Assumptions of Making a Good Deal with Bad Person: Empirical Evidence on Strong Form Market Efficiency
Behavioral finance challenged paradigms of standard finance by questioning rationality assumptions posed by market efficiency that had been a focal point for researches in finance and economics. This study aimed to test Strong-Form Efficient Market Hypothesis by employing data from emerging Stock Markets of Pakistan before its amalgamation and applied a different methodology. Firms were tested upon data availability and accordingly, ten firms were selected out of sixteen further for usability criteria of data. A part of the current study also validates the usefulness of dividend announcements for valuing the stock of KSE listed firms and suggested utilizing it in stock price revision. The market was found weak and strong form inefficient whereas the hypothesis for semi-strong form sustained overall
-
Capital Market Efficiency, Strong form Efficiency, Emerging Markets, Dividend Announcements, Insider Trading.
-
(1) Taqadus Bashir
Associate Professor,Department of Business Studies,Bahria University, Islamabad, Pakistan.
(2) Kanwal Iqbal Khan
Assitant Professor,Institute Of Business & Management,University of Engineering & Technology, Lahore, Pakistan.
(3) Saima Urooge
Assistant Professor,Department of Economics, Islamia College University, Peshawar, Pakistan.
- Akhter, S., & Misir, M. A. (Jul-Sep 2005). Capital Market Efficiency: Evidence from the Emerging Capital Market with Particular Reference to Dhaka Stock Exchange. South Asian Journal of Management, 12(3), 35-51.
- Baesel, J. B., & Stein, G. R. (September 1979). The Value of Information: Inferences from the Profitability of Insider Trading. Journal of Financial and Quantitative Analysis. 553-571.
- Bettis, J., Coles, J., and M. Lemmon. (2000). Corporate policies restricting trading by insiders. Journal of Financial Economics 57(2): 191-220.
- Chow, G. C. (1960). Tests of Equality between Sets of Coefficients in Two Linear Regressions. Econometrica, 28, 591-605.
- CMIE, (2009). About Us. Retrieved June 2008 From http://www.cmie.com/database/?services=aboutcmie.htm.
- Collins, D. W., Rozeff, M. S. & Dhaliwal, D. S. (March 1981). The Economic Determinants of the Market Reaction to Proposed Mandatory accounting Changes in the Oil and Gas Industry: A Cross-Sectional Analysis. Journal of Accounting and Economics. 37-72.
- DAWN.COM. 2016-12-23. Retrieved 2016-12-24.
- Durnev, A. A., Nain, A. S. (2007). The Effectiveness of Insider Trading Regulation: International Evidence, CESifo DICE Report, ISSN 1613-6373, ifo Institut für Wirtschaftsforschung an der Universität München, München. 05(1): 10-15
- Eckbo, B., & Smith, D. C. (1998). The Conditional Performance of Insider Trades. Journal of Finance, 53(2): 467-498.
- Economic Survey of Pakistan, (2018-19). Ministry of Finance. Finance Division.
- Etebari, A., Tourani-Rad, A., & Gilbert, A. (2004).
- Finnerty, J. E., (Sep., 1976b). Insiders and Market Efficiency. The journal of Finance, 31(4), 1141- 1148.
- Fisher, F. M. (1970). Tests of Equality between Sets of Coefficients in Two Linear Regressions: An Expository Note. Econometrica, 38, 361-366.
- Givoly, D., & Palmon, O. (January, 1985). Insider Trading and the Exploitation of Inside Information: Some Empirical Evidence. The Journal of Business.
- Greene, W. H. (1993). Econometric Analysis, Second Edition, New York: Macmillan Publishing Company.
- Hebner, K. J., & Kato, T. (1997).
- Huddart, S., Ke, B., & Shi, C. (2006). www.ise.com.pk
- Jabbour, A.R., & Jalilvand, A., & Switzer, J. A. (2000). www.ise.com.pk
- Jaffe, J. F. (1974). Special Information and Insider Trading. The Journal of Finance, 47, 410-428.
- Jaffe, J. F. (July 1974). Special Information and Insider Trading. The Journal of Business, 75-117.
- Jagolinzer, A. D. (2005). An analysis of insiders' information-based trade within SEC Rule 10b5-1 safe harbor. Unpublished manuscript, Stanford University.
- Kabir, R., & Vermaelen, T. (1996).
- Kallunki, P. J., Nilsson, H. & Hellstrom, J. (2009). Why do insider trade? Evidence based on unique data on Swedish insiders. Journal of Accounting and Economics, 48 37-53.
- Kara, A., & Denning, K. C. (1998). Applied Financial Economics, 1998, vol. 8 (3): 211-220
- King, R. D., & O'Keefe, T. B. (January 1986). Lobbying activities and Insider Trading. The Accounting review, LXI(I), 76-90.
- Mouen, C. J. (2016).
- Pratt, S. P., & DeVere, C. W. (1970). Relationship between Insider Trading and Rates of Return for NYSE Common Stocks, 1960-1966. Modern Developments in Investment Management. J.H. Lorie and R. Brealey ed.; Praeger Publishers. New York
- Raja, M., Sudhahar, J. C., & Selvam, M. (2009). Testing the Semi-Strong Form Efficiency of Indian Stock Market with respect to Information Content of Stock Split Announcement - A Study in IT Industry. International Research Journal of Finance and Economics, 25, 7-20.
- Rogoff, D. L. (1964).
- Rose, C. (2003).
- Rozeff, M. S., & Zaman, M. A. (January, 1988). Market Efficiency and Insider Trading: New Evidence. The Journal of Business, 61(1), 25-45.
- Teall, J. L. (2008). Chapter 7: Semi-Strong Form, Event Study Methodology and Strong Form efficiency. Rensselaer Polytechnic Institute. Retrieved June 2008 From . pp. 1-57. www.rpi.edu/~tealj2/adfin07.pdf
- The Express Tribune. 2015-06-03.
Cite this article
-
APA : Bashir, T., Khan, K. I., & Urooge, S. (2020). Assumptions of Making a Good Deal with Bad Person: Empirical Evidence on Strong Form Market Efficiency. Global Social Sciences Review, V(I), 154-162. https://doi.org/10.31703/gssr.2020(V-I).16
-
CHICAGO : Bashir, Taqadus, Kanwal Iqbal Khan, and Saima Urooge. 2020. "Assumptions of Making a Good Deal with Bad Person: Empirical Evidence on Strong Form Market Efficiency." Global Social Sciences Review, V (I): 154-162 doi: 10.31703/gssr.2020(V-I).16
-
HARVARD : BASHIR, T., KHAN, K. I. & UROOGE, S. 2020. Assumptions of Making a Good Deal with Bad Person: Empirical Evidence on Strong Form Market Efficiency. Global Social Sciences Review, V, 154-162.
-
MHRA : Bashir, Taqadus, Kanwal Iqbal Khan, and Saima Urooge. 2020. "Assumptions of Making a Good Deal with Bad Person: Empirical Evidence on Strong Form Market Efficiency." Global Social Sciences Review, V: 154-162
-
MLA : Bashir, Taqadus, Kanwal Iqbal Khan, and Saima Urooge. "Assumptions of Making a Good Deal with Bad Person: Empirical Evidence on Strong Form Market Efficiency." Global Social Sciences Review, V.I (2020): 154-162 Print.
-
OXFORD : Bashir, Taqadus, Khan, Kanwal Iqbal, and Urooge, Saima (2020), "Assumptions of Making a Good Deal with Bad Person: Empirical Evidence on Strong Form Market Efficiency", Global Social Sciences Review, V (I), 154-162
-
TURABIAN : Bashir, Taqadus, Kanwal Iqbal Khan, and Saima Urooge. "Assumptions of Making a Good Deal with Bad Person: Empirical Evidence on Strong Form Market Efficiency." Global Social Sciences Review V, no. I (2020): 154-162. https://doi.org/10.31703/gssr.2020(V-I).16