Market Decline Research Articles

HACKED: Understanding the stock market response to cyberattacks

Increasing levels of digitisation make firms more susceptible to cyberattacks and privacy violations. In this paper, we quantify the impact of cybercrime on company stock returns using a large international sample. On the day after the cyber event, stock returns are found to decrease by -0.24%, but the effect reverses in about two weeks. The magnitude of the decrease in the stock market is greatest for companies that have experienced reoccurring events and for breaches deemed to be most severe. We show that the extent of the stock market decline cannot be explained by national institutional and macroeconomic factors, and is related to company-specific characteristics, including size, volatility, credit ranking and asset volatility. The empirical results highlight important policy and regulatory issues, not least the need for cyber risk disclosure requirements.

Powering Through the Turn: Finding Time for Concept Exploration Before Industry Stagnation

This study examines how the tension between exploration and exploitation affects early-stage development within the engineering teams of large corporations. Using survey data collected from over 900 system engineers and managers, it was observed that exploration decreased as an organization’s market growth declined, but dire market projections prompted a refocus on exploration. In addition, engineers routinely desire more concept exploration time than they perceive that they have available. The authors argue that engineering teams should more intentionally consider their innovation strategy, and that companies with stagnant market growth should invest in concept exploration before they get to a period of market decline.

Employing behavioural portfolio theory for sustainable investment: Examining drawdown risks and ESG factors

ABSTRACT This study uses behavioural portfolio theory (BPT) within the Markowitz Portfolio Theory framework to enhance portfolio management by focusing on sustainability and risk mitigation during market downturns. It selects portfolios to hedge against market lows using Conditional Drawdown at Risk (CDaR) and Expected Regret of Drawdown (ERoD). These measures help choose securities that perform well during a market decline. This study applies drawdown-based risk metrics to assist institutional investors and fiduciaries in making informed investment and fund management decisions. By merging BPT with Markowitz’s mean–variance framework, selected investments are maintained above a safety threshold, contributing to the portfolio’s overall quality and sustainability. Additionally, by incorporating an Environmental, Social, and Governance (ESG) preference function, the findings suggest that BPT built portfolios meet traditional performance standards and align with socially responsible investment principles, thereby offering higher utility and alignment with investor values focused on sustainable investing.

Research on the Dynamic Interrelationship between Economic Policy Uncertainty and Stock Market Returns

This paper employs the Panel Vector Autoregression (PVAR) method to examine the dynamic interrelationship between Economic Policy Uncertainty (EPU) and stock market returns. The existing literature has not reached a consensus on the relationship between EPU and stock market returns, and there is a lack of comparative analysis of domestic and foreign EPU. Therefore, this paper is the first to incorporate domestic and foreign EPU, stock market returns, and output into a unified framework, considering the dual impact of domestic and foreign EPU shocks. Additionally, the generalizability of the results is ensured by including a large sample of nine emerging and eleven advanced economies. The main findings are as follows: First, a positive shock to foreign EPU leads to a decline in stock market returns and is stronger than the impact of domestic EPU. Second, a positive shock to stock market returns reduces both domestic and foreign EPU. Third, a rise in stock market returns promotes domestic output growth, while increases in domestic and foreign EPU suppress domestic output growth. Finally, the United States is a net exporter of EPU rather than a net importer.

The impact of collateral-based monetary policy on green financing cost: an analysis of the People's Bank of China’s approach

ABSTRACT This paper examines the effects of the collateral-based monetary policy, implemented by the People’s Bank of China, on green financing costs. Employing a Difference-in-Differences (DID) method to examine credit spreads of financial bond in primary and secondary markets from 2017 to 2019, our findings highlight a significant decrease of 26 basis points (bps) in the financing costs of green financial bonds in the primary market, with a 12-bps decline in the secondary market post-policy. Our study underscores the crucial role of implicit credit enhancement provided by the People’s Bank of China's collateral endorsement. Interestingly, the liquidity provision mechanism, where investors pay premiums to secure liquidity support, does not find empirical backing in the specific context of China's bond market. These findings illuminate the effectiveness of collateral-based monetary policies in reducing green financing costs, offering valuable insights for using collateral strategies to green monetary policies.

Animation Production Contributes to the Innovation and Development of Intangible Oil Paper Umbrella Culture

This study explores using animation to enhance the cultural promotion and innovation of intangible heritage oil paper umbrellas. These umbrellas, rich in history and craftsmanship, face modern challenges like market decline and skill inheritance issues. The research seeks to offer fresh insights and strategies for cultural preservation and innovation through animation. It starts by examining the cultural significance and current challenges of oil paper umbrellas, such as waning market interest and a lack of youth engagement with tradition. The study then discusses the role of animation in promoting intangible culture, highlighting its potential to raise awareness, engage the youth, and showcase traditional Chinese charm. The research suggests innovative promotional ideas like animation series, interactive platforms, and cultural events, focusing on multimedia, storytelling, and technology. It also proposes new concepts like cultural element extraction, cross-industry collaboration, and digital presentation to highlight the umbrella's unique appeal and facilitate its promotion. The conclusion emphasizes that animation is a powerful tool for cultural promotion and preservation, with the potential to revitalize the oil paper umbrella culture in the modern era. It anticipates future developments in market reach, education, cultural exchange, and social engagement, stressing the need for ongoing innovation in cultural inheritance. Overall, the study aims to provide a theoretical foundation and practical guidance for the preservation and innovative development of the oil paper umbrella culture, fostering integration with modern society and promoting sustainable cultural growth.

Gold characteristics as safe haven and assets diversification for Sharia stocks in Indonesia

Purpose This study aims to determine the role of gold as a safe haven, hedge and asset diversification for Shariah stock in conditions of extreme stock market declines. Design/methodology/approach Quantitative approach is used by applying the threshold generalized autoregressive conditional heteroskedasticity (TGARCH) model to capture bad or good news in the market condition and quantile regression method to obtain the extreme values of stock returns in several market conditions. The data used were the daily closing price of gold and the Jakarta Islamic Index from January 2011 to October 2022. Findings The average conditions show gold does not have a hedge property and only acts as an asset diversification. Second, gold has a substantial, safe haven property in every economic condition. However, the safe-haven property of gold seemed to weaken during the most extreme stock market decline. Thus, although gold appears as a safe haven and asset diversification, it remains a risky investment and only provides a minor role in the face of the extreme stock market period. Practical implications This research provides a discourse and literature for Islamic investors and investor managers to choose the right investment instrument in various economic conditions where gold has a function as diversification and safe haven in their asset portfolio under any other asset portfolio conditions which is also in line with modern portfolio theory. For policymakers, the study can be used as material for consideration in making policies related to the accessibility of gold as an investment instrument. Originality/value This study presents the originality by using the price of Antam gold as a proxy for gold investment during the latest research year data and focusing on case studies in Islamic capital market in Indonesia. Moreover, this research provides quantile regression that sharply discussion in various economics condition.

Economic Feasibility Analysis of Investment in International Circuit Development in the Mandalika Special Economic Zone (SEZ)

The Mandalika Special Economic Zone (SEZ) has been planned from the start to build facilities and infrastructure by creating a management concept set out in the main plan for the area with the theme of eco green tourism. One of the developments that has been developed in the Mandalika SEZ is the Mandalika International Circuit. The construction of the Mandalika Circuit certainly provides many positive aspects, especially in the local economic sector. The impact of Covid-19 in the Mandalika SEZ could trigger a decline in the tourist market. The circuit as a symbol of the Mandalika SEZ was also affected by Covid-19, this resulted in a reduction in visitors to events at the Mandalika International Circuit. So an in-depth analysis is needed regarding the changes that have occurred as a result of Covid-19, especially in the financial aspect. For feasibility from the financial aspect, cash flow calculations are used with investment feasibility parameters, namely; NPV (Net Present Value), BCR (Benefit Cost Ratio), IRR (Internal Rate of Return), and PP (Payback Period). From the analysis of the financial aspects, the NVP value was obtained with an interest rate of 8.75% per year, in the initial planning phase the value was obtained at IDR 202,628,841,832,- in 2035, then during the operational phase the NVP result was IDR 14,497,533,652,- in 2041, and the NPV multiplier effect is IDR 552,401,765,515 in 2041. The BCR value in the initial planning phase is 1.112 in 2035. During the operational phase the BCR value is 1.008 and in the phase due to the impact of the multiplier effect it is obtained The BCR value is 1.304 in 2041. The IRR value in the initial planning phase was 13.96% in 2035. In the operational phase the IRR was 12.56% and the IRR due to the impact of the multiplier effect was 14.43% in 2041 . The PP value for the initial planning phase is obtained over 8 years. Meanwhile, in the operational phase, PP was obtained for 11 years and PP due to the impact of the multiplier effect was obtained for 9 years. The Mandalika International Circuit project was declared feasible based on analysis data that had been carried out in the operational phase and due to the impact of the multiplier effect, even though it took longer than the initial planning phase.

Is democracy costly? The effect of political turmoil on Kuwait’s stock market

This study is the first to analyze the impact of domestic political unrest on Kuwait’s stock market. Our data indicates a daily market decline of 0.16 percent during periods when the parliament is suspended. This translates to a 7.1 percent loss in the value of the Kuwait Stock Exchange for each period of suspension. Our findings suggest that Kuwait, despite having a more democratic political system, experiences greater economic instability than Saudi Arabia. This research highlights the nuanced relationship between the political structure and economic performance, particularly in emerging markets, challenging the notion that more democracy invariably leads to better economic outcomes.

An Investigation into the Influence of E-commerce Platforms on Local Retailers: A Case Study of Kollam District

The impact of the Internet and e-commerce on traditional retailing has been a topic of extensive debate, with divergent views ranging from apocalyptic predictions of the demise of physical retail to assertions of minimal impact on traditional retailing. Despite the exaggerated hype, occasional high-profile failures, and the multitude of conflicting perspectives, e-commerce processes offer the potential for a profound reevaluation of retail operations and retailer behavior. Indeed, the advent of e-commerce necessitates a reassessment of existing retail practices and cost structures in response to the influx of new technologies and evolving retail structures. While the e-commerce market continues to expand rapidly, it is important to note that this growth does not necessarily translate to a significant decline in the traditional retail market. Shopping malls are not shuttering at an alarming rate, nor are the retail outlets of beloved brands disappearing due to online competition. However, there is undeniably a paradigm shift underway, with consumers increasingly turning to online platforms for their shopping needs. This shift presents a unique challenge for private sector employers in the retail industry, who must navigate the changing landscape and adapt their strategies to remain competitive. While online shopping offers unparalleled convenience and accessibility, traditional retailers must leverage their strengths in areas such as personalized customer service, immersive shopping experiences, and community engagement to differentiate themselves in an increasingly crowded marketplace. As e-commerce continues to reshape the retail landscape, it is imperative for retailers to embrace innovation, invest in digital capabilities, and explore new business models to thrive in this evolving environment. By understanding and harnessing the potential of e-commerce technologies, retailers can not only survive but also thrive in the dynamic and interconnected world of modern retailing.

Роль цифровых продуктов в развитии предпринимательства отечественного ретейла

The relevance of the research topic is due to the decline in the retail market, the development of digitalization of the economy and the steadily growing e-commerce market in Russia, which confirms the need to introduce digital products in retail. The purpose of the article is to determine the role of digital products in the development of Russian retail trade. Achieving the goal is determined by solving the following tasks: develop a classification system for digital products, prepare an analysis of the categories of digital products in retail, present the author’s definition of a digital product. The study analyzes industry development trends in the medium term. An important aspect of the study is the analysis of digital products necessary for integration into retail, based on the developed classification taking into account industry trends. The scientific novelty of the work lies in the development of: the author’s definition of a digital product, in the classification system of digital products, which contributes to the understanding of the role of digital products in modern retail trade and represents the theoretical value of the study. Consequently, determine the need for conducting further research aimed at enhancing the effectiveness of product management in real market conditions.

Hedging in the Stock Market: Is the Colored Coin Better than the Physically-Backed Diamond Index?

The present paper examines the potential utilization of diamond-connected cryptocurrencies as one novel means to acquire long or short positions in tangible diamonds. We evaluate the equity risk hedging capability of two popular colored coins associated with diamonds, namely PinkCoin and CaratCoin. PinkCoin is chosen over CaratCoin for further analysis due to its extensive transaction data, allowing for a comparison with a benchmark diamond price aggregate. Our results suggest incorporating such tokens in portfolios enables protection against swings in the equity market, particularly during periods of market decline. Moreover, these assets have the attribute of augmenting portfolio diversification within a conventional mean-variance frontier framework. The reconciliation of colored coins’ accessibility and price fluctuations with the safe-haven characteristic of diamonds has resulted in unique diversification benefits comparable to those associated with trading natural gemstones. Although the conclusion above holds significant appeal for investors who favor the inclusion of diamonds in their investment portfolios, it harbors concerns regarding liquidity and the assurance of genuineness.

Real estate up to the mark: review and analysis of the real estate market in some Gulf countries

The purchase of real estate by foreigners and its full ownership in the Gulf countries has become feasible only recently. The diversification of the economies of oil exporting countries is forcing them to strengthen the role of non–oil sectors, in particular the real estate sector.A sharp increase in demand for real estate occurred, including two years ago, with the arrival of wealthy Russians on the UAE market, who decided to minimize the risks to their finances by investing in real estate in the Emirates.At the same time, despite the opening windows of opportunity for foreign investors, according to some experts, the UAE market may be overheated and a bubble, characteristic of fast-growing markets, will form, the further development of which may lead to a market decline.

Asymmetry risk and herding behavior: a quantile regression study of the Egyptian mutual funds

PurposeThis paper deeply investigates the herd behavior of the Egyptian mutual funds under changing and different conditions of the market pre- and post-events and compares the impact of asymmetric risk conditions on the herding behavior of the Egyptian mutual funds in both up and down markets.Design/methodology/approachWe test for the existence of herding for the whole period from 2003 to 2022, as well as for the pre-and post-different Egyptian uprising periods. We employ two well-known models, namely the cross-sectional standard deviation (CSSD) and cross-sectional absolute deviation (CSAD) models. Additionally, we use the quantile regression approach.FindingsWe find that the behavior of mutual funds does not change following the different political and social events. For the whole period, we find evidence of herding behavior using only the model of CSAD in down-market conditions. We generalize our finding to be evidence of the existence herding behavior in different quantiles, under only the down market in specific points’ pre, post or both given events throughout the whole series. Conversely, during the upper market, we show a full absence of herding behavior considering all different quantiles. When the market is down, managers are afraid of the condition of uncertainty, neglecting their own private information, avoid acting independently and consequently, following other mutual funds. When the market is up, managers become rational and act fully independent.Research limitations/implicationsFuture research should delve deeper into the drivers of herding behavior, assess its longer-term effects, develop risk management strategies and consider regulatory measures to mitigate the potential negative impact on mutual fund performance and investor outcomes.Practical implicationsThe study reveals that the behavior of mutual funds remains consistent despite various political and social events, suggesting a degree of resilience in their investment strategies. The research uncovers evidence of herding behavior in both high and low quantiles, but exclusively in down markets. In such conditions of market decline, fund managers appear to forsake their private information, exhibiting a tendency to follow the crowd rather than acting independently.Social implicationsThe study reveals that the behavior of mutual funds remains consistent despite various political and social events, suggesting a degree of resilience in their investment strategies. The research uncovers evidence of herding behavior in both high and low quantiles, but exclusively in down markets. In such conditions of market decline, fund managers appear to forsake their private information, exhibiting a tendency to follow the crowd rather than acting independently. Future research should delve deeper into the drivers of herding behavior, assess its longer-term effects, develop risk management strategies and consider regulatory measures to mitigate the potential negative impact on mutual fund performance and investor outcomes.Originality/valueThe paper investigates the herd behavior of the Egyptian mutual funds under asymmetric risk conditions, the study follows the spectrum of the herding behavior analysis and Egyptian mutual funds, extending the research with imperial analysis of market conditions pre- and post-events including currency floating, COVID-19 and political elections. The study gives substantial recommendations for policymakers and investors in emerging markets mutual funds.

THE IMPACT OF THE COVID-19 PANDEMIC ON THE STOCK PRICES OF MANUFACTURING COMPANIES ON THE INDONESIA STOCK EXCHANGE

The coronavirus, or COVID-19, is caused by the SARS-CoV-2 virus, first discovered in China in late 2019 and as of June 2021. Since then, the virus has spread worldwide. Indonesia has reported more than 31,000 cases of COVID-19 (Gugus Tugas Percepatan Penanganan COVID-19, 2020), making it the second-highest country in ASEAN, according to CNN Indonesia (2022). The global tally has surpassed 6.7 million cases, with over 395,000 fatalities. This pandemic has not only affected the health sector but has also impacted various other economic sectors, including the stock market. Developing countries like Indonesia have felt the repercussions, evident in the movements of the Composite Stock Price Index (IHSG). Studying the IHSG's trends before and during the COVID-19 pandemic is crucial as a guide for governments and companies in managing foreign fund flows, maintaining index stability, and preserving economic value (Nurmasari, 2020). In this context, the Indonesia Stock Exchange (PT. Bursa Efek Indonesia) and the Financial Services Authority (Otoritas Jasa Keuangan or OJK) have introduced new policies to prevent a decline in the capital market caused by Covid-19. The decision by the Indonesia Stock Exchange states that these measures are taken to reduce the spread of the virus.

Time Information Money and Energy (T.I.M.E.) Strategy: A Case Study of Energet East Africa Limited

Energet East Africa Limited (EEAL), established in 1967, has built a strong presence in the East African market with its diverse product lineup, including batteries, lighting products, and household items. Despite its iconic status, EEAL faces challenges such as market decline, counterfeit products, and stiff competition. To address these issues, EEAL must adopt the TIME (Time, Information, Money, Energy) strategy. This strategy focuses on efficient time management, accurate information utilization, strategic financial allocation, and sustainable energy management. By prioritizing tasks, leveraging market research, optimizing financial resources, and adopting energy-efficient practices, EEAL aims to streamline operations and enhance product quality. The strategy includes internal actions and external advocacy, such as enforcing stringent laws, educating customers, and diversifying into new product lines like car batteries. Objectives include increasing market share, enhancing product innovation, strengthening brand loyalty, expanding regional presence, and implementing sustainability initiatives. EEAL will use marketing approaches like social media campaigns, advertising, public relations, personal selling, and digital marketing. The total budget for the TIME strategy is $4 million. Implementation will be monitored through a comprehensive Monitoring and Evaluation (M&E) plan involving data collection, stakeholder engagement, and continuous improvement. The TIME strategy aims to optimize resources, drive innovation, and forge stronger consumer connections for sustainable growth and profitability.

Professional financial advice and investor behavior during the COVID‐19 pandemic

AbstractEmployees are commonly defaulted into either a homogeneous passive investment such as a target‐date fund, or into a managed account that offers personalization and access to an advisor. Higher performance among investors in target‐date funds suggests a possible behavioral benefit of a passive default that requires no active monitoring by investors. Access to a human advisor and an asset allocation matched to employee risk preferences can also help investors avoid trading after a market decline. This paper explores the relationship between trading activity and advice‐seeking behavior among 5 million US DC participants during the COVID‐19 pandemic, comparing self‐directors and target‐date fund investors to those using managed accounts service. We find participants who use target‐date funds are less likely to phone during a market crash. Participants in managed accounts are the least likely to trade after seeking advice. These findings are consistent with the hypothesis that passive default can improve outcomes where active choice can harm outcomes, and personalized defaults with access to advice can help participants avoid investment mistakes.

Comparative Analysis of the Real Estate Market in Different Countries

As a matter of fact, real estate industry has always been an important market that countries attach importance to. In recent years, the whole world seems to be facing a decline in the real estate market, especially in Asia including China. In reality, the globalization effect is not so strong for the real estate market. With this in mind, this study will compare the situation of the real estate industry (sales, house prices, etc.) in China, the United States and Japan in the past few years. Based on the analysis and evaluations, this research finally analyses whether the real estate market is globalized. Subsequently, this paper will analyze the similarities and differences of the development trends of the real estate market in different countries in recent years. According to the analysis, relative suggestions will be put forward based on the estimations. Overall, these results shed light on guiding further exploration of real estate market analysis in different regions.

Impacts of COVID-19 on Global Financial Market

Inflation and volatility have reached previously unheard-of heights as a result of the COVID-19 pandemic's significant market disruptions. The purpose of this paper is to examine the pandemic's short- and long-term effects on financial markets while taking into account how these effects vary across nations and geographical areas. Investors, businesses, and governments around the world have faced enormous challenges as a result of the initial stock market decline in February and March 2020 as well as the ongoing economic volatility and unpredictability.

Analysis of Agropreneurship Potential in the Middle of the COVID-19 Pandemic in Kupang City

This study examines agropreneurship in Kupang City and adjacent areas during the COVID-19 pandemic. The author uses qualitative descriptive methodologies to observe, interview, and document ten local agropreneurs. Newspaper, social media, and YouTube data supplemented the investigation. The results demonstrate that agropreneurs have product quality, reliable output, experience and love of farming, natural resource potential, and commercial and agricultural infrastructure. Agropreneurs benefit from rising demand for fresh veggies, close marketing networks, and reliable business even in times of crisis. However, this sector faces several weaknesses and threats, including inadequate farming equipment, limited capital, a lack of guidance for agropreneurs, limited land, and limited market information, as well as a lack of supporting institutions, high costs, competition, and PSBB-induced market decline. This research helps agropreneurs during crises like the COVID-19 pandemic understand entrepreneurship in Kupang City and the surrounding area. Results may vary by location and circumstance.