• Industry Promotion Research
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• v.9 no.2
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• pp.197-205
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• 2024

This study examines the impact of corporate ESG performance on debt default risk using a sample of Chinese A-share listed.The I mpact of ESG Performance on Debt Default Risk of Heavy Polluter Firms from 2012 to 2022. The findings show that good ESG performance can effectively reduce firms' debt default risk. Further analysis shows that firms' ESG performance reduces debt default risk by mitigating the impact of financing constraints. This study explores the influencing factors of debt default risk from the perspective of ESG performance, and also enriches the research on the economic impact of corporate ESG performance, providing empirical evidence for the prevention of corporate debt default risk.

• Journal of Korea Society of Industrial Information Systems
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• v.29 no.2
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• pp.119-131
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• 2024

In recent years, there has been a significant growth in loan comparson services offered by fintech platforms in South Korea. However, it has been reported that loan comparison platform users tend to have a higher risk of default compared to non-users. This paper investigates the difference in platform-specific credit risk factors using survival analysis models - Kaplan-Meier curves and Accelerated Failure Time (AFT) model. Our findings show that, relative to non-users, users of loan comparison platforms are characterized by elevated default rates, a greater propensity for home ownership, lower credit scores, and shorter loan durations. Furthermore, our AFT models elucidate the variance in default risk among the various loan comparison service platforms, highlighting the imperative for customized strategies that address the unique risk profiles of customers on each platform.

• Korean Journal of Construction Engineering and Management
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• v.12 no.2
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• pp.121-132
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• 2011

One of the advantages of BOT PF(Project Finance) is the government can be protected from risks involved in projects as the private finances, builds, and operates relevant projects. Moreover, the private may avoid outstanding responsibility in case of default thanks to BOT PF's unique financial structure and characteristics. However, despite increasing attention on risk mitigation effect of financial structure and characteristic of BOT PF to default risk with emerging controversies of capital crunch, introduction of IFRS, and contingent liabilities, valuation of default risk mitigation effect caused by financial structure and characteristics of BOT PF still seems sophisticated due to uncertain cash flows, complexly layered contracts, and their interaction. So, this paper is to show the theoretical frame to assess the default risk mitigation effect of financial structure and characteristic of BOT PF with option pricing and related financial economic theories and to provide some meaningful implications. Finally, this research shows that the financial structure and characteristics of BOT PF help mitigate the default risk and default risk mitigation effect increases as change of relevant variables on financial feasibility gets the BOT project less financially feasible.

• Journal of Family Resource Management and Policy Review
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• v.26 no.3
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• pp.19-34
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• 2022

There are growing concerns about debt insolvency among youth and low-income households. The deterioration in household debt quality among young people is due to a combination of sluggish employment, an increase in student loan burden and an increase in high-interest loans from the secondary financial sector. The purpose of this study was to explore the possibility of household debt default among young borrowers in Korea and to predict the factors affecting this possibility. This study utilized the 2021 Household Finance and Welfare Survey and used random forest algorithm to comprehensively analyze factors related to the possibility of default risk among young adults. This study presented the importance index and partial dependence charts of major determinants. This study found that the ratio of debt to assets(DTA), medical costs, household default risk index (HDRI), communication costs, and housing costs the focal independent variables.

• Korea Real Estate Review
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• v.28 no.3
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• pp.21-35
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• 2018

The recent performance of residential mortgages demonstrated how default risk operated separately from prepayment risk. In this study, we investigated the determinants of the borrowers' decisions pertaining to early termination through default from the mortgage performance data released by Freddie Mac, involving securitized mortgage loans from January 2011 to September 2013. We estimated a Cox-type, proportional hazard model with a single risk on fundamental factors associated with default options for individual mortgages. We proposed a mortgage default model that included two specifications of delinquency: one using a delinquency binary variable, while the other using a delinquency probability. We also compared the results obtained from two specifications with respect to goodness-of-fit proposed in the spirit of Vuong (1989) in both overlapping and nested models' cases. We found that a model with our proposed delinquency probability variable showed a statistically significant advantage compared to a benchmark model with delinquency dummy variables. We performed a default prediction power test based on the method proposed in Shumway (2001), and found a much stronger performance from the proposed model.

• Management & Information Systems Review
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• v.3
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• pp.179-199
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• 1999

Case-Based Reasoning(CBR) offers a new approach for developing knowledge based systems. In case-based approach the problem solving experience of the domain expert is encoded in the form of cases. CBR has successfully been applied to many kinds of problems such as design, planning, diagnosis and forecasting. In this paper, CBR was applied for forecasting default risk. The applied result was successful in spite of the small casebase. Generally, CBR requires large casebase. So, if the number of data was large, the result was better. But in this paper, what financial variable was more forecastable was not tested. Next, this should be tested.

• The Korean Journal of Financial Management
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• v.22 no.1
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• pp.1-36
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• 2005

In this study, we analyzed determinant factors of leverage ratio and debt maturity for Korean firms in the simultaneous equation system using 2SLS (two stage least square) method under assumption that two variables are jointly determined in the capital structure decision. As a result of the analysis, we found that leverage ratio and debt maturity are positively related. Also, as for determinant factors of debt maturity, agency cost hypothesis, asset maturity matching hypothesis, signalling and liquidity risk hypothesis are all generally supported, and further leverage ratio are significantly positively related with firm size, but negatively related with default risk. However, when we divided samples into groups according to bank debt level and Chaebul affiliation, with contrast to existing study which worked on similar issues with OLS, we found no evidence supporting the argument that the information asymmetry problem is less severe in firms with more bank debt, whereas information asymmetry and financial constraint problems are more severe in non-Chaebul affiliated firms.

• The Journal of the Korea Contents Association
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• v.16 no.3
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• pp.81-90
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• 2016

This study aims to investigate the association between stock performance and credit ratings, and credit rating changes using a sample of 1,691 KRX firm-years that acquire equity in the form of long-term bonds from 2002 to 2013. Previous U.S. literature is mixed with regard to the relation between credit ratings and stock price. On one hand, there is evidence of a positive relation between credit ratings and stock prices, an anomaly established in U.S. studies. On the other hand, the CAPM model suggests a negative relation between stock prices and credit ratings, implying that investors expect financial rewards for bearing additional risk. To our knowledge, we are the first to examine the relationship between stock price and default risk proxied by credit ratings in period t+1. We find a negative (positive) relation between credit ratings (risk) in period t+1 and stock returns in period t, suggesting that credit rating agencies do not consider stock returns as a metric with the potential to influence default risk. Our results suggest that market participants may prefer firms with higher credit risk because of expected higher returns.

• Journal of Digital Convergence
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• v.20 no.4
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• pp.185-192
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• 2022

This study investigates the effect of the semi-supervised learning(SSL) method on predicting default risk of peer-to-peer(P2P) loans. Despite its proven performance, the supervised learning(SL) method requires labeled data, which may require a lot of effort and resources to collect. With the rapid growth of P2P platforms, the number of loans issued annually that have no clear final resolution is continuously increasing leading to abundance in unlabeled data. The research data of P2P loans used in this study were collected on the LendingClub platform. This is why an SSL model is needed to predict the default risk by using not only information from labeled loans(fully paid or defaulted) but also information from unlabeled loans. The results showed that in terms of default risk prediction and despite the use of a small number of labeled data, the SSL method achieved a much better default risk prediction performance than the SL method trained using a much larger set of labeled data.

• The Journal of the Korea Contents Association
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• v.6 no.4
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• pp.146-157
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• 2006

Causal relationship means what relations the result occurred have with a fact as a reason. In general, a formular that no result exists without reasons is used for the method to confirm existence and inexistence of causal relationship. Problematic causal relationships in Private Law are reparations (Article No. 393 of Private Law) due to debt nonfulfillment and reparation due to tort (Application of Article No. 393 by Article No. 750, and No. 763 of Private Law). The purpose pursued by reparation system in private law is to promote equal burden of damages, and the range of reparation at this time is decided by the range of damage and the range of damage is decided by the principle of causal relationship. That the causal relationship theory fairly causes confusion by treating one problem and the other problem as the same thing, instead of dividing them according to the purpose of protection presented by the law is a reason of the criticism from different views.