• The Journal of Asian Finance, Economics and Business
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• 제8권4호
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• pp.653-663
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• 2021

There has been a massive increase in household debt in China, especially in the last five of years. Learning from past experiences, the country needs careful forecasting that may help to form new policies or make amendments to the existing ones. This research paper aims to highlight the impact of the monetary policy on household debt in China. The study covers the time period from 1996 to 2020 The study employs a cointegration test, Autoregressive Distributed Lag Bound Test (ARDL) approach, a Augmented Dicky Fuller (ADF) and PP test (PMG) and time series data. The findings suggest on a quantitative analysis using a time-series model in which gdp per capita and interest rate has a positive impact on household debt whereas, cpi doesn't have significant impact. In a short-term variables relationship, household debt responds more to an increase in income than in the long-term. Also, the impact of interest rate changes on household debt is lower than income in the short run.The research suggests that there should be some restrictions on household debt and consumer financing provided to citizens and for this, appropriate leverage measures should be taken in order for the central bank to sustain robust macroeconomic conditions.

• The Journal of Asian Finance, Economics and Business
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• 제9권5호
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• pp.355-363
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• 2022

The debt maturity structure has a significant impact on a company's financial situation. Any debt maturity structure decisions substantially impact investment decisions due to changes in capital cost and dividend decisions due to cash flow consequences. This study used the system generalized method of moment (Sys-GMM) to investigate the debt maturity structure of real estate companies listed on the Ho Chi Minh Stock Exchange (HOSE) in the duration from 2008 to 20019. It found that the firm size, liquidity, and tangible assets affected the decision on debt maturity structure. The tangible asset had the most significant impact on the possibility for companies to access long-term loans. This finding revealed that the majority of the real estate companies listed on HOSE borrowed money from banks. Such decisions are most likely affected by the collateral. Another finding of the study is that financial institutions had a major impact on loan maturity structure, whereas the effects of the financial market were negligible. Besides, the real estate companies listed on HOSE seemed not to pay attention to changes in inflation, economic growth, and institutional qualities when deciding on the debt maturity structure.

• 한국항해항만학회지
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• 제39권1호
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• pp.69-75
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• 2015

본 연구는 분석적 모형의 도출과 함께 실증적 자료를 통하여 해운산업의 적정부채비율을 추정 가능하게 하는 한 가지 접근방법을 제시하고 실제로 최적 자본구조를 위한 부채비율지표를 제시하는 데 구체적인 연구목적을 둔다. 그 분석적 모형은 독립변수를 부채비율로 하는 자기자본순영업이익률 계산식으로부터 출발한다. 관련모수는 매출액영업이익률, 총자산회전율과 순금융비율(금융비용대부채)로 구성되는데, 매출액영업이익률과 총자산회전률의 경우 부채비율과는 어떠한 상관관계가 존재한다고 보기 어렵지만 금융비용율은 부채비율과 상관관계 또는 인과관계가 존재한다고 볼 수 있다. 즉 부채비율이 높은 기업은 재무위험에 대한 대가로 무위험이자율보다 높은 대출금리를 부담해야 할 것이다. 이 경우 금융비용율과 부채비율 간에 1차 선형 관계가 존재할 것이고 이러한 관계를 고려하기 위한 방정식을 분석모형에 추가할 수 있다. 이러한 분석적 절차에 따라, 적정부채비율의 기준을 자기자본순영업이익률을 극대화하는 부채비율 수준으로 정의한다면, 두 식으로부터 통해 자기자본순영업이익률은 부채비율을 독립변수로 하는 2차함수로 나타낼 수 있다. 그리고 우리나라 수상운송업의 12년 자료를 기초로 회귀분석을 통하여 관련모수를 추정하고 최적부채비율을 산출한 바, 약 400%임을 확인하였다. 결론적으로, 우리나라 해운산업 부채비율의 경우, 매출과 영업이익이 안정적이라면, 과거 재무적 안전성을 담보하는 부채비율로 강제하였던 200%의 2배인 400%까지도 적정부채비율로 용인될 수 있을 것이다.

• The Journal of Asian Finance, Economics and Business
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• 제9권4호
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• pp.1-12
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• 2022

Our study adds to the body of knowledge about the relationship between credit ratings and the capital structure of bond issuers. Using Bloomberg and Datastream databases and employing panel regression models, we study the capital structure changes of Japanese enterprises after credit rating changes by global rating agencies (S&P and Moody's) as well as their local counterparts (R&I and JCR) from 1998 to 2016. We find that after rating downgrades, Japanese enterprises considerably reduce net debt or net debt relative to net equity, similar to the findings of Kisgen (2009), who focused on U.S. industrial firms. They do not, however, make adjustments to their financial structure as a result of rating improvements. In comparison to downgrades by S&P and Moody's, Japanese corporations issue 1.89 percent less net debt and 1.50 percent less net debt relative to net equity after R&I and JCR rating downgrades. To put it another way, Japanese companies consider rating adjustments made by local agencies to be more significant than those made by global rating organizations. Our findings contradict earlier research that suggests S&P and Moody's are more prominent in the investment community than R&I and JCR in Japan.

• 무역상무연구
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• 제52권
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• pp.25-44
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• 2011

Possibility of credit risk, foreign exchange risk and interest rate risk of exporter increases in the recent international Commercial transactions, due to financial crisis of Europe and liberalization of Middle East. Under this circumstance, Forfaiting is trade finance that forfaiter purchase negotiable debt instrument without recourse from exporter, which occurred related with international commercial transactions, and credit risk, contingency risk, foreign exchange risk and interest rate risk of exporter can be transferred to forfaiter. Forfaiting is typically medium-term finance(three to five years) concluded at fixed interest rate, although it can also arranged on a floating interest-bearing basis for periods from six months to ten years or more. But Forfaiting service of Korea has limitation as follows. First, forfaiting in Korea deals with unrestricted irrevocable documentary credit as debt instruments. Period that forfaiting is provided is short and amount of money is limited, compared with advanced forfaiting. But forfaiting provided in advanced countries deals with various methods such as guarantee for bill, payment guarantee, and can be resold in financial market. Recently importance of forfaiting is increasing in international commercial transactions. Therefore profound study on forfaiting is required. The study will examine the risk that happens to the concerned parties in forfaiting, and its management measures. The study adopted literature review method such as local and foreign books and papers about trade finance, internet information about forfaiting, and professional journal related with international finance.

• The Journal of Asian Finance, Economics and Business
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• 제8권1호
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• pp.45-52
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• 2021

The capital structure is one of the hot financial topics among researchers and scholars. Its importance comes from the fact that capital structure is closely related to companies' ability to meet different stakeholders' needs. A suitable capital structure will boost the business and create a competitive advantage in the context of fierce competition. Many companies choose an optimal debt level based on the trade-off between interest and debt costs. This study aimed to test the existence of trade-off theory in capital structure, the case of Vietnam's real estate companies, which are growing very fast recently. Instead of considering constant optimal leverage to test the trade-off model, we take advantage of the dynamic capital structure determined by growth opportunities, profitability, tax incentives, tangibility, liquidity, and firm size. The dynamic panel data regression was estimated by the system Generalized Method of Moment (Sys-GMM). The empirical evidence showed that real estate companies listed in the Vietnamese stock market might change their leverage toward a target capital structure determined by influential factors in a long-term perspective. In particular, the debt-to-asset ratio will change by approximately 14 percent, positively, in response to the difference between the current debt-to-asset ratio and the dynamic target debt-to-asset ratio.

• The Journal of Asian Finance, Economics and Business
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• 제9권8호
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• pp.71-80
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• 2022

This study aims to investigate the effects of fair value valuation of biological assets and bearer plants measured at historical cost on the cost of third-party capital. The study contributes to the agricultural sector and the International Accounting Standard - IAS 41, which has been modified to remove the requirement to apply fair value for bearer plants, one of the primary biological assets with no active market. For this, 182 companies from 39 countries were studied in the years 2020 and 2021, with information taken from the Thomson Reuters Eikon platform. The methodology involves regression by the ordinary least squares method based on the model of Daly and Skaife (2016). The results show that the biological asset at fair value does not influence the cost of debt and that the measurement of bearer plants at historical cost has no effect on the cost of debt. Fair value did not change the perceived cost of debt of the analyzed companies in the studied period, contrary to Daly and Skaife (2016). Finally, the cost of third-party capital can be influenced by other aspects related to profit quality, which were not examined in this paper, such as profit management.

• The Journal of Asian Finance, Economics and Business
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• 제8권5호
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• pp.403-411
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• 2021

This paper discusses the relationship between debt literacy, peer-to-peer lending, and over-indebtedness in Indonesia. It is essential because the number of loans on this platform continues to increase, both legal and illegal. Data was collected online in collaboration with commercial market research firms, JajakPendapat.net. Debt literacy and over-indebtedness were measured by self-assessment with questions from Lusardi and Tufano (2009a). Questions for debt literacy are about interest compounding, debt interest, and the application of time value of money in payment options. The question for over-indebtedness is about the amount of debt and the conditions resulting from that debt. By using descriptive methods, it is clear that the majority of respondents, both borrowers and non-peer-to-peer lending borrowers are debt illiterate, and those who have poor debt literacy have huge debt. Overall, only 1.85% of the respondents were debt literate. Those who live on the island of Java have better literacy because they are the center of economic growth in Indonesia. Debt from peer-to-peer (P2P) lending also has the potential to create problems, namely over-indebtedness. P2P lending borrowers also have very poor debt literacy. However, there is no difference in debt literacy between P2P lending borrowers and non-P2P lending borrowers.

• The Journal of Asian Finance, Economics and Business
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• 제9권4호
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• pp.261-272
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• 2022

This study examined the association between key audit matters (KAM) and the cost of debt. Financial records and auditors' reports were used to collect data for the fiscal years 2016 and 2017, which were the first two years after KAM was implemented in Thailand. Samples are listed companies in Thailand, where the financial system is primarily debt-based and external auditors play an important role in maintaining financial reporting quality. The final samples for the two-year period consist of 770 observations. The KAM is measured in three aspects: the number of issues, the number of words, and the readability, while the cost of debt is measured by the ratio of interest expense to total debt. The research finds that the KAM readability is significantly and negatively related to the cost of debt. Meanwhile, the number of issues and words have no significant effect on the cost of debt. The finding suggests that auditors' writing skills play a crucial role in the lending decisions of creditors.

• 유통과학연구
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• 제13권9호
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• pp.47-57
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• 2015

Purpose - The aim of this paper is to investigate the explanatory power of the Pecking-order theory (the cost of financing increases with asymmetric information) among Korean retail firms from the perspective of debt capacity. According to the Pecking-order theory, a firm's first preference is to use internal funds for its capital needs, its next preference is the issuance of debt, and its last preference is the issuance of equity; this is due to the information asymmetry problem between existing shareholders and investors. However, prior empirical studies, such as Lemmon and Zender (2010), argue that the entire sample test for the Pecking-order theory could be misleading due to the different levels of debt issuance capability of each of the individual firms; in fact, they confirm that the explanatory power of the Pecking-order theory improves after taking into account the differences in debt capacity of the U.S. firms they examined. This paper implements a case study approach among Korean retail firms to examine the relationship between debt capacity and the explanatory power of the Pecking-order theory in Korea. Research design, data, and methodology - This study uses the sample of public retail firms on the Korea Composite Stock Price Index (KOSPI) from the time period of 1990 to 2013. We gather related financial and accounting statements from the financial information firm WISEfn. Credit rating information is provided by the Korea Investor Service. We employ the models of Lemmon and Zender (2010) and Son and Kim (2013) to measure a firm's debt capacity. Their logit models use the rating dummy variable as a dependent variable and incorporate other firm characteristics as independent variables to estimate debt capacity. To test the Pecking-order theory, we adopt variants of the financing deficit model of Shyam-Sunder and Myers (1999). In the test of the Pecking-order theory, we consider all of the changes in total debt obligations, current debt obligations, and long-term debt obligations. Results - Our main contribution to the literature is our confirmation of the predicted relationship between debt capacity and the explanatory power of the Pecking-order theory among Korean retail firms. The coefficients on financing deficits become greater as a firm's debt capacity improves. This is consistent with the results of Lemmon and Zender (2010). The coefficients on the square of the financing deficits are also negative for the firms in the largest debt capacity group, which is also consistent with the predictions in prior literature. Conclusions - This study takes a case study approach by examining Korean retail firms. We confirm that the Pecking-order theory explains the capital structure of retail firms more appropriately, after taking into account the debt capacity of each firm. This result suggests the importance of debt capacity consideration in the testing of the Pecking-order theory. Our result also implies that there has been a potential underestimation of the explanatory power of the Pecking-order theory in existing studies.