Academic research can provide insights into various aspects of capital markets, including the role of institutional investors or accounting standards, and the impact of financial regulations or macroeconomic factors. More specific examples include studies on the impact of insider trading on bond prices, the role of voluntary disclosure in stock liquidity, the valuation of unfunded pension liabilities, and the relationship between executive compensation and short-termist behavior in speculative markets.

Other studies claim that the Dodd-Frank Act led to a decrease in credit default swaps (CDS) liquidity and an increase in their pricing, suggesting that the regulation has had unintended consequences on capital markets, and that private equity funds are able to generate higher returns than public equity funds, and that the growth of private equity has led to changes in the way public equity markets operate, such as a decrease in the number of public companies and a shift towards longer holding periods for public equity investments, and that stock returns are positively correlated with real economic activity and negatively correlated with inflation and interest rates.

To find out what the research tells us, explore the many papers in our series: 

https://www.ecgi.global/categories/markets