Three Essays in Financial Markets. The Bright Side of Financial Derivatives: Options Trading and Firm Innovation PDF Download
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Author: Iván Blanco Publisher: Ed. Universidad de Cantabria ISBN: 8481028770 Category : Business & Economics Languages : en Pages : 90
Book Description
Do financial derivatives enhance or impede innovation? We aim to answer this question by examining the relationship between equity options markets and standard measures of firm innovation. Our baseline results show that firms with more options trading activity generate more patents and patent citations per dollar of R&D invested. We then investigate how more active options markets affect firms' innovation strategy. Our results suggest that firms with greater trading activity pursue a more creative, diverse and risky innovation strategy. We discuss potential underlying mechanisms and show that options appear to mitigate managerial career concerns that would induce managers to take actions that boost short-term performance measures. Finally, using several econometric specifications that try to account for the potential endogeneity of options trading, we argue that the positive effect of options trading on firm innovation is causal.
Author: Iván Blanco Publisher: Ed. Universidad de Cantabria ISBN: 8481028770 Category : Business & Economics Languages : en Pages : 90
Book Description
Do financial derivatives enhance or impede innovation? We aim to answer this question by examining the relationship between equity options markets and standard measures of firm innovation. Our baseline results show that firms with more options trading activity generate more patents and patent citations per dollar of R&D invested. We then investigate how more active options markets affect firms' innovation strategy. Our results suggest that firms with greater trading activity pursue a more creative, diverse and risky innovation strategy. We discuss potential underlying mechanisms and show that options appear to mitigate managerial career concerns that would induce managers to take actions that boost short-term performance measures. Finally, using several econometric specifications that try to account for the potential endogeneity of options trading, we argue that the positive effect of options trading on firm innovation is causal.
Author: Don M. Chance Publisher: John Wiley & Sons ISBN: 1118160649 Category : Business & Economics Languages : en Pages : 403
Book Description
In the updated second edition of Don Chance’s well-received Essays in Derivatives, the author once again keeps derivatives simple enough for the beginner, but offers enough in-depth information to satisfy even the most experienced investor. This book provides up-to-date and detailed coverage of various financial products related to derivatives and contains completely new chapters covering subjects that include why derivatives are used, forward and futures pricing, operational risk, and best practices.
Author: Yubin Li Publisher: ISBN: Category : Derivative securities Languages : en Pages : 116
Book Description
My dissertation comprises of three essays: 1) Accounting information and financial derivatives: a literature review 2) The Effect of Option Transaction Costs on Informed Trading in the Option Market around Earnings Announcements; and 3) The Effects of Credit Default Swaps trading on Analyst Forecast Properties. The first essay surveys the previous researches on accounting information and financial derivatives. The financial derivate instruments we mainly focus on are stock option and credit default swaps. Then we also identify some research gaps for future research. The second essay investigates the effect of transaction costs related to trading options on the directional and volatility informed trading in the option market. We find that both forms of informed trading are significantly stronger among firms with lower option bid-ask spread. Importantly, the effect of transaction costs is significant around earnings announcements, but not significant (on average) around randomly chosen dates with no events of consequence. This suggests that transaction costs play a particularly important role during information intensive periods. Trading strategies based on directional informed trading and option transaction costs earn monthly abnormal returns of 1.39% to 1.91%. The third essay investigates whether the initiation of credit default swaps (CDSs) trading can affect analysts' forecast properties. Using a difference-in-difference research design, we find that the onset of CDS trading help analysts to increase forecast accuracy, which is consistent with notion that a new financial market facilitate information discovery and dissemination. This effect is more pronounced for firms with greater information asymmetry and higher leverage. We also find that CDS initiation can depress analysts' strategic forecast optimism. Relying on several proxies for analysts' strategic optimism, we find that the depressing effect is more pronounced for subsamples with higher optimism level. In addition, we find that the depressing effect is stronger when bad news is realized ex post in the earnings announcement date.
Author: Merton H. Miller Publisher: John Wiley & Sons ISBN: 9780471183402 Category : Business & Economics Languages : en Pages : 266
Book Description
Dieses Buch ist die sorgfältig umgeschriebene und redigierte Bearbeitung von Reden und Aufsätzen des Nobelpreisträgers Merton Miller, die seine persönlichen Einschätzungen des Marktes widerspiegeln. Gut verständlich wird die Problematik der Derivative sowie wichtige Themen der modernen Finanzwelt - jedoch ohne mathematische Formeln - erörtert. (10/97)
Author: Sinan Tunbek Publisher: GRIN Verlag ISBN: 3668952140 Category : Business & Economics Languages : en Pages : 6
Book Description
Essay from the year 2016 in the subject Economics - Finance, grade: 2,7, University of Mannheim, course: The Evolution of Financial Markets, language: English, abstract: In the essay the author discusses some of the most important risks and threats of using financial derivatives by explaining them. The essay deals with questions like: Are financial derivatives really a threat for firms and, worse, for the whole economy? Do they increase welfare? If yes, who benefit the most? Are there losers? Warren Buffet, without any doubt one of the most famous investors of the world, once referred to financial derivatives as “Financial weapons of mass destruction”. Ed Murray, practicing lawyer and senior member of the Allen & Overy team advising ISDA (International Swaps and Derivatives Association), states that derivatives played an important role and worsened the Financial Crisis. Many more influential people seem to point accusing fingers to financial derivatives, stating that derivatives may bear significant problems people are underestimating. Since the derivatives market have been growing immensely since the 1970s to todays unbelievable estimated notional value of 1,2 quadrillion US dollars, more than ten times the gross world product (107,5 trillion US dollars), financial derivatives play an extremely important and growing role in todays financial system. Therefore we should be aware of the problems, risks and threats coming with the usage of derivatives instrument.
Author: Iván Blanco 
Author: Iván Blanco 
Author: Atilim Murat
Author: Don M. Chance
Author: Ronnie Söderman
Author: Long Phi Tran
Author: Yubin Li
Author: Merton H. Miller
Author: Sinan Tunbek
Author: Andrés E. Rivas-Chávez
Author: Jackie Zhang