• The Journal of Asian Finance, Economics and Business
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• 제8권10호
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• pp.361-371
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• 2021

This research aims to analyze the effects of managerial overconfidence and corporate governance on investment decisions. Besides, it also tries to discover the effect of internal financing mediation between managerial overconfidence and corporate governance on investment decisions. This study employed panel data from 44 manufacturing companies from 2014 to 2019, out of a total of 117, thus the total observations are 264. The hypothesis was verified through structural equation modeling (Smart PLS 2). The study revealed as follows: 1) Managerial overconfidence has a positive and significant effect on internal financing, while corporate governance has a negative and significant effect on internal financing, 2) managerial overconfidence, internal financing, and corporate governance have a positive and significant effect on investment decisions, 3) internal financing partially mediated the effect of managerial overconfidence on investment decisions, However, internal financing does not mediate the effect of corporate governance on investment decisions. The findings in this study will help company managers implement good corporate governance to improve investment efficiency. In addition, managers can reduce the proportion of retained earnings and increase the proportion of dividend payout ratios, and increase the use of external sources of funds in making investments to minimize agency costs and manager's opportunistic behavior.

• 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.

• 한국항해항만학회지
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• 제46권2호
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• pp.121-133
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• 2022

The purpose of this study was to analyze decision-making regarding ship finance term selection from the behavioral finance perspective and to confirm if the causes and backgrounds of decision-making related to the term selection of ship finance are explicitly explained by behavioral finance theories. Additionally, through a case study, this study infers if decisions are irrational. Narrative and questionnaire responses on the selection of the ship finance period were obtained and analyzed from the behavioral finance perspective. Some shipping companies incur additional losses by choosing inappropriate ship-financing terms. This study applied behavioral finance theories, such as the certainty effect, availability heuristic, and loss aversion, to clearly explain the causes and background of such decision-making. Based on the results, it was found that behavioral finance theories impact ship financing decisions and errors related to behavioral finance can result in irrational decisions. Ship finance managers must be vigilant in preventing behavioral finance errors that can affect the decision-making term of ship finance.

• 한국항해항만학회지
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• 제44권4호
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• pp.326-337
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• 2020

선박금융 의사결정에서 해운기업들은 비합리적인 의사결정을 선택하는 경우가 있으며, 이러한 결과는 해운기업들에 막대한 손실을 유발시킨다. 이러한 선박금융 의사결정 선택에 대한 분석을 본 연구는 행동재무학 이론 중 엥카링 효과와 매몰 비용 효과 이론으로 접근 하였으며, 설문지법과 사례 분석 방법론으로 논문을 작성하였다. 분석 결과, 행동재무학 이론인 엥카링 효과와 매몰 비용 효과가 선박금융 의사결정에 영향을 미친다는 사실과 이러한 영향으로 의사결정자가 비합리적인 의사결정을 선택하게 될 수 있다는 사실을 발견했다.

• 아태비즈니스연구
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• 제14권1호
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• pp.215-229
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• 2023

Purpose - Based on the funding-horizon theory, this study aims to test the effects of cash needs and the persistence of external funding needs on firms' external financing. Design/methodology/approach - Financial data of Korean listed companies were collected from DataGuide. Immediate and near-term cash shortfalls are defined using the methodology of Haung and Ritter (2021). We estimate multinomial logit regressions for the financing choice. Findings - First, all three cash depletion variables used in our study increase the likelihood of external financing. Second, firms prefer to issue debt to meet immediate spending and equity to meet long-lived cash needs. Third, this effect is more pronounced for high R&D firms. Fourth, chaebol firms with internal capital markets defer raising external capital for immediate and near-term cash needs. Research implications or Originality - This paper provide empirical evidence that immediate and near-term cash needs induce external financing, and the persistence of cash needs affects the choice between debt and equity, the finding which is consistent with the funding-horizon theory of financing decisions. Being the first paper to test the funding-horizon theory using Korean data, this paper contributes to the literature on the capital structure of Korean firms.

• 한국산학기술학회논문지
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• 제12권12호
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• pp.5663-5670
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• 2011

이 논문은 기업의 자본조달과 자본구조를 설명하는 이론으로 대표적인 정태적 절충이론과 자본조달순위이론을 2000년부터 2010년까지 11년간의 기간에 걸쳐서 한국의 중소기업이 주로 상장되어 운영되는 코스닥시장을 대상으로 분석하였다. 코스닥 시장에 거래된 금융업을 제외한 762개의 표본에 대해 전체기간, 전반기 및 하반기의 하위기간으로 구분하여 회귀분석한 결과 부채사용으로 인한 법인세 절약효과와 기업규모 증가에 따라 부채비율이 증가하는 정태적 절충이론의 주장이 일부 지지되지만, 성장기회가 많을수록 부채사용을 선호하고, 수익성이 높을수록 유보이익과 같은 내부자금을 선호함에 따라 레버리지가 감소하는 자본조달순위이론도 일부 지지하는 결과를 얻었으나 감가상각비 등을 이용한 비부채 세금절약은 자본조달 의사결정에 영향을 미치지 않는 것으로 분석되었다.

• 유통과학연구
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• 제12권10호
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• pp.75-84
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• 2014

Purpose - This article aims to examine whether the stock issuance of firms in the retail industry follows Myers' (1984) pecking order theory, which is based on information asymmetry. According to the pecking order model, firms have a sequence of financing decisions, of which the first choice is to use retained earnings, the second one is to get into safe debt, the next involves risky debt, and the last involves finance with outside equity. Since the 2000s, the polarization of the LEs (Large enterprises) and SMEs (Small and Medium Enterprises) arose in the retail industry. The LEs exhibited an improvement in growth and profitability, whereas SMEs had a tendency to degenerate. This study contributes to corroborating the features of financing decisions in the retail industry distinguished from the other industries. Research design, data, and methodology - This study considers the stocks listed on the KOSPI and KOSDAQ markets from 1991 to 2013, and is more concentrated on the stocks in the retail industry. The data were collected from the financial information company, WISEfn. The empirical analysis is conducted by employing two measures of net equity issues (and), which were introduced in Fama and French (2005), and can be calculated from firms' accounting information. All variables are generated as the aggregate value of the numerator divided by aggregate assets, which, in effect, treats the entire sample as a single firm. Substantially, the financing decisions of the firms were analyzed by examining how often and under what circumstances firms issue and repurchase equity. Then, this study compares the features of the retail industry with those of the other industries. Results - The proportion of sample firms that show annual net stock issues reaching the level of the year's average was 54.33% for the 1990s, and fell to 39.93% per year for the 2000s. In detail, the fraction of the small firms actually increases from 45.08% to 51.04%, whereas that of large firms shows a dramatic decline from 58.94% to 24.76%. Considering the fact that the large firms' rapid increase in growth after the 2000s may lead to an increase in equity issues, this result is rather surprising. Meanwhile, net stock repurchases of assets are considerably disproportionate between the large (-50.11%) and the small firms (-15.66%) for the 2000s. Conclusions - Stock issuance of retail firms is not in line with the traditional seasoned equity offering based on information asymmetry. The net stock issuance of the small firms in the retail industry can be interpreted as part of an effort to reorganize business and solicit new investment to resolve degenerating business performance. For large firms, on the other hand, the net repurchase can be regarded as part of an effort to rearrange business for efficiency and amplifying synergy across business sections through spin-off. These results can help the government establish a support policy on retail industry according to size.

• 아태비즈니스연구
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• 제12권1호
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• pp.151-163
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• 2021

Purpose - The break-even point refers to the point where total profit and total cost coincide, and from this point on, the entrepreneur's decision-making takes a different route. Strategic decisions can be made for more efficient operation and eventually for more likelihood for growth and sustainability if a startup figures out when it recoups the investment and switches to a net profit. Design/methodology/approach - 748 creativity and skill-based sole proprietors in manufacturing industry were examined to demonstrate the effect of the entrepreneur's entrepreneurial experience and education level, the business launch preparation time, or the self-financing on the achievement of break-even point. Findings - While the business launch preparation time lowered the likelihood of reaching a break-even point, self-financing increased the likelihood. As a result of further analysis by subdividing into subgroups according to skill level, only the business launch preparation time was statistically significant in the highly skilled industries. In the low skilled industries, in addition to the business launch preparation time, the CEO's education level and the self-financing were statistically significant. Research implications or Originality - The longer the business launch preparation time, the higher the start-up cost, which increases the burden of initial cost recovery, and the agile response to market changes is thereby delayed, resulting in the business idea losing its appeal. Self-financing not only provides stability and strong motivation for the business operation but also promotes careful spending which contributes to the achievement of break-even point. In particular, it is found that practical experience is more useful than theoretical knowledge in low skilled industries. Due to the limitation of secondary data based on the recollection, the time required to reach a break-even point, percentage of financing sources, etc. may include cognitive errors. In addition, variables are not included that explain the characteristics of creativity and skill-based sole proprietorship, so it is necessary to exercise caution with the actual application.

• The Journal of Asian Finance, Economics and Business
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• 제8권3호
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• pp.11-21
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• 2021

In the last few years, there is growing interest in the field of simultaneous equation estimation in finance due to the endogeneity problem caused by measurement errors, simultaneity, or omitted variables. This study aims to discuss the endogeneity problem in corporate financing decisions and investigate the interrelationship of financial decision-making such as investment decision, dividend decision, and external financing decision in Pakistan Stock Exchange (PSX) using two-stage least squares (2SLS) and generalized method of moment (GMM) estimation. The Bruech-Pagan test shows that the data has no heteroskedasticity issue and 2SLS is a better approach in the context of this study as compared to the GMM approach, and internal instruments are also sufficiently strong and valid. The three financial decision-making attributes are not jointly determined, and the dividend is influenced by one-sided investment. In the emerging stock market context, external financing and investment are not inter-related and did not affect each other. The question of whether the simultaneous equation estimation can be useful in the context of the emerging stock markets and newly-growing firms remains unanswered. The inclusive evidence shows that the theoretical link in the emerging stock market is difficult to prove like in developed stock markets.

• 산경연구논집
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• 제9권1호
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• pp.25-38
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• 2018

Purpose - The purpose of this study is to empirically investigate the impact of donor's fiscal status on aid decisions before and after the 2008 global financial crisis. The effects on aid can change depending on the donor country's fiscal status and the period of financial crisis. Research design, data, and methodology - A fixed effect regression and dynamic panel GMM is conducted using a comprehensive dataset combining 31 donor and 167 recipient countries during 1996-2015. The key explanatory variable is central government debt-to-GDP ratio of donor country. Recipient countries' GNI per capita, population, governance indicators, and bilateral trade-to-GDP ratio between donor and recipient countries are included as control variables. Results - We can confirm the relationship between donor country's fiscal status and aid flow. The cyclical component of government debt is found to have a negative impact on grant decisions particularly after the 2008 global financial crisis. This effect becomes larger in the countries with high government debt-to-GDP ratio. ODA decisions from the countries with low financial constraint do not significantly affected by the recipient countries' factors such as GNI, population, and governance indicator. Conclusions - Based on the empirical results of this study, the source of aid should be diversified by incorporating private sector and innovative financing sources.