Margin Trading Research Articles

Extensive margins of trade and firm survival

Using firm-level transaction data from Taiwan, this study shows that firms that engage in exports alone and import intermediate inputs significantly increase the probability of their survival compared to firms that engage in no external trade. Extending current studies, this study shows that multiproduct and multicountry trading firms are more likely to survive by becoming “leaner and meaner” and trading with a more diverse set of countries.

Moderated Mediation Effect of Consumer Knowledge on the Relationship between Social Cultural Factors and Purchase Intention through Attitude of Mobile Phone Counterfeits in Kenya

Counterfeit consumption has been on an upsurge globally aided by comparative higher trade margins and increasing demand for renowned brands at lower prices. Social cultural factors have been found to play a major role in the growth of the trade as they influence the intention, hence purchase of such good. This study investigated the moderating effect of consumer knowledge on the relationship between social cultural factors (SCF) and Purchase Intention (PI) through attitude. The study applied an explanatory research design among university students guided by the Theories of Planned Behavior, Reasoned action, Moral competence and consumer theory. Data was collected from university students using simple random sampling methods using structured questionnaires. Data collected from 450 respondents were analyzed using descriptive and inferential statistical procedures, with the significance of each independent variable and relationship being tested at 95% confidence level (P=0.05). The study findings showed a positive and significant relationship between Social cultural factors (SCF) and Purchase Intention (PI) (β 1 =0.579, P<0.05, r 2 =0.334) and found that consumer knowledge had a positive (ΔR 2 =0.0042, [F=5.25, P<0.05]) moderated mediated effect (index 0.0668, [LLCI 0.128, ULCI 0.1361]) on the relationship between Social cultural factors and Purchase Intention through Attitude. The study concluded that Social Cultural Factors have an influence on Purchase Intention while Attitude intervenes significantly in the relationship between Social Cultural Factors and Purchase Intention with the relationship conditioned by Consumer Knowledge at different levels of interaction. The study recommends that manufacturers put product differentiating features and information on the packages so that consumers get information before they make purchase choices.

Public expenditure for water facility and road transport infrastructure in Ethiopia: a comparison of impacts using an economy-wide model

BackgroundEthiopian government is investing in a wide range of pro-poor sectors but the economic effects of public investment widely vary across sectors. With a limited public resource, public investment across sectors has to be prioritized based on their potential socio-economic contributions and/or economy-wide benefits. Therefore, the objective of this study is to compare and explore the economy-wide returns of public expenditure on water facility and energy technology (such as improved cooking stoves) on the one hand and public expenditure on road infrastructure on the other hand.MethodsThe source of data for this study is the 2005/06 updated Social accounting matrix (SAM) of Ethiopia. The analysis applies the STAGE Computable General Equilibrium (CGE) model developed by McDonald (2007). This study analyses two policy scenarios; the first scenario is an increase in the total factor productivity (TFP) of water fetching and firewood collection activities due to public investment in water facility and improved cooking stoves and the second scenario is a decrease in the trade and transport margins due to public investment in road transport infrastructure. For ensuring the comparability of the return of public expenditure, the same amount of public capital is invested in both scenarios.ResultsThe simulation outcome indicates that public investment in water facility and improved stoves results relatively higher domestic production in most sectors, larger household consumption, improved household welfare and improve in the major macroeconomic indicators (GDP, absorption, private consumption, and total domestic production) as compared to public investment in road transport infrastructure.ConclusionsIt is conducive to explore the potential economic contribution of public expenditure across the different pro-poor sectors before launching public investment in any specific sector. This will ensure limited public budgets are appropriately invested in the sector that can bring relatively highest economic-wide benefits to the wider society.

Margin Analysis Of Trade Administration And Marketing Strategy Of Fish Catch Using Cantrang At Ppp Klidang Lor, Batang Central Java

PPP Klidang Lor Batang is one of the fishing ports still dominated by cantrang fishing gear. The purpose of this study was to analyze the margins of trading and marketing strategies by the waiters who use cantrang. This study used a descriptive method with data collection by observing directly in the field at PPP Klidang Lor. The population used in taking respondents in this study were fishermen who used cantrang fishing gear. Data analysis was carried out using qualitative analysis and quantitative analysis. The catch and variety is one of the factors for the high and low income of fishermen. The catch that is traded to TPI, middlemen, retailers, or even consumers without a good trading strategy will not maximize the income earned by fishermen. By analyzing the trading system margins of fishermen, TPI, middlemen, retailers, and consumers, alternative strategies for fishermen will be known in order to increase marketing of the catch they get. The purpose of this study is to determine the margin of trade and the composition of catches, marketing channels. Analysis of the data used to determine the value of the margin of trade using BEP, HPP, R/C, Fisherman's share. Meanwhile, the marketing strategy uses SWOT analysis to determine the internal and external factors of marketing the fisherman's catch using cantrang fishing gear.

The potential built‐in supply effect from margin trading in the Chinese stock market

AbstractUtilizing a unique daily data set, we examine how the covering of margin positions affects earnings announcement returns in the Chinese stock market dominated by retail traders. Unlike previous research on forced covering during price crashes, we propose that margin interest acts as a built‐in supply and find that intensive covering of margin positions pushes down stock prices during earnings announcements of extreme good news. The release of built‐in supply leads to stronger post‐earnings‐announcement drift (PEAD) after good news compared with that after bad news, consistent with investors’ tendency to realize profits after a gain under the disposition effect.

The impacts of trade policy uncertainty on trade flow of emerging economies and low-income developing countries

This study is aimed to investigate the effects of the trade policy uncertainty (T.P.U.) on the trade flow of 113 emerging economies and low-income developing countries to 143 destination countries. It further investigates the effects of T.P.U. based on income heterogeneity. Moreover, it considers the effects of T.P.U. on trade flow between developing countries’ pair and non-manufacture trade. The two-step Heckman sample selection model is applied to run the structural gravity model of trade using three-year intervals for the period 2004–2019. The analysis is repeated using the Poisson pseudo-maximum likelihood (P.P.M.L.) model for the robustness test. The results imply that the extensive and intensive margin of trade flow of emerging economies and low-income developing countries are adversely affected by the T.P.U. of destination countries. However, the T.P.U. of origin has an adverse effect on the extensive margin of trade. It also negatively affects the trade flow between developing-developing pairs. We also conduct a counterfactual simulation analysis to convert the effect of T.P.U. on trade flow to distance equivalent. To sum up, the findings of this study imply that T.P.U. is a more important barrier to trade for emerging economies and low-income developing countries. Policy implications are forwarded based on the findings.

Food shopping preferences in the context of logistic chains of food supplies on the example of consumers from the Podkarpackie voivodeship

The article focuses on consumers' dilemmas regarding the choice of food products. Growing consumer awareness is reflected in everyday choices and has both economic and public health significance. Public awareness is generating a tendency to pay attention to health aspects by choosing fresher, better quality and less processed products. Consumers are increasingly interested in short food supply chains and shortening the time it takes to move food “from the field to the table”. Purchasing behavior is conditioned, inter alia, by the individual hierarchy of values professed by the consumer, in which short food supply chains are identified with better quality, lower price and reduced trade margins. Preferences for local and regional products are also observed. The market provides such opportunities, as legal changes introduced in Poland in 2016–2017 enabled farmers to legally sell food products directlyin an unprocessed as well as processed state. Such sales are carried out in short supply chains. A similar phenomenon is also observed among farmers in many EU countries. Short food supply chains play an important role in the process of creating market advantage of agricultural producers, as food products are quickly delivered to the final recipient. Local markets become very important in this case and direct selling, which lost its importance at the turn of the 20th and 21st centuries, is gaining popularity again. Logistical food supply chains are considered in various scientific fields. They combine organizational and technical, economic, social as well as cultural, and health dilemmas. The aim of this study was to identify preferences of food supply chains in the context of consumer behavior of the inhabitants of south-eastern Poland. The survey was conducted using the CAWI (Computer-Assisted Web Interview) method. The survey shows that respondents associate food quality with the length of the supply chain, in the declarative sphere, they prefer short food supply chains, but do not use them. A sizeable proportion of respondents said they were willing to pay slightly more for safe and wholesome food. Research has confirmed that the modern consumer increasingly recognizes the importance of the healthiness of products, and links this to shortening the food supply chain.

COVID-19 and changes in global agri-food trade

Abstract COVID-19 has raised questions about the resilience of agri-food trade to global shocks to the system. This paper analyses the changes in agri-food trade (values, extensive and intensive margin, and diversification) during the pandemic at global and regional levels. It also considers parallels in the changes in agri-food trade and changes of various COVID-19-related factors (infections, deaths, mobility, policy stringency, and industrial production output). The results show that changes in trade remained limited to short-term disruptions that mostly occurred at the extensive margin of trade and, primarily, at the height of policy stringency, mobility reductions, and the overall reduction of economic output. The trade of staples was most resilient, while that of other agri-food products declined considerably. Inter-regional trade of Asia, Africa, and Latin America and the Caribbean proved generally more resilient than these regions’ intra-regional trade.

The information content of analysts’ textual reports and stock returns: Evidence from China

We apply a Long Short-Term Memory (LSTM) deep-learning approach, which can capture the order of words, to extract textual tones from analyst reports written in Chinese. The market reaction is significantly and positively correlated with the textual tone of the analyst reports. Furthermore, we find that the market reaction is stronger to negative tones. Additionally, investors are more responsive to the textual tone from star analysts and the analysts from larger brokerage houses. We also investigate how the margin trading and Shanghai-Hongkong (or Shenzhen-Hongkong) stock connect impact the informativeness of textual opinion.

SISTEM TATANIAGA CABAI MERAH KERITING DI KECAMATAN BANYUASIN III KABUPATEN BANYUASIN

The aims are Knowing the marketing channel of curly red chili, Knowing the marketing function carried out by the curly red chili trading institution, Calculating trade system costs, trading margins, farmer's share and share in institutions involved in chili trading activities, Knowing the efficiency of the curly red chili trading system, The research was carried out in Seterio Village, Banyuasin III District, Banyuasin Regency. The method used is a survey method for chili farmers and marketing institutions (chili traders). The data were analyzed using the formula for trading margins, trading costs, trading profits, farmer's share, institutional share and marketing channel efficiency. The results showed: the red curly chili trade system consists of 4 trading channels, namely: I = Farmers-collectors at village level-collectors at sub-district level-wholesalers- retailers-consumers, II=farmers-collectors at the sub-district level-wholesalers- retailers- consumers, III = Farmers-collectors at village level-retailers-consumers,and IV = farmers-collectors at the sub-district level-retailers-consumers. The marketing functions carried out in the chili trade system are: a) Exchange function: Buying and selling (performed throughout the institution), b) Physical function: transportation (performed by all trading institutions except wholesalers), c) Facility function: Standardization and grading (performed by sub-district traders and village collectors, wholesalers and retailers), risk assurance, financing and market information (performed by all trading institutions). Chile trading margin value, namely: channel I = Rp. 3.350/kg, channel II= Rp. 4,200/kg, channel III = Rp. 4.197/kg and channel IV = Rp.3.350/kg.Farmer's share value in: channel I = 78.83%, channel II = 79.66%, channel III = 79.52% and channel IV = 83.29%. All of the curly red chili trades on various channels are efficient, and the most efficient is channel IV..

The causal effect of free trade agreements on the trade margins: Product‐level evidence from geographically distant partners

AbstractWe estimate the causal effects of free trade agreements (FTAs) on the trade margins by focusing on recent agreements involving geographically distant partners. Using border‐sharing countries as controls, our product‐level difference‐in‐differences estimates reveal that FTAs had positive and significant effects, with the extensive margin accounting for around half of the export growth. In terms of timing, the intensive margin effects preceded those of the extensive margin. At the sectoral level, our results indicate that the extensive margin drove export growth in sectors with differentiated products, whereas export growth in sectors with homogeneous products was due to the intensive margin.

The impact of margin trading and short selling by retail investors on market price efficiency: Empirical evidence from bitcoin exchanges

I exploit the high fraction of retail investors in the early years of Bitcoin and the introduction of margin trading and short selling by the Bitcoin Exchange Kraken to apply a difference-in-differences approach. I document that the potential composite use of margin trading and short selling is associated with lower market price efficiency. Moreover, I find that more likely short selling relative to margin trading is positively related to market efficiency indicating that margin trading causes their negative composite effect. If margin traders are more likely sophisticated retail investors, the negative impact of margin trading is less pronounced.

Margin Trading Program, External Profit Pressure and Enterprise Financialization—A Quasi-Natural Experiment Based on Double Difference Model

Based on the urgent need of the real economy to “get away from fictitious to substantial”, this paper constructs a quasi-natural experiment based on the margin trading program gradually implemented in China in 2010 and studies the influence of the margin trading program on the financialization level of the target company by using the difference-in-difference method. The results show that, because of the dominant role of financing transactions in margin trading programs in China’s capital market, financing transactions drive up the share prices of listed companies, which leads to an excessive easing of the financing constraints of listed companies and short-sighted behavior of executives, which has a significant role in promoting enterprise financialization. Moreover, the driving effect is more significant in state-owned enterprises, enterprises with a high degree of financing constraint, and enterprises with a low degree of marketization. Economic policy uncertainty will restrain the positive effect of margin trading programs on enterprise financialization through information and governance mechanisms. In contrast, the “branding” effect caused by the financial connection of senior executives will intensify the positive relationship between margin trading programs on enterprise financialization levels. When considering the intermediary effect, we find that the margin trading program will result in the optimistic deviation of analysts’ earnings forecasts and cause the external profit pressure of enterprises, thus increasing the financialization trend. This study is of great theoretical significance and practical value for evaluating the policy effect of the margin trading program, improving this policy, investigating the influencing factors of enterprise financialization, and promoting the real economy to move from fictitious to substantial.

Naïve Bayes Classification Model for the Producer Price Index Prediction

Producer Price Index is an index number that describes the level of price change at the producer level. Data users can take advantage of the development of producer prices as an early indicator of wholesale and retail prices. In addition, it can also be used to assist in the preparation of the economic balance, distribution of goods, trade margins, and so on. Every year the Badan Pusat Statistika (BPS) updates data on the producer price index to facilitate producer price standards, including rice and grain producers. To determine the Price Prediction Index, a prediction algorithm is needed, namely Naive Bayes based on data from Quarters I and II of 2021. The Naïve Bayes Algorithm, can be used to predict the Producer Price Index. This prediction is made to provide an overview of Quarter III, considering that in 1 year BPS updates the Producer Price Index’s data up to Quarter IV in 1 year. The prediction obtained is an increase for Quarter III with a maximum value between 0.961 – 0.980 based on data from Quarters I and II .

Do Bond Investors Care about Margin Trading and Securities lending?: ——An Empirical Study Based on Secondary Market of Medium Term Notes

Since the advent of margin trading in 2010, the spillover effect of margin trading system has attracted extensive attention. From the perspective of bond investors, this paper studies the effect of margin trading and securities lending on the credit spread in the secondary market of MTN(medium-term notes). It is found that listed companies’ margin trading and securities lending are significantly positively correlated with credit spreads, and securities lending has a greater effect. Credit spreads increase 0.26% for each 1% increase in relative financing balance, and 20.10% for each 1% increase in relative margin lending balance. Further study found that the change of financing balance was more significant in the AAA grade, 5-year medium-term notes issued by state-owned enterprises, while the change of margin balance was more significant in the non-AAA grade, 3-year medium-term notes issued by state-owned enterprise.The above results show that bond investors do care about the signals released by margin trading and securities lending.

Retail Investors’ Margin Trading in Korea: Current State, Characteristics and Implications

Retail Investors’ Margin Trading in Korea: Current State, Characteristics and Implications

Deregulation of Short Selling and Equity Financing Costs —A Quasi-natural Experiment Based on Margin Trading

The high cost of financing is one of the reasons that restrict the development of the real economy. The soundness and development of the capital market can help reduce the cost of corporate financing. Based on the quasi-natural experiment of the margin financing and short selling system, this paper takes A-share listed companies in Shanghai and Shenzhen stock exchanges from 2010 to 2020 as research samples, and uses a difference in difference model to study the impact and internal mechanism of relaxation of short selling on the cost of equity financing of enterprises. The research indicates that the reduction of short-selling control is significantly negatively related to the company's equity financing cost, and the relaxation of short selling can reduce the cost of equity financing by improving the company's transparency. Further research indicates that the relaxation of short selling restrictions has a more significant effect on reducing the cost of equity financing in private companies and companies with a high level of analyst coverage. This paper enriches the literature in related fields such as margin trading and short selling, equity financing cost, and also provides some theoretical references for government department to strengthen the supervision of financial markets and promote financial system reform.

Information Frictions and the Two Margins of Trade: Evidence from Slovenian Manufacturing

Information Frictions and the Two Margins of Trade: Evidence from Slovenian Manufacturing

Forecast of anaemia prevalence in the regions of Russia using the agent-based model

In the article development of the agent-based model of anemia prevalence in Russia is discussed. The structure of the model is presented, which includes agents-residents, food producers and sales agents. For each actor in the model, algorithms have been developed that determine their interactions. For food producers, their purchases, sales, production process and dynamics of investments in equipment are simulated. Simulation of sales agents includes the assortment formation and product prices, taking into account transport and trade margins. Households form their diet based on their income, composition, traditions and habits. The expected dynamics of anemia is modeled depending on the quality of the received food and the current stage of the disease. The article also discusses program realization and information support of the model, the user interface is presented. Three scenarios of the dynamics of the socio-economic environment of the model are formalized, taking into account epidemiological and external economic risks. A series of calculations was carried out to predict the dynamics of anemia prevalence under conditions of the developed scenarios. A program of subsidizing low-income families was proposed and its influence on availability of a balanced diet and anemia prevalence among Russian residents was studied.

Estimating the repercussions from China's export value‐added tax rebate policy*

AbstractOur study shows that China's export value‐added tax (VAT) rebate system is a major industrial policy that affects its exports. We use export data at the HS6 product level for a panel of 329 Chinese cities over the 2003–2012 period to assess how changes in the export VAT tax have affected China's export performance. We consider different trade margins in terms of volumes, prices, and the number of countries served. To counter endogeneity, we exploit variations in the expected impact of the export VAT rebates by trade regime, which come from an eligibility rule disqualifying certain export flows from the rebates. Our results suggest that a 1 percent decline in the export VAT tax leads to a 7.2 percent relative increase in eligible export values at the city level. This effect is due to an adjustment of quantities and the number of foreign markets served while the average unit values of exports remain unchanged.