Comparison of the European and the U.S. Unregulated Stock Markets Designed for SMES
The International Journal of Business and Finance Research, v. 13 (1) p. 85-102, 2019
18 Pages Posted: 23 Mar 2019
Date Written: 2019
This paper examines the state of small and medium enterprises (SMEs) in European and U.S. unregulated stock markets. The analysis compares the performance of both markets, using the weekly adjusted closing index prices of Euronext all share index, NYSE AMEX Composite Index, and the OTCM ADR Index for the 2013-2017 period. ADF, EGARCH, and ARCH tests were performed on the collected time series data, to measure and forecast index price volatility, risk and return. The results show a high level of price volatility in some periods; but a permanent effect of shocks was not observed in the long term for all the analyzed indexes. Negative shocks cause more volatility than positive shocks. However, an overall result shows that, the Euronext all share index, despite slight declines, displays an upward trend and relatively higher returns with less risk, than the NYSE AMEX Composite Index, and the OTCM ADR Index. This results reflects the better performance of the European unregulated market, compare to its U.S. counterparts.
Keywords: Small and Medium Enterprises, Stock Markets, Initial Public Offering, Index Prices, Financial Risk and Return
JEL Classification: M130, G1, C120, C220
Suggested Citation: Suggested Citation