Finance and Financial Management Commons^™

Can The Euro Rival The United States Dollar And Become The World Currency?, Kar Wai Man, Feissal Thomas Germais Mombo Paraga Apengue, Weixin Zhang, Yiqing Tu, Yuan Yuan

Lingnan Journal of Banking, Finance and Economics

Due to the outstanding performance of the Euro since its advent, the public may wonder whether the Euro would, one day, replace the US dollar (USD) which has all along been a force to be reckoned with all around the world. By tracing the chain of contributions the USD (the United States of America) and the Euro (European Union) have made to the world economy in the past and at present, we hope to arrive at some conclusions. However, the paper will give primacy to predicting the future trends for them separately.

Democracy And Economic Growth: A Perspective Of Cooperation, Menghan Yang, Li Zhang

Lingnan Journal of Banking, Finance and Economics

Does democracy cause higher economic growth? We build a model taking culture and interpersonal cooperation into account and find that democracy increases economic productivity through giving people more equal rights, which allows people to build a larger interpersonal network so that they can reduce investment risk and employ high-productivity (high-risk) methods in production.

Does Okun’S Law Still Hold Today?, Michael Jeffrey White, Lai Yee Chu

Lingnan Journal of Banking, Finance and Economics

Arthur Okun claimed that when a country’s unemployment rate fell, the GDP expanded. This paper investigates the claim of Arthur Okun and the effect of unemployment rates and GDP of a country on each other. Data from three countries, namely, USA, Japan, and France, were tested to see if there was a causal link between the two variables. It was found that the proposed law of Arthur Okun did not hold. In the USA, there was a two way causality link but different directions of effect. France and Japan did not have a causal link between the two variables.

Impact Of Change In Exchange Rate On Foreign Direct Investment: Evidence From China, Weifeng Jin, Qing Zang

Lingnan Journal of Banking, Finance and Economics

Based on the monthly data of foreign direct investment (FDI) in China and the index of real effective exchange rate (REER) of RMB during Jan 1997 to Sep 2012, we develop a statistical model in this paper to test the impact of changes in exchange rate in the host country on FDI, with reference to international and domestic research. According to the results of the empirical test, the appreciation of RMB promotes FDI after the reforms in the exchange rate regime in 2005 and this phenomenon is a result from the change in the type of FDI into China in …

Quadrophobia, Analyst Recommendations, And Financial Reporting System, Eugene Groff, Stefan Vladan Blagojevic, Taras Koshylovskyi, Haigang Zhou

Undergraduate Research Posters 2013

“Quadrophobia” is a relatively novel term that corresponds to a type of ‘fear’ or ‘misrepresentation’ that can manifest itself during the process by which companies report their earnings per share (EPS) values to the public. This study sought to conduct an in-depth examination into the process by which company's reported their respective EPS amounts, in order to determine the degree to which they manipulate the fourth number after the decimal place to bolster their perceived value. Our research focused on analyzing the actual v. reported EPS data (via Worldscope) of various companies being trading on different exchanges throughout the world, …

Modeling The Skewness Of Stock Return Distributions Using A Bayesian Framework, Ian J. Wright, Dr. Keith P. Vorkink

Journal of Undergraduate Research

In order to make optimal portfolio choices, individuals, firms and portfolio managers are interested in the probabilities attached to their receiving various returns in the stock market. These probabilities of returns on securities are described by statistical functions called return distributions. However, much uncertainty concerning such return distributions exists and over the years many models have been created that attempt to predict the mean and variance of return distributions, and recently some have even been put forth that attempt to predict the skewness of such distributions. The skewness of return distributions is of import to investors in particular because the …

An Examination Of The Effect Of Brigham Young University’S Single-Student Housing Policies On Local Condominium Values, Daniel Matthews, Dr. Barrett Slade

Journal of Undergraduate Research

My research revolved around four hypotheses relating to the impact of BYU’s single-student housing policies on condominium values in Provo and around Utah Country. These four hypotheses are as follows:

Best Practices For Microfranchising In Bangladesh, Joseph W. Wade, Dr. Richard Mcclendon

Journal of Undergraduate Research

The purpose of this research project is to fulfill a research need for the Microfranchise Initiative at BYU’s Center for Economic Self-Reliance.

Issue Brief: Auditing Your Town's Development Code For Barriers To Sustainable Water Management, New England Environmental Finance Center

Sustainable Communities Capacity Building

This issue brief is intended for town officials who want to understand how development regulations in their community affect local water resources. Municipal development codes – the set of regulations that control the built environment – can have a great influence on the availability of clean and healthy water for drinking, recreation, and commercial uses. This in turn affects the community’s social, environmental, and economic vitality.

Comprehensive plans, zoning codes, and building standards are just a few examples of regulations that intentionally or unintentionally regulate the way water is transported, collected and absorbed. Regulations that produce dispersed development or large …

Issue Brief: Saving By Mitigating, University Of Louisville, New England Environmental Finance Center

Sustainable Communities Capacity Building

Natural disasters can cause loss of life, inflict damage to buildings and infrastructure, and have devastating consequences for a community’s economic, social, and environmental well-being. Hazard mitigation means reducing damages from disasters.

Local governments have the responsibility to protect the health, safety, and welfare of their citizens. Proactive mitigation policies and actions help reduce risk and create safer, more disaster-resilient communities. Mitigation is an investment in your community’s future safety, equity, and sustainability.

Quantifying Expertise In Private Equity, Singapore Management University

Perspectives@SMU

Just how much is expert knowledge worth in running a private equity fund?

Is Manager Gender Important In The Performance Of Mutual Funds?, Steven Welch, Yunqing Wang

Accounting and Finance Faculty Publications

We investigate whether there are differences in characteristics and performance of mutual funds caused by the manager’s gender. Through examining a large sample of U.S. domestic equity mutual fund, we find some evidence that suggests female managers have a lower risk tolerance than males. This leads to the observation that females tend to hold a higher total number of assets (stocks) and fewer assets in their top 10 holdings than do male managers. We then analyze performance within funds over time in order to evaluate the impact of changes in management’s gender composition on funds’ performance. We find some evidence …

Short Sales Constraint And Seo Pricing, Charlie Charoenwong, David K. Ding, Ping Wang

Research Collection Lee Kong Chian School Of Business

We examine the influence of SEC's Rule 105 on informed trading and the information content of stock prices around an SEO's offer day. We show that constraints on short sales inhibit informed trading and hamper incorporation of information into stock prices for offers whose traders have private adverse information and without options listing. The constraints contribute to increased price uncertainty and higher market sensitivity to seller-initiated trading. After controlling for other causes of SEO discounts, we find that the decrease in information content of stock prices just before an offer day has a significant impact on the SEO's value discount.

Alternative Financing And Private Firm Performance, Daphne W. Yiu, Jun Su, Yuehua Xu

Research Collection Lee Kong Chian School Of Business

Why do private firms grow vibrantly in transition economies despite their limited access to formal financing? This study underscores the importance of informal financing in facilitating the growth of private firms in China. Drawing from the institutional economics argument, we posit that informal financing, in the form of underground financing and trade credit, substitutes formal financing in providing financial assistance and capital to private firms in China. We further posit that the effects of two kinds of informal financing vary across provinces with different levels of institutional development, and complement each other by supporting firms in different industries. We test …

An Empirical Analysis Of Healthcare Ipos And Seos, Jonathan Holloway, Dr. James C. Brau

Journal of Undergraduate Research

Overall, three phenomena exist in corporate equity issuances. These phenomena include hotissue markets, first-day underpricing, and poor long-run performance. Hot-issue markets refer to fluctuation in the volume of issuances. Hot waves are periods of high issuance volume, and cold waves are periods of low volume. The second phenomenon, first-day underpricing, results in the initial price of equity beginning lower than its first-day closing price. The third phenomenon, poor long-run performance, refers to the tendency of issuances to underperform during a period beginning the day after the issuance and ranging from one to five years.

Exchange Consolidation, Steven D. Dolvin

All Chapters

BATS and Direct Edge, two large electronic exchanges, are merging to form the second largest exchange operator in the United States, taking over the ranking currently held by Nasdaq. This change exhibits the transformation of the industry toward electronic trading. While electronic increases speed and likely lowers trading costs, it doesn't come without risks, as the recent Nasdaq outage illustrates. See article here, Wall Street Journal.

Examining The Relationship Between Expected Market Returns And Political Variables Using Generalized Method Of Moments Procedures, Ian Wright, Dr. Keith Vorkink

Journal of Undergraduate Research

Investors, economists and financial analysts are constantly seeking to develop models that may help them learn what the stock market will do and how it functions. They do this so that they may take advantage of any market anomalies as soon as they appear and try to make “easy money.” Various pricing models (see Sharpe (1964), Litner (1965) and Fama and French (1993) for example1) have been and continue to be constructed that try to predict returns, and variables suspected to be correlated with returns have been included in these models in an attempt to determine specific predictors of returns.

Financial Literacy Amongst University Students, Adam Trone, Dr. James Brau

Journal of Undergraduate Research

My interest in financial literacy and my decision to pursue an ORCA grant in this subject began in the fall of 2007. Many remember the upheaval that devastated financial markets beginning at this time. This upheaval is not just a memory because similar economic and financial conditions continue to this day. As a casual observer of this crisis as shown on the news, I began to think. I began to think about my own finances, saving for retirement, taxes, and the job market. These thoughts never became a serious bother but I was mildly concerned. I began to realize that …

How Does Asymmetric Information Relate To Investment Efficiency? Evidence From Analysts' Earnings Forecasts And Daily Stock Trading, Lingmin Xie

Lingnan Theses

The adverse selection and agency cost theories suggest that the informational transparency of a firm can help to reduce over- or under-investment. This thesis examines how information asymmetry influences firm-level investment efficiency for companies listed in the U.S. market from 1993 to 2009. Information asymmetry is measured by the dispersion and error of the earnings forecasts made by financial analysts. I investigate how information asymmetry affects firms’ proneness to overor under-invest and the firms’ deviations from the investment levels predicted by investment opportunities. To be consistent with the prior literature, I also use the volatility of daily stock returns and …

Institutional Stock Ownership And Corproate Dividend Policy : Evidence From China, Jianghua Shen

Lingnan Theses

Agency theory suggests that institutional stockholders are able to influence the dividend policies of listed firms with the underlying objective of reducing a firm’s agency costs. This study explores the causal effects of institutional ownership on dividend policies for the firms listed in China. Using various measures of institutional ownership and dividend policy, I find that mutual fund ownership in a firm causes it to pay out more cash dividends or to initiate cash dividends. These effects are mainly evident in the firms controlled by the state and regional governments and those with relatively high free cash flows. The effects …