The influence of U.S. equity returns on Asian-Pacific equity markets

Corrections to the article made on November 24, 2020

The standardization/adaptation debate in cross-cultural advertising is a topic on which little consensus prevails and which remains heavily discussed. Using evolutionary psychology, this paper presents a typology of advertising cues and explains their cross-cultural relevance and transportability. The paper highlights three distinct categories – human universals (evolved similarities), local adaptations (evolved differences), and local socialization (differences not due to evolution). The paper contributes to advertising theory by providing a meta-framework for the study of cross-cultural similarities and differences in the processing of advertising cues. It further assists advertising practice by delivering a framework aiding in cross-cultural advertising copy decisions. By raising the questions that the paper poses to develop the proposed typology categories, advertisers can identify which advertising cues are malleable by advertising and which are based on innate human preferences and are relatively stable. With that knowledge in hand, advertisers can decide when and to what extent to use a standardization approach versus an adaptation approach.

Integration or segmentation of markets determines whether substantial advantages in risk reduction can be attained through portfolio diversification in foreign securities. In an integrated market, investors face risk from country-specific factors and factors, which are common to all countries, but price only the later, as country-specific risk is diversifiable. The aim of this study is two-fold, firstly, investigating the superiority of the Fama-French three-factor model over Capital Asset Pricing Model (CAPM) and later using the superior model to test for integration of Indian and US equity markets (a proxy for global markets). Based on a sample of Bombay Stock Exchange 500 non-financial companies for the period 2003–2019, the data suggest the superiority of Fama-French three-factor model over CAPM. Using the Non-Linear Seemingly Unrelated Regression technique, the first half of the sample period (2003–2010) shows evidence of market segmentation; however, the second sub-period (2011–2019) shows weak signs of market integration, which is supported by the Johansen test of cointegration, suggesting that Indian market is gradually getting integrated with global markets.

The study examined the determinants of bank stability within the South African banking sector. By controlling for individual bank characteristics and market characteristics, the study determined possible determinants of solvency, a proxy for bank stability, measured by z-score within the South African financial sector. The South African financial sector is highly concentrated but with a significantly large number of banks, the greater portion being foreign owned banks. The business models of some of the financial intermediaries differ from the big four and therefore the influence of the type of business model is of great interest in this study, as it highlights a unique feature of the South African financial sector. The study’s investigation used panel data estimation techniques and found that among the specific bank characteristics, lending activity and capitalization do significantly affect solvency of banks and at sector level concentration was significant. The crisis dummy also revealed that the presence of a financial crisis heightened insolvency. The results have implications for financial institutions and therefore are of interest to regulators, bank management and researchers. Policy prescription in the form of Prompt Corrective Action framework is made to ensure proactive reaction to trends likely to cause instability.