Global Market Factors Research Articles

Regimes of global and national oil palm cultivations from 2001 to 2018

Regimes of global and national oil palm cultivations from 2001 to 2018

Competitive strategy and organizational performance: a systematic literature review

PurposeThe purpose of this paper is to provide an organizing lens for viewing the distinct contributions to knowledge production from those research communities addressing the impact of competitive strategy on company performance in general, and the influence of cost leadership and differentiation strategy on organizational performance in detail.Design/methodology/approachThe research methodology was based on the PRISMA review, and thematic analysis based on an iterative process of open coding was analyzed and then the sample was analyzed by illustrating the research title, objectives, method, data analysis, sample size, variables and country.FindingsThe main factor that influenced the competitive strategy is strategic growth; strategic growth has a significant influence on competitive strategy. Furthermore, competitive strategy will boost firm network, performance measurement and organization behavior. In the same way, the internal goal factor will enhance organizational effectiveness. Also, a differentiation strategy will support management practice factors, strategic positions, product price, product characteristics and company performance.Originality/valueThis study contributes to the literature by identifying a framework of competitive strategy factors, company performance factors, cost leadership strategy factors, differentiation strategy factors and competitive strategy with global market factors. This study provides a complete picture and description of the resulting body knowledge in competitive strategy and organizational performance.

IMPROVING THE INNOVATIVE STRATEGY OF MANAGEMENT OF AGRICULTURAL ENTERPRISES IN THE CONDITIONS OF GLOBALIZATION

The purpose of the article is to study the peculiarities of the implementation of innovative strategies by Ukrainian farmers, to identify influencing factors, including the influence of global market factors on the effectiveness of the implementation of strategies, and to develop a mathematical approach to assessing the influence of uncertain factors. The methodological basis of the article is the methods and forms of scientific knowledge accepted in science, such as methods: of comparative and abstract-logical analysis, induction and deduction, abstraction, and mathematical formalization. A stratification of the factors of the negative impact of globalization, which slow down the implementation of the innovative strategy and create threats to the activity of agricultural enterprises, is carried out. It is indicated that the main directions of improvement of the innovation strategy should be assessment, consideration, and neutralization of the influence of globalization factors. It is also indicated that this leads to the heterogeneity of the implementation of the innovative management strategy of agricultural enterprises. Prospective directions for the implementation of innovative strategies in agricultural production are stratified. The stages of the implementation of the innovation strategy in the conditions of globalization and the tasks of management for the implementation of the innovation strategy in the global conditions are determined. Peculiarities of the implementation of innovative strategies in Ukraine are revealed. A mathematical model was developed to assess the influence of uncertain global factors, which will allow for reducing risks for the implementation of significant innovative strategies. It is indicated that significant innovative projects could lead to the transformation of agribusiness activities and the need for permanent implementation of innovative processes. It is indicated that thanks to the systemic innovation process, a synthesis of the resource and innovation model of enterprise development could be formed. Taking into account the specifics of innovative strategies and using the developed mathematical approach to assess the influence of uncertain global factors will allow reducing risks in the implementation of innovative strategies and improving their management.

Resurrecting the market factor: A case of data mining across international markets

Resurrecting the market factor: A case of data mining across international markets

Do geopolitical risks and global market factors influence the dynamic dependence among regional sustainable investments and major commodities?

Do geopolitical risks and global market factors influence the dynamic dependence among regional sustainable investments and major commodities?

Global market factors that impact Baltic Dry Index

The Baltic Dry Index is used as a strategic tool by shipping companies to monitor the daily movement of freight rates for the transportation of bulk cargoes on predetermined routes for the different types of bulk carriers. Therefore, the management of shipping companies pays great attention to the factors that can contribute to the prediction of the price movement of the Baltic Dry Index. Main goal of this paper is to explore if stock market indices of United States of America (S&P 500 stock index) and China (Shanghai stock exchange Composite index), 10 Year bond yield, CRB index, WTI Crude oil and Gold as global market factors, but also as leading macroeconomic global indicators, have impact on movement of BDI. We explored period from January 1, 2003 to December 31, 2021, with monthly data for which the multiple linear regression method was used to analyse mentioned global market factors impact on BDI. The research found that the movement of S&P 500 and SSECI stock indices and CRB index had a positive impact on the movement of BDI, while the movement of Gold and WTI crude oil had negative impact on BDI for the observed period. The scientific contribution of this paper is manifested through observation and exploring relationship of mentioned global market factors with BDI, previous papers observed shorter time period and included macroeconomic indicators which are lagging, together with some global market factors.

The Drivers of Sovereign CDS Spread Changes: Local Versus Global Factors

AbstractWe use daily data for a panel of 34 countries to investigate regional differences in sovereign credit default swaps (CDS) spread determinants and the significance of local versus global market factors. Similar to prior studies, we find a high level of commonality among CDS spreads, but our results show that this effect is stronger in Latin American CDS. The results of our quantile panel regression model show that although global forces drive spreads across the conditional distribution, changes in credit ratings are significant in explaining CDS spreads only in the upper quantiles. We also confirm the existence of regional differences in spread determinants.

Hierarchy, cluster, and time-stable information structure of correlations between international financial markets

Abstract This paper investigates the correlations between 52 financial markets located in different countries or regions from July 2004 through June 2011. By using a correlation matrix time series and a participation frequency method based on the random matrix theory, we show that a time-stable information structure is contained in the correlations between global financial markets. We further find that the information structure is closely associated with global market and global geographical factors, and that each financial index's participation in the global market factor varies over time and presents dynamics. Two patterns, hierarchy and cluster effects, are found to be in the dynamics of the indices' participation in the global market factor. The cluster effect implies a more concentrated participation during the 2008 financial crisis.

Price Volatility and Market Efficiency of Futures Market in India

Due to the increased effects of globalization, economies are invariably exposed to global market factors and are volatile and sensitive to rising level of complexity of risks and changing conditions, making risk universal. However, due to the word of the ill effect of wide fluctuations of risk, various financial innovations have taken place at all times - derivatives being the most important. The uses of derivatives have become very predominant because of increased globalization and financial integration causing unpredictable variables and fluctuations. Though derivative instruments provide benefits, they come with certain risks as well. Low transaction cost and flexibility to take positions are the predominant features of futures and options instruments, which have lead to mushroom growth in their trading volume across the world. Popularity of equity futures contracts in India can be adjudged from the fact that in terms of trading volume.India's experience with the launch of equity derivatives market has been extremely positive. The derivatives turnover on the NSE has surpassed the equity market turnover. The turnover of derivatives on the NSE increased from Rs. 23,654 million (US $ 207 million) in 2000-01 to Rs. 315,330,030 million in 2012-13.

Derivatives in Indian Financial Market - 'Structure & Financial Concerns' an Indian Perspective

Derivatives are like aircraft: In the right hands, they are wonderful vehicles, but in the wrong hands, or incompetently handled, they are dangerous.Due to the increased effects of globalisation, last couple of years have seen the Indian Financial Market being increasingly exposed to global market factors and are faced by rising levels of complexity of risks. To mitigate the effect of those underlying risks, Indian markets are increasingly using highly complex hedging strategies with the help of exotic instruments. The sheer explosive growth in volume of total contracts outstanding validates the heightened interest of Indian markets for such products. To satiate this heightened interest for instruments, banks have readily agreed to structure and offer these contracts to their corporate clients by focusing more on the returns rather than stressing on the potential down-side risks. However, banks should undertake transactions, particularly with companies with a sense of responsibility and circumspection that would avoid, among other things, mis-selling. Under such circumstances, it has become imperative for Indian Financial Market to adopt and demonstrate a pro-active (but disciplined) approach towards financial risk management. Putting the right prevarication strategy in place is only half the battle won; companies need to continuously monitor and assess the effectiveness of the hedging strategies and ensure that they are in sync with the underlying risk profile. However, this is easier said than done. Some of the key challenges that Indian Markets face when confronted with such complex hedging strategies are as follows:* Lack of a clear and well thought out hedging policy with clearly defined permissible instruments, allowable hedge ratios, prudent limits and maximum tenors * Lack of technical expertise to evaluate the complexity of the hedge transactions and ability to identify, understand and quantify the risks by performing periodic Mark-to-Market calculations.* Inability to closely match the hedge transactions with the underlying exposures, thereby causing ineffectiveness.* Lack of understanding of the accounting treatment to be used for both effective as well as ineffective hedge relationships. * Limited or no access to risk measurement tools as well as market data systems to independently validate the Mark-to-Market numbers reported by counterparties.* Limited band width in terms of skilled man-power to perform Mark-to-Market calculations of the transactions on an ongoing basis.* Inability to build - in worse case scenarios in the valuation models to incorporate sudden and adverse price movements ability to quantify counterparty risk exposures in the event of defaults.* Limited ability to factor - in liquidity premiums for unwinding the hedge transactions prematurely in times of adverse market conditions.* Increased scrutiny and regulatory pressure requiring companies to evaluate and document their quantitative methodologies, supporting processes, underlying systems and adherence to strict reporting guidelinesOf course, the word derivative covers a multitude of investment vehicles and strategies. It includes relatively common put and call options, and stock and bond index futures, but also more exotic instruments such as swaps and swaptions, collateralized mortgage obligations, total-return and credit default swaps, and commodity derivatives.Protecting against loss:Most derivatives can be used to protect against loss or to enhance returns modestly with limited risk.* Buying put options for a portfolio can protect it against market declines, generally at modest cost. Selling call options on the stocks in a portfolio can enhance its return when the market is moving sideways.* Stock and bond index futures also can be used to hedge portfolios or to put to work instantly new cash flow without affecting the market prices of the stocks being acquired.But these and other instruments can be used in more dangerous ways. Futures can be used to leverage portfolios. There is no way, at present, for investors to make reasoned decisions about whether to accept the exposure to derivatives, and no easy way for their financial advisers to get the information needed to advise their clients properly. Before the fund watchers begin to gather and publish this information, many planners and advisers will have to refresh their knowledge of derivatives, a technical area the details of which are all too easy to forget when not dealt with frequently. Then they will be equipped to educate their clients and help them make appropriate choices of funds, fully cognizant of what the derivatives in their funds bring to the table in terms of risk and return.

Modern Tactical Asset Allocation

In the past five years, tactical asset allocation (TAA) has experienced a renaissance after its fall from grace in the 1990s. This rebirth is the result of an expansion of TAA beyond domestic market factors to include global market factors and cross-sectional security characteristics. Implementation today is most frequently accomplished through a separate management structure in lieu of the overlay structure that was commonly used in the early days of TAA. The result has been a vast reduction in the operational complexities and performance measurement challenges that plague users of the overlay structure.

How Oil Moves Stock Prices

An important question in asset markets is whether oil prices are a global factor in asset returns. In this paper, we propose a hierarchical model of stock returns which assumes that markets are integrated conditional on a set of factors, including oil. The hierarchical model is a variant of the Jorion and Schwarz model of market integration and permits significance testing of factors at three levels; global, country and sector. In an application to three countries across nine common sectors, we found the pattern of significance of oil was different than for six other commodities. While there is no evidence that oil is a global or country factor, there is evidence that oil is more significant at the sector level than other commodities. The average P-values for oil are less than for other commodities and, in Wald tests across sectors, oil behaves like a global market factor and a country market factor. The effect of oil is therefore both disaggregated and heterogeneous. There are two important implications of this study. First, in the aggregate, stock prices appear remarkably insensitive to oil prices, suggesting that the correlation between stock prices and oil prices is less certain than usually perceived. While an oil shock may cause a real economy recession, it does not necessarily cause an asset economy recession. A second implication relates to the testing of linear factor models. If factors affect asset prices in a hierarchy rather than linearly, tests of factor models must adjust for the hierarchical structure.

A Factor Approach to Asset Allocation

The typical asset allocation decision focuses on gaining exposure to systematic market risks such as equity, interest rate, and credit risk. Investors also often explicitly manage their exposure to firm-specific characteristics like size, book-to-market, or momentum. For a global portfolio, we can add another category of exposures not correlated with systematic market risks and firm-specific characteristics: global market factors that explain the cross-section of returns across individual equity, fixed-income, and currency markets. Portfolios constructed to include exposures to each of these three categories of risk and return seem to be more efficient at producing diversified returns than those limited to just systematic market risks. Using this factor-based approach to asset allocation results in optimal portfolios with significantly less exposure to equity market risk than the typical institutional portfolio generated using the traditional asset allocation approach.

Emerging market bond returns—An investor perspective

The novel features of this study consist in applying a conventional multifactor global market model to emerging market sovereign bond index rates of return that are denominated in US dollars and subsequently relating the unexplained residuals from the market model's estimates of each country's total bond index return to country-specific factors. They include political and financial risks as well as other presumed determinants of bond index rates of return. The results of our study confirm that sovereign countries’ bond index rates of return that include interest payments and capital gains/losses may be explained in terms of conventional bond pricing models by combining global market factors with local risk and other country-specific influences.

Re-Emerging Markets

Recent research shows that emerging markets are distinguished by high returns and low covariances with global market factors. To check whether these results can be attributed to their recent emergence, we simulate a simple, general model of global markets with a realistic survival process. The simulations reveal a number of new effects. We find that pre-emergence returns are systematically lower than post-emergence returns, and that the brevity of a market history is related to the bias in returns as well as to the world beta. These patterns are confirmed by an empirical analysis of emerging and submerged markets.

Re-emerging Markets

Recent research shows that emerging markets are distinguished by high returns and low covariances with global market factors. These are striking results because of their immediate implications for the international investor. One key issue is whether these results may be attributed to recent emergence. Most of today's emerging markets are actually re-emerging markets, i.e. markets that attracted international attention earlier in the century, and for various political, economic and institutional reasons experienced discontinuities in data sources. To analyze the effects of conditioning on recent emergence, we simulate a simple, general model of global markets in which markets are priced according to their exposure to a world factor; returns are only observed if the price level exceeds a threshold at the end of the observation period. The simulations reveal a number of new effects. In particular, we find that the brevity of a market history is related to the bias in annual returns as well as to the world beta. These patterns are confirmed by long-term histories of global capital markets and by recent empirical evidence on emerging and submerged markets. Even though these results can also be explained by alternative theories, the common message is that basing investment decisions on the past performance of emerging markets is likely to lead to disappointing results.