Financial institutions, instruments and markets

Latest information, developments and statistics, with website addresses provided to allow students to access up to the minute, real-world data. Real-world examples throughout the text help students relate theory to pracical situations.

The credit spread dynamics of Latin American euro issues in international bond markets

This paper investigates two important relationships using the sovereign issues made by major Latin American economies in the international bond market: the determinants of credit spread changes using variables derived from structural and macroeconomic theory and the impact of a default episode on the underlying equilibrium dynamics. We find four significant determinants of credit spread changes: an asset and interest rate factor—consistent with structural models of credit spread pricing; the exchange rate—consistent with macroeconomic determinants and the slope of the yield curve—consistent with a business cycle effect. Also, an intra-regional analysis of sovereign yields reveals a shift in the long-run equilibrium dynamics around the Argentine default on the 23 December 2001.

States, markets and communities : is there room for educational leadership?

This paper attempts a comparative analysis of classification and framing relationships as they are exemplified in the four papers presented in this Special Issue. In particular, it interrogates Bernstein's assertion that education is simply a relay for power relations external to it and examines approaches to educational leadership and administration that follow from such analysis. It is concluded that in different times and places power relationships external to education are often complex and contested, producing a variety of relays and attempts at classification and framing that serve differing interests and are articulated through policies containing significant internal contradictions. In such circumstances contingency and immediate local influence may affect the practice of educational leadership as well as offering scope for subversion, resistance, simulated consent and collective action. The possibility of a public pedagogy through which such complexities could be articulated is raised and its importance to the practice of educational leadership affirmed.

Competition in mature software markets

A theoretical framework is built for capturing properties of competition in mature monopolistic digital product markets. Based on an empirical study of the market of accounting software for small and medium enterprises, a consumer choice model is suggested, where a rational consumer is already using a particular version of a software package and is considering to chose from the following three options: either to continue using it, or to upgrade to a newer version of the product, or to switch to a competitive product. Consumer decision is justified by software quality, and network effects, under the price and switching costs constrains. A modified consumer demand function is used for the model, and theoretical conditions are analysed for choosing from one of the three above-mentioned options. The results are applicable to a wide range of digital products.

Competition in the mature markets of professional versus final consumer information products

Factors are explored of decision making in regard to buying and/or upgrading information products. Mature information product markets are considered. Comparing two cases - professional and final consumer information products - the decision making process is considered on the choice of product variant. We distinguish three groups of users according to their ultimate decisions to either not to upgrade the existing system, or to upgrade it with the existing provider, or to switch to another provider. Consumer decision is based on multiple characteristics of information product quality, network effects, price and switching costs, whereas producers have to compete not only with their competitors, but also with the previous versions of the own products. Based on the considered cases, differences in consumer priorities are discussed in the markets of professional versus final consumer information products.

Random walk versus multiple trend breaks in stock prices : evidence from 15 European markets

This letter extends research reported in Narayan and Smyth (2005) by employing multiple trend break unit root tests to examine the random walk hypothesis for 15 European stock market indices. The results provide strong support for the view that stock prices are characterized by a random walk.

Are Australia's tourism markets converging?

In this paper we make an important contribution towards understanding Australia's tourism industry by examining whether or not Australia's tourism markets are converging. We define convergence as the reduction in tourist arrivals' differential, which is calculated as the difference between total visitor arrivals to a country and visitor arrivals from a particular tourist source market. We analyze Australia's thirteen major tourist source markets using monthly data over the period January 1991 to September 2003. To test for convergence, we use the univariate and panel Lagrange multiplier (LM) tests. Our main finding is that when we allow for two structural breaks in the data series, both univariate and panel LM tests provide strong evidence for convergence of Australia's tourism markets. This implies that policies aimed at attracting visitor arrivals from any one of Australia's thirteen tourist source markets will boost the volume of tourists coming into the country.

Multi-scaling modelling in financial markets

In the recent years, a new wave of interest spurred the involvement of complexity in finance which might provide a guideline to understand the mechanism of financial markets, and researchers with different backgrounds have made increasing contributions introducing new techniques and methodologies. In this paper, Markov-switching multifractal models (MSM) are briefly reviewed and the multi-scaling properties of different financial data are analyzed by computing the scaling exponents by means of the generalized Hurst exponent H(q). In particular we have considered H(q) for price data, absolute returns and squared returns of different empirical financial time series. We have computed H(q) for the simulated data based on the MSM models with Binomial and Lognormal distributions of the volatility components. The results demonstrate the capacity of the multifractal (MF) models to capture the stylized facts in finance, and the ability of the generalized Hurst exponents approach to detect the scaling feature of financial time series.