This article develops a model in which an intermediary uses a supply chain finance (SCF) program to fund suppliers. The SCF program pools liquidity from suppliers and meanwhile provides immediate payment to suppliers with pressing liquidity needs. We show that the intermediary optimally selects not only suppliers with positive profitability but also suppliers with negative profitability who, however, contribute to the liquidity pool. Inserting the model to an otherwise standard monetary framework, we show that with higher nominal interest rates, the SCF program emphasizes the liquidity contribution more and the profitability contribution less. Deviating from the Friedman rule, where only suppliers with positive profitability are selected, may lead to welfare gains.

Purpose – The aim of this paper is to examine the effect of information disclosure by unlisted bond issuers on the stock price informativeness of listed firms in the same industry. Design/methodology/approach – This paper takes advantage of information disclosure during the bond issuance and examines the spillover effect of unlisted bond issuers’ information disclosure on listed firms in the stock market. The sample is composed of A-share firms listed on the Shanghai and Shenzhen stock exchanges from 2007 to 2018. All the data are obtained from the China Stock Market and Accounting Research and WIND databases. The impact of bond market information disclosure on price informativeness of listed firms in the same industry is identified through multivariate regression analyses. Findings – Empirical results show that price informativeness of listed firms has a significantly positive association with the information disclosure of same-industry unlisted bond issuers. Further analyses show that the above finding is more significant when information disclosure of bond issuers is a more important channel for acquiring industry information (i.e. when industry is more concentrated, when economic uncertainty is high, and when industry information is less transparent) and understanding the industry competitive landscape (i.e. when bond issuers are relatively large, when bond issuers and listed firms have more direct product competition, when bond issuance firms are large-scale state-owned business groups), and when there are more cross-market information intermediaries (i.e. more cross-market institutional investors and more sellside analysts).This paperindicates that information disclosure of bond issuers has a positive spillover effect on the stock market. Originality/value – The novelty of the research is that the authors examine industry information spillover from unlisted firms to listed firms leveraging on unlisted firms’ information disclosure in bond markets.

Using proprietary data of all high-tech incubators in China, we study a new approach by government to implement industrial policy through market intermediaries instead of directly allocating resources. Exploiting a highly localized industrial policy that targets different “strategic emerging industries” across provinces, we find that the incubators in policy-targeted industries receive higher government subsidy after the policy relative to their peers in other industries. Moreover, we find evidence that government subsidy to high-tech incubators increases the incubated startups’ innovation activity. Privately owned incubators in targeted industries, relative to their state-owned peers, receive less government subsidy, although they utilize government subsidy much more efficiently than do their state-owned peers.

We examine the determinants of U.S. equity traders’ choice of electronic versus intermediated execution. While traders exhibit a strong overall preference for automation, when the market is less liquid at order submission time, traders seek market maker automated and human order-matching services more often. Traders overall tendency to choose intermediaries is highly correlated with their demand for liquidity. Market maker participation rates are higher for more active and larger size traders. Traders who choose intermediaries more often trade more stocks, execute orders quicker, price orders more aggressively, and disperse their trading over longer periods of time. Although U.S. stock intermediaries continue to lose market share, our results highlight the important niche role these firms can play in an increasingly automated, electronically-driven marketplace.

In the last decade hundreds of companies from emerging markets have listed and issued their shares on American and European stock markets. Brazil, Russia, India, and China have been the main origins of issuers, and stock exchanges in the US, UK, and Luxembourg the main destinations involved in the process. These four home and three host markets are the empirical focus of our paper. We present an economic geography perspective on foreign listing, grounded in the geography of finance and the world city network approaches, emphasising the sub-national origins of foreign listed firms, the role of intermediaries, and competition for foreign listings. Our analysis, based on comprehensive up-to-date datasets on foreign listings and foreign equity issues, shows that issuers listing their shares abroad are predominantly large firms, coming from relatively high-growth, internationally oriented sectors, and headquartered overwhelmingly in the leading economic centres of their home countries. Key intermediaries in the foreign listing process are the global investment banks, operating out of the very same centres where the cross-listing firms and the host stock exchanges are located. Competition between host stock markets is affected significantly by the direct and indirect costs of foreign listing, including disclosure and corporate governance requirements. Both host markets and intermediaries exhibit a significant degree of specialisation in terms of the size, sector, and geographical origin of the issuers they serve. The market for foreign listing differs significantly between the BRIC countries, with the Chinese market offering the greatest potential, but facing considerable uncertainty.

We present a model in which informational economies of scope that provide a cost advantage to universal banks oering “one-stop” shopping for lending and underwriting services also enable these intermediaries to “lock in” their clients’ subsequent business. This (limited) market power of universal banks reduces their incentive, relative to that of investment banks, to undertake costly eort in underwriting their clients’ securities. The consequent reduction in firms’ likelihood of successful security issues with universal bank underwriters prevents these intermediaries from using their scope economies to completely dominate their markets. Our analysis identifies economy, intermediary, and firm characteristics that motivate either the integration or segmentation of underwriting and bank lending. Our results also have implications for financial innovation and capital market development in markets characterized by the integration of financial services. Some of our empirical implications have not been tested; others can be compared with findings in Kroszner and Rajan (1994).