• 융합경영연구
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• 제7권3호
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• pp.43-49
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• 2019

Purpose - This paper empirically investigates what factors contribute to management decisions by corporate governance in the Korean stock market. In the paper, dividends and investments were imployed as management decisions and major stockholders' shares and foreign investors' shares were used as corporate governance. Research design, data, and Methodolog - Samples are constructed by manufacturing firms listed on the stock market of Korea as well as those who settle accounts in December from 2001 to 2018. Financial institutions are excluded from the sample as their accounting procedures, governance and regulations differ. This study adopted the panel regression model to assess the sample construction including yearly and cross-sectional data. Results - This results support the literatures that major shareholders showed insignificance to dividends, positive significance to investment in financially unconstrained firms and negative significance to investment in financially constrained firms. Whereas foreign investors favor firms to increase dividends but they decrease investments only in financially constrained firms. Conclusion - This paper documented evidence that financial constrained firms use dividends for their investment and foreign investors decrease investments under financial constraints. But for dividends decisions, foreign investors give significant positive impacts irrespective of financial constraints.

• The Journal of Asian Finance, Economics and Business
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• 제9권1호
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• pp.121-132
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• 2022

The uncertainty regarding inventory may impart dynamic impacts on corporate-level financial decisions. Among others, a decision about capital investment is a crucial decision that requires overall financial stability. Following these theoretical notions, the current study aims to identify possible consequences of inventory volatility relating to corporate capital investment decisions. We employed ten years of data (2010-2019) of non-financial sector firms to achieve the objective. The Driscoll-Kraay model was used to quantify the regression. The statistical results imply that inventory volatility negatively influences capital investment decisions due to information asymmetry about the current financial position. Additionally, more volatility brings discrepancies in managers' investing decisions to fulfill the possible demand options of capital investment that require processing the inventory. However, based upon the statistical findings, it is suggested to corporate managers that they should consider the financial sensitivity of enterprises regarding inventory volatility. Thus, the current study introduces new thoughts regarding inventory volatility and its empirical role in determining capital investment.

• The Journal of Asian Finance, Economics and Business
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• 제6권3호
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• pp.67-79
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• 2019

This study examines the impact of corporate governance on capital structure decisions based on a large panel of Chinese listed firms. Using the system Generalized Method of Moments (GMM) estimator to control for unobserved heterogeneity, endogeneity, and persistency in capital structure decisions, we document that the ownership structure plays a significant role in determining leverage ratios. More specially, we find that managerial ownership has a positive and significant impact on firms' leverage, consistent with the incentive alignment hypothesis. We also find that managerial ownership only affects the leverage decisions of private firms in the post-2005 split share reform period. State ownership negatively influence leverage decisions implying that SOEs may face fewer restrictions in equity issuance and may receive favourable treatments when applying for seasoned equity ¿nancing, thus use less debt. Furthermore, our results show that while foreign ownership negatively influences leverage decisions, legal person shareholding positively influences firms' leverage decisions only for state controlled firms. We also find that the board structure variables (board size and the proportion of independent directors) do not influence firms' capital structure decisions. Our findings suggest that recent ownership reforms have been successful in terms of providing incentive to managers through managerial shareholdings to take risky financial choices.

• KDI Journal of Economic Policy
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• 제43권4호
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• pp.45-67
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• 2021

We analyze the social welfare effect when a policy-based financial system (PFS) enters a decentralized financial market. Particularly, the PFS in this case supports the interest spread for corporate loans held by firms with heterogeneous bankruptcy decisions under an imperfect information structure. Although support for capital costs through the PFS expands the economy consistently, the optimal level of PFS out of the corporate loan market is estimated to be 8.6% by a simulation model considering social welfare adjusted by the disutility of labor. This result is much lower than the recent level of PFS in the Korean financial sector.

• The Journal of Asian Finance, Economics and Business
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• 제8권7호
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• pp.447-456
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• 2021

State-Owned Enterprises (SOEs) are business entities that are owned mainly by the state. Good financial governance (GFG) is as important for SOEs as for the private sector companies. Prudence and GFG can affect the value of the company. This research aims to test the impact of macroeconomics, investment decisions, and financing decisions on prudence, Corporate Social Responsibility Disclosure (CSRD), dividend policy, and company value of SOEs registered on the IDX from 2014-2019. GFG and financing decisions are moderating variables. The population in this study is 16 SOEs listed on the Indonesia Stock Exchange from 2014-2019. The research method is quantitative and uses Partial Least Squares (PLS), which is an approach to Structural Equation Models (SEM) that allows researchers to analyze the relationships simultaneously. The results showed that macroeconomic factors, investment decisions, financing decisions, and prudence directly affect the company's value. However, CSRD and dividend policy directly do not affect the company's value. Prudence can mediate the influence of financing decisions on company value. GFG moderates the relationship between prudence and company value. Thus, GFG is key to producing compliant regulatory reports and disclosures. GFG aims at facilitating effective monitoring and efficient control of the business. Its essence lies in fairness and transparency in operations and enhanced disclosures for protecting the interest of different stakeholders.

• The Journal of Asian Finance, Economics and Business
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• 제7권11호
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• pp.177-184
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• 2020

This paper analyzes factors affecting corporate investment decisions in economic groups listed on the Vietnam stock market. The panel data of the research sample includes 39 economic groups listed on the Vietnam stock market from 2009 to 2019. The Generalized Least Square (GLS) is employed to address econometric issues and to improve the accuracy of the regression coefficients. In this research, the investment rate is a dependent variable. Cash-flow (CF), Investment opportunities (ROA), Fixed capital intensity (FCI), Leverage (LEV), Sales growth (GR), Size (SZ), Business risk (RISK) are independent variables in the study. The model results show that cash flow and sales growth have the same impact on investment decisions of economic groups in Vietnam. In addition, investment opportunities have a negative impact on the capital investment decisions of economic groups. The remaining factors include fixed capital intensity, leverage, firm size, and business risks that have a weak and insignificant impact on capital investment decisions of economic groups in Vietnam. The findings of this article are useful for business administrators, and helping business managers make the right financial decisions. Besides, the research results are also meaningful to money management agencies. The authors recommend that the State Bank of Vietnam should maintain a sustainable monetary policy.

• KDI Journal of Economic Policy
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• 제38권3호
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• pp.79-106
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• 2016

This paper investigates the effectiveness of public credit guarantee programs and interest-support programs for SMEs (small and medium enterprises). First, assuming that there is an imperfect information structure in the SME loan market, we analyze how SME support financial programs affect the corporate decisions made by SMEs with regard to default or loan sizes. In addition, this paper theoretically computes the optimal levels of credit guarantee amounts and the interest-support spread under equilibrium with imperfect information in a competitive loan market. Second, the paper empirically analyzes the continuous policy-treatment effect with the GPS (generalized propensity score) method. In particular, we consider the ratio of guaranteed debt to the total debt as a continuous policy treatment. The empirical results show that marginal effects of a credit guarantee on SMEs' productivity, profitability, and growth potential decrease with the ratio of guaranteed debt to the total debt. In addition, the average effect of a credit guarantee is maximized when this ratio is at 50% to 60%.

• 유통과학연구
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• 제11권11호
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• pp.5-11
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• 2013

Purpose - Considering corporate companies that are continually growing and bearing in mind the theory of agency, how confident can stakeholders be about their benefits in relation to managers' decisions? Previous research has indicated that the type of corporate governance can have an effective impact on companies' performance. The current study aims to investigate the impact of ownership structure on listed companies on the Tehran Stock Exchange. Research Design, Data, and Methodology - Through use of the correlation coefficient, the results indicate a positive correlation among the percentage of common stock held by board members, the percentage of non-executive board members, and separation of the positions of chairperson of the board of directors and managing director. Results - Based on the return on assets index, only the correlation between the proportion of ownership of the managing director and financial investment company ownership is significant. Conclusion -Managers can potentially make decisions that benefit themselves but are detrimental to shareholders' interests. Corporate governance is a factor that can mitigate agency costs. Corporate governance comprises the laws, regulations, structures, processes, cultures, and systems that lead to the achievement of objectives such as accountability, transparency, justice, and stakeholders' rights.

• 지능정보연구
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• 제29권2호
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• pp.85-100
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• 2023

최근 기업의 지속가능경영 역량으로 대변되는 기업 ESG 성과(environmental, social, and corporate governance)가 투자의사 결정에 주요 요인 중 하나로 부각되고 있다. 전통적 ESG 성과 평가 프로세스는 평가기관마다의 고유 기준에 따라 질적 정성적 방식으로 수행되어 그 평가 소요 시간 및 비용이 큰 데 비해 투자의사 결정 시 신뢰성과 예측 가능성 및 적시성에 제약이 존재한다. 이에 본 연구에서는 정량화되고 공개된 기업 재무 정보를 활용하여 머신러닝을 통한 자동화된 기업 ESG 평가 예측을 시도하였다. 심층신경망 기법을 활용해 2019년부터 2021년까지 3년간 한국ESG기준원에서 제공한 1,780건의 ESG 평가에 대하여 총 12종(21,360건)의 시장 공개 재무 정보를 기반으로 예측 모형을 구축한 결과, 제안된 심층신경망 모형은 약 86%의 분류성능을 보여 여타 비교모형 대비 크게 높은 정확도를 나타냈다. 본 연구는 정량적이고 공개된 과거 기업 재무 정보만으로도 자동화된 프로세스를 통해 비교적 정확한 미래 ESG 평가 예측을 달성할 수 있었다는 점에 의의가 크다. 특히 기업 ESG 관련 정보 접근이 상대적으로 불리한 일반 투자자들의 입장에서 볼 때 낮은 비용과 적은 시간 투자로도 기업 ESG 성과 평가에 대한 예측 가능성과 적시성을 향상 시킬 수 있다는 점에 실용적 함의가 있다. 또한 본 연구는 향후 추가적인 국내외 데이터 수집 및 모형 고도화를 통해 기업 ESG 성과 예측 분야에서의 확장이 기대된다.

• The Journal of Asian Finance, Economics and Business
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• 제8권2호
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• pp.289-295
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• 2021

This study investigates the role of corporate governance in the dividend decision of 198 non-financial companies listed on the Colombo Stock Exchange of Sri Lanka, over the period from 2009 to 2016. Four corporate governance indicators are used in this study; managerial ownership, the board size, board independence, and CEO duality. Furthermore, this study considers three control variables such as profitability, firm size, and corporate tax. This study employed the Generalized Method of Moments (GMM) model to estimate the regression models on panel data study. The major contribution of this study is exploring the insight into the effect of corporate governance factors on dividend decisions. The results of the study revealed that managerial ownership showed a significant positive impact on the dividend payout ratio. Board size showed a significant positive influence on the dividend payout ratio. Board independence negatively but significantly influenced the dividend payout ratio. CEO duality showed an insignificant negative impact on the dividend payout ratio. In the framework of these CG indicators, Sri Lankan listed firms are recommended to have dispersed ownerships, large Board size and maintain a balance of power and authority by separating the individual who is assuming the position of the CEO from the Chairperson of the Board and maintain at least two independent directors.