Finance

In a recent article forthcoming in the American Economic Review, UC3M Business’ Jesper Rüdiger, and coauthor Adrien Vigier from the Norwegian Business School, explore information acquisition in dealer markets. We have asked the authors to comment on the paper’s main findings: “There are many ways to structure a financial market. The “dealer market” is one […]

Long-term growth in profits depends significantly on firms’ investment in innovation activities. However, firms may not invest in innovation in an optimal way. Some distortions arise because the decisions as to whether and how to invest in innovation are not only affected by their long-term expected benefits but also by other considerations. A recent study

BLOCKCHAIN: WHAT WE KNOW AND HOW WE CAN APPLY IT TO THE INSURANCE SECTOR By Ruben Nova There has been much talk in recent months about Fintech, Insurtech, cryptocurrencies, Machine Learning, Artificial Intelligence and Blockchain. But what is known about Blockchain so far? As part of my research, I have had the opportunity to attend

There is extensive debate about the role banks play as reference shareholders in companies. There are positive aspects, such as the support banks provide for long-term investments by their investee companies. These investments include those involving R projects, which generate high net worth. Among the negative aspects is the risk that banks use their power

Innovation is a determining element of the competitive advantage of companies, as well as an essential ingredient of economic growth. The recent financial crisis and the stagnation of production and job creation in developed countries have led to an intense debate that has highlighted the need to promote growth models based on an increase in

1. Cheap TradingMarkets have come a long way from the time of trading in 1/8ths and 1/16ths. Spreads have come down enormously and many shares now trade a few cents apart. There has never been a better time to execute a trade quickly and cheaply.

1. Fleeting LiquidityMarkets have become so volatile and sensitive that even a relatively small market order, say 500 shares, in most assets will not be executed at the current best price and is very likely to trigger a price move. 2. Trading ComplexityIt used to be that when choosing to make a trade you could

Firms choose their debt-to-equity (i.e., leverage) ratios to balance the benefit of borrowing against its cost; namely, to balance the tax advantages against the greater likelihood of financial distress. The degree of competition in product markets affects the relative importance of these costs and benefits, and therefore firms modify their capital structures depending on whether

Saturation in a market segment occurs when a large number of products with very similar characteristics are offered. In a context of saturation, consumer interest in products decreases, reducing the effective demand for the segment and often leading to its disappearance. Therefore, the launch of new products in such a context has a high probability