Market segmentation and stock prices: evidence from an emerging market

Article Abstract:

We examine the relationship between stock prices and market segmentation induced by ownership restrictions in Mexico. The focus is on multiple classes of equity that differentiate between foreign and domestic traders, and between domestic individuals and institutions. Significant stock price premia are documented for shares not restricted to a particular investor group. We analyze the theoretical and empirical determinants of premia across firms and over time. In addition to economy-wide factors, segmentation reflects the relative scarcity of unrestricted shares. The results provide additional support for Stulz and Wasserfallen's (1995) hypothesis that firms discriminate between investor groups with different demand elasticities. (Reprinted by permission of the publisher.)

Mexico, Securities, Market segmentation

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Comovements in stock prices and comovements in dividends

Article Abstract:

The comovements in real stock prices between the U.K. and the U.S. appear to be too large to be accounted for in terms of the comovements of real dividends between the countries even after consideration of the possibility of information pooling. When consideration is made of the comovements of real interest rates between the countries, there is weaker evidence of excess comovement of price. (Reprinted by permission of the publisher.)

International aspects, Dividends, Stock-exchange, Stock exchanges, Interest rates

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The Canadian Tax Reform and its Effect on Stock Prices: A Note

Article Abstract:

The effect of tax reform on stock prices is examined using data resulting from the Canadian Tax Reform Act of 1971. Dividend tax was reduced for low marginal tax rate investors and raised for high marginal tax rate investors. Significant increases were observed in high-dividend stocks. Little change was observed for low dividend stocks.

Canada, Statistics (Mathematics), Mathematical statistics

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