The current research was undertaken to assess if the prices in the South African capital market imply a risk free rate that is not equal to the theoretical risk free rate. The research was conducted by means of a literature review and desktop-research-based analysis of the market price based yield curve. The literature review was conducted to establish the importance of the risk free rate in the financial systems dynamics. The literature review highlighted that all the portfolio theories and performance-measure indicators have the risk free rate at the core of their methodology. This implies that the risk free rate is the most important concept that determines the market demand of different instruments. Next, a comparison has been drawn between the BESA published bond yield curve and a market-price-based yield curve developed by the researcher. The findings establish that the market price derived risk free rate is higher than the theoretical risk free rate. It was also found that the shape of the yield curve is different from the BESA projected yield curve, and that it is indicative of future problems in the South African capital market. The implications of investors‟ perceptions of the higher risk free rate are discussed and it is revealed that the foreign investors consider the country risk and the default risk associated with the South African government as higher than the BESA may perceive it to be. / Thesis (MCom (Risk Management))--North-West University, Vaal Triangle Campus, 2013

Finance scholars disagree on how real world financial markets work. On the one hand, efficient market hypothesis (EMH) advocates claim that arbitrage ensures that market prices do not systematically deviate from their fundamental value even when some market participants are less than fully rational. Hence, in the EMH world, securities’ prices always reflect all available information. On the other hand, behavioural finance theorists argue that investors suffer important cognitive biases and that arbitrage is both risky and costly. In this alternative setting, prices may not reflect all available information and can systematically deviate from their fundamental value for long periods of time. My thesis contributes to this ongoing debate by exploring how the US equity market reacts to bankruptcy announcements. Using a set of 351 non-financial, non-utility firms filing for Chapter 11 between 1979 and 2005 that remain listed on a main exchange, I first find a strong, negative and statistically significant mean post-bankruptcy announcement drift. This ranges from -24 to -44 percent over the following 12 months depending on the benchmark adopted to measure abnormal returns. A number of robustness tests confirm that this result is not a mere statistical artefact. In fact, the post-bankruptcy drift is not subsumed by known confounding factors like the post-earnings announcement drift, the post-first-time going concern drift, the momentum effect, the book-to-market effect, industry clustering or the level of financial distress. In addition, I show that my main result is robust to different methods for conducting longer-term event studies. My empirical findings are consistent with the previous behavioural finance literature that claims that the market is unable to deal appropriately with acute bad news events. In the second part of this thesis, I investigate how limits to arbitrage impact the stock price of firms undergoing a Chapter 11 reorganization. I find that, despite the apparent large negative abnormal returns, the post-bankruptcy announcement drift offers only an illusory profit opportunity. Moreover, I show that noise trader risk is critical for the pricing of these firms’ stock. Taken together, my results suggest that limits to arbitrage issues can explain the persistence of the market-pricing anomaly I uncover. As such, the market for firms in Chapter 11 appears to be “minimally rational” (Rubinstein, 2001). My work additionally explores whether behavioural finance theory can help clarify why the post-bankruptcy announcement drift occurs in the first place. I find that the Barberis, Shleifer and Vishny (1998) and the Hong and Stein (1999) models do not account well for the typical return pattern associated with the announcement of Chapter 11. My results call into question the reliability of existing theoretical models based on behavioural concepts in explaining how real world financial markets really work. In the last part of this thesis, I show that the different motivations for filing for Chapter 11 Court protection affect the market’s reaction to this extreme event. Solvent firms addressing the Bankruptcy Court not as a last resort but as a planned business strategy characterize a strategic bankruptcy; companies on the verge of imminent failure typify a non-strategic bankruptcy. I find that for non-strategic bankruptcies, there is a negative and statistically significant post-event drift lasting at least twelve months. Conversely, I show that, although the initial market reaction to bankruptcy filing is similar in the case of strategic bankruptcies in terms of viewing all bankruptcies as homogeneous, there is a subsequent reversal in the stock return pattern for these peculiar firms. In effect, abnormal returns become strongly positive and significant suggesting that, over time, the market to recognise strategic bankruptcies as good news events. Overall, the results of my PhD allow me to make some important contributions to finance theory and the finance literature, in particular in the bad news disclosure and market pricing domains.

Investors accept that there is uncertainty, or risk, associated with equity investment returns. Consequently, equities are normally priced so that they provide a premium to the returns available on risk-free investments. Equity returns, however, are cyclical. There can be long periods when equity returns greatly exceed risk-free returns; there can be long periods when the premium disappears altogether. This thesis explores the influences and driving forces in equity markets, with a particular emphasis on the UK equity market. Both rational and irrational influences are examined and discussed. A General Literature Review examines the general progression in academic thinking in the area of equity pricing over four decades and takes a close look at the concepts of market efficiency and the challenges mounted by behavioural finance. The “equity risk premium puzzle” is also examined. Chapters 3 to 6 contain empirical studies of the variation in UK equity returns over time from four angles. The chapters look, respectively, at: macro-economic influences on the equity market; the relationship between equity returns and market volatility; the impact of variation in risk-free returns; a full decomposition of both ex-ante and ex-post equity returns. Reassuringly, the results confirm that the UK equity market is driven, in the main, by economic factors. However, the results also indicate that the full set of influences on the equity market is complex. The analyses undertaken suggest that significant swings occur in the risk premium element of expected equity returns. The results also suggest that there are periods when the UK equity market may be in disequilibrium with other financial markets. It is not the contention that many of the puzzles that have confronted equity market researchers over recent decades are now resolved by the analyses undertaken and presented in this thesis. It is to be hoped, however, that a useful platform has been built from which further investigation and analysis can be taken forward. In particular, it is suggested that comprehensive surveys of long-term expectations could lead to a better understanding of equity market mechanisms.

This is a thesis about knowing, working and migrating in a complex and fluid world. Through an analysis of biographic-narrative interviews with migrants working in 'knowledge intensive' roles, as well as with those employed in jobs normally considered 'low-skilled', arguments about knowing, working and migrating in the 'new knowledge economy' are developed. Foregrounding an active and embodied understanding of knowing as a socially embedded and fluid phenomenon allows for a reconceptualisation of the relationships between knowing, migrating and working, raising questions about our normative understandings of both the 'knowledge' economy and divisions of migrant labour. This thesis seeks to illustrate how everyday practice and the interaction of complex (and often competing) 'forces' have acted to produce powerful ideas about what kind of jobs are suitable for which types of migrants, and how these ideas become accepted as normal – as 'common sense' assumptions. Furthermore, such productions of knowledge about migrants, also impacts on how, what and where we know. That is, the processes and performances of knowing are both constitutive of, and constituted by, the structures of power which shape our lives. Thus the 'power to know' is contextual, fluid and yet fundamental to the constitution of our everyday lives.

This thesis considers China’s rural financial system and its impact on rural economy.  It explores three specific aspects, i.e. the relationship between agricultural growth and finance; agricultural banking efficiency and financial reforms; and the impact of lack of access to credit on production. The results of the general finance-growth relationship over 1992 to 2003 indicate no evidence of a positive relationship between state finance and agricultural or overall growth, although, perhaps as a result of the reforms, this negative impact seemed to disappear when the later sub-period was considered.  The results also suggest that the impact of the lagged state credit variable on growth is positive.  There is also weak evidence that agriculture growth was less negatively affected by state lending than in the economy overall.  There is also some indication that the changes which occurred after the 1993 financial reform were less in agriculture than for the wider economy. Examination on the performance of the Agricultural Bank of China (ABC) over the period 1979 to 1992 and 2002 to 2005 show that ABCs’ performance fluctuated over years.  However, the overall comparison between the beginning and end of the period indicates an improvement in banking performance in the long-term.

This study analyses the announcements of European mergers and joint ventures as forms of intra-European direct investment that affect the share prices of U.K. plcs. From a review of the theories of multinational enterprise and foreign direct investment in the context of European economic integration, the study emphasized the importance of the single market and its implications on foreign direct investment. A comparison is made between mergers and joint ventures as forms of foreign direct investment based on their theories and empirical evidences. The effects of the integration on European mergers and joint ventures are then examined by analysing the announcement effects. Using event study methodology, the study investigates the effects of announcements of UK plc acquisitions of European firms and their involvement in European joint ventures on the share prices of UK plcs. Both parametric and non-parametric techniques are used to measure the impact of these announcements in terms of abnormal returns and volatility of returns. The results show positive significant market reaction to the merger announcements on the announcement day for the abnormal return and on the day before the announcement for the volatility. However a significantly negative post announcement cumulative abnormal return is found. A shift of the market reaction after U. K. Is entry into the Exchange Rate Mechanism (ERM) is also found. The market reaction to the joint venture announcements is not significant on the day of announcement. However a significant positive cumulative abnormal return is found a few days prior to the announcement of the joint venture. A positive significant relationship between cumulative market reaction and U.K. Is entry into ERM is also established. Profile analysis of the significant announcements also shows the relevance of certain factors that could explain the market impact of joint ventures.

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What do marketing scholars need to know about markets? The quote above places markets at the heart of marketing theory. Yet many commentators have lamented the scant attention paid to markets in marketing and argued for the need to better understand this central facet of the subject (Araujo et al., 2008; Vargo, 2007; Venkatesh et al., 2006). We share this view and outline issues and research opportunities against the backdrop of recent contributions proposing a practice approach to markets (Araujo et al., 2010; Kjellberg and Helgesson, 2007; Storbacka and Nenonen, 2011; Vargo and Lusch, 2011). A central tenet in this tradition is the idea that working markets are always in the making; that they are the continuous results of market practices. Paraphrasing Vargo and Lusch (2004): markets are not, they become. In this process of becoming, markets take on multiple forms as a result of practical efforts by many different actors to shape economic exchanges, establish rules for their performance, and represent such exchanges as markets. The observation that economic theories (including marketing) contribute to shape markets by influencing these practical efforts (Callon, 1998) introduces a complication in our study of markets and presents a reflexive challenge for marketers studying the shaping of markets.

The entire literature on adverse selection in the labour market spawned by Greenwald (1986, Review of Economic Studies, 63(3)) has been built, somewhat unwittingly, on the assumption that firms forget the type of a worker after the worker quits. In many contexts, this assumption is implausible. The first three chapters of this thesis therefore explore an alternative approach to modelling labour markets with asymmetric information by assuming firms will never forget a worker's type. The first chapter turns the standard Greenwald result on its head by showing that if the worker knows her own type and productivity is unchanging, the possibility of competitive wage offers from fully-informed previous employers means that adverse selection will never persist. Job changing frictions can cause a semi-separating equilibrium where the more productive workers have their type revealed whilst the least productive workers receive a pooling payoff. But even where asymmetric information persists there is no adverse selection because job changing frictions shield potential employers from the winner's curse. The second chapter investigates the robustness of the non-persistence of adverse selection result where previous employers are asymmetrically informed. The result is found to be robust where firms bid for the worker under a closed but not an open auction. The third chapter finds that, if workers are not sure of their exact value to their employer, there will be an adversely selected stream of job changers in equilibrium, even as the probability of a worker quitting for exogenous reasons approaches zero. Less able workers are quickly revealed as such, whilst more able workers have their type revealed gradually. The fourth substantive chapter of this thesis investigates the widely observed paradox that, despite what traditional economics would lead us to believe, there can be such a thing as too much choice. The model provides a formal theoretical explanation for this phenomenon using the regret theory of Loomes and Sugden (1982, Economic Journal, 92(368)). When options are few it is shown that enlarging the choice set improves welfare, but when options are many, a "less is more" phenomenon emerges. In some cases, excess search options can decrease search.

The topic of this final thesis is the definition of the relevant market for the purpose of the EU competition law. The main purpose of this thesis is to provide the structured summary of the rules on the definition of the relevant market as these have been mostly determined by the Court of Justice of the European Union and the European Commission. The case-law provided by these institutions has formed the main source of this thesis, however, the literature, in particular English, has also formed an important source. The final thesis is divided into four main chapters. The first one deals with the EU competition law in general, its position within the EU law and its significance for establishing the common market and attaining the main goals of the European integration. The first chapter also provides the sources of the EU competition law and the institutions supervising the observation thereof, i.e. the European Commission and the Court of Justice of the European Union. The second chapter of this thesis is focused on the significance of the relevant market definition within the EU competition law. This chapter provides for the particular cases requiring the relevant market definition. These cases are divided pursuant to Articles 101 and 102 TFEU and the merger control regulation. The third chapter...