Promarket Reforms and Allocation of Capital in India

The government of India initiated pro-market reforms in the 1990s, after almost five decades of socialist planning. These and subsequent policy reforms are credited as the drivers of India’s radical economic transformation. Prior to reforms, private investment was strictly regulated and restricted to certain areas and sectors. There have since been numerous changes in sectors important for investment, which should lead to changes in outcomes of firm-level strategic decision making and investment behavior. By most estimates, India will continue to grow. The purpose of this paper is to investigate changes in investment behavior from the introduction of reforms to current conditions. Reforms changed several institutional frameworks for firm operations, allowing firms to pursue more competitive strategies. Given the importance of ownership in determining firm efficiency and access to capital, we examine the effect of ownership on the performance of Indian firms for the period 1991-2006. We also examine industry differences in capital allocation. We compute a measure of investment efficiency derived from the accelerator principle: Elasticity of capital with respect to output. We examine the effect of various ownership structures on investment behavior and the efficiently of capital allocation across different sectors of the economy. We find that the allocation of capital has been slow to respond to reforms, indicating similar pace of firm responses.allocation of capital; India; institutional reforms; ownership

JJ-factors for self-interacting dark matter in 20 dwarf spheroidal galaxies

Dwarf spheroidal galaxies are among the most promising targets for indirect dark matter (DM) searches in $\gamma$-rays. The $\gamma$-ray flux from DM annihilation in a dwarf spheroidal galaxy is proportional to the $J$-factor of the source. The $J$-factor of a dwarf spheroidal galaxy is the line-of-sight integral of the DM mass density squared times $\langle \sigma_{\rm ann} v_{\rm rel} \rangle/(\sigma_{\rm ann} v_{\rm rel})_0$, where $\sigma_{\rm ann} v_{\rm rel}$ is the DM annihilation cross-section times relative velocity $v_{\rm rel}=|{\bf v}_{\rm rel}|$, angle brackets denote average over ${\bf v}_{\rm rel}$, and $(\sigma_{\rm ann} v_{\rm rel})_0$ is the $v_{\rm rel}$-independent part of $\sigma_{\rm ann} v_{\rm rel}$. If $\sigma_{\rm ann} v_{\rm rel}$ is constant in $v_{\rm rel}$, $J$-factors only depend on the DM space distribution in the source. However, if $\sigma_{\rm ann} v_{\rm rel}$ varies with $v_{\rm rel}$, as in the presence of DM self-interactions, $J$-factors also depend on the DM velocity distribution, and on the strength and range of the DM self-interaction. Models for self-interacting DM are increasingly important in the study of the small scale clustering of DM, and are compatible with current cosmological observations. Here we derive the $J$-factor of 20 dwarf spheroidal galaxies from stellar kinematic data under the assumption of Yukawa DM self-interactions. $J$-factors are derived through a profile Likelihood approach, assuming either NFW or cored DM profiles. We also compare our results with $J$-factors derived assuming the same velocity for all DM particles in the target galaxy. We find that this common approximation overestimates the $J$-factors by up to one order of magnitude. $J$-factors for a sample of DM particle masses, self-interaction coupling constants and density profiles are provided electronically, ready to be used in other projects.Comment: 10 pages, 3 figures and 2 table

Can outsiders follow insiders to beat the market? An Event Study on the Stockholm Stock Exchange

i Summary Previous studies have indicated that information asymmetries exist on the financial markets. People with access to non-public information could use that information to their advantage when they trade financial instruments. The Swedish Financial Supervisory Authority (FI) is a public authority that works for stability and efficiency on the financial market. In their work for achieving an efficient market is FI trying to minimize the information asymmetries on the market by keeping a record of all trades being done by what the Swedish law classifies as insiders. The record is public information and a way to inform the market about insider transactions, which creates the question: Can the public information on insider trades kept by FI help an investor to make better investments? Yes, it can! In order to examine the question have we performed event studies on different trading strategies that have been based on information from previous studies in the field. The event studies have focused on insider purchases in Small Cap and Mid Cap companies on the Stockholm Stock Exchange during [2007][2008][2009]. We choose to focus on insider purchases because of its higher relevance for other investors than insider sales. Insiders have several reasons to sell shares in their company, for example portfolio diversification and liquidity needs, but they have one main reason to buy shares, to earn money on their investment. We created and tested three different trading strategies based on the insider purchases executed during 2007-2009. The first trading strategy was based on periods of intensive trading, the second strategy was based on large volume transactions and the third strategy was based on short periods of intensive trading where small purchases were excluded. The first two strategies were applied on Small Cap and Mid Cap separately, while the third strategy was applied on the Small Cap only. We have been using a well-established and highly referenced way to perform our event studies. To be able to test the average development statistically have the returns been aggregated through time and through securities. The trading strategies have been tested over 5, 10, 30 and 90 day periods. The results that we have found indicate that outsiders have a possibility to earn abnormal returns in small companies by using the information provided by FI. The strongest positive result that we attained by our tests was an 1.367% cumulative average abnormal return (CAAR) for a 5 day period with the intensive trading strategy on Small Cap companies. It was surprising that all the tests executed showed negative abnormal return over 30 and 90 days, with some of them being negative statistically significant. The results imply that the trading strategies would not be successful for a time-period over 30 and 90 days. The large volume transaction strategy and the third strategy for Small Cap companies did not result in any statistically significant results but showed positive development for 5 day event periods. We conclude through our study that reported insider trading is valuable for outsiders investing in small companies over short time-periods. The results that we found indicate that smaller companies are less efficiently priced than larger companies. i

Root trenching: a useful tool to estimate autotrophic soil respiration? A case study in an Austrian mountain forest

We conducted a trenching experiment in a mountain forest in order to assess the contribution of theautotrophic respiration to total soil respiration and evaluate trenching as a technique to achieve it. We hypothesised that the trenching experiment would alter both microbial biomass and microbial community structure and that Wne roots (less than 2 mm diameter) would be decomposed within one growing season. Soil CO2 eZux was measured roughlybiweekly over two growing seasons. Root presence and morphology parameters, as well as the soil microbial community were measured prior to trenching, 5 and 15 months after trenching. The trenched plots emitted about 20 and 30% less CO2 than the control plots in the Wrst and secondgrowing season, respectively. Roots died in trenched plots, but root decay was slow. After 5 and 15 months, Wne root biomass was decreased by 9% (not statistically diferent)and 30%, (statistically diVerent) respectively. When wecorrected for the additional trenched-plot CO2 eZux due to Wne root decomposition, the autotrophic soil respiration rose to »26% of the total soil respiration for the Wrst growing season, and to »44% for the second growing season.Soil microbial biomass and community structure was not altered by the end of the second growing season. We conclude that trenching can give accurate estimates of the autotrophic and heterotrophic components of soil respiration, ifmethodological side eVects are accounted for, only

Formal and Informal Institutions in Asia : A Survey of Asian Corporate Governance

Comparative literature in corporate governance typically separate between countries with different legal origin, institutions and corporate traditions. However, the importance of informal institutions and their effects on the economic development, firm performance and corporate governance should not be neglected. Informal institutions have been claimed to be of extra importance foremost Asia. This paper comprise of a general discussion on legal origin and formal and informal institutions. This discussion is then connected to recent studies on corporate governance issues in Asia. The results are mixed, but a general picture of corporate governance in Asia is presented. Foremost formal institutions and legislations seems to have their intended effect on the economy in general. However, differences between the countries become clear and the influence of informal institutions seems to differ substantially between the Asian countries. The impact of formal institutions in contrast to informal institutions is important since the economical effects for many of the developing countries in the region may be imperative

Corporate governance, legal origin and firm performance : an Asian perspective

This dissertation deals with corporate governance, legal origin and firm performance with a focus mainly on Asia. The dissertation consists of four individual papers and an introductory chapter. All papers can be read individually but share a common theme in corporate governance and investments. The main region of interest is Asia due to its special characteristics of ownership structures and governance. However, comparative studies of Asia and Europe as well as global outlooks are included in the dissertation too. The papers contribute to research by studying effects on investment performance, firm performance, capital allocation and capital structure from legal traditions, institutional indicators and ownership type. The first paper focuses on family ownership which is found to affect firm performance negatively when using measures of firm valuation and returns, but investment performance positively when measured by marginal q. This suggest that family owned firms may be better at avoiding bad investments but at the same time have lower market valuation and returns to capital compared to firms with other owners. The second paper investigates investment performance and firm size in terms of number of employees in 58 countries around the world. It is found that initial increase of staff size tend to positively affect investment performance overall, but excessive employment has a negative impact on investment performance. The third paper studies the capital allocation in India after their economic reforms in the 1990s. It is found that allocation of capital has been slow to respond to reforms and firms face significant costs in adjusting their capital stock, leading to inefficient capital allocation. The fourth paper deals with firm capital structure in 24 Asian and European countries. Both financial market indicators of maturity and firm specific characteristics influence the leverage of firms. Financial market maturity measures have a negative effect on debt levels as do family ownership of firms

INVESTMENT FOR GROWTH – a comparative study of firm performance in Scandinavia and South East Asia

Previous studies have shown that differences in corporate governance systems and both formal and informal institutions, such as traditions and laws appear to correlate with firm performance. It has been suggested that Scandinavia and South East Asia have similar ownership structures with vote-differentiated shares, pyramids and strong family ownership. However, the regions have different legal traditions and also differ substantially in informal institutions. This paper is a study of firm performance for a unbalanced dataset of listed firms in Scandinavia (represented by Denmark, Finland, Norway and Sweden) and South East Asia (represented by Malaysia, Thailand, Hong Kong, Taiwan and South Korea), from 1998 to 2006. Firm performance is estimated using both Tobin’s Q and the Marginal q-approach.ownership; investment performance; corporate governance; institutions; growth

En undersökning om veckodagsanomalier existerar på OMXS-30

Uppsatsens syfte är att undersöka om det är möjligt att med en viss handelsstrategi kunna möjliggöra sig en avkastning som är högre än index. Uppsatsen avhandlar tio slumpvis valda aktiers prisutveckling under perioden 1/1-2007 – 31/12-2011 och undersöker veckodagsskillnader i prissättningen. Två tillvägagångssätt har används och det första tillvägagångssättet har använts för att se om det finns en veckodagsanomali inom den egna aktien och jämför därför prissättningen mellan valda veckodagar. Den andra undersökningen gör avdrag för index under samma period och jämför sedan på exakt samma sätt som den första undersökningen. Uppsatsen behandlar också teori såsom effektiva marknader och prissättningar av aktier. Resultaten tyder på att det inte är möjligt att göra en överavkastning med de strategier som har avhandlats. I ett fall så finns det dock en signifikant skillnad