Investment Survey Research Articles

Location, Ownership, Origin and the Spillover-Productivity Nexus. Evidence from Uganda Manufacturing Firms

<p>The main purpose of this article is to investigate the drivers of labor productivity in the firms at the intra-industry level with focus on the spillover effects of FDI. Using a fixed effects approach, we estimate an expanded Cobb-Douglas production function in its intensive form to isolate the effects of increased capital intensity on labor productivity as well as the spillovers, using annual Private Sector Investment Survey data collected on the Ugandan manufacturing firms over the period 2007- 2010. Over all, there are significant negative horizontal spillovers for the domestic firms in Uganda, with OECD-originating FDI appearing to be the main source of such effects. By location, these are most adverse in the western and eastern regions and better spillovers can be traced in the central region. Additional findings point to firm size, labor quality and profit as positive contributors to labor productivity, whereas technology gap exhibits a detrimental impact just as we document no significant effect of capital intensity. Larger domestic firms appear to benefit significantly from spillovers in industries where foreign firms have a larger presence. The aforementioned findings reflect the need for well-designed policies to improve the competitiveness of local firms particularly via an incentive-equal opportunity-policy that captures both domestic and foreign investors and to improve infrastructure and other investor-friendly environment in the East and Western parts of Uganda. Similarly, our results suggest that the promotion of joint ventures (foreign) is likely to generate unequivocal benefits to the manufacturing sector in Uganda not only in terms of less negative horizontal spillovers but also from the labor quality, firm size and profit spillovers perspective. Finally, the finding of learning difficulties of domestic firms from foreign firms calls for programs in line with skill acquisition through job training and the review of the curriculum to focus on labor quality.</p>

Crash Beliefs from Investor Surveys

Historical data suggest that the base rate for a severe, single-day stock market crash is relatively low. Surveys of individual and institutional investors, conducted regularly over a 26-year period in the United States, show that they assess the probability to be much higher. We examine factors influencing investor responses and test the role of media influence, finding evidence consistent with an availability bias. Adverse market events made salient by financial press are associated with higher subjective crash probabilities. Exogenous shocks related to earthquakes are also associated with higher probabilities. Finally, subjective crash probabilities are negatively associated with mutual fund flows.

International Sentiment Spillovers in Equity Returns

AbstractThis paper examines the extent of spillovers from US investor sentiment on G7 aggregate market, value and growth stock returns. As a proxy for investor sentiment, we include individual investor survey, measured by the University of Michigan consumer confidence index and market sentiment measured by Baker and Wurgler composite sentiment index. Using monthly data for the period January 1991 to December 2013, our results indicate the presence of significant spillover effects of US investor sentiment on G7 stock returns. Our findings from generalized impulse response functions show that aggregate market and growth stocks of all non‐US G7 countries are significantly affected by the propagation of the US market sentiment. The financial crisis of 2007 has played a significant role in affecting value stock returns in these countries. Our findings further reveal that both the rational and irrational components of the US individual investor sentiment do not play any significant role in affecting international stock returns. Copyright © 2016 John Wiley & Sons, Ltd.

Distance Matters for Portfolio Investment - But What Kind of Distance?

Using the International Monetary Funds (IMF) Coordinated Portfolio Investment Survey (CPIS) across 174 originating and 50 destination countries, we apply extreme bounds analysis ((Leamer (1983),Granger and Uhlig (1990) & Salai Martin (1997)) within a gravity framework to examine the interactions between geographic, institutional, cultural and psychic distances in shaping bilateral international portfolio positions throughout the world. We find that while psychic distance always matters, the other concepts are fragile in their contribution to explaining global investments. Our approach and findings have implications for many studies in international business, economics, finance and management.

Impact of big data on the retail industry

With the recent emergence of Big Data with its Volume, Variety and Velocity (3V’s), data analysis has emerged as a crucial area of study for both practitioners and researchers, reflecting the magnitude and impact of data-related problems to be resolved in business organizations, including the retail industry. This study has methodically identified and analysed four factors, namely, data source, data analysis tools, financial and economic outcomes and data security and data privacy, to gauge their influence on the impact of Big Data in the retail industry. This research analyses the impact of big data analysis on retail firms that use data and business analytics to make decisions, termed a data-driven decision-making (DDD) approach. The new finding is arrived that financial and economic outcome showed a strong support and have direct relationship with data analysis tools of retail industry. Data for the study were collected using a survey of various business practices and investments in information technology by retail organizations. The data analysis showed that retail organizations which use DDD have higher output and productivity. Using SMART PLS data analysis methods with solid support of review from ISI Journals, the relationship between DDD and performance is also evident in aspects of organization such as the utilization of inventory, customer engagement and market value in the retail industry.

Investors’ Perception on Factors Causing Volatility at Indian Stock Market

Study of volatility in the equity market is a crucial issue in economics and finance. Volatility change in the stock prices has many adverse effects on an economy and also investment. It has received great attention from both academicians and practitioners over the last two decades because it can be used as a measure of risk exposure in investments. This study examines the perception of investors to identify factors affecting volatility in Indian stock market. It employs a questionnaire survey of equity investors at BSE using a sample of 226 individual and institutional investors. The data collected is analyzed with factor analysis and multiple regression models. The study reveals that Indian stock market is perceived to exhibit high degree of volatility. It finds that external factors like macroeconomic situation, political condition and spillover effect from global markets have the highest influence in affecting volatility of the Indian stock market followed by the stock market factors like noise trading, market manipulation, foreign portfolio investment and derivative trading. Company factors like financial performance and other company specific information have been found to have the relatively lower effect on perceived riskiness of the stock market.

IFRS adoption, information asymmetry and the home bias

This paper investigates whether IFRS adoption reduces the home bias equity using the information asymmetry as a mediator variable to this relationship. Focusing in countries included in the Coordinated Portfolio Investment Survey “CPIS” our sample is composed by 512 observations (country-year) that cover the period 2003 to 2012. Our finding indicates that the full IFRS adoption reduces the information asymmetry and then the home bias. These results validate our expectations. Nevertheless, the partial IFRS adoption doesn’t clearly support our expectations. We found that the partial IFRS adoption increases significantly the information asymmetry but reduces the home bias. This paper examined the effect of others factors that prior researches indicate that they affect the home bias as the governance indicators, the economic indicators, equity market characteristics and the capital controls.

Level of Transportation Infrastructure and Public Utility Readiness for Thai Investors in Myanmar, Cambodia and Lao PDR Economic Zones

This research investigates the level of infrastructure readiness in three countries to support investors in apparel and textile, electronic parts and agro-processing industries. Infrastructures and utilities in this study are transportation to market and ports, electricity and power, water supply, and telecommunication. Ten economic zones are Myawaddy, Yangon and Dawei in Myanmar, Poipet-Sisophon, Koh Kong-Sihanoukville and Phnom Penh in Cambodia, and Vientiane, Savannakhet, Pakse and Bokeaw in Lao PDR. This research evaluated the quality of existing and being developed infrastructures through field survey and interview of local investors. After that, investor demands are compiled through in-depth interviews and questionnaires from 51 companies in three segments to rank the importance of infrastructure. Both demand and supply data were compared to show the level of infrastructure readiness for Thai investors. Finally, investment recommendation maps for industries are displayed along with recommendations for Thai government to develop infrastructures according to investor demand.

Credit for Agricultural Households in India: Growing Inequities

Why has the share of non-institutional finance sources for agricultural households not come down between 2002 and 2012? Is the dependency on non-institutional sources the same across farm size classes? Who are the major beneficiaries of the revival in agricultural credit in the 2000s? Are larger farmers becoming more productive and commercial thus requiring higher levels of credit? Are small farms becoming unviable, making it difficult for banks to finance them? This paper examines these issues empirically based on data from the Situation Assessment Survey (SAS) of Agricultural households and the All India Debt and Investment Survey (AIDIS) conducted by the National Sample Survey Organization (NSSO) in its 59th (i.e. 2003) and 70th round (i.e. 2013) and various publications from the Reserve Bank of India (RBI).

Past returns and the perceived Sharpe ratio

We find that human perception contradicts the market efficiency assertions that high expected returns are accompanied by high risk and that past returns are not correlated with future returns. A survey of investors reveals that the last month realized returns are positively correlated with next month perceived returns and that they are negatively correlated with perceived risk. Neither expected return nor perceived risk captures the entire effect. Thus, in the human mind the “perceived Sharpe ratio” is positively correlated with short-term past returns. The effect does not depend on gender, education, income, and portfolio value, but it is more profound among older investors.

Financial Integration in Asset and Liability Holdings in East Asia

In this article, we examine the evolution of intra-East Asian financial integration from 2001 to 2013. Most existing studies on this topic look primarily at asset holdings; we examine liability holdings as well. Using the International Monetary Fund’s Coordinated Portfolio Investment Survey data for equities, long-term debt, and short-term debt, our analysis generally supports the conventional wisdom that East Asian countries are more financially integrated with global financial centers than they are with each other. This is true for both asset holdings and liabilities and is confirmed by an econometric analysis based on financial gravity equations. However, the gap between global integration and regional integration has narrowed for asset holdings over time but not for liability holdings. The results of additional econometric analysis indicate that diversification of liability holdings can mitigate financial instability due to global financial shocks. More precisely, diversification was associated with smaller exchange rate depreciation during the quantitative easing taper tantrum of 2013. These results point to a possible benefit from strengthening regional financial integration. Deeper regional integration would reduce dependence on global financial markets for funding and hence vulnerability to global shocks.

FDI and Migration of Skilled Workers Towards Developing Countries: Firm-Level Evidence from Sub-Saharan Africa

This article investigates the determinants of the employment of foreign skilled workers by firms operating in Sub-Saharan African countries. We use cross section firm-level data on a large sample of foreign and domestic firms collected through the Africa Investor Survey 2010 by the United Nations Industrial Development Organization. We find evidence of a strong complementarity between foreign capital inflows and the employment of foreign skilled workers. Our results also indicate that interventions in improving the working regulation and skilled workers immigration regimes may stimulate foreign skilled workers transfer by firms, and thereby foreign direct investments.

- - (The Relationship Between Objectives of Savings and Investment and Financial Assets Allocation: Focused on the Moderating Effects of Money Attitudes and Financial Risk Tolerance))

Korean Abstract: 본 연구는 저축 및 투자목적과 금융자산선택 간의 관계를 살펴보고, 특히 투자자들의 주관적 심리적 변수인 돈에 대한 태도와 투자성향에 의한 조절효과가 있는지를 검증하는 것을 목적으로 하였다. 이를 위해 2012 펀드 투자자 조사의 원자료 2,530부 중 부실기재된 것을 제외한 1,621부를 분석자료로 사용하였다. 분석결과, 첫째 저축 및 투자목적에 따라 금융자산을 선택하는 것으로 나타났다. 저축목적으로 금융자산을 선택할 때에는 안정적인 자산을, 투자목적일 때에는 어떠한 투자목적인가에 따라 금융자산을 선택하는 경향을 보였다. 둘째, 돈에 대한 태도는 금융자산선택 즉 투자규모를 결정할 때 조절효과가 있는 것으로 나타났다. 노후/은퇴대비 저축목적이 간접투자금액을 증가시키는데, 자산증식과 노후/은퇴대비 투자목적이 간접투자금액을 증가시키는 데에 긍정적 영향력을 강화시키는 조절효과를 보였다. 셋째, 투자성향은 투자목적을 위해서 수익추구형으로 적극적, 공격적인 투자성향일수록 직접투자자산을 선택하는 것으로 나타났다. 마지막으로, 투자자들은 저축목적과 투자목적을 구분하여 금융자산을 선택하는 것으로 나타났다. 투자자들은 일부 항목에서는 저축목적과 투자목적을 구별없이 투자행동을 하지만 저축 및 투자목적에 따라 금융자산규모를 다르게 결정하는 것으로 나타났다. 본 연구는 투자자들의 투자의사결정에 영향을 미치는 다양한 주관적 변인들에 대한 이해와 금융상품 판매를 하는 금융기관의 심도있는 투자자 관찰의 필요성에 대해 시사점을 줄 것으로 기대한다. English Abstract: The purpose of this study was to identify the relationship between financial asset allocation and objectives of saving or investment. In particular, the study attempted to identify whether subjective psychological variables such as money attitude and financial risk tolerance had moderating effects in the model. Among the 2,530 data from 2012 Fund Investment Survey conducted by the Korea Investor Protection Foundation, 1,621 data were selected. Major findings are as follows. First, the result indicates that investors chose financial assets according to their saving or investment objectives. Investors showed a tendency of choosing less risky financial assets if they had a savings goal, but if they would like to invest their money then they chose various types of financial assets according to their specific investment goals. Second, attitude toward money had a moderating effect on choosing financial assets. The attitude toward money had a positive moderating effects on accumulating assets or retirement preparation by increasing the amount of indirect investment. Third, the results on risk tolerance showed that investors pursued profit. In addition, as the investors were aggressive, they had a tendency of choosing direct investment. Fourth, investors showed to distinguish between saving objectives and investment objectives and they chose financial assets based on their objectives. Investors showed different behaviors in some other categories, but they chose different amount of financial assets based on saving and/or investment objectives. This study provides insights for the needs of in-depth observation of investors when a agency sells financial products, and understanding of diverse subjective factors influencing investors' decisions.

Determinants of Bear Market Performance at the Nairobi Securities Exchange in Kenya

This study sought to establish the determinants of bear market performance by taking a survey of investors at the Nairobi Securities Exchange. To achieve this, a quantitative and qualitative research design was adopted and the study involved administering questionnaires to 500 retail investors participating at the Nairobi Securities Exchange through five purposively selected stock brokerage firms based in Mombasa Town. Convenient sampling technique was used to administer questionnaires to respondents. Data was analyzed by the use of descriptive statistics and correlation analysis was carried out to determine the relationship between the variables. A multiple regression model was employed to analyze the independent variables and their effect on bear market performance. The ANOVA result at a p-level of .05 showed that all the four variables; transaction cost, mobilization of resources by retail investors, financial literacy and cultural values had an influence on bear market performance. The Pearson Moment correlation analysis showed that bear market performance was weakly associated with transaction costs and financial literacy while the relationship between bear market performance and mobilization of resources by retail investors as well as cultural values was largely insignificant. The study recommends that further research should be carried out on the economic cycle and its influence on bear market performance.

Financial Integration in Asset and Liability Holdings in East Asia

In this paper, we examine the evolution of intra-East Asian financial integration from 2001 to 2013. Most existing studies on this topic look primarily at asset holdings; we examine liability holdings as well. Using the International Monetary Fund’s Coordinated Portfolio Investment Survey data for equities, long-term debt, and short-term debt, our analysis generally supports the conventional wisdom that East Asian countries are more financially integrated with global financial centers than they are with each other. This is true for both asset holdings and liabilities and is confirmed by an econometric analysis based on financial gravity equations. However, the gap between global integration and regional integration has narrowed for asset holdings over time but not for liability holdings. The results of additional econometric analysis indicate that the diversification of liability holdings can mitigate financial instability due to global financial shocks. More precisely, diversification was associated with smaller exchange rate depreciation during the quantitative easing taper tantrum of 2013. These results point to a possible benefit from strengthening regional financial integration. Deeper regional integration would reduce dependence on global financial markets for funding and hence vulnerability to global shocks.

USEPA's 2015 Drinking Water Infrastructure Needs Survey

USEPA is conducting a critical survey of water system infrastructure investment needs that will inform the allotment of each state's share of federal grants. The survey also helps the federal government and the public understand the extent of drinking water infrastructure needs that are critical to the nation's public health and economy.

Do Investors Look at the Past to Predict the Future? Evidence Based on the Perceived Sharpe Ratio

We find that human perception contradicts the market efficiency assertions that high return is accompanied by high risk and that past returns do not affect future prices. A survey of investors reveals that the last week realized returns are positively correlated with perceived returns and negatively correlated with perceived risk. Thus, in the human mind there is a free lunch opportunity, where the perceived Sharpe ratio is positively correlated with short-term past returns. As higher perceived Sharpe ratios are also followed by more actual stock buying, our study provides a novel explanation to the observed short-term autocorrelations in stock returns.

The Relationship between Discounts and Premiums and Value Investing Theory

Abstract The aim of this topic is to provide a different view on the theory of value investing through exploration of discounts and premiums. Method of discounts and premiums comes from the field of business valuation and answers the question, why the price of certain stock is overvalued or undervalued compared in contrast with an average. The first chapter of this thesis deals with general issues of value investing and method of choosing appropriate shares. The next section presents a theory of discounts and premiums. The last chapter tests a sample of stocks selected on the basis of the value investment approach and surveys that sample of stocks by the approach of discounts and premiums.

International investment positions and risk-sharing: an empirical analysis on the coordinated portfolio investment survey

By using data from all available waves of the IMF Coordinated Portfolio In- vestment Surveys, we explore the dynamics of the determinants of cross portfolio investments. The main aim of our analysis, however, is to understand whether a diversification motive can also be found, among the various determinants. We find strong evidence that, indeed, the correlation between the idiosyncratic components of gdp growth, as well as the correlation between stock returns between pair of coun- tries, that we consider as proxies for diversification, are relevant to explain bilateral portfolio holdings, when unobserved heterogeneity is properly taken into account, by means of a fixed effect, panel estimation (where the fixed effects refer to pair of countries, rather than countries in isolation). Interestingly, the same results, cannot be retrieved from cross section estimations. It also turns out that the diversification motive is less relevant, if at all, in choosing whether or not to invest in a particular area.

A Network Analysis of Sectoral Accounts: Identifying Sectoral Interlinkages in G-4 Economies

The recent financial crisis highlighted that balance sheet exposures can be a major shock transmission channel. Using sectoral accounts data in combination with data from the Coordinated Portfolio Investment Survey, International Investment Position, and BIS this paper estimates bilateral exposures between financial and non-financial sectors in three different financial instruments within and across G-4 economies (Euro Area, Japan, U.K. and U.S.). The generated financial networks represent a powerful tool for assessing financial stability, as they allow for the identification of systemically important sectors. The analysis suggests that after the financial crisis bilateral exposures in debt securities have increased, while exposures in loans and equities have declined. Shock simulations reveal that the vulnerability of the financial sector to the government sector has increased considerably since the outbreak of the financial crisis.