Editorial

Citation

Burton, B. (2009), "Editorial", Qualitative Research in Financial Markets, Vol. 1 No. 2. https://doi.org/10.1108/qrfm.2009.40701baa.001

Editorial

Article Type: Editorial From: Qualitative Research in Financial Markets, Volume 1, Issue 2

Welcome to the second issue of Qualitative Research in Financial Markets (QRFM). The reaction to the first issue has been extremely positive and I am delighted that so many academics and practitioners see real value in having an outlet devoted to studies of this nature. I would also like to thank those whom I met at the British Accounting Association Conference in Dundee where the journal had an informal launch. Cass Business School will be hosting the forthcoming conference on behavioural research concerning the credit crunch that will take place in December 2009 (please check the QRFM webpage for further details: http://emeraldinsight.com/qrfm.htm); papers submitted to and accepted for the conference will feed into this journal. William Forbes, Paul Hamalainen and Gulnur Muradoglu have worked hard to make this happen and attract big names to the event, and I would like to express my thanks to them again here. Formal flyers and calls for papers are being prepared, but for now please let me know of any interest and I will pass the information on. More generally, I would be delighted to receive any suggestions for future special issues. Book reviews, conference reviews, etc. are also very welcome.

This issue features four papers that again indicate the broad scope of the exciting work being submitted to QRFM. In “United Kingdom gilt securities and market liquidity: surveying the impact of structural reforms,” Moorad Choudhry presents evidence that recent Bank of England reforms of the gilt market were seen as broadly favourable by market participants regarding liquidity enhancement. Such a finding is likely to be particular important in the current climate and points once more to the ability of qualitative research to generate insights into market behaviour that have substantive practical implications. “Testing the pecking order theory: the importance of methodology,” by Dimitrios Vasiliou, Nikolaos Eriotis and Nikolaos Daskalakis provides a further example of the ability of qualitative research to generate important insights regarding the determinants of key corporate decisions. The paper illustrates the danger of concluding that the pecking order model is descriptive of firm practices simply because quantitative analysis suggests a negative relationship between profit and gearing levels. Using questionnaire data from Greece, the authors show that careful analysis of responses points to the hierarchy model not holding, contrary to the impression that could be gained erroneously from simple inspection of the aggregate data. “Variance and beta as perceived risk: questionable science” by Robert A. Olsen, provides a novel behavioural perspective on these two “elegant” concepts, arguing that there are fundamental psychological reasons why the measures have had only limited success in explaining asset price movements. In particular, the paper suggests that the “affective” (or “qualia”) nature of risk needs to be assimilated into academic modelling if more accurate forecasts of risk premia are to be developed in the future. Finally, in “The investment decision-making process from a risk manager’s perspective: a survey,” Omar Masood, Bora Aktan and Sahil Chaudhary provide novel interview-based evidence regarding the views of those closest to risk management in Saudi Arabia. The results suggest that although inter-bank perspectives differ, a general preference exists for the employment of prior experience and judgement over formal statistical examinations of risk exposure – including risk-loss analyses provided by the nation’s leading supervisory agency – when investment decisions are being made.

Bruce Burton