Mixed Market Research Articles

Is the Fama French model robust in the Chinese stock market?

Many previous studies have analyzed the different stock return models in various segments of the Chinese stock market. This essay analyzes the Fama-French five factors and three factors model in the main board, the second board, and STAR market. It finds that the three-factor models are efficient in all three markets expect for the STAR market, while the five-factor model is inefficient in testing the second board market alone and overall efficient in testing the mixed market and the STAR market. Furthermore, it is also found that the MKT factors are the most significant contributors to the portfolio excess return in all six situations. The HML and SML factors also exhibit constant relations with the portfolio return. Besides, it is found that HML and SMB factors are not significantly correlated with the stock’s performance on the STAR market. Overall, the relative efficiency of Fama French's three and five-factor model in explaining these markets is proved. Investors can use these two models to analyze the stock return and earn profit in the next period, and policymakers can also employ this model to understand the market and decide suitable fiscal and monetary policies.

ANALYSIS OF UKRAINE’S COMPETITIVENESS: PROBLEMS AND PROSPECTS OF EUROPEAN INTEGRATION

The article analyzes the competitiveness of Ukraine, identifies problems and outlines the prospects and consequences of the country’s European integration aspirations. A retrospective review of the development of the country’s economic model was conducted in order to evaluate the effectiveness of the implementation of reforms and identify errors that affected the place and role of the domestic economy in the world markets of goods and capital. This made it possible to single out certain comparative characteristics with the main theories of international trade and international investment. It was noted that unsuccessful attempts to quickly transform from a command-administrative economy to a mixed market system led to a loss of industrial potential and, accordingly, negatively affected the structure of foreign trade relations and the investment climate, which in turn led to a drop in the level of competitiveness of Ukraine. Along with this, the analysis of the key indicators of socio-economic development indicates certain positive changes in the period 2002-2012, which was reflected in the dynamics of GDP growth, an increase in incoming investment flows, stabilization of inflation at the targeted level and overall improved welfare of society. However, the uncertainty and constant change of the vector of economic integration together with the change of power led to the deterioration of the state’s economic condition and made sustainable economic growth impossible. The period of revival of business and investment activity in the post-Covid 2021 year was replaced by a deep crisis with the beginning of the war. At the same time, the aspiration of our state to join the European community nevertheless gave a powerful impetus to the implementation and implementation of innovative reforms, which made it possible to achieve certain success in the direction of digitalization, infrastructure development, and further implementation of educational, medical, and social reforms even during the conduct of military operations. Currently, on the way to European integration, Ukraine is overcoming the difficult path of transforming its economic system to the requirements and values of the EU. Our country, together with the European Union, needs to solve the issues of labor migration and refugees, the introduction of a duty-free regime for domestic goods, the creation of a safe investment climate, etc. And there is not always unity in the choice of tools for solving these issues in the EU countries. Ukraine needs to use its advantages in logistics, geographical location, labor and natural resources, develop an industrial direction, introduce modern technologies, improve its energy independence and take an active part in integration processes. Finding compromises and political will allow Ukraine to successfully reform the socio-economic model and become a full member of the EU.

Equilibrium model for hospital competition with stochastic demands based on government subsidies in a mixed market

Equilibrium model for hospital competition with stochastic demands based on government subsidies in a mixed market

Designing professional services: Pricing and prioritization

We study the optimal design of a professional service in a mixed market of customers with heterogeneous skills and capabilities of using such service. Expert customers can avail of the service on their own, whereas amateur customers find it challenging to deploy the service and can only procure the service through an intermediary who resolves the technical issues. We develop a model that captures the essential trade‐offs in such settings: heterogeneity in customer expertise, decentralization between a service provider and intermediary, and congestion due to limited capacity. We analyze how customer expertise differences drive the equilibrium outcomes under various pricing and priority schemes. We find that a sufficient base of amateur customers allows expert customers to “free‐ride” under single pricing. Price discrimination can fully allay such free‐riding, but it may drive prices downward. Price discrimination also favors expert customers under the First‐Come‐First‐Served (FCFS) policy, but such preference is generally reversed under prioritization. Specifically, prioritizing amateur customers can bring revenue and welfare gains relative to the FCFS policy and a policy that prioritizes expert customers. Our results offer normative guidelines for managing professional services, clarifying regimes for price and priority discrimination, along with revenue and welfare implications.

Analysis of hourly price granularity implementation in the Brazilian deregulated electricity contracting environment

Brazil’s electricity market is the largest in Latin America and the ninth largest in the world. It has been implemented as a mixed market in which regulated and deregulated contracting environments coexist. The volume of transactions in the deregulated market has experienced steep growth over the last few years and is expected to surpass the regulated market. Different programs to diversify the country’s energy matrix have been devised, especially by integrating intermittent renewable sources to address the deregulated market expansion. Consequently, such an energy policy path has prompted the need to increase the granularity of the Brazilian deregulated market’s spot price, namely the Difference Settlement Price (DSP). The DSP had been weekly defined accounting for three loading levels and four submarkets, and, as of 2021, it has been hourly defined accounting for four submarkets; the weekly DSP is inefficient in actually signaling prices based on ex-ante marginal cost of operation of the interconnected Brazilian power system. Besides such granularity alteration, Brazil has also undergone a severe hydrological crisis in 2021 that led to significantly lower water inflows into major hydrographic watersheds and, as a result, most hydroelectric power plant reservoirs hit a 91-year low. The described scenario is relevant in utility policies and energy economics since it depicts a significant paradigm shift experience in such a large electricity market. This study presents the first hourly DSP behavior analysis since its implementation in the Brazilian electricity market and explores its statistical characteristics and relationships with exogenous variables throughout 2021. Additionally, we discuss the hourly DSP’s volatility observed in the year 2021 and how it has resulted in price spikes. At last, we compare the behavior of the Brazilian hourly DSP with the energy prices of five other countries’ electricity markets. Despite being a significant market improvement, the DSP granularity increase per se could not accurately represent the actual marginal cost of operation over the year 2021 since, besides instabilities observed in the hourly DSP, market intervention mechanisms had to be applied by Brazilian regulatory agencies to minimize the hydrological crisis’ impacts.

Can in-store recommendations for online-substitutive products integrate online and offline channels?

An increasing number of multichannel retailers have adopted an offline-to-online recommendation strategy (OORS) that provides information regarding products sold online to in-store shoppers via recommendation systems employing in-store technologies (e.g., in-store virtual shelves and smart fitting mirrors). We investigate the impact of an OORS on cross-channel integration for retailers mainly selling substitutable products via online and offline channels. Considering omnichannel shoppers (who strategically choose a channel for purchasing) and offline shoppers (who prefer to shop in store), pricing game models with and without an OORS are developed for a decentralized retailer operating offline and online channels as separate businesses. The results show that although an OORS enables the offline channel to cannibalize more omnichannel shoppers from the online channel, interestingly, it alleviates channel conflict, which is reflected in increased prices and shopping traffic in both online and offline channels, because an OORS drives more in-store customers who cannot find matched products to the online store than omnichannel shoppers who shift from online to offline. Thus, an OORS increases online and offline profits and creates a synergic effect for a retailer with a decentralized organization. Compared to multichannel centralization, an OORS can even generate a higher synergic effect, especially when the proportion of offline shoppers in the mixed market is high. Finally, an OORS always improves social welfare, but its impacts on consumer surplus vary. An OORS can be beneficial for customers in a centralized organization but detrimental in a decentralized organization.

The Determinants of Micro Finance Institutions’ Decision to Receive a Social Rating: An Institutional and Resource-Dependence Perspective

We examine the determinants of MFIs’ social rating decisions according to institutional and resource dependency pressure factors. We exploit a unique data set containing 221 MFIs resulting in 767-year observations, obtained from both mixed market and social rating agencies (Planet, MicroFinanza, and Microrate rating agencies). Our data was collected for both rated and non-rated MFIs between the years 2006 and 2018, in six major less-developed regions of the world. Our study contributes to the CSR literature in microfinance as the decision to be rated acts like a CSR signal. Our research shows that the tighter the rule of law the less inclined MFIs are to seek a rating. In addition, we borrow from the resource-dependence perspective to demonstrate that proxies for resource (in)dependence such as for-profit status, mature stage, and subsidization are negatively associated with the obtention of a social rating. Overall, in the less-developed regions of the world, when MFIs operate in a strongly regulated environment and have a strong position (financial and mission-wise), with respect to investors, they are less willing to obtain a social rating.

Comparing potential cost savings of energy quota trading and carbon emissions trading for China's industrial sectors

In response to the severity of its environmental problems, China is fully promoting the construction of a national energy quota trading (EQT) market and a national carbon emission trading scheme (ETS). However, there is currently a lack of studies comparing the cost savings of EQT and ETS from the perspective of different industries in different provinces under the same environmental regulation. To fill this gap, this paper first estimates the shadow price of energy and CO2 in 30 Chinese provinces' 38 industrial sectors using provincial-industrial level data from 2005 to 2016 based on the duality theory of non-radial directional distance function. Thus, at the methodological level, this study also overcomes the shortcomings of the DEA method used in most previous studies, that is, it is not appropriate for the cross-industry and cross-province heterogeneity characteristics of the research target. It then evaluates the cost savings of EQT and ETS by simulating actual trade scenarios. We find that the single EQT market obtains greater cost-saving benefits than the mixed market and the single ETS market with the same environmental target. We suggest that the energy consumption units should choose the trading market based on their energy-saving and emissions reduction costs, which is more conducive to achieving the set environmental goals and obtaining cost savings, taking into account different regional industry structures, natural resources, and environmental regulation intensity.

Nursery chains and takeovers

The early years sector, with its combination of schools-based provision and private, voluntary and independent settings, forms a very mixed market. In recent years, increasing numbers of privately run nurseries have been bought up by larger chains. Sue Cowley looks at the implications of this for staff pay and conditions, and potentially on sustainability in the sector.

Combined effect of the multichannel retailer’s price self-matching strategy and channel role

This paper considers a mixed market including a multichannel retailer and an online-only retailer. Using game-theoretic model, we investigate the combined effect of channel role and price self-matching strategy. Results show that the multichannel retailer is most likely to benefit from price self-matching when the two retailers have symmetrical channel roles, and price self-matching cannot benefit a multichannel retailer who is channel leader. This cautions that the multichannel retailer needs to be careful in his/her channel role when adopting price self-matching. Furthermore, when the multichannel retailer adopts price self-matching, the two retailers should raise online retail prices, which will dampen online competition and benefit the online-only retailer. Moreover, compared with the symmetric channel roles, when consumer’s product valuation is large or horizontal differentiation is small, the asymmetric channel roles enhance the strength of online competition dampening effect and the promotion effect of price self-matching on the online-only’s profit; when consumer’s product valuation is small or horizontal differentiation is large, however, the opposite appears. Interestingly, in the case without price self-matching, one retailer achieves the highest profit when he/she is channel follower, then when he/she is channel leader, and finally when the two retailers have the symmetric channel roles.

Alcohol and drinking within the lives of midlife women: A meta-study systematic review.

A range of societal changes have created positive and encouraging environments for women's alcohol use. Within this context, in Western countries there is evidence of rising rates of alcohol consumption and related harms among midlife and older women. It is timely and important to explore the role of alcohol in the lives of midlife women to better understand observed data trends and to develop cohort specific policy responses. Focussing on Western countries and those with similar mixed market systems for alcohol regulation, this review aimed to identify 1) how women at midlife make sense of and account for their consumption of alcohol; 2) factors that play a role; and 3) the trends in theoretical underpinnings of qualitative research that explores women's drinking at midlife. A meta-study approach was undertaken. The review process involved extracting and analysing the data findings of eligible research, as well as reviewing the contextual factors and theoretical framing that actively shape research and findings. Social meanings of alcohol were interwoven with alcohol's psycho-active qualities to create strong localised embodied experiences of pleasure, sociability, and respite from complicated lives and stressful circumstances in midlife women. Drinking was shaped by multiple and diverse aspects of social identity, such as sexuality, family status, membership of social and cultural groups, and associated responsibilities, underpinned by the social and material realities of their lives, societal and policy discourses around drinking, and how they physically experienced alcohol in the short and longer term. For harm reduction strategies to be successful, further research effort should be undertaken to understand alcohol's diverse meanings and functions in women's lives and the individual, material, and socio-cultural factors that feed into these understandings. As well as broad policies that reduce overall consumption and "de-normalise" drinking in society, policy-makers could usefully work with cohorts of women to develop interventions that address the functional role of alcohol in their lives, as well as policies that address permissive regulatory environments and the overall social and economic position of women.

Differential diffusion of pharmaceutical innovations in a mixed market middle - income economy

BackgroundPolicymakers are faced with the challenge of balancing patient’s access for effective and affordable medicines to sustain the rising healthcare costs. In a mixed healthcare market such as Malaysia, coverage decisions of new medicines are different: public funded health system has a formulary listing process whereas for private sector, which is a market-based economy, depends on patient’s willingness to pay and insurance coverage. There is little overlap between public and private healthcare service delivery with access to new innovative medicines, as differentiated by sources of funding. The objectives of this study were to examine the diffusion of New Chemical Entities (NCEs) into the public and private healthcare market between 2010 and 2014, and determine the factors explaining the diffusion.MethodsWe matched medicines from the product registration database by medicine formulation to medicines in IQVIA National Pharmaceutical Audit database for each year. The price per Defined Daily Dose (DDD), market concentration and generic utilization share variables were calculated. A panel fixed effect model was performed to measure diffusion of NCEs for each year and test possible determinants of diffusion of NCEs for overall market and sector specifics.ResultsThe utilization of NCEs was larger in the private sector compared to the public sector but the speed of diffusion over time was higher in the public sector. Price per DDD was negatively associated with diffusion of NCEs, while generic utilization share was significantly regressive in the public sector. Market concentration was negatively associated with utilization of NCEs, however result tends to be mixed according to sector and Anatomical Therapeutic Chemical (ATC) category.ConclusionsUnderstanding key aspects of sectoral variation in diffusion of NCEs are crucial to reduce the differences of access to new medicines within a country and ensure resources are used on cost effective treatments.

Corporate social responsibility, entry and optimal privatization in an international mixed market

We formulate a mixed oligopoly in which one public firm competes with two private firms: an established Corporate social responsibility (CSR) firm and a profit-maximizing entrant that could either be domestic or foreign-owned. We find that in an international market, with an increasing degree of CSR, the government might levy a higher tariff to restrict imports from the welfare viewpoint. Furthermore,a third firm entrant is going to increase welfare specially if the firm is domestic. Surprisingly, when the degree of CSR is in a certain range, privatization and tariff are always negatively correlated with CSR. Our findings suggest that differences in objectives between private firms may play an important role in government decisions on optimal privatization policies.

Dynamic decision making in a mixed market under cooperation: Towards sustainability

Sustainability goals are becoming a priority in many societies. An important element in this context is the success of environmentally friendly products. Hence, we consider a manufacturer-retailer vertical supply chain model, managing a green product and its conventional counterpart, designated by brown product. We analyze three kinds of dynamic market scenarios: no market leadership, the manufacturer as the market leader, and the retailer as the market leader. Under each scenario, we determine the equilibrium decisions for pricing and greening investments as well as their dependence on a cost-sharing proportion agreement between the firms. We find that generally both firms have similar pricing trends, where the gap between the two product prices increases with the share of cost carried by the retailer. Moreover, we analyze how these decisions affect the consumer surplus and the performance of the firms. The absence of a market leader leads to higher consumer surplus with the manufacturer investing more in greening. However, cost-sharing may fail if there is no market leader. The retailer has incentive to share the highest proportion of greening costs when it is the leader. When the manufacturer is the leader, the retailer may have incentive to change the cost-sharing proportion over time. Finally, we compare the greening level and learning trajectories for the different scenarios. We provide essential managerial insights on how decisions should be operated, enabling green products to successfully gain a stable market share.

The French Nitrogen Industry during the Interwar Period: The Ambiguous Relationship between the State and Manufacturers

Abstract At the end of the First World War, the French government seized the opportunity to acquire the chemical processes of the German firm BASF, including the Haber-Bosch process. This patent made it possible to synthesize nitrogen from the air and thus produce nitrogen fertilizers in large quantities. French industrialists, however, refused to acquire these patents, and to make up for this lack of private sector involvement, the French Parliament decided in 1924 to create a national plant (ONIA), which became the first state-owned plant to be exposed to market competition. The intention was for the ONIA to supply the army with nitric acid in times of war, and, in peacetime, to sell fertilizers at the lowest possible prices in order to curb the monopoly of the private industry cartel. The purpose of this article is therefore to study the establishment and organisation of the French market for nitrogen fertilisers during the inter-war period by raising a number of questions about the ambiguous and complex relations between the state and private industry in this strategic sector. Why was the state policy initiated with the ONIA not successful at first? From 1927-1928, once the ONIA was operational, why and how did the public and private players jointly organise the marketing of fertilisers even though their interests were partially divergent? From the economic crisis of the 1930s onwards, how did the regulation of this mixed market evolve and how were public/private tensions overcome? In the French case, why did French producers leave the international cartel very early on in favour of state protectionism? And finally, to what extent can it be said that this “managed economy” framework succeeded in satisfying all the players in the French nitrogen industry?

Information Distribution and Informed Trading in Mixed and Islamic Capital Markets

The correlation between volume and frequency with return volatility can explicate the information distribution process and informed traders' transaction behavior in a stock market. In this study, the Indonesian stock market represents the mixed market, while the Saudi Arabian stock market represents the Islamic market. We find that 94% and 96% of sharia-compliant stocks in Indonesia and Saudi Arabia follow the Mixture of Distribution Hypothesis (MDH). Consequently, we may conclude that sharia-compliant stocks in both markets are informationally efficient. However, we find that informed traders tend to behave differently in both markets. In the Indonesian market, informed traders exhibit competitive behavior in 95% of shariacompliant stocks and strategic transaction behavior in only 5% of the stocks. In contrast, in the Saudi Arabian market, we find that informed traders exhibit competitive behavior in only 38% of the stocks and strategic behavior in 62% of the stocks. The findings suggest that social and religious contexts may affect market participants' behavior.

Social and strategic innovation: extending the varieties of capitalism to asian countries

This article empirically analyzes how institutional context affects the nature of firms´ innovation—social and/or strategic—using the varieties of capitalism paradigm extended to include Asian economies. Because formal and informal institutional pressures shape the way firms behave in terms of risk-taking and opportunity-detection, it can be expected that institutional context influences the nature of innovation. An empirical analysis using a sample of 603 small- and medium-sized innovative enterprises is developed to provide a comprehensive view of how the institutional context in which a company operates determines the nature of firms´ innovation. A cross-country-cluster comparison is made using analysis of variance among Asian economies, coordinated market economies, liberal market economies, and mixed market economies. The results show that the high degree of public involvement and institutional support that characterize coordinated market economies and the normative pressures that characterize Asian economies fosters firms´ involvement with social innovation. These empirical findings support the theoretical arguments that point to institutional context as an important determinant of the nature of firms´ innovation.

К вопросу о продовольственной безопасности продуктов питания В России

Abstract. The purpose of the research is to study the tools necessary to improve the quality of natural and organic agricultural products, as well as to increase the volume of their receipts and sales in the Russian agro-industrial complex and retail chains. In the context of the current crisis and sanctions from the United States and a number of countries of the European Union the problem of food security in our country is of particular importance. One of the main tasks of agriculture is not only solving the problem of import substitution by increasing the production of essential products, but also improving their quality. The analysis of the materials made it possible to assess the current state of the food market in Russia. The state mechanism for regulating prices in the food market was analyzed. To solve this problem, it is proposed to use the positive experience of China, Western European countries and our country in different historical periods. Methods. The basic research methods of the posed problem applied in the work are comparison, deduction, modeling, historical and logical methods. The result of the research carried out in this article is an attempt to establish the reasons for the insufficiently developed and implemented subsidized mechanism of state financing in the agricultural sector. In the course of the research, the prerequisites and reasons for the current circumstances were considered and indicated. The scientific novelty is based on the authors’ conclusion of a scientifically grounded concept about the need to bring the branches of agriculture within the framework of a mixed market economy into the non-market sector. This, in turn, can provide an urgent need for self-sufficiency.

Indonesian mutual funds: performance determinants and interaction of macroeconomic factors

We examine the determinants of fund returns of equity, fixed income, mixed, and money market mutual funds in Indonesia. Our empirical findings suggest that previous fund performances are significant determinants of current fund performances. On the other hand, fund age, management fee, and management period of the investment manager are not significant determinants of fund performances. Fund size is a significant determinant of fund performances only for equity funds. Furthermore, introducing the interest rate as a moderator variable weakens the effect of fund size on fund returns only for equity funds and it weakens the effect of the exchange rate on fund performances for equity and money market funds. For fixed income and mixed funds, the moderator variable does not change the effects of fund size and the exchange rate on fund performances. Overall, the robustness tests using three partitions of fund performances, namely bottom 20%, middle 60%, and top 20%, confirm our main findings. An interesting result is that returns of middle performers of fixed income funds are more sensitive to the changes of determinants than those of bottom and top performers.

Hybrid Platform Model

We provide a canonical and tractable model of a trade platform enabling buyers and sellers to transact. The platform charges a percentage fee on third-party product sales and decides whether to be hybrid, like Amazon, by selling its own product. It thereby controls the number of differentiated products (variety) it hosts and their prices. Using the mixed market demand system, we capture interactions between monopolistically competitive sellers and a sizeable platform product. Using long-run aggregative games with free entry, we endogenize seller participation through an aggregate variable manipulated by the platform's fee. We show that a higher quality (or lower cost) of the platform's product increases its market share and the seller fee, and lowers consumer surplus. Banning hybrid mode benefits consumers. The hybrid platform might favor its product and debase third-party products if the own product advantage is sufficiently high. We also provide some tax policy implications.