Friday, February 14, 2020

Relationship between Stock Market Prices and Macroeconomic Variables Essay

Relationship between Stock Market Prices and Macroeconomic Variables - Essay Example This is an indication that the indexes will rely majorly on the stock prices of the major companies in the capital market. Therefore most financial experts like relying on this index as it is closer to representing the real market. According to Madura (2008, pg 347), the index is calculated by considering the stock price of five hundred biggest companies in the market. It explains that the companies are selected based on their market capitalization. To understand this dynamic relation the relation between the stock price and the variables in the macro economy, a clear and incisive analysis of the effects of these variables on the financial markets is required. This paper examines some of the relationships between the stock prices and market indices and the variables of the macroeconomic environment within economies of countries like the United States and England. Â  The GDP of a nation covers all the products and services produced in a single financial year. In Berezina (2012) opinion, it covers the entire products, from the smallest item to the largest possible item and services purchased by the consumers in this economy. It notes that investors pay keen attention to indicators of sustainable growth in the GDP of an economy to make decisions on investment. When the report shows that there is growth in GDP, many investors will be attracted to the economy. This translates to higher stock prices as investors rush to acquire stakes in companies within these economies. In the absence of growth, the investor confidence is low and the stock prices are likely to slump. This is usually reflected in the performance of the index of the market. Analysts believe that the performance of a market over a financial year will reflect the overall performance in GDP. For instance, Madura (2008) explains that economic factors that affect the stock prices includ e indicators like GDP (Madura 2008, pg 270).

Saturday, February 1, 2020

Barriers cross cultural communication Research Paper

Barriers cross cultural communication - Research Paper Example In the business world, increasing globalisation has been resulting in the formation of many multinational companies (MNCs). Initially, these were mostly dominated by the West, whereas Asian Multinational Companies (AMCs) have mostly been of Japanese or Korean origin. Lately, a new breed of AMCs are emerging that are mostly of Chinese and Indian origin. Their expansion however, as with the earlier MNCs before them, is posing challenges related to cross-cultural communication. This paper seeks to identify the typical barriers to effective cross-cultural communication in this new context and how they can be overcome. The greater focus is on examining Chinese culture and the experience of Chinese managers of AMCs working within the American socio-cultural environment. Such Chinese high-profile AMCs include Haier, Lenovo and Huawei, and Indian AMCs include Tata and Bharti Airtel. Both countries have some domestic economies. Apart from issues such as the need to improve governance, have greater transparency, and so on (Moller, 2008), they also recognise the need to adapt to different cultures. This entails stressing responsibility and accountability, and to be more responsive to local needs (Rajan et al., 2009). The Chinese realise that it is knowledge and skills for operating internationally that are needed more than owning shares due to the previously limited exposure and general seclusion. The Indians on the other hand have had a longer exposure to the market economy. Both acknowledge that knowledge acquisition is paramount for innovation (Teagarden et al., 2008), but new knowledge has to be communicated using language in order to be acquired (Welch & Welch, 2008). Tata’s acquisition of South Korea’s Daewoo vehicle company in 2004 was seen as a success but that is because their cultures shared many similarities to begin with (Rodrigues, 2006). The language barriers were overcome easily, which speeded the integration, and confidence developed