Stock Exchange Market Research Articles

The Efficiency and Firm Performance Analysis of Nigeria Manufacturing Firms: Application of Stochastic Frontier Analysis Technique

ABSTRACT: Despite several measures adopted by the government to improve the efficiency of the manufacturing firms in Nigeria, the performance of these firms is below expectation. The poor performance of Nigerian manufacturing firms has prompted concern for Nigeria’s economic prospects in the long run. This needs to be addressed because, under this scenario, most development objectives would be difficult to achieve. Therefore, there is a need for Nigerian manufacturing firms to achieve high productivity to improve their performance. This study, therefore, evaluated the level of technical efficiency and examined the determinants of technical inefficiency in Nigerian manufacturing firms. It employed panel data of fifty-five manufacturing firms quoted in the Nigeria Stock Exchange Market from 1999 to 2020. The result from the Stochastic Frontier Analysis technique showed that all inputs (capital, labor, raw materials, cost of energy and other expenses) impacted positively on firms’ output at a 1% significance level. But the impact of raw material is the highest. It was also found that the mean efficiency for Nigerian manufacturing firms is 52.74%. Finally, it was revealed that the age of the firm, total assets and management efficiency are the technical inefficiency determinants in Nigerian manufacturing firms. This implies that the efficiency level of manufacturing firms in Nigeria can be improved by 47.26%. Also, manufacturing output can be enhanced by providing adequate raw materials. Furthermore, the efficiency of manufacturing firms in Nigeria is enabled by the managerial capability and asset size of the firms. The study suggested that government should give tax concessions on the purchase of raw materials (sourced domestically and externally) to encourage availability and use to optimize production. Also, manufacturing firms should encourage skill acquisition programs through various on-the-job training programs for managers and their entire workforce to boost labor productivity and performance. In addition, policies that will encourage good education system should be adopted by the government which will help the nation to produce trained and skilled labor force. Finally, manufacturing firms should mobilize more resources for the procurement, consolidation and expansion of the size of their assets using their undistributed corporate profit. Through its regulatory bodies [such as Federal Ministry of Industries, Trade and Investment, Nigeria Chamber of Commerce and Industry and Small and Medium Enterprises Development Agency of Nigeria (SMEDAN)], government should enforce minimal asset requirements for each sub-sector (industry) as a basis for takeoff and subsequent renewal of licence for the manufacturing firms in Nigeria.

Earnings management and ESG performance: Empirical evidence from Italian context

The purpose of this paper is to investigate the relationship between environmental, social and governance (ESG) performance, both in its totality and its three pillars (environmental, social and governance), and earnings management. The sample includes companies listed on the Italian Stock Exchange market (FTSE Italia All-Share index) during business years 2014–2019. After excluding those firms belonging to the financial sector, along with those with missing values, the final sample consists of 103 firms for a total of 618 firm-year observations. Data have been collected from two databases, that are Refinitiv Eikon (for ESG and governance variables) and AIDA Bureau van Dijk (for economic and financial variables). Panel data regression analysis has been implemented to analyse the impact of ESG performance on accrual-based (AEM) and real based (REM) earnings management. It is found that ESG performance has a negative effect on AEM but not on REM, and the governance pillar has the strongest impact compared to those of environmental and social ones. In addition, this research suggests a bidirectional link between ESG performance and earnings management. This analysis contributes to prior research since it is the first study that has used accrual and real-based earnings management proxies with this topic in relation with ESG performance and its three components in the Italian traditional corporate governance system. Corporate practice, regulators and researchers should recognize that ESG performance and earnings management should be discussed together.

Understanding the Moderating Role of Dollar Exchange Rate in Shaping the Linkages Between Foreign Direct Investment and Pakistan Stock Exchange Performance

The stock exchange market is a crucial component of the economy, providing investors with the opportunity to participate in the shares of different enterprises. This study investigates the influence of the United States Dollar exchange rate and foreign direct investment (FDI) on the Karachi Stock Exchange-100 index, a key component of the Pakistan Stock Exchange. Utilizing monthly data from July 2008 to March 2023, the research employs an Augmented Dickey-Fuller test for stationarity and Johnson Cointegration test for model confirmation. Results from the Granger Causality test highlight significant long-term relationships between FDI, inflation, interest rates, balance of payments, and the Karachi Stock Exchange-100 index. Conversely, the exchange rate and FDI exhibit statistical insignificance in the short term. Introducing moderation effects, the exchange rate demonstrates negligible long-term impact but reveals a negative short-term association with the Karachi Stock Exchange-100 index. Impulse response analysis indicates positive reactions to shocks for FDI, balance of payments, and the dollar exchange rate, with inflation and interest rates exhibiting negative responses. The study's novel contribution lies in uncovering the nuanced temporal dynamics between economic indicators and the stock market, offering valuable insights for policymakers crafting investment strategies to navigate market volatility and enhance stock market returns.

Devaluation and stock prices

Aim: The study evaluated the causal link between exchange rate devaluation and stock prices in African stock markets within the African region, namely, Zambia, Nigeria, Uganda, Tunisia, Tanzania, Botswana, Indonesia, Egypt, South Africa, and Malaysia. Research method: The Toda-Yamamoto (T-Y) Granger causality methodology which entails a determination of maximum order of integration, determination of optimal lag length, and finally conducting the T-Y causality test based on augmented var k + dmax was used in the study. We also deployed the ARDL model to estimate the effects of devaluation on stock prices in Africa. To accommodate issues of endogeneity, we further implemented dynamic panel model estimation to unravel the true effects of exchange rate devaluation on stock prices. Findings: Currency devaluation and the consumer prices negatively impacted stock prices by 3.6% and 3.2% respectively in the short term period following a 1% rise in devaluation and consumer prices. In the long-term period, a 1% rise in currency devaluation and consumer price level stimulated 1.45% and 0.68% reductions in stock prices respectively in ten developing African countries. The lending interest rate also significantly and positively impacted stock market prices over the long-term period by 0.25% following a 1% rise in lending rate, whereas, in the short-term period, a 1% rise in lending rate stimulated 0.38% decline in stock prices of the ten African countries. Originality: in this research, we executed the Toda-Yamamoto granger causality methodology in explaining the causal relation between exchange rate devaluation and stock prices in ten developing African countries and with the ARDL model, the study estimated the effects of devaluation on stock prices in Africa. Contributions: The research is a contribution to a remarkable long-run connection linking stock market price, exchange rate and price index. Though there was a remarkable long-term association linking them, the outcome also showed an essential short-run relationship linking stock market price, consumer price index and interest rate. Limitations: This research is limited to ten countries within the African region. This choice of countries was made on basis of the available data. Hence, data could be sought on additional developing countries and estimation done for a larger sample of countries to obtain results that can be used to generalize the causality between devaluation and stock price movements.

Impact of Gold Price and Oil Price on the Indian Stock Market : With Special Reference to the Bombay Stock Exchange Market

Impact of Gold Price and Oil Price on the Indian Stock Market : With Special Reference to the Bombay Stock Exchange Market

Eight Years of Research Related to the Green Sukuk in the Global Stock Exchange Market to Support the Implementation of SDG: A Bibliometric Review

The awareness of investors that only invest in green instruments has been increasing recently. Green sukuk was an investment that followed the Sharia principle and promoted environmental preservation. This study aims to analyze green sukuk in previous studies as an alternative financing for green infrastructure development in Indonesia. This study used a bibliometric method by taking secondary data from meta-data papers from Scopus and SCI. Forty papers from Scopus and 29 from SCI during 2016-2023 were taken as samples. Data were analyzed with Vosviewer and Biblioshiny. The results of this study show that the energy was closely related to the topic of green sukuk. Energy was mostly used in the abstract and titles of papers. Moreover, the abstract and the title showed that the word sustainable was used frequently, implying that the energy power plant could become an underlying asset for green sukuk due to its sustainable revenue. However, the government should take action to create regulations that could support the green project as an underlying asset of Green Sukuk.

Stock Market Integration and Corporate Investment in Nigeria: A Critical Analysis

Low level of corporate investment in Nigeria coupled with poor financial base of a single stock exchange market system bring the need for the study to critically examined the effect of stock market integration on corporate investment in Nigeria from 1986 to 2022. The study adopted Augmented Dickey Fuller (ADF) unit root test and Auto-regressive Distributed Lag (ARDL). The data used for this study were collected from the Central Bank of Nigeria, Statistical Bulletin (2022). The ADF showed that the real exchange rate, lending interest rate, and trade openness were all integrated of order zero (∆ = 0); while, stock market integration and corporate investment were integrated of order one (∆ = 1). The ADF result showed that stock market integration exhibited a non-stability trend over the years, real exchange rate showed a negative sign but non-significant at 5%; while, lending interest rate and trade openness was negative and significant. The study concluded that stock market integration was volatile over the years which limited the rate of impacting corporate investment in Nigeria; while, lesser interest rate and trade liberation promote corporate investment. The study recommended that in order to fast ease stock market integration, which is crucial for economic progress, the Nigerian Exchange Group NGX should aim toward ensuring that each listed firm on the market have a strong market capitalization through encouraging different ownership structure to possess their respective stock value

The impact of Covid-19 on the behavior of actors and the regulation of the Moroccan stock market

Purpose: This study examines the impact of the COVID-19 health crisis on the behavior of actors and legislation on the Moroccan stock market. Research Methodology: This study uses the collection and exploitation of data from key institutional reports and legal data limited to certain laws and regulations (excluding relevant case law and doctrine) attesting to the orientations of capital market authorities following the declaration of a state of health emergency. Results: The analysis revealed that the measures taken by the government, central bank, and AMMC helped curb the capital market and provide investors with the tools they need to strengthen the resilience of Morocco's capital market. Limitations: The first concerns the difficulty of analyzing the long-term effects of a health crisis. The second limitation concerns the existing models, theories, and methodological limitations. Contribution: This documentary study synthesizes the psychic reactions and behaviors of Moroccan stock exchange market actors in times of crisis. In addition, it enables researchers to better understand the legal interventions taken to regulate and redirect behaviors influenced by the pandemic in the Moroccan capital market.

Does Debt Influence Earnings Management in Going Private Transactions in Brazil?

This paper aimed to analyze the influence of debt in earnings management of non-financial companies that were listed on the Brazilian capital market and went private by stock repurchase between 2002 and 2020. The companies that went private were matched by size and sector of activity with those that remained on the stock exchange market in the year prior to the offer announcement. Earnings management was estimated using discretionary accruals and debt was measured by Debt-to-Equity ratio and Total Debt ratio. The results suggest that companies that went public by repurchasing shares tend present negative earnings management. Also, it was found negative and significant relationship between earnings management and Debt-to-Equity ratio and company size. It is understood that the intensification of the monitoring of the managers' actions, mainly due to the publicity of the process implies the restriction of discretionary practices.

Modelling Inflation Rate Uncertainty in India: An Empirical Study

In recent years, the concept of volatility has gained much importance in macroeconomic variables like stock market indices, exchange rates and price indices. In this study, inflation indicators like the Consumer Price Index Combined (CPI-C) and Wholesale Price Index? all commodities (WPI-AC) starting in 2014:01 and ending in 2023:04 in India are used to measure the inflation uncertainty. To show volatility both symmetric and asymmetric models which are GARCH type are employed. So, that an appropriate forecasting model could be projected. For CPI an asymmetric GARCH model is found appropriate while for WPI a symmetric GARCH model was shown appropriate in the analysis. The volatility of CPI is less than WPI as shown by the various variance tools applied in the paper.

Exchange Rate and Stock Market in Mexico: A Correlation Analysis (1993-2022)

The aim of this paper is to estimate using monthly data the influence of the Mexican Stock Market in the nominal Exchange Rate from 1993 to 2022. We conducted an Exploratory Data Analysis to identify the most important correlations of the following monetary variables: 28-day Mexican Debt bills/ (T-Bill), interest rates, inflation, and Stock Exchange Market both from Mexico and from the USA respectively. We then resorted to a VAR model to indentify which of these variables determined changes in Mexico´s nominal Exchange Rate more significantly. During the period in question the model showed, that Exchange Rate variations were driven by the Mexican Stock Exchange Market, the Dow Jones Industrial Average and the US Treasury Bills. The model also pointed out that variations in Mexican Stock Market were determined by the Mexican Stock Market itself, the Dow Jones Industrial Average and the US Treasury Bills (T-Bills).

Sentiment investor, exchange rates, geopolitical risk and developing stock market: evidence of co-movements in the time-frequency domain during RussiaUkraine war

PurposeThe aim of this paper is threefold: (1) to develop a new measure of investor sentiment rational (ISR) of developing countries by applying principal component analysis (PCA), (2) to investigate co-movements between the ten developing stock markets, the sentiment investor's, exchange rates and geopolitical risk (GPR) during Russian invasion of Ukraine in 2022, (3) to explore the key factors that might affect exchange market and capital market before and mainly during Russia–Ukraine war period.Design/methodology/approachThe wavelet approach and the multivariate wavelet coherence (MWC) are applied to detect the co-movements on daily data from August 2019 to December 2022. Value-at-risk (VaR) and conditional value-at-risk (CVaR) are used to assess the systemic risks of exchange rate market and stock market return in the developing market.FindingsResults of this study reveal (1) strong interdependence between GPR, investor sentiment rational (ISR), stock market index and exchange rate in short- and long-terms in most countries, as inferred from (WTC) analysis. (2) There is evidence of strong short-term co-movements between ISR and exchange rates, with ISR leading. (3) Multivariate coherency shows strong contributions of ISR and GPR index to stock market index and exchange rate returns. The findings signal the attractiveness of the Vietnamese dong, Malaysian ringgits and Tunisian dinar as a hedge for currency portfolios against GPR. The authors detect a positive connectedness in the short term between all pairs of the variables analyzed in most countries. (4) Both foreign exchange and equity markets are exposed to higher levels of systemic risk in the period of the Russian invasion of Ukraine.Originality/valueThis study provides information that supports investors, regulators and executive managers in developing countries. The impact of sentiment investor with GPR intensified the co-movements of stocks market and exchange market during 2021–2022, which overlaps with period of the Russian invasion of Ukraine.

COVID Impact On Indian Stock Market And Commodity

The COVID-19 pandemic that broke out in 2019 tremendously affected worldwide monetary markets, especially the products and stock markets in India. This study investigates the pandemic's perplexing repercussions on India's monetary framework. The review looks at the presentation, instability, and swings of the Indian stock market and commodity exchange all through the pandemic. It investigates the short-and long haul impacts of COVID-19 on stock records, individual values, and different products markets like energy, metals, and agribusiness. Everybody on the planet had various troubles because of the new Covid flare-up. One industry that was answerable for numerous worldwide shocks was finance, explicitly the stock and commodity markets. In the different areas of the planet, the two markets answered in special and shifted ways. This was brought about by various elements, including venture conduct, government assistance software engineers, and government activity. This paper dives further into that topic, including worldwide models and examination discoveries. This study researches how the Indian monetary markets answered the new emergency, taking a gander at how regulative choices, public activities, and financial backer mentalities impacted market elements. It likewise assesses how financial backer way of behaving, risk discernments, and exchanging designs are advancing in response to the vulnerability welcomed on by the pandemic.

EMPLOYER BRANDING AS A TOOL FOR EMPLOYEE LOYALTY: THE CASE OF MOROCCAN COMPANIES LISTED ON CASABLANCA STOCK EXCHANGE

To attract qualified profiles, known as talents, and to retain them, many enterprises are actively leveraging on employer branding. The objective of this research is to shed light on the role played by the concept of employer branding, defined as the set of brand image assets with respect to employees and their impact on human resources loyalty. Our hypothetico-deductive research method will be completed by conducting an empirical study based on a series of semi-structured interviews with 10 large companies listed on Casablanca stock exchange market. We suggest a model to articulate the employer brand around three key dimensions: low propensity to seek a new job, affective engagement and task performance. The collected and analyzed feedback led us to a clear and obvious conclusion. The intention to leave the company, the affective commitment as well as the performance in the task are directly impacted by the attributes of the employer brand. Therefore, organizational loyalty is influenced by the employer brand. The latter is a powerful loyalty tool that allows the company to retain talent. Further research should be conducted to explore the potential of employer branding as a powerful tool for talent retention.

The Monetary Market Uncertainty, Reasons and Consequence of Financial Market

The previous Federal Reserve rate hikes have had an important impact on the global financial economy. In this paper, on the overview of the fed rate cycle and the related theory and literature review, by combing the fed in 2022 start rate cycle of high inflation and huge debt deficit pressure province scene and process, analyzes the influence of the fed rate of the world economic development, international trade, monetary policy, financial market stability, especially the fed started in 2022 rate cycle on the stock market, foreign exchange market. Epidemic of the haze to the U. S. economy, rising unemployment, rising prices, and caused inflation, the fed to curb inflation, adopt tightening monetary policy start interest rates cycle, this paper thinks the fed this move also to the global stock market and foreign exchange market caused irreversible negative impact. Based on this, this article suggests that investors act cautiously in uncertain financial environments.

The Impact of Environmental, Social and Governance, Sustainable Financial Performance, Ownership Structure, and Composition of Company Directors on Tax Avoidance: Evidence from Indonesia

The aim of the present study is to empirically estimate the impact of ESG, composition of company directors, ownership structure and financial performance on tax avoidance. To achieve the study objectives, 114 companies listed on Indonesian Stock Exchange market are selected covering the data span over 2013-2020 period. Institutional ownership, female directors, ESG performance, return on assets and firm size are taken as the measures of ownership structure, composition of company directors, ESG and financial performance respectively. Empirical analysis is carried out using Fixed Effects Model as it is found as the appropriate estimation technique in Hausman test and Breusch-Pagan test. According to the study findings, EGS, ownership structure, composition of company directors all have significant and negative impact on tax avoidance. Among financial performance indicators, only firm size has negative and significant impact while return on assets has no significant effect on tax avoidance. The study recommends the firms or businesses to pay attention to ESG factors, institutional ownership and female directorship as these factors are found to have prominent role in improving tax avoidance behavior.

Enhanced safe-haven status of Bitcoin: Evidence from the Silicon Valley Bank collapse

This paper sets out to assess the safe-haven property of Bitcoin by employing a complete ensemble empirical mode decomposition with adaptive noise (CEEMDAN)-based event analysis approach amid the collapse of Silicon Valley Bank. Results reveal Bitcoin's role as a safe-haven amidst the uncertainty permeating the US banking market. In comparison to gold, stock, bond, and foreign exchange market indices, Bitcoin exhibits superior short-term performance and outperforms gold in terms of return and volatility stability in the medium term. Notably, the observation that Bitcoin sustained its safe-haven attribute over a span of 50 days even during periods of relatively diminished market uncertainty further solidifies its status as an improved safe-haven asset.

Stock and Foreign Exchange Markets under the Pandemic

The background of this paper is that the outbreak of the pandemic had a great impact on the financial market, and the stock market and foreign exchange market had significant fluctuations under the influence of the pandemic. This paper mainly adopts the literature research method and qualitative analysis method. The first part of the research is how the stock prices of the pharmaceutical industry and the gaming industry change under the pandemic and the intrinsic factors of the changes, and the second part is the fluctuation changes of the RMB exchange rate and the US dollar index under the pandemic and analyses the reasons for the abnormal changes. Through the study, it was found that both the pharmaceutical industry and the gaming industry did not see stocks plummet due to the outbreak of the pandemic but instead rose significantly. The main reason for this phenomenon is that these two industries have been affected by the pandemic and the demand has greatly increased, thus making the company's earnings have increased and the stock price has also risen. The main purpose of this paper is to enhance the stability of financial markets by analyzing the causes of their volatility.

The Impact of Inflation and Exchange Rate on Stock Market Returns in Tanzania

The influence of exchange rate and inflation on stock market returns in Tanzania was investigated using monthly inflation and exchange rate data from the BOT and NBS, as well as monthly market returns from the DSE, over the period 2011 to 2020. This effect was investigated using the autoregressive distributed lag (ARDL), cointegration approach, and the error correction parameterization of the ARDL model. The results from the analysis show that in both the short-run and long-run, stock market return is impacted by inflations rate and exchange rate. Moreover, the empirical results demonstrate the significant negative impact of inflations rate and exchange rate in long run on stock market return while there is positive impact between stock market return and exchange rate and inflation at short run on the basis of the above analysis it can be conclude that two selected macroeconomic variables are relatively significant and likely to impact stock market return of the Dar es salaam stock exchange basing on their coefficients and their significance relationship both in short and long run impacts of which its consistence with theories .The outcome of this thesis discovered potential need to focus on impact of macroeconomic variables in designing monetary and fiscal policy of the country’s economy, since; the capital market does respond quickly to the arrival of new information.

Financial innovation and digitalization promote business growth: The interplay of green technology innovation, product market competition and firm performance

With the emergence of technological innovations, digital finance with a blend of new models and the development of inclusive financial innovation shows great significance for business firms to emphasize innovative and competitive product market competition. Thus, financial digitalization and business environment directives help improve the financial performance of business enterprises. This study assesses the role of product market competitiveness on firm performance through the mediating role of digital financial innovation. The annual data of 90 companies from 2014 to 2020 is taken from the Pakistan stock exchange market. The empirical results are estimated using three paths by the Structural Equation Model (SEM) regression approach. The study identifies that product market competitiveness positively contributed to determining the firm performance. Besides, digital financial innovation serves as the mediator in the study, which partially positively determines firm performance. It shows that firm financial innovation fails to account fully for firm performance. This study does not include several other factors determining firm performance. The research results deliver a useful empirical and theoretical contribution to digitalization and product innovation. The findings help to uncover the antecedents of financial innovation and firm performance. This research model can assist researchers in designing robust strategies to appraise the impact on firm performance. Investigators may advance valuable insights by integrating this methodology. Concerning originality, these results indicate that digitalized innovation positively influences firm performance by offering innovative products and digitalization. The outcomes contribute to the literature on digital innovation, and the study recommends that business organizations should pay particular attention to improving financial innovation and digitization in business firms.