The paper highlighted last week showed the relationship between stock price crash risk and a long delayed audit. To remind, the principal reason for stock price crashes is managers hoarding bad information which, ultimately, comes out all at once. The authors of the paper highlighted today, Hua Feng from the Xi’an Jiaotong University et al, […]
Category: Sunday Papers
Academic research has been closing in on why stock prices go up in small increments over a long period but ‘crash’ more violently over much shorter periods. The reason seems to be a combination of asymmetric management reporting and the fact that all investors can buy good news but few can sell short. Company managers […]
Apologies, this paper is too long and a lot of the conclusions have the whiff of biased conjecture; but there’s some good stuff among the often circular-referencing social ‘science’. The authors, Kristin Shi-Kupfer, Mareike Ohlberg, Simon Lang and Bertram Lang all from the Mercator Institute for China Studies in Berlin, have tried to take China’s […]
Censorship in China is normally associated with political issues; but Jonathan Hassid, an Assistant Professor at the Iowa State University, has taken a look at censorship from an economic perspective. In the process he takes the lid off a major contributory factor to domestic Chinese investors’ antipathy to the A-share stock markets. The high degree […]
Perhaps, with the National Congress still in full flow, this isn’t the most appropriate time to look at the dark underbelly of the Magic Kingdom? Let’s do it anyway. In the paper highlighted this week from Dimitar D. Gueorguiev, Assistant Prof. of Political Science, Syracuse Univ., Maxwell School of Citizenship and Public Affairs, he uses China […]
In the 1960’s students in Hong Kong were concerned about local Chinese being given a fair shake by an aloof colonial administration. This generation are now the ‘Uncles of Victoria Park’ that go there to shout down the new generation of young malcontents who want to be recognized as Hongkongers first and foremost. [How times […]
The more analysts covering a stock the better the quality of information about the stock, right? WRONG! The paper highlighted this week, from Nianhang Xu, Xianyu Jiang, Shinong Wu and Kam C. Chan of the Renmin, Central University of Finance and Economics and West Kentucky universities, is the first study to address the question ‘Is […]
The paper highlighted this week adds a thought provoking dimension to a discussion that’s been ongoing for some time; the one about how differently men and women operate in markets. It suggests a rethink of the notion men were responsible for the recent financial crisis, due to their higher risk taking proclivity. It also sheds […]
For the new reader an accessible and informed primer; for practitioners, some useful reminders. Writing last July in an International Monetary Institute Working Paper, Chao Xi and Le Xia from the Chinese University of Hong Kong and BBVA Asia respectively, took a look at the sector from an emerging regulatory framework perspective. Their catalogue in […]
The paper this week is a useful companion to one I highlighted back in May. The May paper came to the conclusion, using the same before and after study approach made possible by China mandating Corporate Social Responsibility (CSR) reporting for firms in December 2008, that there was an effect (down) on pollution levels subsequently […]
This is the first work I’ve seen that comes down unequivocally on both the the benefits and the dis-benefits of China’s (and others’ by implication) rise as a trading nation to the rest of the world; part of the process often sloppily summarized as ‘globalization’. First, the benefits. The authors of this IMF Working Paper, […]
Why is China so cagey about it’s military capability? Isn’t the fact that Beijing keeps the world and it’s neighbors guessing destabilizing; and couldn’t it lead to a dangerous proliferation of arms in the region if others end up over-arming on the better-safe-than-sorry principle? Surely that outcome isn’t in Beijing’s best interest, so what explains […]
Writing in the Journal of Democracy (July 2017) Professor Kevin J. O’Brien from the University of California, Berkley notes that China’s development model is tired and, for different reasons, some former supporters are now somewhat brassed-off. He looks in more detail at three such groups: frustrated cops, former military officers and bullied cadres, teachers, hospital […]
Does corruption grease the economic wheel or is it sand in the gears? The question is perennial because corruption, by it’s very nature, is hard to gauge. The paper highlighted this week may be a landmark in addressing this question and, certainly, I’ve seen nothing like it with regards to China. The authors, Nan Chen […]
The paper summarized this week got a lot of press when released last month because it sounds, sort of, TED-talkie-right. In a nutshell it tries to show that color, particularly the color red, negatively affects investment decisions. The researchers, William J. Bazley, Henrik Cronqvist and Milica Mormann from the universities of Miami and Southern Methodist […]
The piecemeal approach adopted so far by European governments to the recent waves of migration from the Middle East and North Africa (MENA) and sub-Saharan Africa won’t do. This migration trend will persist, perhaps for a very, very long time; and the paper highlighted this week explains why. Frédéric Docquier and Joel Machado writing in […]
A car is faster than a bicycle, a plane faster than a car. Apes are smarter than trees, humans (most anyhow) smarter than apes. Examples of higher complexity leading to better results are all around. However, when it comes to investing, this is not the case. Hedge funds, as a group, have been unmasked as […]
Listed in Hong Kong there are now several Chinese City Commercial Banks (CCBs); and many more have plans in the pipeline to come here. If you’ve invested in the sector, have been or might be tempted then read on. What follows is depressing work on why this sector is (most likely) a solid avoid. Writing […]
The issue of whether inequality is rising or falling in China is not a trivial one. Since the beginning of the reform and opening up in 1978 inequality widened and carried on widening for many years. In a Discussion Paper for the International Food Policy Research Institute Ravi Kanbur and Yue Wang of Cornell University […]
As ETFs and passive strategies continue their march into the lunch-rooms of the world’s biggest active managers they’re resorting to a series of rearguard actions. One of these getting a lot of press has been the concept of so-called ‘Smart Beta’ [Eeeew!]. If the term is new for you a smart-beta strategy is supposed to […]