Strategic Plan Benefits Essay Sample For College

Benefit Structure

The fundamental goal of any strategic plan, particularly an employee benefits strategy plan, is to address internal and external issues that will influence a successful benefits program that will help the company expand. It helps gain consensus among important business stakeholders by developing a compelling, long-term strategy (Martocchio, 2020). When CapraTek chooses to create a 3-5 year benefits strategy, they gain a place at the decision-making table to solidify their position as a trusted advisor, fundamentally changing their role. Organizational structures can aid businesses in streaming their operations. CapraTek business operations are accomplished effectively and efficiently when business functions are organized into departments. CapraTek can save money by minimizing the number of operations that are performed by multiple areas. Having a benefit structure is important for every organization (Martocchio, 2020). The benefit structure determines and identifies the organization’s hierarchy. The organizational structure helps CapraTek decide on wage grades and ranges for each position.

CapraTek highly prioritizes its employees’ benefits. The reason is that employee benefit is important and helps in fostering their continuity and ensures high employee retention. Security is also highly considered in CapraTek because it offers employee protection. Many other benefits are offered to CapraTek’s employees to expect that they will perform better and increase the organization’s productivity. They include retirement benefits, discretional benefits, and legally acquired benefits. The legally required benefits that the employees in the organization are offered include; Social Security and Medicare taxes, which are paid by CapraTek and part of it paid by the employees. Others include Federal and State unemployment, overtime compensation, and workers compensation taxes fully paid by CapraTek. The retirement benefits offered to the employees prove the validation of the statement made by the US that employee protection arrangements are to be done by the organization and not the government. Even though US laws control retirement programs, they are not required by the law. The discretional benefits offered by CapraTek are those that are not mandated by the law but still offered when need be. The organization offers discretional benefits such as sick leave, vacation leave, maternity leave, health, life insurance, and pension plan benefits.

Alignment to pay structure

A pay structure includes the collection of the wages and levels related to jobs found within a certain hierarchy. The main objective of having a pay structure within an organization is to align the reward strategy with the business strategy and the benefits offered by the organization. The pay structure used by CapraTek helps in effectively ensuring and maintaining equity and fairness in the organization. The organization’s pay structure will help ensure the growth of the employees and the organization (White, 2017). The benefit structure of CapraTek effectively aligns with its pay structure in many ways. The benefits prioritized by CapraTek and the programs they offer to the employees reward the employees on their potential. The programs are given based on the contribution of every employee to the organization and how they perform in the organization (White, 2017). The benefit structure aligns with the pay structure in that it offers job enrichment and flexibility in the work schedule.

With the benefits, the employees will prefer to perform jobs with higher benefits and characteristics. Therefore, they will be able to improve their performance, which also aligns with the pay structure of CapraTek. The employees get the chance to train and learn specific jobs easily; them also become more involved and engaged in the task they perform. The benefit structure used by CapraTek aligns with the pay structure since they encourage accountability and a lean process in the organization’s pay structure (White, 2017). Employee engagement is another significant part of the benefit structure that contributes to the success of CapraTek. When there is a random benefit structure and a way of compensation, the pay structure, and the reward structure will be significantly affected. Therefore, CapraTek is trying as much as it can to ensure the benefits and pay structures are effective and align together for the organization’s success.

Evaluation

The strategy consideration of the organization will be evaluated based on the total rewards system of CapraTek and the employees and organizational performance. The total rewards strategy of CapraTek involves the significant aspects of compensation and the regulations. Designing an effective compensation program is important for every organization. The overall organizational structure and the pay structure must all be considered (Sarkar et al., 2021). The evaluation will also involve taking into consideration the organization and the employees. The first consideration of the organizational performance is considering the company’s value to a specific job specification compared to that of the competitors.

Equity and fairness should be part of the benefits and reward structure to ensure retention of employees and high individual performance. A better reward structure will also prevent cases of employee overpayment and underpayments (Sarkar et al., 2021). When the organization has a well-articulated strategy and consideration, its success will be evident. Aligning the pay and other significant benefits will help the organization achieve its goals and employees (Sarkar et al., 2021). The individual consideration of CapraTek include rewarding their performance through; increasing their annual benefits and compensations, promotions, bonuses and providing them with long-term and short-term incentive compensations. It also promotes policy that eliminates discrimination and ensures employees’ safety.

References

Martocchio, J. J. (2020). Strategic compensation: A human resource management approach (10th ed.). Boston, MA: Pearson.

Sarkar, J., Jena, L. K., & Sahoo, K. (2021). Mediating role of need satisfaction on total reward management towards retention: a conceptual frameworkVilakshan-XIMB Journal of Management.

White, R. S. (2017). Executive pensions and optimal pay structure. Advances in Quantitative Analysis of Finance and Accounting, (15), 215-244.

Stroop Effect And Selective Attention Free Essay

Abstract

The research examines Stroop effects among people of different ages and gender. It employs three various Stroop tasks named Card A, Card C, and Card B. Each Stroop task has a different level of conflict or interference in participant responses. The research is conducted on 100 participants, with 50 young people and 50 older persons. The participants were selected from a school setting following exclusive and inclusive criteria like a normal vision without color blindness. The main research question for the study is to find the relationship between age and gender on the Stroop effect. The study’s outcome shows that when individuals get older, their Stroop task time difference increases and results in a substantial variance between women and men. The materials used in the study to ensure successful results were obtained colored markers and computers to aid in assessing the Stroop effect between adults and young persons. The research had limitations, such that it did not reveal how the version of the color-word affected the tested results because a recording of reaction time was manually done. The research study was essential because it can be used in psychology to provide in-depth information on adults’ and children’s brain processing.

Introduction

The Stroop effect is a phenomenon that discloses information regarding how the brain of individual processes information when there is interference. Psychologist John Ridley Stroop first coined the Stroop effect in the 1930s as a predisposition of an individual to encounter difficulty identifying the color of a printed word when the word spells the name of a different color (Goldfarb et al., 2011). The simple outcome played a vital part in clinical psychology and psychological study. In the original work of Stroop, he employed three aspects colors’ names imprinted in black ink, colored names engraved in various ink than the colored named, and squares of every specified color. Two parts of the experiments were then conducted. In the initial study, the participants were requested to read the color imprinted in the blank ink, after which they were requested to read the words imprinted, regardless of the color imprinted (Poguntke et al., 2019). In the second test, Stroop used the ink color as an alternative to the written word such that red would have been printed in green, and participants were asked to specify the color green instead of reading the word red. In this section, also, the participants were requested to determine the color of the squares.

Stroop established that participants took more time before finishing naming the colored words in the second test than the time taken to recognize the color of the rectangular boxes. In the second test, participants also took a long time to detect ink colors than when they were required to read the imprinted word in the first test (Penner et al., 2012). Stroop then recognized the effect as an interference instigating a delay in color identification when different from the imprinted word. The finding of the Stroop effect resulted in the creation of the Stroop test, which was then used in the psychology field to assess the potential to constrain intellectual interference occurring when the processing of explicit colors’ characteristics delays the simultaneous processing of a second color feature (Raz et al., 2006). Therefore, the Stroop test formed the most straightforward form of the initial experiment presenting unlike information about participants’ color of words differing from the imprinted word. The Stroop test is useful as it helps measure selective attention.

A few theories explain the existence of the Stroop effect, such as speed of processing theory, automaticity, selective attention theory, and parallel distributed processing theory. Selective attention involves choosing the type of information to grant access for further awareness and processing and those to be ignored (Roy et al., 2018). Regarding the Stroop effect, recognizing words’ color takes more devotion than merely reading the writing. Therefore, selective attention theory proposes that the brain of individual processes the written information instead of the colors themselves. On the other hand, cognitive processing entails controlled and intuitive thinking (Wang et al., 2017; Ward et al., 2021). Stroop effect means the brain potentially recites the term since reading is perceived as an automated process than identifying colors. Written words can be processed faster than processing colors, making it harder to recognize the colors once the words have been read. The brain also creates diverse pathways for diverse tasks, which plays crucial roles that are easier to name the text or color.

There is continued research on the Stroop effect by psychologists, finding the underlying causes for the phenomenon. However, factors have emerged affecting the outcomes, such as the variance in the Stroop effect among men and women. During early studies, Stroop had identified that women were less likely to be distracted than men (Raz et al., 2006). Older persons have also been identified to have longer delays in processing than younger persons. However, studies show a lot regarding how individuals process information and assess their capabilities to override intuitive thought. Studies show that the effect identified in the Stroop task provided a clear understanding of the potential of persons for discerning attention (Scarpina & Tagini, 2017). The Stroop test forms a valuable part of evaluating interfering control and task set directing among adult people with ADHD and assessing selective attention of people in traumatic brain injury.

Several studies established that Stroop interference could be decreased; thereby, it has inferences for people’s knowledge skills, capability to form habits, and multitasking (Savaş et al., 2020; Scarpina & Tagini, 2017). In the Stroop effect, when individuals understand how their brains make connections, it becomes easier to overcome interference, reach more logical conclusions, and incorporate controlled thinking. Therefore, the Stroop effect has continually played vital roles in research that entail intellectual processing, selective attention, controlled and intuitive thinking. In this study, the research question is how the Stroop effect is correlated with age. It is hypothesized that as people get older, their time difference between Stroop tasks increases.

Method

Participants

The study comprised of 100 participants who were divided into two groups according to age (young and adult). The two groups’ age groups ranged as follows: young (18- to 25-years old) and old (60- to 75-years old). Entire young participants had normal vision, or their vision was altered to normal. Caregivers and parents of young adults confirmed that no young person experienced school issues or colorblindness problems because of attentional shortages. The recruitment of young participants into the research study was done through advertisements on school notice boards. Together with their caregivers, all young people were given an informed consent to sign after being informed of all that the research involved, including its implication to them. On the other hand, adult participants volunteered to participate after attending a preliminary study in applied psychology. All the adult participants had standard vision without incidences of colorblindness. Before enlisting participants into the research, they were given an informed consent form which they signed without any manipulation.

Materials and Procedure

In the research, participants completed three unlike types of Stroop tasks. The first test involved a task with word for color whereby colors word blue, yellow, green, and red appeared on a sheet of paper as a color name. All the words in this first test were printed in black. Each form comprised 50 black words organized in ten rows and five columns. Each participant was tasked to read the color name as fast as possible, and recording was done for the time taken to read all the 50 words. Repetition of the Stroop task was then done three times with a recess of five minutes to examine test-retest consistencies.

The second task was named Card C, in which rectangular color boxes were presented in ten rows and five columns, each printed with either color blue, yellow, green, and red arranged in a manner that caused conflict conditions. The participants were allowed to name each rectangle’s color loudly after each row or column as quickly as possible. The process was repeated three times. A similar test was also arranged on a computer screen where applicants were directed to press one of 4 push buttons conforming to the four possible imprinted colors as fast as possible. The color names were offered in white typing at the bottommost of a mainframe screen to facilitate recognizing the right button. This test was also done by presenting color prints of red, yellow, green, and blue on paper arranged in ten rows and five columns.

The third task involved color-word that matched colors blue, yellow, green, and red with color names that resulted in conflict conditions appearing on the computer screen. The participants were responsible for naming the color of the print while the word spelling was different. The participants were required to follow the lines as quickly as possible, naming out loudly the color of each word and not what the word says. After reaching the end of the page, the process was repeated three times, recording the time taken to complete the task. All participants performed assigned tasks on color-word. They used computerized versions testing the reliability and stability of performance by allowing a time interval of five minutes between tasks. The results obtained from the research were analyzed using Pearson correlation and t-tests.

Results

The descriptive statistics of the research data set were determined whereby young participants had a mean age of 21 years and a standard deviation of 1.11, while adult participants had a mean age of 67.4 years and a standard deviation of 5.8. The research study showed a significant t-test variation amongst words matched with their corresponding color. The results for Stroop effects were as follows; it took 17.166 seconds to run a preliminary test 1 Card A. 54.91 seconds to complete Stroop trial 1 Card C, 48.24 seconds to complete practice trial 1 Card B, and 16.663 seconds to complete practice trial 2 Card A, 37.599 seconds to complete Stroop Trial 2 Card C, and 44.21 seconds to complete Stroop Trial 2 Card B. The results show that older people take longer to recognize congruent stimuli and incongruent word colors than young people. There was greater variability in response between the participants because of the large standard deviation for the group. The difference among the groups involved in the research was analyzed based on the differences between them using a t-test for independent samples such that the results were t (100) = 28.32, p ≤ 0.035. The values of time taken to READ word and SAY colors were significantly higher for participants who belonged to the aged group than for younger persons. Due to this variation, older participants recorded a higher magnitude of the Stroop effect than young people. Pearson correction was as follows (100) = 0.802, p=0.035. The correlation showed an association between adults and young people regarding the Stroop effect. Young people recorded an excellent Stroop effect on color-words tests such that the t-test was as follows t (50) = 2.96, p ≤ 0.001, while adults showed significant outcomes in computerized versions recording a t-test of t (50) = 0.57, p ≤ 0.001.

   Stroop Results    
Age Range (Years) Mean SD Stroop Task A Stroop Task B Stroop Task C
1 18 to 25 21 1.11 16.663 44.21 37.599
2 60 to 75 67.4 5.8 17.166 48.24 54.91

Discussion and Conclusion

The research aimed at exploring the Stroop effect among adults and young people using three different tasks. In both groups, the version of the Stroop task initiated an interference effect to a changing degree. Stroop task card B recorded the most substantial impact, with Card C results recording higher differences in adult participants than young participants. In the Stroop task, A, C, and B, the time taken to both stimuli was longer, with greater magnitudes of Stroop effect in older persons than the younger participant. Older people have declined capability of processing speed that inhibit information processing causing poorer outcomes of Stroop tasks than younger persons (Roy et al., 2018; Raz et al., 2006). However, there was also a correlation between the effect of aging on the speed of response and the accurate measurement of outcomes. Older participants are likely to focus on accuracy rather than speed, resulting in delayed response to Stroop tasks. More trials were used to guarantee the validity of the Stroop test result because presentation stimuli style had a more substantial effect on test validity. Based on sex differences, research shows that there has been no report on the impact of sex distribution on the Stroop effect. However, psychologically there can be a slight advantage to female such that they possess better verbal abilities than men, which make them name the ink colors faster.

In conclusion, all the Stroop tasks caused various interference effects, leading to considerably more interference than other tasks across both groups of participants involved. There was more interference in the color-word matching Stroop task C than the Card B task. Also, it recorded the highest t-test reliability among all the participants involved. There was, however, a lack of significant association with color-word tasks among adult participants. It can be concluded that Stroop tasks resulted in interferences that were diverse among adults and young participants.

The study had limitations, such that the sample size of participants in the group was not equal, which likely influenced the outcome of the study. Also, the research did not reveal how the version of the color-word affected the tested results because a recording of reaction time was manually done. Also, recording separately incorrect trials followed with the counterbalanced design of the study would have resulted in limited reaction times for computerized tasks. The study implies future studies such that from the findings, they can be used in psychology to provide in-depth information on the brain’s processing among adults and children. In the future, when designing the study of the Stroop effect, it would be essential to include brain mechanisms that help in elucidating on Stroop effect factors in terms of anticipation and control. The extent to which test results are affected by color-word versions should be revealed and incorporate a similar sample size among study groups.

References

Goldfarb, L., Aisenberg, D., & Henik, A. (2011). Think the thought, walk the walk–Social priming reduces the Stroop effect. Cognition118(2), 193-200.

Penner, I. K., Kobel, M., Stöcklin, M., Weber, P., Opwis, K., & Calabrese, P. (2012). The Stroop task compares the original paradigm and computerized versions in children and adults. The Clinical Neuropsychologist26(7), 1142-1153.

Raz, A., Kirsch, I., Pollard, J., & Nitkin-Kaner, Y. (2006). Suggestion reduces the Stroop effect. Psychological Science17(2), 91-95.

Roy, A., Kefi, M. Z., Bellaj, T., Fournet, N., Le Gall, D., & Roulin, J. L. (2018). The Stroop test: A developmental study in a French children sample aged 7 to 12 years. Psychologie Française63(2), 129-143.

Savaş, D. D. E., Yerlikaya, D., Yener, G. G., & Tanör, Ö. Ö. (2020). Validity, reliability and normative data of the Stroop Test Çapa Version. Turk Psikiyatri Dergisi31(1), 9.

Scarpina, F., & Tagini, S. (2017). The Stroop color and word test. Frontiers in psychology8, 557.

Wang, K., Wu, W., Zhong, H., & Cheng, J. (2017). Gender differences in performance for young adults in cognitive tasks under emotional conflict. Neuroscience letters661, 77-83.

Ward, N., Hussey, E., Alzahabi, R., Gaspar, J. G., & Kramer, A. F. (2021). Age-related effects on a novel dual-task Stroop paradigm. PloS one16(3), e0247923.

Poguntke, R., Wirth, M., & Gradl, S. (2019, September). Same same but different: Exploring the effects of the Stroop color-word test in virtual reality. In IFIP Conference on Human-Computer Interaction (pp. 699-708). Springer, Cham.

Article Summary: The Real Value Of China’s Stock Market Free Sample

Brief Summary of the Article

The summary below is based on the value of the stock market in China as derived from the journal of financial economics 2021. The main question addressed in the abstract is the role of China’s capital allocation play in the stock markets. In most economic giants and investments, stock market prices determine the future profits as explicated in the USA; rising stock price informativeness leads to investment efficiency among privately owned firms (Marcin, 2020). The abstract also relates the success of privately held firms against state-owned enterprises in terms of profit-making.

The introduction introduces the reader to the main agenda and the main economic terminologies to be used in the entire article. The article will be evolving around terms like capital allocation, price information, market integration, and global investment. The introduction also mentions a bit of the GDP development of China in the past ten years. This development has made China the world’s largest investors with $5.9 trillion higher than the USA investment capital of $4.2 trillion and Japan $1.2 trillion. The reason for this growth of capital investment is due to its government held banking industry as the main apparatus of the middle policies of investment.

The A-shares in the local stock market in China have developed highly since the 90s though the banking sector stagnates it. China stock market is highly occupied by medium investors and subjected to often inventions and worthwhile restrictions on exchangeable shares, thus making it to be used as a side experiment. Due to this experimental aspect, the researchers and journalists find it difficult to relate China’s financial investment sector and gross domestic product. The regulators have also reflected low confidence in the market due to recurrent sector inventions, trading standstills, as well as IPO suspension. Despite efforts to incorporate external ventures, the overseas investment of A-shares is at 3%. In 2019 China had over 3700 firms with over $8trillion in market capitalization, making China a focus of international investment and regulations.

Therefore, the article is out rightly prepared to expose the capabilities of China’s shares market as an investment provision, channeled by examining the running of this sector in view of the price information, efficiency of investment, and the cost of equity capital. The methodology to determine these three main financial concerns will be the Bai et al. (2016) model. The article is divided into three; the share cost informativeness, allocation efficacy cost of capital within China, and finally, a conclusion of the same. The summary will also be used to gauge whether the knowledge attained from the article can answer the questions related to finance.

Stock price Informativeness and Allocation Efficiency

Legalized market institutions are highly related to the stock price market informativeness in relation to future gains, as well as extend to the volatility of resource distribution and commercial venture. This institution contains a few elements: effective listing, disclosure, auditing policy, accumulation of wordy data across persons, motivations to create data as well as its knowledge from prices, administrative use of cost indicators in distribution of resources, as well as investment choices.

Bond et al. (2012) distinguish between two forms of price volatility; the first is Forecasting Price Efficiency (FPE) and Revelatory Price Efficiency (RPE). He further highlights two areas that cost informativeness has actual impacts. These are; motivation constricting areas that affect executives’ incentives to work competently, as well as the knowledge network that influences administrators’ capacity to act professionally.

Bai et al. (2016) developed a system whereby share cost informativeness encourages effective placement of company investment as well as financial development. Bai et al. (2016) describe cost informativeness as the procession to which sector determination differentiates companies that will have profit from those with losses. Realistically they range value informativeness within a particular period (t) as the hypothesized difference of gain from costs, Bt*Qt(M/A) within the subsequent profit regression (K- years) prior to the present equity marketplace price and present gain familiarized by asset book value.

Mock et al. (2000) introduce a new stand of methodology that utilizes Ras of a sector incentive as well as additional controls of strict value amalgamation as an opposite measure of the degrees of share-specific data in costs. Most researchers rejected this formula and adopted the Bai et al. (2016) methodology.

According to Bai et al. (2016), as costs adapt more informativeness, they must forecast venture extra heavily. Thus, managers should choose investments to maximize profit. Hence managers acquire inference from profit, i.e., if the balance exposes RPE, prices attain more informativeness of future profits, and therefore the efficiency of financial placement should go upward. To understand the efficiency of economic standing, one needs to determine the extent to which organizations with more significant investments keep having greater returns by observing the hypothesized disparity of returns from investments B*QT (I/A).

The most outstanding aspect of China’s commercial industry is their system of leadership grouped from entirely solely owned companies that maximize profits and the SOEs that chase other objectives, i.e., capitalize on employment, gross domestic product, or state’s strategic value. Some economists blame the state for the underperformance of the SOE. Lin et al. (1998) retort that national possession deteriorates the pay-performance work for key executives. Chen et al. (2015) say that managerial promotions are dependent on profitability, avoiding layoffs rather than profitability. Harrison et al. (2019) contribute that denationalized SOEs remain to enjoy low-interest credits as well as state given subventions compared to entirely privately owned firms. Thus, we can conclude that informativeness is an aspect of the fractions of government owned enterprises as well as performs a sub-sample analysis for the privately held firms and the SOEs. In order to understand better the concept of price informativeness, this section is divided into three: profits, investments, and capital allocation.

Stock price Informativeness about future profit

In order to attain the correct statistics of the future price, the method of Bai et al. (2016) is used. The data used to analyze this future price prediction was within (1995-2016). This data is attained by first estimating the regression in (1995-2016) and comparing it with the USA’s results from the same years.

The focus period will be the first five years for both USA and China. A table is prepared to sample the findings, and a significant difference is seen between the third and fifth years between the two countries. In these two periods, the USA price informativeness seems to be higher than that in China, though overall, both countries’ price informativeness increase as the years’ increase. In 2000 China attained the casino economy theory of the stock market when they had low price informativeness. Still, in the following years, China rose, and in 2004 their price informativeness became higher than those in America by 10% (Paul, 2021). In order to understand further this rise of price informativeness, the article divides the work into four different areas to cover the future profits on stock price informativeness.

  • Robustness checks

The analysis results show two related concerns, that is, composition effects over time. This does not affect the price informative measures because no evidence shows whether the doubling of firms affects either earnings or price informativeness. The second robust check is that formal structures personal to China’s shares market affect the outcomes and interfere with the hermeneutics of the controls of the price informativeness.

There are features related to the China stock movement that make them robust checks. The first is that the outlining procedure is highly regulated by the CSRC, limiting firms that want to go public. The second is the availability of exceptional treatment firms, which are companies under threat of delisting because of low revenues.

  • Historical context

The early years of 1995 in China was a year of structure as well as movement to a unified contemporary market. Jones, in 1996, initiated the publishing of the Shenzhen and China Shanghai indices. This lured a large interested party by equity experts, synchronized border order records, concentrated trading directives, and improved liquidity. According to Chordia et al. (2008), increased liquidity aggregates market efficiency and informativeness. In 1997 the CSRC was made the official controller of China’s stock market. In 1998-2002 China experienced low price informativeness since it was a season of widespread speculations, bookkeeping frauds, and manipulation of shares costs.

In 2001 the CSRC brought tight delisting guidelines to caution retail investors’ interest. The CSRC, in 2002, rectified the OFII program, allowing skilled foreign established stockholders to directly capitalize in the A-shares market. In 2004, they came up with nine national guidelines to safeguard smaller shareholders’ interest, prevent stock price manipulation, and reduce accounting and audit fraud.

In 2005 the CSRC established the splint share structure improvement to open non-tradable stocks and denationalize them via a firm-by-firm negotiations procedure that paid back holders of retailed stocks. In 2006 the Shanghai and the Shenzhen stock exchange established a margin trading and short selling pilot program, which spread gradually in the following years. From 2007 onwards, there were an economic crisis and immediate reconstruction during which price informativeness declined.

  • Privately owned firms versus the SOEs

Share cost informativeness of imminent returns is less in SOEs as compared to solely owned companies due to national supplements making it challenging to determine, particularly next on the post-crisis financial inducement program. To assess this prediction, they averaged a prolonged form that comprises the collaboration of the share price regression; Log (M/A) with the government-held portion of equity, X, and this collaboration was accepted to develop in the dual sub-periods of (1995-2008) as well as (2009-2016).

In the first sub-period, that is (1995-2008), there is little or no difference between the state-owned firms and the privately-owned companies, after the crisis in 2009 where the state-owned firms attained subsidies and funding worth 4 trillion Yuan. The state-owned firms became economical, statistical and had less price informativeness in the following period.

  • Dual listing QFII ownership and stock price informativeness

This segment determines two supplementary traits that may expound on cross-section variations in cost informativeness. The first is if the organization has an identical H share with the same financial flow as well as voting abilities in a twin listing within Hong Kong. The second is the degree of overseas proprietorship within the QFII program.

Stock price informativeness about future investments

According to Bai et al. (2016), as costs develop into more revealing regarding forthcoming returns, the likely worth of cost informativeness for actual-time choices must be more obvious in the receptiveness to venture in sector price. The development of cost informativeness with regards to future speculation must adhere to the price informativeness of future profits, but SOEs have other objectives despite gains; thus, cost informativeness regarding future gains as well as investments is not strong.

Efficiency and capital allocation

Here the article considers whether an rise in share cost informativeness from 2001 relates to a rise in FPE or RPE. In relation to Bai et al. (2016), the essential requirement for a rise in RPE is a surge in the effectiveness of financial placement, as determined through variations of profits. The efficiency of financial standing is lesser at companies with higher government possession, specifically during the after-crisis stimulus in the 2009-2016 sub-periods.

Cost of capital

This is an additional approach in which the share market capability influences the actual investment choices of executives. A considerable summary control of the price of equity investment within a specific market is the value-weighted average predictable profit across shares in surplus of the zero-risk proportion, referred to as equity premium. There are two ways of viewing equity premium in China. The first is the notion of local investors that control the entire Chinese share market currently. The second is the notion of USD investors in the outcasts of China that are in view of growing their interest weight within the country.

China shares market provides international investors the chance for differentiation and achieving higher average profits. China also has a lot to attain from reducing external as well as internal hurdles to its shares market and fastening improvements that could lure external investment.

Conclusion

The second-largest stock market in the world is China. China’s shares costs have emerged as revealing regarding firm future gains as of that within USA. The increase in share cost informativeness from 2000 has led to a rise in corporate investment efficacy amongst private organizations. Therefore. we can conclude that China’s banking sector that controls financial subsidies and policies is behind the success in the price informativeness in China. Also, China’s economic growth depends on its private-owned firms that influence the price informativeness to maximize profits and investments. Therefore China as a nation using its banking policy can still make an impact in the wider global stock market.

Part two: Questions related to the article

  1. To which topics lectures are the article closely related to? Lecture 4 topic is Capital Assessment Pricing Model (CAPM)and Arbitrage Pricing Theory(APT)
  2. Does the article help to improve your understanding of the relevant topics in AF5344? Yes, the article gives a proper insight into price informativeness that is facilitated by profits and investment that go hand in hand with capital allocation in firms. The report also provides the implication of post-crisis stimulus to SOEs towards price informativeness and stock marketing pricing, and the GDP.
  3. If you become a junior financial analyst in a major asset management company, does the article help you build a successful career in financial history? Yes. The article provides evidence-based on China’s financial report growth since 1995- 2016. The history of their development is not smooth. Still, with proper policies, restrictions from the CSRC, and the subsidies towards the SOEs in order to avoid laying off have extensively built the country’s economy thus; in making a successful career, one must consider all sectors, not just profits, and direct investments but also future profits and investments.
  4. If you plan to start your own company to offer investment management services to high net worth individual investors in the Guangdong-Hong Kong-Macao greater bay area, does the article help you succeed? Yes. The report has clearly stipulated and explained the dual system in Hong Kong that so far has 100 registered firms. Having understood the dual-process, it’s straightforward to give investment advice to big firms, as mentioned.

References

Marcin, K. J. (2020). Market Power and Informativeness. Jaromirnosal.net, 1-55. https://www.jaromirnosal.net/uploads/6/0/7/5/60756213/kns_october2020.pdf Accessed on 15th December 2021

Paul, H. E.-Y. (2021). China Overtakes US as World’s Leading Destination for Foreign Direct Investment. The Wall Street Journal, 1-6. https://www.wsj.com/articles/china-overtakes-u-s-as-worlds-leading-destination-for-foreign-direct-investment-11611511200 Accessed on 15th December 2021