Net Buyers Research Articles

Assessing Market Participation of Smallholder Cassava Farmers in Sekyere Central District of Ghana Using Vector Generalized Additive Ordered Models

Smallholder farmers theoretically produce and market their output to meet livelihood needs of the family under given set of resource constraints. In spite of numerous policy efforts to ensure that smallholder farmers in Ghana and rural districts in particular, exploit the economic potential of cassava production, many of them continue to produce for subsistence with limited participation in the markets. To assess and explain the levels at which smallholder cassava farmers participate in markets, the study applied the partial proportional odds model in the framework of Vector Generalized Additive model (VGAM), which comprehensively addresses conceptual, modelling and interpretational complexities implied by market participation (MP) theory. Data for the study were collected from 365 cassava farmers in Sekyere Central (SC) district of Ashanti region, Ghana. The results showed that only 32% of the farmers participated in the markets as Net sellers, while 45% and 23% participated as Autarkic producers and Net buyers respectively. The econometrics analysis revealed that household size, access to market information, age, education, market access, membership to famer or community organisation, off-farm income, farm income, livestock holdings, cassava output and cassava being cultivated as major crop, appeared statistically significant in explaining MP decisions. Five variables, namely income, livestock, produce, access to market information and cassava as major produce, failed the proportional odds assumption and entered the model unconstrained, producing regime specific estimates. These results are indicative of how conditional, on a given regime, farmers respond to changes in the factors that affect their MP decisions, in terms of intensity and direction. Farm level policies, that target cassava farm households’ participation in markets should consider regime specific strategies.

The dark side of “flight-to-safety”: Evidence from macroeconomic tail risk beta

This study examines the impact of “flight-to-safety” (FTS) on price efficiency in the stock market, where FTS is driven by investors’ demand to hedge against macroeconomic tail risk (MTR). Stocks with higher MTR beta exhibit greater returns at higher MTR levels, suggesting a stronger capacity to hedge against MTR. We find that stocks with higher MTR beta are associated with lower price efficiency, and this negative effect intensifies with increased economic policy uncertainty. By examining the mechanism, we find that investors, particularly institutional investors, favor stocks with higher MTR beta, resulting in excessive net buying pressure and liquidity constraints. This overenthusiasm for safe-haven assets hinders the incorporation of information into stock prices, thereby reducing price efficiency.

Foreign trade and China’s yield curve during the COVID-19 pandemic: An analysis based on an extended arbitrage-free Nelson–Siegel model

We propose a general extension of the arbitrage-free Nelson–Siegel (AFNS) model by incorporating exogenous factors into the unspanned AFNS model. Regarding the number of people newly diagnosed with COVID-19 as an exogenous shock and net foreign purchases of treasury bonds of different maturities as unspanned factors, we study the impacts of the COVID-19 pandemic and the trading behavior of foreign investors on the yield curve in China. Our empirical results show that the COVID-19 pandemic significantly increases net foreign purchases of short-to-medium-term treasury bonds while significantly reducing the long-term treasury yield. Net foreign purchases of treasury bonds of different maturities cause large shifts with different shapes in the yield curve and have different effects on the excess returns of bonds of different maturities. This paper provides an important reference for risk management, investment decision-making and risk assessment of China’s financial opening policy for its treasury bond market.

The role of the net purchase of stocks by foreign investors in boosting stock returns: Evidence from the Indonesian stock market

Low reporting quality, as demonstrated by lower earnings informativeness, can exacerbate the information asymmetry gap, particularly in emerging markets. Although recent research shows that aggregate earnings can predict future economic growth, accruals, an important earnings component, are more likely to be manipulated in less sophisticated markets. Using data from Indonesia, we examine the impact of foreign stock investors' activities and accruals on stock returns. Our findings show that foreign stock investors' optimism, as measured by their net purchases of stocks, leads to higher excess returns. Foreign investors improve the quality of financial information. They provide benefits through two channels. First, foreign investors’ trading value significantly impacts stock prices in a thin market. Second, net stock purchases by foreign investors can help reduce information asymmetry. Our results contribute to the investment strategy by examining the relationship between sentiment generated by foreign investors and stock returns.

코로나 19 이후 개인투자자의 투자패턴에 대한 연구

Purpose – This research investigates the trading patterns of individual investors participating in the KOSPI stock market during and after the COVID-19 Pandemic, thereby explaining the indisputably low performance compared with institutional and foreign investors. Design/Methodology/Approach – Daily KOSPI stock market data was used, and the data period ranges from 2018 to 2023. The total period is divided into 12 sub-periods. For each sub-period, 25 stock-groups were generated by the magnitude of net purchases of individual investors at 4% intervals. Periodic information on returns, volatilities, and the net purchases of institutional and foreign investors were also utilized in the analysis. Findings – The sub-period analysis shows that the ratio of individual investors’ net purchases was negatively correlated with periodic cumulated returns, and the ratio of institutional and foreign investors’ net purchases with a strong statistical significance. The total period analysis also confirms the negative relationship between the ratio of individual investors’ net purchases and periodic cumulative returns, and shows a positive relationship between the ratio of individual investors’ net purchases and the change in volatilities. It was also revealed that the low performance of individual investors results from the choice of transaction timing, not from the choice of stocks. Research Implications – Empirical results imply that individual investors need to be cautious in determining the timing of transactions, thus utilizing the negative relation between the ratio of individual investors’ net purchases and the ratio of institutional and foreign investors’ net purchases merits consideration to enhance the profitability of individual investor portfolios.

Giao dịch của nhà đầu tư nước ngoài và giá trị doanh nghiệp

This study aims to investigate the effect of foreign trading on firm value, in terms of Tobin’s Q. Using the sample of Vietnamese listed firms over the 2010 – 2021 period and the Generalized Least Squares (GLS), the regression results show that the increase in foreign trading is positively associated with the increase in firm value. Specifically, the higher net traded value of foreigner the higher firm value is. In addition, the increase in net buy value also enhances firm value.

Impact of the COVID-19 Market Turmoil on Investor Behavior: A Panel VAR Study of Bank Stocks in Borsa Istanbul

Assuming that investors can be foreign or local, do high-frequency trading (HFT) or not, and submit orders through a bank-owned or non-bank-owned broker, we associated trades to various investors. Then, building a panel vector autoregressive model, we analyzed the dynamic relation of these investors with returns and among each other before and during the COVID-19 market crash. Results show that investor groups have influence on each other. Their net purchases also interact with returns. Moreover, during the turmoil caused by the pandemic, except foreign investors not involved in HFT, the response of any investor group (retail/institutional, domestic investors doing HFT and those not doing HFT, and foreign investors doing HFT) significantly altered. This shows that the interrelation among investor groups is dynamic and sensitive to market conditions.

Does Absence of Insider Trades Before Seasoned Equity Offerings Provide Information to the Market?

This study analyzes the interaction effect of short and long-run performance and insider trading with 1,099 seasoned equity offerings(SEOs) announced between 2004 and 2020. The major results of this study are as follows. First, insiders are net sellers prior to SEOs and the relationship between insider’s net purchase ratio and announcement effects is significantly positive. Second, the positive relationship holds only for net sell group, not for net buy group. Third, compared to firms in net sell group and net buy group, those in no trade group are marginal firms with worse operating performance, higher probability of delisting, smaller size, and lower return before SEOs, and lower ownership by largest shareholders. Fourth, regression analysis shows that announcement effect and long-run performance of no trade group is significantly more negative than net sell group and net buy group. To summarize, “dog that did not bark” effect exists in insider trading before SEOs and the absence of insider trades provide valuable information to the market.

Macroeconomic Fundamentals and the Volatility of Foreign Investors’ Net Purchase in Korean Stock Market

We employ the GARCH-MIDAS model to examine whether low-frequency macroeconomic variables help to explain the high-frequency volatility of the foreign investors’ net purchase in Korean stock market. The estimation results show that business cycle expansion along with high production growth, high inflation and low unemployment rate predicts high volatility in the near future. Higher interest rate and lower money growth are also likely to lead to higher volatility of foreign investors’ net purchase. We also find that domestic macroeconomic variables, relative to the US variables, have a stronger correlation with the future volatility of foreign investors’ net purchase.

M&A performance commitments and insider trading: ‘Listen to their words’ or ‘watch their actions’?

Whether performance commitment will become a tool for insiders to pursue self-interest through cashing out at a high price is an important issue worthy of research. While academics generally agree that performance commitments bring positive synergies to both sides of M&A, some scholars have begun to focus on the reasons and economic consequences behind the failure of performance commitments recently. Using data from 850 A-share listed firms in China over the period from 2008 to 2019, we examine the relationship between performance commitments and insider trading by the acquirer. The results show that the greater the degree of performance commitments, the larger the scale of stock sales by the acquirer's executives and the smaller the scale of their net stock purchases after the announcement of M&A, which exhibits heterogeneity across different corporate property rights and performance commitment characteristics. The above findings suggest that high performance commitment is a tool for insiders to “speculation”. This paper innovatively reveals the self-interested motives and negative economic consequences of signing high performance commitments from the view of insider trading, and it provides a new perspective for investors to recognize the investment risks.

Macroeconomic news and sovereign interest rate spreads before and during quantitative easing

ABSTRACT This paper studies how macroeconomic news affected the spreads of Italian sovereign bonds before and during the quantitative easing by the European Central Bank. Daily changes in the bond spreads are regressed on macroeconomic news shocks, where the news shocks are computed as the difference between the published data and the preceding private-sector forecasts. The analysis shows that macroeconomic news shocks had economically and statistically significant effects on Italian bond spreads in 2012–2014 before quantitative easing, while the effects were negligible afterwards although with a partial exception of a period in 2019 when the net asset purchases were paused.

Asset purchases and sovereign bond spreads in the euro area during the pandemic

We analyse the impact of ECB asset purchases on sovereign bond spreads during the Covid-19 pandemic. Using an enhanced event study design, we trace the impact of asset purchases over time, distinguishing between announcements, expectations, and implementation effects. The analysis draws on a new granular cross-country dataset of the ECB’s asset purchases and market expectations. We find large announcement effects, particularly for countries with lower sovereign credit ratings. Expectations about the final size of ECB asset purchases (‘the stock’) and actually implemented net purchases (‘the flows’) affected sovereign spreads at the time of severe market stress with significant cross-country variations. Overall, the ECB’s asset purchases were highly effective in warding off risks of financial fragmentation in the euro area during the pandemic.

Analisis Harga Pokok Penjualan Dan Laba : Studi Kasus Di UD Han Petshop Lamongan Tahun 2023

This research aims to analyze the calculation of cost of goods sold and profit determination at UD Han Petshop Lamongan. The approach used in this research is a case study in accordance with the problem formulation and research objectives. The data collection techniques used were observation, interviews and documentation. The data analysis techniques in this research are data collection, data reduction, data presentation, and drawing conclusions, using data validity techniques used, namely source triangulation and method triangulation. The results of this research show that UD Han Petshop Lamongan in calculating the cost of goods sold has complied with the calculation procedure by entering initial inventory data plus net purchases then minus ending inventory. In determining profit, the company has included all the data required in the profit and loss financial report. The data used in determining net profit before tax is net sales minus the cost of goods sold and operating costs.

Optimization of long-lasting insecticidal bed nets for resistance management: a modelling study and user-friendly app

BackgroundUp until the present, pyrethroid-treated bed nets have been a key tool for vector control in the fight against malaria. A global system that sets standards and facilitates procurement has successfully driven down the price of these bed nets to enable more of them to be distributed. As a result of their mass rollout, malaria cases have been significantly reduced, but pyrethroid resistance is now widespread. Going forward, new insecticides have been and continue to be developed for use on bed nets, but it is unclear how to best deploy them for maximum impact.MethodsHere, an app for the optimization of bed nets based on their insecticide loading concentration and deployment lifespan is presented. Underlying the app are simple models that incorporate the chemical and physical properties of bed nets, and the genetic and ecological properties of resistance evolution in mosquitoes. Where possible, default parameter values are fitted from experimental data. The app numerically searches across a massive number of these simple models with variable loading and lifespan to find their optima under different criteria that constrain the options for vector control.ResultsThe app is not intended to provide a definite answer about the best bed net design, but allows for the quantative exploration of trade-offs and constraints under different conditions. Here, results for the deployment of a new insecticide are explored under default parameter values across public health budgets for the purchase of bed nets. Optimization can lead to substantial gains in the average control of the mosquito population, and these gains are comparatively greater with lower budgets. Whilst optimizing a bed net within the constraints of the incentives of the existing system of standards and procurement leads to substantially greater control than not optimizing the bed net, optimizing the bed net without constraints leads to yet substantially greater control. The most important factor in this optimization is coverage, which depends on the price per bed net. With this in mind, it is unsurprising that the optimization for plausible budgets suggests that a pyrethroid would be the preferred partner for a new insecticide under current constraints because it is cost-effective in the balance of being less expensive than the new insecticide but also less effective due to pre-existing resistance. Surprisingly, a pyrethroid is shown to be an effective partner for a new insecticide in this model because of its contribution to resistance management in delaying the onset of resistance to the new insecticide.ConclusionsThis study highlights the importance of trade-offs in the design of bed nets for vector control. Further, it suggests that there are challenges in the roll-out of bed nets with new insecticides because of the constraints imposed by the global system of standards and procurement, which currently fails to adequately incentivize important considerations in bed net design like resistance management.

Does price limit improve price discovery? Evidence from IPO market in a quasi-natural experiment

The two major Chinese stock exchanges imposed a new trading rule with a price-move limit of 44% on the first trading day for IPOs after 2013. Following this quasi-natural experiment, market sentiment on IPOs drastically rises, resulting in extreme price run-up in initial trading days. Newly listed stocks under the trading rule experience greater illiquidity, higher turnover and volatility than earlier ones. Account-level data from the Shanghai Stock Exchange shows that following the new rule, net buyers of IPO change from institutional to retail investors. The evidence suggests that this price limit delays price discovery by arousing sentiment and crowding out informed investors.

Primary market demand for German government bonds

This paper provides evidence on the drivers of demand at government bond auctions using data on more than 600 German federal government bond auctions between 2005 and 2022. Applying the model averaging technique Weighted Average Least Squares robust determinants are identified from a large set of regressors representing auction-specific, institutional, regulatory and financial market conditions. To cover different characteristics of the empirical demand curves new measures of auction demand are introduced which i.a. reflect bidders’ estimated real-time allotment expectations. The main results can be summarised as follows: Demand is positively affected by the secondary market yield of the respective security, the announcement of upcoming syndications by the issuer, the volume offered, and underpricing at previous auctions. Furthermore, central bank net purchases in the secondary market have a robustly positive effect on demand at least for short-term bonds. Robustly negative effects are found for market volatility and the regulatory introduction of the leverage ratio for banks. The most noticeable null result is that I do not find robust evidence for crowding-out-like effects where the issuance activity of comparable issuers would dampen auction demand.

Separability, spillovers, and segmented markets : Evidence from dairy in India

AbstractA long history of empirical research has focused on testing whether and when household consumption and production decisions are separable. If markets were perfect, household consumption would be independent of production. In this article, we propose that market channel choice complicates this relationship. Our analysis of household panel data from rural India, focusing on dairy, leads us to four key conclusions. First, milk consumption is correlated with production, and markets are not a complete substitute for household production. Second, a large presence of formal milk buyers in a village is associated with lower milk consumption in dairy households, overturning the positive association of participation in formal value chains with household milk consumption. Third, contrary to expectations, for households that do not own dairy animals and net buyers, the presence of formal value chains remains uncorrelated with milk consumption. Fourth, we infer, test for and find suggestive evidence of segmented milk markets, that is, different types of households participate in different markets for milk that do not seem to interact with each other. Policymakers focused on market development or production‐based strategies need to factor in the possibility of market segmentation based on market channels while designing interventions.

Do informed REIT market participants respond to property sector mispricing?

ABSTRACT Sector mispricing represents the deviation of current and long-run sector fundamentals indicating either over- or undervaluation. We focus on the response of informed market participants to property sector mispricing in the context of equity REITs. We argue that REIT market participants such as institutional REIT investors and analysts have an informational advantage due to their access to commercial real estate market data. As a result, they are expected to respond to property sector mispricing. Using a sample of 2,637 firm-quarters of pure play equity REITs over the period of 1993 to 2020, we find that sector mispricing indeed impacts the decision-making of informed REIT market participants. The more overvalued (undervalued) a property sector is, the more institutional investors behave as net sellers (buyers) for REITs with the respective property type specialisation in the next quarter. Similarly, property sector overvaluation (undervaluation) results in lower (higher) net buy recommendations by analysts for REITs in the respective sector in the next quarter. However, our results are driven by smaller REITs and REITs with higher growth options. The sensitivity of institutional REIT investors and analysts to property sector mispricing also varies across different states of trading and recommendations respectively.

Rainfall shocks and risk aversion: Evidence from Southeast Asia

AbstractWe analyze how individual risk aversion changes in response to shocks in an agrarian setting, and the role of changes in yields and prices as two potential channels. To do so we specify a theoretical model that describes temporal alterations in risk aversion. Empirically, we test the model's proposition by combining individual‐level panel data with historical rainfall data for rural Thailand and Vietnam. We find that rainfall shocks increase individuals risk aversion, whereby the largest effects are observed among households that are net buyers of food commodities. Regarding potential channels, only prices seem to explain–and even then just to a very small extent–the increase in net buyers' risk aversion. Our findings imply that shocks can increase risk aversion, and, in the absence of functioning credit and insurance markets, may ultimately lead to decisions that perpetuate poverty.

Foreign Investors and the Peer Effects to Payout Policies

Abstract This research studies the influence of foreign investors on payout policies and the peer effect of dividends. We show that peer effects on dividend policies exist in Korea using an instrumental variable approach. Additionally, our results suggest that foreign investor activities intensify the peer effect on dividend policies. Firms with a higher net purchase by foreign investors are more heavily scrutinized to reduce information asymmetry between managers and shareholders. This monitoring behavior affects dividend choices among firms and the responsiveness to peer influence. Further, the impact of foreign investors is prominent for dividend increases but not for decreases.