![]() But it’s worth noting that the large magnitude of portfolio return difference in the United States, Anthony and Tan (2011) found that the magnitude of liquidity premium and transaction cost spread is the first order, and transaction cost has asset pricing power. Then, Vayanos (1998, 1999) thinks that the transaction cost mainly affects the holding period and trading volume, and the impact on the expected return is the second order. On the meaning of asset pricing of transaction cost, Constantinides (1986) found that although transaction cost affects asset demand, the impact on asset return is the second order, that is, when investors face large transaction cost, they can adjust it by reducing transaction frequency and volume. It’s not surprising that portfolio return difference exists. A lot of literatures have found that there is a high-low portfolio return gap formed by some liquidity indicators. Stocks with lower liquidity will have higher expected return, which marks the establishment of liquidity premium theory. The research of liquidity starts from bid ask spread (Amihud and Mendelson, 1986). Transaction cost measures the width of liquidity. Therefore, transaction cost analysis, transaction cost asset pricing power research is very important. With the improvement of corporate governance, market transparency and pricing efficiency, there is less and less room to earn excess profits. Since then, the securities market has begun to pay attention to transaction cost. In 1986, the Department of labor of the United States issued guideline 86-1, which requires the financial market to focus on transaction cost. The lower transaction cost enables investors to quickly change their investment portfolio according to market information, accelerate the reaction of stock price to innovation of information, and make the market more efficient and transparent. Lower transaction cost means that the stock price will not be greatly distorted due to incomplete information and sudden changes in supply and demand, which makes the market more stable. Lower transaction cost means higher liquidity. Liquidity and transaction cost are actually “the positive and negative sides of the coin”. Readership: Graduate and research level students of microeconomics, corporate governance and industrial organization.Transaction cost is composed of direct transaction cost and implicit transaction cost (Demsetz, 1968), which is the comprehensive embodiment of market quality and an important factor of the core competitiveness of stock exchange. The New Institutional Economics: Taking Stock, Looking Ahead.Transaction Cost Economics: How It Works Where It is Headed.Pragmatic Methodology: A Sketch, with Applications to Transaction Cost Economics.The Theory of the Firm as Governance Structure: From Choice to Contract.Calculativeness, Trust, and Economic Organization.Transaction Cost Economics: The Natural Progression.Simultaneously, for scholars who study the market economy, Transaction Cost Economics provides a very attractive way to explain the practice of the Chinese market economy. Gengxuan Chen, the editor of this volume, recommends that China will benefit by bringing Transaction Cost Economics to bear. China has similarly given much more attention to Property Rights Theory. In China, research on New Institutional Economics began in the 1990s and has grown rapidly since. Transaction Cost Economics has nonetheless taken shape of late. Of the two, Property Rights Theory developed more rapidly. What is referred to as New Institutional Economics is developed in the West in two mainly complementary ways: Property Rights Theory, and Transaction Cost Economics. In short, as Williamson states, "any problem that originates as or can be reformulated as a contracting problem can be examined to advantage in transaction cost economizing terms." The applications of Transaction Cost Economics are extensive, ranging from the field of industrial organization and applied fields of economics such as labor, public finance, comparative economic systems and economic development, to the business fields of strategy, organizational behavior, marketing, finance, operations management, and accounting. This book brings together a collection of seven papers on Transaction Cost Economics by Nobel Laureate Professor Oliver E Williamson.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |