Marknadsinflytandets påverkan på aktiens prissynkronicitet
The influence of market power on stock price syncronicity
This report studies the relationship between firms’ market power and their behavior in the equity market. To examine this relationship, the operating margin and weekly returns for 50 companies listed at the Stockholm exchange has been analyzed. The firms operating margin, subtracted by the average operating margin in the sector, has been used as a proxy for the firms’ market power. The R-squared method has been used to proxy the stock price synchronicity. These variables have been the components of a regression with price synchronicity as the dependent variable and market power as the explanatory variable to determine if a relationship between the two exists. The regression did not generate a significant coefficient and thus such a relationship has not been established. This has been a successful method in earlier research of the subject. However, in this study the method fails to generate a significant coefficient for the Swedish market. The size of the smaller and more international Swedish market, compared to the US, appears to be the main reason for why this method is better suited for the American market.