley
ABSTRACT Analyses of global financial markets are dominated by atomized models of decision-making and behavioural psychology (,exuberance' or ,panic'). In contrast, this paper argues that overwhelmingly, finance organizations rather than ,individuals' make decisions, and routinely use emotions in formulating expectations. Keynes introduced emotion (business confidence and animal spirits) but in economics, emotion remains individualistic and irrational. Luhmann's system theory lies at the other extreme, where emotions like trust and confidence are central variables, functional in the reduction of complexity in sub-systems like the economy. The gap between irrational emotions aggregated to ,herd' behaviour in economics, and ,system trust' applied to finance and money as a ,medium of communication' in sociology, remains largely unfilled. This paper argues that while organizations cannot be said to ,think' or ,feel', they are rational and emotional, because impersonal trust, confidence and their contrary emotions are unavoidable in decision-making due to fundamental uncertainty. These future-oriented emotions are prevalent within and between organizations in the financial sector, primarily in generating expectations. The dynamic of corporate activities of tense and ruthless struggle is a more plausible level of analysis than either financial ,manias' in aggregate or ,system trust'. [source]

Asset Bubbles, Leverage and ,Lifeboats': Elements of the East Asian Crisis

THE ECONOMIC JOURNAL, Issue 460 2000
H. J. Edison
Collapsing credit markets have been blamed for the depth and persistence of the Great Depression in the United States. Could similar mechanisms have played a role in ending the East Asian economic miracle , and in creating fragility in global financial markets? After a brief account of the nature of the East Asian crises of 1997/8, we use the framework of highly-leveraged, fully-collaterised firms due to Kiyotaki and Moore (1997) to explore the impact of a credit crunch. The paper emphasises the fragility of equilibrium and how rapidly boom can turn to bust. [source]

The global market for OTC derivatives: An analysis of dealer holdings

THE JOURNAL OF FUTURES MARKETS, Issue 1 2005
Ekaterina E. Emm
We provide a descriptive examination of the trading activities of one of the most important intermediaries in global financial markets,the OTC derivatives dealer. These dealers play a central role in the provision of derivative products and in the intermediation of market risks faced by financial and nonfinancial firms alike. Utilizing a unique database, we analyze the derivatives holdings of 264 dealers spanning 34 countries over the period 1995,2001. We document the geographic composition of dealers on both country and regional levels as well as analyze trends in dealer holdings on an aggregate and individual product level. We further analyze the extent of global merger activity among dealers and resulting consolidation effects. Finally, we investigate at the individual dealer level the extent and evolution of their array of product offerings. © 2005 Wiley Periodicals, Inc. Jrl Fut Mark 25:39,77, 2005 [source]

Would China's Sovereign Wealth Fund Be a Menace to the USA?

CHINA AND WORLD ECONOMY, Issue 4 2008
Friedrich Wu
G11; F21; F31 Abstract The sovereign wealth club acquired a new member with the official launch of the China Investment Corporation (CIC) on 29 September 2007. The arrival of CIC has further heated up debate regarding sovereign wealth funds (SWFs) and their potential implications for global financial markets. This is because, in carrying out its investments, CIC can tap into China's huge official foreign exchange reserves, which by April 2008 had surged to US$1.76tn. CIC's initial working capital of US$200bn makes it the fifth largest SWF in the world today. This article seeks to analyze CIC's investment strategies, as well as their potential economic and political implications for global as well as US financial markets. [source]