Posted: December 10th, 2014

The effects of stock markets on businesses

Order Description

based on the proposal attached please write the research paper

conclusions of your research, and each member also will write a brief
individual reflection
on
this experience.
Earli
er
this semester, your group launched your research project
by choosing
one of several key articles provided by the instructor, then developed a main theme from
that
article into a well
–
defined proposal
,
which contained
a
plan
for
your own research study a
nd
was
supported with secondary sources.
The second part of the research project
—
this assignment
—
is to undertake your
proposed
research study, document the results via a paper, and complete a brief
reflection paper.
As such, two required submissions are d
ue to finish the project:
1.
Research Pape
r:
the project’s formal written output, submitted as a group.
2.
Reflection Pape
r:
a brief personal essay reflecting on the project and its results,
completed individually by each member of the group.
I. PAPER REQUIRE
MENTS
Introduction
??
Paragraph 1, Introduction: Write a minimum of 6
–
8 sentences using the article you
chose to introduce your general subject and catch the reader’s attention.
??
Paragraph 2, Purpose: Write 6
–
8 sentences explaining why your particular topic i
s
important. Why does the subject matter? Why is this project intellectually worth
doing? What’s at stake here?
2
of
4
??
Paragraph 3, Thesis: Write at least 6
–
8 sentences stating the project’s specific thesis
and describing the 2
–
3 specific research questions you w
ill test in your study in order
to answer the thesis.
Literature Review
??
Multiple Paragraphs, Background: Write at least one paragraph, based on your
sources, dealing with the background of existing research or work on the topic.
??
Multiple Paragraphs, Criti
que: Write at least one paragraph analyzing or taking
exception to at least 2
–
4 sources on the topic.
??
Multiple Paragraphs, Solutions: Write at least one paragraph, based on at least 2
–
3
sources that suggest possible solutions to your problem. This work sho
uld foreshadow
by explaining how your sources relate to and help determine your methodology.
??
All of these paragraphs must be properly documented according to APA format. You
must use citations properly, and cite all of your references at least once.
Metho
dology
??
Paragraph 1, Explanation: Write 6
–
12 sentences briefly reviewing your purposing and
then explaining the methodology you will use in your research.
??
Paragraph 2, Research Instrument: Write 6
–
12 sentences introducing your research
tools, such as survey
s or other quantitative method(s) you’ve chosen. Include how it
was developed, the number of sections and/or items, reliability, validity.
??
Paragraph 3, Population: Write 6
–
12 sentences describing your research population,
sampling strategy, and sample grou
p.
Findings & Implications (Analysis, Results, Discussion)
??
Multiple Paragraphs, Results: Report and describe the results of your research, using
at least one paragraph for each specific finding.
??
Multiple Paragraphs, Discussion and Implications: Write at l
east two paragraphs
discussing the implications of your particular findings. This is the big picture, what
your results mean.
Conclusion
??
Paragraph 1, Summary: Write 6
–
12 sentences summarizing the outcomes, or main
points, of your project.
??
Paragraph 2, Rec
ommendations: Write 6
–
12 sentences with recommendations for
future research and what you could do to improve your work.
References
??
Include your complete list of at least 6 references, formatted properly in APA style.
Appendices
??
Include the aggregated ra
w data you gained in your research, such as tables of results,
any survey forms you created, and so on.
II. REFLECTION ESSAY REQUIREMENTS
Each member of the group will complete a 300
–
500 word reflection essay. Each person will
complete their own essay
as an individual, which should use critical thinking and careful self
–
assessment to address the following three considerations:

ASSESTMENT II
RESEARCH PROPOSAL
The effects of stock markets on businesses
INSTRUCTOR COMMENTS:
•    You have a good start and a solid topic. Your research questions and scope, in particular, are very fitting.
•    Thesis statement should be more specific—it’s too broad to just say there are advantages and disadvantages. Does one side outweigh the other? Maybe think of ways to narrow this down further, within the scope of your questions.
•    Research is relatively solid.
•    Be sure to put sections in order of guidelines sheet.
•    Solid plan in methodology. Be sure to follow up on this closely for results and final paper.

The effects of stock markets on businesses
Introduction:
The stocks are the ownership interest of companies that are important to both the businesses and individuals. The stocks are key components in the retirement portfolios of individuals while businesses seek access to the stock markets in order to raise capital and funds for operational and strategic reasons. Surprisingly, the relationship works the other way as the business conditions affect stock markets. The research proposal will concentrate on the effect of stock markets on the business operations.
The stock market is an area that has been studied for long to establish its link with business operations. Therefore, the research proposal will discuss the effects of stock markets on businesses in the US.
Thesis statement
The stock markets affect businesses positively and negatively.
Research questions:
1. What are the impacts of market stock trading on the business and the national economy?
2. How does the stock market influence business operation?
3. What are the roles of stock exchange in the business and economy in general?
4. How does the stock market affect Saudi market?
The objectives of the study and research proposals are:
1.    To identify how the stock market operate.
2.     To establish how the stock market affect business in the US and in smaller case in Saudi Arabia .
3.    Elaborate on how businesses respond to the effects of stock markets fluctuation.

Methodology
A quantitative method of research design will be used. The data will be collected using quantitative research method because it will develop reliable and accurate results. It will help to identify the effects of stock markets on businesses. The survey questionnaire was developed from the questions and themes that emerged from the quantitative document and literature review (Van Rooij, Lusardi & Alessie, 2011).
An extensive and detailed literature review was conducted on the effects of stock markets on businesses. North American Palla  company   has stock market at the American stock exchange. The Data was collected using questionnaire on American stock exchange and business profile of North American Palla so as to test the hypothesis (Kaplan, Moskowitz & Sensoy, 2013). The academic experts and stock market brokers were interviewed to gain data on the effects of stock markets on businesses and how to reduce them. The data will be analyzed to enables businesses to gain knowledge of the stock markets and organizations in USA. The questionnaire and interview was carried on the top management of North American Palla Company and American stock exchange to enable us formulates the hypothesis. The quantitative survey questionnaires were distributed to 100 and 24 staffs of North American Palla Company and American stock respectively at Washington DC.  The interviewed participants were the top management such as the departmental managers and the CEO.  The data collected was analysed  and the the results was as follows. Interestingly, majority of the participants (89%, n=41) indicated that the stock market affected business operation North American Palla Company. They perceived that there was a need for North American Palla Company to engage in strategies that would counter the negative effects of stock markets on the business. Likewise, 11 % of the participants were of the opinion that the stock markets had no effect on the business operations of North American Palla Company (Filis, Degiannakis & Floros, 2011). Anyway, the majority of the participants expressed their opinion by indicating that the stock markets should be regulated well to avoid the negative effects it has on business operations. On top of that, the participants were concerned with the unpredictable stock markets in the US. All the participants in the semi-structured interviews came to an agreement that there is a need for North American Palla Company to engage in strategies and measures to combat the effects of the stock markets on business operations (Edmans, 2011).
Research review
As earlier pointed out, stock market is simply a source of equity financing (risk capital) to business organizations. The business finds it cheaper and easier to raise capital when the stock market prices appreciate. However, business finds it expensive and hard to raise capital when the stock market prices depreciate (Beer & Hebein, 2011).
According to the studies and research, business is affected by the stock market in different ways. It can affect business in either a positive or negative way. The positive effects where a business can get an opportunity are as follows. First and foremost, the business world is good when the stock market goes up. There will be more liquidity for the business leading to liquidity for investors. Moreover, the fluctuations of stock market prices influence the confidence of business that ultimately affects the economy. The movement of stock market prices impacts the businesses psychologically. Research indicates that the rise in stock market prices creates confidence that the business is moving in the right direction. The business builds momentum since more investors will join the business as the stock market prices (Næs, Skjeltorp & Odegaard, 2011).
On the other hand, a business is threatened with the following negative effects of stock markets. The business operation will not be good at all when the stock markets go down. First, the investors and banks will be less concerned forcing the business to reduce labor costs to avail more funds. The fall in the stock market prices have an opposite effect on the business. The investors will feel pessimistic about the investing in the business. The media will make matters worse by creating panic. The market stock of a business will depress further because investors will withdraw their funds from stocks with low prices and invest into low-risk assets (Edmans, Goldstein & Jiang, 2012).
On top of that, the stock markets create wealth effect because investors feel more confident and happy when they realize that their stock investment portfolios value is rising. Conversely, the business experiences a reverse wealth effect if the stock market prices keep on falling. This creates uncertainty on the future of a business. The investors reduce spending on nonessential items, thus slows down economic growth of a business.
In addition, the stock market prices affect business investments because they will make capital investments if it will lead to the rise of market values. In other words, it is up to the management to operate in a flexible manner in order to take advantage of the stock market prices. Besides, the fluctuations of the stock market prices influence merger and acquisition of business organizations (Bollen, Mao & Zeng, 2011).

Bibliography
Beer, F., & Hebein, F. (2011). An Assessment of the stock market and exchange rate Dynamics in industrialized and emerging markets. International Business & Economics Research Journal (IBER), 7(8). Retrieved from http://www.cluteinstitute.com/ojs/index.php/IBER/article/view/3283
Bollen, J., Mao, H., & Zeng, X. (2011). Twitter mood predicts the stock market. Journal of Computational Science, 2(1), 1-8. Retrieved from http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0CDoQFjAC&url=http%3A%2F%2Fwww.socialmoodconference.com%2Fwordpress%2Fwp-content%2Fuploads%2F2012%2F01%2F10_BollenMao_SOCSummit.pdf&ei=rNxLVPm8Mq2S7AbxhoHoAg&usg=AFQjCNGhibtoqwSroC4UhbEA9dzDh2Am1g&sig2=opNFic8AfjYt-SvwzeQmvg&bvm=bv.77880786,d.ZGU
Edmans, A. (2011). Does the stock market fully value intangibles? Employee satisfaction and equity prices. Journal of Financial Economics, 101(3), 621-640. Retrieved from http://www.sciencedirect.com/science/article/pii/S0304405X11000869
Edmans, A., Goldstein, I., & Jiang, W. (2012). The real effects of financial markets: The impact of prices on takeovers. The Journal of Finance, 67(3), 933-971. Retrived from http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCQQFjAA&url=http%3A%2F%2Fwww.columbia.edu%2F~wj2006%2Ftakeover_feedback.pdf&ei=it1LVImkPLGM7Aahk4DYCw&usg=AFQjCNGtUoj0LeJ5W8OAWf6PmVW6hYOwUA&sig2=1rme55ohZGa9twSnIz5qnA&bvm=bv.77880786,d.ZGU
Filis, G., Degiannakis, S., & Floros, C. (2011). Dynamic correlation between stock market and oil prices: The case of oil-importing and oil-exporting countries. International Review of Financial Analysis, 20(3), 152-164. Retrieved from http://www.sciencedirect.com/science/article/pii/S1057521911000226
Kaplan, S. N., Moskowitz, T. J., & Sensoy, B. A. (2013). The effects of stock lending on security prices: An experiment. The Journal of Finance, 68(5), 1891-1936. Retrieved from http://onlinelibrary.wiley.com/doi/10.1111/jofi.12051/abstract
Næs, R., Skjeltorp, J. A., & Odegaard, B. A. (2011). Stock market liquidity and the business cycle. The Journal of Finance, 66(1), 139-176. Retrieved from http://onlinelibrary.wiley.com/doi/10.1111/j.1540-6261.2010.01628.x/abstract
Van Rooij, M., Lusardi, A., & Alessie, R. (2011). Financial literacy and stock market participation. Journal of Financial Economics, 101(2), 449-472. Retrieved from http://www.nber.org/papers/w13565

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