British Stock Research Articles

Western University (No. 10 Canadian Stationary Hospital and No. 14 Canadian General Hospital): a study of medical volunteerism in the First World War

The Canadian government depended on chaotic civilian volunteerism to staff a huge medical commitment during the First World War. Offers from Canadian universities to raise, staff and equip hospitals for deployment, initially rejected, were incrementally accepted as casualties mounted. When its offer was accepted in 1916, Western University Hospital quickly adopted military decorum and equipped itself using Canadian Red Cross Commission guidelines. Staff of the No. 10 Canadian Stationary Hospital and the No. 14 Canadian General Hospital retained excellent morale throughout the war despite heavy medical demand, poor conditions, aerial bombardment and external medical politics. The overwhelming majority of volunteers were Canadian-born and educated. The story of the hospital's commanding officer, Edwin Seaborn, is examined to understand the background upon which the urge to volunteer in the First World War was based. Although many Western volunteers came from British stock, they promoted Canadian independence. A classical education and a broad range of interests outside of medicine, including biology, history and native Canadian culture, were features that Seaborn shared with other leaders in Canadian medicine, such as William Osler, who also volunteered quickly in the First World War.

“Reffos, Wogs and Dagoes:” The Immigration Experience in Post-World War II Australia

This article seeks to analyze the ways in which immigrants experienced Australia in the years following World War II, when the makeup of Australian society changed. In Voyage of Their Life: Story of the SS Derna and Its Passengers, Diane Armstrong - a child immigrant to Australia - writes, Homogenous, conservative and almost entirely Anglo-Saxon in its origin, Australians were about to awake from their illusion of perfection (274). Focusing on memoir, poetry and short stories, this article analyzes Andra Kins' memoir Coming and Going: A Family Quest; Serge Liberman's short stories Home, Greetings, Australia! To You I Have Come, The Fortress and Two Years in Exile; Peter Skrzynecki's Sparrow Garden; Lily Brett's poetry; and Susan Varga's memoir Heddy and Me. Jewish and non-Jewish immigrants from Russia, Poland, Latvia, Hungary and Ukraine struggled with trying to build new lives in a new land in the face of prejudice and anti-refo feeling. Measures were introduced to limit severely the number of Jewish refugees allowed to travel to Australia. Despite these obstacles, Australia was transformed. According to Mark Wyman, Eventually, 182,159 DPs emigrated to Australia, led by 60,000 Poles and 36,000 Balts. Enough of an Eastern European mixture was admitted through Australian gates to constitute a small revolution in the nation's much-publicized homogeneity. long tradition of allowing only British stock down under was broken. By 1966 almost one in five Australians was a postwar immigrant or the child of one, and 60 percent of this group had non-British ethnic backgrounds (191).

Industry Effect and Stock Market Reaction to Global Financial Crisis: A Comparative Analysis

This paper aims at analyzing the “industry effect” on stock market reaction to global financial crisis. This has been conducted using a sample of 4 stock markets, and covering the period from 2007 to 2011. Kruskal-Wallis tests indicated that we could accept hypotheses regarding the effects of “industry effect” on stock market reaction to global financial crisis in Egyptian, Kuwaiti, American and British stock markets for all the research period and for the during- crisis period, where the most negatively affected sectors are “insurance” and “real estate” for the Egyptian and the Kuwaiti markets, while “banking” is the most negatively affected sector for the British and American ones. Also, they referred to the need to reject the hypotheses regarding these effects in all stock markets, for the pre-crisis period. Tests indicated that we could accept hypotheses regarding the effects of “country effect” on stock market reaction to global financial crisis in banking, insurance and real estate sectors. Results of “country effect” tests are consistent with those of “industry effect” in periods and sectors. Tests of the two hypotheses could be considered as robustness checks for each other.

War and stock markets: The effect of World War Two on the British stock market

This paper studies the effect of World War Two (WWII) on the British stock market. It contributes to the literature in several ways. First, this paper thoroughly investigates the impact of historically major events on the British stock market using a variety of empirical approaches in order to ensure a comprehensive examination of the impact of WWII on British stock returns. We utilise an event study of pre-selected historically major events, an investigation of the possible causes of the largest price movements as well as utilising an endogenous procedure testing for structural breaks. Secondly we extend the literature on behavioural finance and investor sentiment in extreme circumstances. In particular we examine the ‘negativity effect’, documented by Akhtar et al. (2011) and determine whether stock returns reacted more strongly to negative events or positive events. Overall we find limited evidence of strong links between war events and market returns although there is support for the ‘negativity effect’.

Underwriting Syndicate Structure and Lead Manager Reputation: An Empirical Study on European Stock Markets

Sur la base d’un echantillon de 1542 introductions en bourse allemandes, britanniques et francaises, nous examinons le lien entre la structure du syndicat bancaire et la reputation du chef de file. Nous etudions deux aspects de la structure du syndicat bancaire : le nombre de banques formant le syndicat et le ratio total des membres du syndicat / total des chefs de file. En premier lieu, nous observons majoritairement que le chef de file est le seul a effectuer l’introduction en bourse, il ne delegue une part de l’operation que dans 41 % des cas. La raison principale de cette concentration du syndicat sur une seule banque est que les introductions en bourse en Europe sont de petite taille. En second lieu, nous montrons que la delegation d’une introduction en bourse a d’autres banques (co-managers et autres managers) s’accroit avec la reputation de d chef de file. Toutefois, cet effet n’existe que pour les grandes introductions en bourse ; les operations de petite taille etant laissees a des banques plus petites, moins reputees et realisant un grand nombre d’operations. Nos resultats sont avec les travaux de Pichler et Wilhelm (2001) qui montrent que la reputation du chef de file cree une segmentation du marche des introductions en bourse entre les petites et les grandes operations.

Knowledge based transactions and decision framing in Information Technology Outsourcing

Knowledge based transaction costs (KTC) are knowledge related costs associated with the transfer of an information technology (IT) firm process outside its boundaries to a contractual partner. In this paper, we show that these knowledge based transaction costs are omitted variables in studies of firm boundaries that may reduce the likelihood of outsourcing. KTC arise from the risk of expropriation of firm knowledge by their contractual partners. In addition, KTC arise from the stickiness of knowledge, as transfer tacit and complex knowledge is both difficult to transfer and difficult to assimilate. Finally, KTC decrease with the knowledge and capabilities that contractual partners have, as this increases the partner firm’s ability to assimilate knowledge transferred. While all three sources of KTC lower the likelihood of outsourcing, the way managers frame the outsourcing decision is also important. As a result, managers may engage in outsourcing of IT processes even though they risk greater expropriation hazards in order not to lose out on higher expected outsourced performance. We validate these arguments based on a study of 180 IT processes from firms listed on the French (CAC40) and British (FTSE100) stock exchanges.

The impact of (global) business cycle risk on the German and British stock markets: Evidence from the first age of globalization

In the period from 1880 to 1913, time-varying German and British stock market returns are related to business cycle variables such as the deviation of industrial production from trend. Common British and German business cycle dynamics Granger cause stock returns and explain more than 20% of time variation in one-year ahead stock market returns. The link between business cycle variables and stock returns is less pronounced in the modern era of financial globalization. A potential explanation for this finding is the fact that during the first globalization period stock indices were dominated by industrial companies and stock prices varied in line with dividends. In the modern era of globalization stock price dynamics predominantly reflect time-varying risk premia.

Asymmetric correlation matrices: an analysis of financial data

We analyze the spectral properties of correlation matrices between distinct statistical systems. Such matrices are intrinsically non symmetric, and lend themselves to extend the spectral analyses usually performed on standard Pearson correlation matrices to the realm of complex eigenvalues. We employ some recent random matrix theory results on the average eigenvalue density of this type of matrices to distinguish between noise and non trivial correlation structures, and we focus on financial data as a case study. Namely, we employ daily prices of stocks belonging to the American and British stock exchanges, and look for the emergence of correlations between two such markets in the eigenvalue spectrum of their non symmetric correlation matrix. We find several non trivial results, also when considering time-lagged correlations over short lags, and we corroborate our findings by additionally studying the asymmetric correlation matrix of the principal components of our datasets.

The rate of return on equity across industrial sectors on the British stock market, 1825-701

This article assesses the contribution of the various industrial sectors to the growth of the British equity market in the 1825–70 period. It also provides estimates of the rates of return on these industrial sectors in this period. The article then proceeds to examine whether differences in rates of return across the various sectors can be explained by risk or other financial factors. One of the main findings is that the relatively high rates of return in the banking, insurance, and miscellaneous sectors appear to be in some measure explained by the presence of extended liability and uncalled capital.

Earnings Management in the UK: The Nonlinear Relationship Between Managerial Share Ownership and Discretionary Accruals

The paper examines the relationship between share ownership by boards of British stock exchange listed companies and accrual based earnings management. It provides the first empirical evidence that the relationship is impacted by UK Company Law and the institutional governance framework.We specifically model nonlinear relationships between the equity stakes owned by executive directors and discretionary accruals to account for managerial alignment-incentive and entrenchment at different levels of share ownership. To explain the nonlinear relationship, we discuss the UK institutional governance framework and highlight key regulatory thresholds. Piecewise linear regressions test the impact of these key regulatory thresholds on the earnings management-ownership relationship. We find that share ownership by executive directors has a significant impact on the level of discretionary accruals. The relationship is negative when the equity stakes of executive directors are below the 5% threshold of the ABI dilution limit and sections 376-378 of Companies Act 1985. Earnings management increases above 5% and below 10% of share ownership by executives. Once the 10% equity threshold of section 209 of Companies Act 1948 is reached, executive share ownership effectively mitigates accrual based earnings management. We find no evidence that equity ownership by non-executive directors mitigates earnings management practice of British companies.

Westward the Course of Empire Takes Its Way Through Tea

The government of the Dominion of Canada hoped their western territory would be filled with immigrants eager to work the land and further strengthen the British Empire in the early 20th century. British stock were viewed as ideal settlers as they would be able to represent and maintain the customs and behavior of the British Empire. Many brought with them to the Canadian frontier a variety of traditions - one of which was the habit of drinking tea. How did tea reinforce British identity and Empire in the Canadian West in the late 19th and early 20th centuries? This paper contends that tea was a powerful tool for nation builders because it reinforced British identity and empire.

Transforming Australia's Social Housing: Pointers from the British Stock Transfer Experience

The expanding provision of affordable housing by non-profit community housing organisations, coupled with possibilities of substantial stock transfer from State Housing Authorities, suggest Australia's social housing sector may be entering a transformative phase. Based on a review of restructuring in Britain, where over the last 25 years, traditionally owned and managed ‘council housing’ has been reduced from over 90 per cent to less than 30 per cent of overall social housing stock, this article considers possible policy implications for Australia. In particular, it analyses British experience which could inform Australian decisions on organisational size, institutional vehicles and governance structures within the context of the future programme of stock transfers envisaged by many commentators on the Australian housing scene.

Cointegration in Finance: An Application to Index Tracking

The purpose of this paper is to construct and test two different index tracking strategies - one based upon cointegration analysis of the price processes of assets (CIT strategy), and the other based on a market equilibrium and continuous time portfolio optimisation approach (MIT strategy). Within a broad empirical analysis it is found that both tracking strategies are able to track an index (FTSE100, DJ Industrial, DJ Composite Average) accurately, even if only a relatively small subset of constituent stocks is used. Thereby, it is also suggested that (particularly in the British stock market) the CIT strategy is preferred since there is some (out of sample) evidence indicating that log-price spreads between index and CIT tracking portfolio follow a stationary process. Moreover, regarding the attempt to perform simple enhanced indexation, no empirical evidence was found that would suggest that either of the two tracking strategies was suitable for such an approach.

Rule Britannia! British Stock Market Returns, 1825-1870

This article presents a new series of monthly equity returns for the British stock market for the period 1825-1870. In addition to calculating capital appreciation and dividend yields, the article also estimates the effect of survivorship bias on returns. Three notable findings emerge from this study. First, stock market returns in the 1825-1870 period are broadly similar for Britain and the United States, although the British market is less risky. Second, real returns in the 1825-1870 period are higher than in subsequent epochs of British history. Third, unlike the modern era, dividends are the most important component of returns.

Dividend Yield Strategy in the British Stock Market 1994-2007

The subject of this study is the profitability of an investment strategy focused on high dividend yield stocks from the British stock market in years 1994 - 2007. We follow the study of Filbeck and Visscher (1997), who analysed this strategy for the companies listed at the London Stock Exchange (LSE) from 1984 to 1994, and construct the portfolios of Top Ten highest dividend yielding companies from the FTSE100 index, which are rebalanced annually until 2007. Our findings are also analysed in a broader context of economic significance, following the studies of McQueen, Shields and Thorley (1997) and Visscher and Filbeck (2003), by considering transaction costs and taxes. We also add the currency risk and look at the obtained results from the point of view of international investors.The results demonstrate that the portfolios composed of the high dividend yield stocks are capable of beating the market, however this has not been happening consistently in the entire analyzed sample period. Nevertheless, the average annual rate of return of the Top Ten portfolios has been over four times as high as the corresponding change of the market index. The analysis of the most important risk-adjusted measures also indicates that the dividend yield portfolios have been a profitable investment.The results presented in this study have an important implication for investors regarding their investment horizon choices. The high dividend yield portfolios in the British market proved to be a profitable investment in a longer run while their returns can vary in shorter periods.

Real-time price discovery in global stock, bond and foreign exchange markets

Using a unique high-frequency futures dataset, we characterize the response of U.S., German and British stock, bond and foreign exchange markets to real-time U.S. macroeconomic news. We find that news produces conditional mean jumps; hence high-frequency stock, bond and exchange rate dynamics are linked to fundamentals. Equity markets, moreover, react differently to news depending on the stage of the business cycle, which explains the low correlation between stock and bond returns when averaged over the cycle. Hence our results qualify earlier work suggesting that bond markets react most strongly to macroeconomic news; in particular, when conditioning on the state of the economy, the equity and foreign exchange markets appear equally responsive. Finally, we also document important contemporaneous links across all markets and countries, even after controlling for the effects of macroeconomic news.

The ‘Bring out a Briton’ Campaign of 1957 and British Migration to Australia in the 1950s

AbstractIn 1957, the Australian Government launched a new assisted migration scheme aimed at bolstering the proportion of British migrants entering Australia. The ‘Bring out a Briton’ campaign was directed at the Australian public rather than, as in previous migration campaigns, the potential migrants and the Government called on community groups to address public anxiety about the high proportion of non‐British European migrants entering Australia. The campaign focussed public debate on the future of Australia as a British country, with the Immigration Minister caught between an establishment intent on maintaining the British character of Australia through the inflow of people of ‘British stock’, and ‘New Australians’, Australians of European descent who objected to British preference. The debate reflected broader public uncertainty about Australia's place in the postwar world, and the pages of Australia's metropolitan daily newspapers witnessed the forging of the terms in which Australia's British values were recast as Australian Western values, enabling Australia to remain part of the British Commonwealth of Nations while developing a role independent of Britain within an anti‐Communist Western bloc.

Portfolio Diversification Benefits of Investing in Stamps

In November 2002, Stanley Gibbons, a large British stamp dealer, introduced the SG 100, an index for stamp investments. This index is used to study whether there are diversification benefits for British and American stock investors to invest in stamps. The Capital Asset Pricing Model regression of the mean monthly stamp index excess returns on the excess returns of stock indexes yields positive alphas for both British and American investors. This means that adding stamps to stock portfolios can improve the investment performance of both groups of investors.

Analysis of long-run benefits from international equity diversification between Taiwan and its major European trading partners: an empirical note

This paper employs four cointegration test approaches, PO, HI, JJ and KSS, to test for pairwise long-run equilibrium relationships between Taiwan's stock price index and each of the stock price indexes of four European markets – French, German, Dutch, and British stock markets. The results from these four tests are robust and clearly consistent in suggesting that the Taiwan stock market is not pairwise cointegrated with the four European stock markets. This provides strong evidence that there exist long-run benefits for Taiwan investors diversifying in the equity markets of Taiwan's major European trading partners, France, Germany, Holland, and the UK, over the sample period considered from 6 January 1998 to 30 May 2002. These findings could be valuable to Taiwan individual investors and financial institutions holding long-run investment portfolios in the equity markets of France, Germany, Holland, and the UK.

Real-Time Price Discovery in Global Stock, Bond and Foreign Exchange Markets

Using a unique high-frequency futures dataset, we characterize the response of U.S., German and British stock, bond and foreign exchange markets to real-time U.S. macroeconomic news. We find that news produces conditional mean jumps; hence high-frequency stock, bond and exchange rate dynamics are linked to fundamentals. Equity markets, moreover, react differently to news depending on the stage of the business cycle, which explains the low correlation between stock and bond returns when averaged over the cycle. Hence our results qualify earlier work suggesting that bond markets react most strongly to macroeconomic news; in particular, when conditioning on the state of the economy, the equity and foreign exchange markets appear equally responsive. Finally, we also document important contemporaneous links across all markets and countries, even after controlling for the effects of macroeconomic news.