AG991 International Financial Markets and Banking

Workshop 7
Workshop Questions:

What is meant by the operational, informational and allocative efficiency of financial

markets?

To what extent is the UK financial system efficient by these criteria? Linton (2011) may
provide some ideas.

How does that compare to other countries you have experience of? You can also use for
instance Patel et al (2012), Sheefeni (2015), or Simões et al (2012) to arrive at an answer
to this question.

Background reading (optional): HB ch 12 / ME ch 6

Required reading *:

Dimson, E., and Mussavian, M. (1998) ‘A brief history of market efficiency’, European
Financial Management 4(1), pp.91-103. Available at:
https://onlinelibrary.wiley.com/doi/abs/10.1111/1468-036X.00056
Please focus on question 5 in the Linton (2011) paper (see page 6):

Linton, O. (2011) ‘What has happened to UK Equity Market Quality in the last
decade? An analysis of the daily data’, Foresight Project Report. Available at:
https://www.gov.uk/government/publications/computer-trading-uk-equity-market-
the-last-10-years

** Patel, N.R., Radadia, N., and Dhawan,J. (2012) ‘An Empirical Study on Weak-Form
of Market Efficiency of Selected Asian Stock Markets’, Journal of Applied Finance &
Banking 2(2), pp. 99-148. Available at:
http://www.scienpress.com/Upload/JAFB/Vol%202_2_5.pdf

** Sheefeni, J.P.S. (2015) ‘Testing the Strong-Form Efficiency of the Namibian Stock
Market’, International Review of Research in Emerging Markets and the Global
Economy 1(4), pp.474-486. Available at:
http://globalbizresearch.org/files/6034_irrem__johannes-peyavali-sheefeni-sheefeni-
163526.pdf

**Simões, M.D., Macedo-Soares, T.D.L.v.A.d., Klotzle, M.C., and Pinto, A.C.F. (2012)
‘Assessment of market efficiency in Argentina, Brazil and Chile: an event study of
mergers and acquisitions’, Brazilian Administration Review 9(2), 229-245. Available
at: http://www.scielo.br/pdf/bar/v9n2/a07v9n2.pdf

** You do not need to read all three papers, selecting one is fine.

*links to these are also on myplace

© Juliane Thamm – University of Strathclyde