China–Africa financial markets linkages: Volatility and interdependence

The China–Africa relationship has blossomed in recent years and the scale and scope of Chinese engagement and investment in the latter have expanded enormously in the last decade. The purpose of this paper is to analyse the dynamic linkages and volatility transmission mechanisms between Chinese and African stock markets in recent years while highlighting the relative importance of Chinese capital flows and investments. We utilise dynamic forecasting models including Bayesian VAR and BEKK GARCH to estimate both price and volatility behaviours of Chinese and 15 selected African stock markets. Our empirical results indicate strong evidence of spillover effects in terms of both price movement and volatility behaviour, implying that Chinese and African stock markets are showing signs of integration. For price movement, bidirectional feedback relationships between Chinese and most of the African stock markets are observed, suggesting that both Chinese and African stock markets could influence each other. China has been building a strong African partnership and, therefore, increasing its trade and investment influences in the region. Examining volatility transmissions, at least one spillover effect (shock and/or volatility) from China to most of the African stock markets is reported. This suggests that the Chinese stock market now plays an influential role across African stock markets given that it has major investments in 46 out of 54 countries. Our findings show important portfolio management implications as a surge in Chinese investments provide new portfolio diversification opportunities for international investors. Policy-wise, we believe further market-oriented reforms and carefully designed and long-term development policies are required to boost capacity for development and achieve sustainable trade and growth.     

Effects of soccer on stock markets: The return–volatility relationship

This paper assesses the effects of domestic soccer teams’ performances against foreign rivals on stock market returns as well as on the return–volatility relationship. Data from Chile, Spain, Turkey and the United Kingdom support propositions that soccer teams results in international cups affect stock market returns and the return–volatility relationship. Evidence from Spain and the UK, soccer powerhouses, suggests that losses are associated with lower returns and higher risk aversion but evidence from Chile and Turkey, where soccer is the most important sport but teams are not as successful, reveals that wins are associated with higher returns and lower risk aversion.     

The willingness-to-accept/willingness-to-pay disparity in repeated markets: loss aversion or ‘bad-deal’ aversion?

Several experimental studies have reported that an otherwise robust regularity—the disparity between Willingness-To-Accept and Willingness-To-Pay—tends to be greatly reduced in repeated markets, posing a serious challenge to existing reference-dependent and reference-independent models alike. This article offers a new account of the evidence, based on the assumptions that individuals are affected by good and bad deals relative to the expected transaction price (price sensitivity), with bad deals having a larger impact on their utility (`bad-deal’ aversion). These features of preferences explain the existing evidence better than alternative approaches, including the most recent developments of loss aversion models.     

Varieties of marketisation in the UK: examining divergence in activation markets between Great Britain and Northern Ireland 2008–2014

This article examines the sub-national diversity in activation quasi-markets in the United Kingdom (UK). Through comparison of four active labour market programmes in Great Britain and Northern Ireland between 2008 and 2014, the article clarifies and maps intra-UK diversity in employment service governance and unpacks the shifting configurations of market structures in each jurisdiction to reveal a temporally and spatially distinct patterning of marketisation. Drawing on Gingrich's approach to analysis and classification of quasi-market variation, the article proposes that between 2008 and 2014, Great Britain rapidly evolved a provider-directed activation market. In contrast, the activation market structure in Northern Ireland, up to late 2014, is better characterised as state directed. A recent reconfiguration of the activation market in Northern Ireland does however indicate some (modified) convergence on Great Britain's approach. One common and consistent feature of the configuration of activation markets in each jurisdiction is the few powers given to direct users of employment services to shape contracted out provision.