FALL 2018
VOLUME19, NUMBER2

ANALYSIS OF THE EFFECTS OF SECURITY BREACHES ON FIRM VALUE

Stoyu Ivanov

The purpose of this study is to examine, on intradaily market microstructure basis, fifteen recent occurrences of corporate security breaches to extend our understanding of market efficiency. We document minor average price responses to announcements of a security breach in the firms’ target of an attack, contrary to many other corporate announcement studies, which document immediate price reaction to an announcement. Surprisingly, we find that the matching firms in our study have a stronger market microstructure response to the announcement of the attack instead. This study suggests to high-frequency investors, such as hedge funds, that they should focus their attention and scarce resources on developing trading strategies on other corporate events and announcements rather than on the announcement of security breaches.


https://doi.org/10.51240/jibe.2018.2.1          PDF

CREATING COMPETITIVE ADVANTAGE BY GOING ABROAD: A CASE STUDY OF TATA STEEL

Tae Gyeom Kim

Through different types of mergers and acquisitions, what started off as a motive for Tata Steel to increase their market expansion had led to diversifying their investments, gaining experiences and new knowledge sets through market and technology learning about different business environments. While the existing studies most simply look at fragmented cases of what advantages Tata Steel had in comparison with other steel firms to go abroad, this paper demonstrates that Tata Steel’s competitive advantages were not innate, but rather created through continuous learning, collaboration, and outward investments based on the Imbalance Theory. Thus, hadn’t been Tata Steel’s motive to learn market and technology in different business settings after market expansion, it would have not become the top global steel player today.


https://doi.org/10.51240/jibe.2018.2.2          PDF

NATIONAL OUTPUT AND MARKET RETURN INTEGRATION OF G-7 COUNTRIES: A PERSPECTIVE FROM PRINCIPAL COMPONENT ANALYSIS

Galin Todorov

This study explores the evolution of integration in output trends, cycles, and market returns for G-7 countries. We use unobserved component model to decompose national output levels and identify quantitatively significant trend and cycle components. For all countries, trend components dominate both in terms of magnitude and importance due to the permanent nature of the shocks they capture. Using principal component analysis, we reveal the existence of common factors driving the volatility in trends, cycles, and market returns. A central contribution of our work is the construction of quantifiable measures of output trend, cycle, and market return integration, referred to as indices of integration. Our indices display high volatility with no trend. In addition, a null hypothesis for white noise could not be rejected for the trend and cycle integration indices. Our study is not able to establish a relationship between integration and national output and market return levels.


https://doi.org/10.51240/jibe.2018.2.3          PDF

THE CONTAGION EFFECTS OF EUROPEAN UNION MACROECONOMIC INSTABILITY IN EMERGING MARKETS: EVIDENCE FROM INDIA

Vighneswara Swamy

This paper examines the European Union (EU) macroeconomic instability and its contagion effects on emerging market economies. Given the large economic weight of the EU in the world, the contagion of the crisis and its potentially devastating effects are necessitating a renewed attention from the researchers and international financial institutions in analyzing the nature and implications of sovereign debt on the political economy of developing and emerging economies in general, particularly India. Though the crisis is epicentered in the EU, its knock-on effects are

felt all across the globe. The emerging and developing economies (EDEs) have posted lower growth on account of the worsening external environment and a weakening internal demand during the period of the Eurozone debt crisis. While presenting the contemporary literature on the topic, this paper analyses the causes of the sovereign debt crisis presents implications for sovereign debt crises and draws lessons particularly for emerging markets such as India.


https://doi.org/10.51240/jibe.2018.2.4          PDF

ENTREPRENEURSHIP IN TRANSITION ECONOMIES: IS THERE AN ENTREPRENEURIAL CHARACTERISTIC SIMILARITY TO WESTERN ENTREPRENEUR?

Thomas Bradley and Paul Eberle

This empirical study consists of two parts. The first part of the study examines the cultural characteristics and dimensions of entrepreneurs and factory workers in transition economies during the early transition period to determine if their cultural values were similar to those found in other nations. The second part of the study compares the differences in Hofstede’s cultural dimension scores between entrepreneurs and workers in market economies. It might seem extraordinary that after more than 70 years of a centralized nonentrepreneurial society that all of the communist nations that the current authors studied had essentially the same cultural differences among entrepreneurs that were found in capitalist nations with a long history of entrepreneurial activity.


https://doi.org/10.51240/jibe.2018.2.5          PDF