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Why did Victorian Britain send so much capital abroad? We collect over 500,000 monthly British and foreign security returns between 1866 and 1907 and investigate the effect of international diversification on Victorian investors' portfolios. This is the first study to use nineteenth-century data that is both broad enough and sampled at a high enough frequency to examine if foreign assets expanded the mean-variance efficient frontier of British investors and how valuable this expansion was in terms of utility. We find that foreign assets significantly expanded the mean-variance frontier and resulted in utility gains equivalent to large increases in wealth.

This paper explores the link between changes in the aggregate value of corporate stock and changes in consumer spending. It presents data on the distribution of corporate stock ownership based on the 1998 Survey of Consumer Finances. It also uses time-series evidence on the comovement of stock market wealth and various categories of consumer spending to calibrate “the wealth effect.” It concludes that in the year after a change in stock market values, consumer spending is likely to rise by between one and two cents for each dollar increase in the value of corporate stock.

Prior literature suggests that the effect of adopting the International Financial Reporting Standards (IFRS) could vary by country-specific or firm-specific factors. In particular, we focus on the effect of the strength of corporate governance of a firm, a firm-specific characteristic, prior to the adoption of IFRS. Specifically, we use the Korea Corporate Governance Stock Price Index, a metric for the corporate governance structure in Korea, to examine whether the corporate governance structure influences the effect of IFRS adoption on the analyst’s earnings forecasts in Korea. We find that the beneficial effect of IFRS adoption on analyst forecast errors is observed for firms with moderate corporate governance prior to IFRS adoption, but not for firms with superior or inferior corporate governance. We interpret our findings such that firms with strong or weak corporate governance do not benefit from IFRS adoption, because firms with strong corporate governance already had transparent information system prior to IFRS adoption and firms with weak corporate governance failed to implement IFRS properly.

This study investigates the influence of sovereign wealth fund (SWF) investments on the financial performance of firms in Saudi Arabia and Spain. Findings indicate that SWF investments exert a notable influence on average share prices, accounting for a considerable portion of the variation in stock values across both countries. Conversely, no significant relationship was found between SWF investments and other financial indicators such as return on investment, liquidity ratio, financial leverage, and profitability ratio. The analysis underscores the relevance of a firm’s national context when assessing the implications of SWF activity, as such investments may alter ownership structures and strategic directions. Additionally, the study emphasizes that SWF decisions are closely linked to broader economic and political developments, necessitating continuous monitoring and contextual evaluation. To explore these dynamics, the research utilized statistical tools such as regression models and coefficients of determination, enabling a clear measurement of the investments’ effects on financial indicators. The study concludes with several recommendations: further investigation into other variables influencing financial performance, stronger collaboration with SWFs as part of strategic investment planning, and improved transparency through consistent financial disclosure. Moreover, longitudinal and cross-sectoral comparative research is encouraged to deepen the understanding of SWF impacts globally.

Before looking at the actual wealth data, it might be helpful to say a few words about what happened to both house and stock prices over the last two and half decades. Although the median house price in real terms was virtually the same in 2001 as in 1989, house prices suddenly took off from 2001-2007, with the median sales price rising by 19% in real terms. Then, the Great Recession hit and home prices plummeted by 24% in real terms from 2007-2010. This drop was followed by a partial recovery, with median house prices rising by 7.8% in real terms through September 2013, though still way below the median house price level in 2007. In contrast to the housing market, the stock market boomed during the 1990s. On the basis of the S&P 500 Index, stock prices in real terms surged 171% between 1989 and 2001.

Population aging is placing enormous pressures on the pension benefits governments are able to provide. The former transition economies of the countries of Central, Eastern, and Southern Europe (CESE) face unique challenges. The growth of their aging populations outpaces other European countries, while the growth of their financial markets (essential to fund pension provisions) lags behind. With support and direction from the ERSTE Foundation, an Austrian group focused on Central European policy issues, a World Bank team investigated the challenges faced by these countries against the background of international experience from the OECD countries and Latin America. 'Aging Population, Pension Funds, and Financial Markets: Regional Perspectives and Global Challenges for Central, Eastern, and Southern Europe' examines how well the financial systems in the CESE economies were prepared for the challenges of multipillar pension reform, how ready they are for the approaching payout of benefits to the first participants, whether returns from pension funds can be sustained in an aging population, and how determined policy actions might be implemented to complete financial market development.

The current economic context, as well as previous research, highlights the importance of corporate governance over the financial performance expected by companies. Therefore, the study of the current practices in the field of corporate governance, the impact that it has on the results of the companies, but also vice versa - the identification if the financial performance achieved puts its mark on the degree of compliance with the requirements established for good corporate governance - is a representative approach in opening new priorities for the interests of companies. This is the objective of the present research in which, applying quantitative research methods, the authors tested some hypotheses that demonstrate the corporate governance and the financial performance causality of companies on the Romanian capital market.

Based on an analysis of the leading trading markets for stock in the United States, I document the dramatic expansion that took place in the scale and scope of the country's stock market from the mid-1880s to the early 1930s. My analysis suggests that a broadbased stock market was a long way from being established even by the early teens. It took the impetus provided by World War I, plus the enthusiasm of the 1920s, to bring such a market into existence. I consider the capacity of today's fashionable theories, which link the development of stock markets to improvements in minority shareholder protection, to explain the growth of the U.S. stock market, and find that they cannot account for the historical patterns that I identify. However, I suggest that there are other arguments that are worthy of further consideration. First, there were factors, besides minority shareholder rights, that led to changes in the demand for corporate stocks during this period, especially an increase in the demand for stocks by institutional investors, notably banks and insurance companies, as well as the emergence of a retail market for stocks after World War I. Second, there were also important developments in the supply of corporate stocks after the War, including the issuance of stock to fund the expansion of young firms, but especially to facilitate mergers and acquisitions by established firms, which seem to have played an important role in driving the expansion of the U.S. stock market.

This paper studies the effects that benefits of control and moral hazard have on the evolution of large stakes in REITs. A large risk-averse shareholder trades off the net benefits of REIT business monitoring and control with the cost of bearing risk beyond the level compensated by the REIT return premium. In equilibrium, the large shareholder gradually adjusts his ownership shares level (as long as his marginal benefits from holding shares increase in his REIT stake) towards the long-run competitive equilibrium in which his marginal share valuation coincides with that of the market. Because of the moral hazard, such level of ownership (and monitoring) is, in general, inefficient. The speed of adjustment is positively correlated with the agent's risk aversion and company volatility, and negatively correlated with his marginal benefits of control and beneficial monitoring effects. [PUBLICATION ABSTRACT]