• Title/Summary/Keyword: Non Systematic Risk

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Firm's Risk and Capital Structure: An Empirical Analysis of Seasonal and Non-Seasonal Businesses

  • TAHIR, Safdar Husain;MOAZZAM, Mirza Muhammad;SULTANA, Nayyer;AHMAD, Gulzar;SHABIR, Ghulam;NOSHEEN, Filza
    • The Journal of Asian Finance, Economics and Business
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    • v.7 no.12
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    • pp.627-633
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    • 2020
  • The study attempts to analyze the impact of firm's risk on capital structure in the context of seasonal and non-seasonal businesses. We use two independent variables namely credit risk and systematic risk and one dependent variable to explore this connection. Sugar sector is taken as seasonal while the textile sector as non-seasonal businesses. The panel data of twenty-five firms from each sector are taken ranging for the period of 2012 to 2019 which has been retrieved from their annual reports for empirical analysis of the study. The results reveal the negative impact of credit risk on capital structure in both types of businesses. Increasing (decreasing) one point of credit risk causes a decrease (increase) leverage ratio by 0.27 points for seasonal while increasing (decreasing) one point of credit risk causes to decrease (increase) leverage by 0.15 points for non-seasonal businesses. Furthermore, the study shows positive impact of systematic risk on leverage ratio in non-seasonal business and no impact in seasonal business. Any increase (decrease) in the systematic risk causes an incline (decline) leverage ratio by 2.68 units for non-seasonal businesses. The study provides a guideline to managers for risk management in businesses. The research focusses on theoretical as well as managerial and policy implications on risk management in businesses.

Corporate Social Responsibility and Firm Risk: Controversial Versus Noncontroversial Industries

  • ERIANDANI, Rizky;WIJAYA, Liliana Inggrit
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.3
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    • pp.953-965
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    • 2021
  • This study aims to analyze the benefits of corporate social responsibility (CSR) performance on corporate risk in controversial and non-controversial industries. The hypothesis of this study is based on the conflicting effects of industry type on CSR and firm risk. The research sample consisted of 927 companies listed on the Indonesia Stock Exchange from 2016 to 2019. The main method for data processing was the ordinary least square method and subgroup analysis as a robustness test. The findings suggest that the performance of CSR can reduce corporate risk. However, the impact was only significant for non-controversial firms and weakened for controversial industries. These results support risk management and signaling theory. Firm risk in this study reflects the company's total risk, further research can categorize it into systematic and idiosyncratic risk. Besides, the number of samples of controversial industry research is not as much as non-controversial; further research can use paired samples. Regulators can use the results to create a new policy regarding CSR implementation. This study contributes to the existing literature by showing that the ability of social responsibility to reduce corporate risk only works in non-controversial industries. This result may be due to the controversial industry receiving negative stigma from its stakeholders.

Systematic Risk Analysis on Bitcoin Using GARCH Model (GARCH 모형을 활용한 비트코인에 대한 체계적 위험분석)

  • Lee, Jung Mann
    • Journal of Information Technology Applications and Management
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    • v.25 no.4
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    • pp.157-169
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    • 2018
  • The purpose of this study was to examine the volatility of bitcoin, diagnose if bitcoin are a systematic risk asset, and evaluate their effectiveness by estimating market beta representing systematic risk using GARCH (Generalized Auto Regressive Conditional Heteroskedastieity) model. First, the empirical results showed that the market beta of Bitcoin using the OLS model was estimated at 0.7745. Second, using GARCH (1, 2) model, the market beta of Bitcoin was estimated to be significant, and the effects of ARCH and GARCH were found to be significant over time, resulting in conditional volatility. Third, the estimated market beta of the GARCH (1, 2), AR (1)-GARCH (1), and MA (1)-GARCH (1, 2) models were also less than 1 at 0.8819, 0.8835, and 0.8775 respectively, showing that there is no systematic risk. Finally, in terms of efficiency, GARCH model was more efficient because the standard error of a market beta was less than that of the OLS model. Among the GARCH models, the MA (1)-GARCH (1, 2) model considering non-simultaneous transactions was estimated to be the most appropriate model.

Determinants and Outcomes of Financial Derivatives: Empirical Evidence from Pakistani Banks

  • ALAM, Atia;ABBAS, Syeda Fizza;ZAHID, Anam;BATOOL, Syeda Irtiqa;KHAN, Misbah
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.4
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    • pp.591-599
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    • 2021
  • The increased risk in financial firms, due to Global Financial Crises and high international trade activities, has encouraged banks to use derivatives for both managing their financial risk and earning non-operating income simultaneously. The present study brings new evidence in the existing literature by determining the drivers behind financial derivative usage in Pakistani banks for 2011 till 2016. Moreover, the paper examines how risk plays a moderating role in determining the relationship between derivative usage and bank value. While assessing the determinants, a two-stage test has conducted, first, the logit regression was used to test the drivers behind the derivative usage in banks. Second, Tobit regression was run to analyze the factors leading to determine the extent of derivative usage. The findings demonstrate that Pakistani banks are using derivatives for both risk management and speculative motive as they are customers and users of derivatives at the same time. Empirical results, regarding moderating role of risk on the value implications of derivative usage, provide mixed findings as derivative usage gives value premium in case of non-systematic risk and foreign exchange risk. Whereas value discounts have been observed for cases where systematic risk is high and managers try to earn non-operating income from speculative activities.

A Systematic Review of Clinical Researches of Korean Medicine for Alopecia (탈모증의 한약제제 치료효과에 대한 체계적 문헌 고찰)

  • Ryu, Deok-Hyun;Roh, Seok-Sun
    • The Journal of Korean Medicine Ophthalmology and Otolaryngology and Dermatology
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    • v.30 no.2
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    • pp.1-18
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    • 2017
  • Objectives : This review aims to evaluate a risk of bias by risk of bias tool and RoBANS(Risk of Bias Assessment tool for Non-randomized Study) tool for clinical trial papers proving treatment effect of Korean medicines to alopecia and provides the newest reason of effectiveness of herbs to alopecia. Methods : Data were collected through electronic database including NDSL, KISS, KMBASE, Koreantk, OASIS, KoreaMed, KISTI, Pubmed, Cochrane CENTRAL and CINAHL. Two experts in Oriental Medicine assessed risk of bias of randomized controlled trials by Cochrane group's Risk of Bias tool and non-randomized controlled trials by RoBANS tool after searching, reviewing and selecting papers. Results : Total number of selected trials is 20 including 4 randomized controlled trial, 13 non-randomized controlled trials and 3 case reports. This study evaluate the risk of bias of 17 papers including 4 randomized controlled trials and 13 non-randomized controlled trials except 3 case reports by risk of bias tool and RoBANS tool. All papers of randomized controlled trials are evaluated unclear for random sequence generation and allocation concealment as there are no word on them. And all papers of non-randomized controlled trials are evaluated unclear for blinding of outcome assessments and relatively low for others. Conclusions : Korean medicine intervention can be an effective for treatment in alopecia. It was evaluated by hair density, thickness and expert panel assessment of photographs and all results are statistically significant. But enhancing levels of evidence, we must try to reduce bias in researches and report a safety, protocol and IRB.

Overview of Methodological Quality of Systematic Reviews about Gastric Cancer Risk and Protective Factors

  • Li, Lun;Ying, Xiang-Ji;Sun, Tian-Tian;Yi, Kang;Tian, Hong-Liang;Sun, Rao;Tian, Jin-Hui;Yang, Ke-Hu
    • Asian Pacific Journal of Cancer Prevention
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    • v.13 no.5
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    • pp.2069-2079
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    • 2012
  • Background and Objective: A comprehensive overall review of gastric cancer (GC) risk and protective factors is a high priority, so we conducted the present study. Methods: Systematic searches in common medical electronic databases along with reference tracking were conducted to include all kinds of systematic reviews (SRs) about GC risk and protective factors. Two authors independently selected studies, extracted data, and evaluated the methodological qualities and the quality of evidence using R-AMSTAR and GRADE approaches. Results: Beta-carotene below 20 mg/day, fruit, vegetables, non-fermented soy-foods, whole-grain, and dairy product were GC protective factors, while beta-carotene 20 mg/day or above, pickled vegetables, fermented soy-foods, processed meat 30g/d or above, or salty foods, exposure to alcohol or smoking, occupational exposure to Pb, overweight and obesity, helicobacter pylori infection were GC risk factors. So we suggested screening and treating H. pylori infection, limiting the amount of food containing risk factors (processed meat consumption, beta-carotene, pickled vegetables, fermented soy-foods, salty foods, alcohol), stopping smoking, avoiding excessive weight gain, avoidance of Pb, and increasing the quantity of food containing protective components (fresh fruit and vegetables, non-fermented soy-foods, whole-grain, dairy products). Conclusions: The conclusions and recommendations of our study were limited by including SRs with poor methodological bases and low quality of evidence, so that more research applying checklists about assessing the methodological qualities and reporting are needed for the future.

The Effectiveness of Bojungikgi-tang and its modifications on Chronic Fatigue Syndrome: A Systematic Review And Meta-analysis (만성피로증후군에 대한 보중익기탕과 그 변방의 효과 : 체계적인 문헌고찰)

  • Nam, Donghyun
    • The Journal of Korean Medicine
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    • v.41 no.1
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    • pp.93-106
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    • 2020
  • Objectives: The aim of this review is to ascertain whether Bojungikgi-tang and its modifications is more effective than non-specific management in chronic fatigue syndrome (CFS). Methods: We collected clinical trials to investigate the effects of Bojungikgi-tang and non-specific management on general symptoms, fatigue, and sleep quality in CFS patients. The databases used for data retrieval were Pubmed, Central Cochrane, CNKI, VIP, CiNii, OASIS, RISS, and Koreamed. We performed selection/exclusion process from the found records according to prespecified criteria, and assessed the final included trials according to the Cochrane risk of bias tool. The included studies were classified on the basis of interventions in experimental group. Results: Seven randomized controlled trials (476 participants) were eligible and their results were synthesized in the meta-analysis. The synthesis showed a substantial effect of Bojungikgi-tang (relative risk 0.20 [95% CI 0.13 to 0.31], Z=7.44, P<0.00001; I2=0%) and combination of Bojungikgi-tang and Sosiho-tang (relative risk 0.15 [95% CI 0.08 to 0.28], Z=5.85, P<0.00001; I2=0%) compared with non-specific management on improvement of general symptoms. However, we could not find sufficient clinical research records to determine their effects of improvement on fatigue and sleep quality. Conclusions: Bojungikgi-tang and its modifications are more effective than non-specific management for improvement of general symptoms in CFS post-treatment.

Emotional Freedom Techniques (EFT) for Students' Mental Health: A Systematic Review (학생들의 정신건강을 위한 감정자유기법(EFT): 체계적 문헌고찰)

  • Lee, Seung Hwan;Jeong, Bo Eun;Chae, Han;Lim, Jung Hwa
    • Journal of Oriental Neuropsychiatry
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    • v.28 no.3
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    • pp.165-182
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    • 2017
  • Objectives: The purpose of this systematic review was to understand clinical usefulness of Emotional Freedom Techniques (EFT) on students' mental health. Methods: Ten databases were included to extract clinical studies on effects of EFT intervention with students. Characteristics of selected studies were described, and biases were assessed with Risk of Bias (RoB) or Risk of Bias Assessment for Non-Randomized Studies (RoBANS). Results: A total of 14 clinical trials were extracted for analysis. There were 8 randomized-controlled trials (RCTs), 2 non-randomized-controlled trials (nRCTs), and 4 before-after studies. EFT have significant clinical usefulness in public speaking anxiety, test anxiety, stress, depression, learning related emotions, adolescent anxiety, and eating issues. The risk of selection bias in most studies was high or uncertain. Conclusions: EFT is an effective clinical technique for managing students' mental health issues. However, the included studies have been conducted with relatively poor quality and small sample size. Clinical trials with high quality study design and well-designed EFT education programs are needed to generalize clinical usefulness.

Liquidity Risk and Asset Returns : The Case of the Korean Stock Market

  • Choe, Hyuk;Yang, Cheol-Won
    • The Korean Journal of Financial Management
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    • v.26 no.4
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    • pp.103-140
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    • 2009
  • This paper investigates various channels through which liquidity can affect stock returns and examines whether behavioral explanation for liquidity risk is reasonable. First, we examine whether liquidity level (average liquidity) plays a significant role in determining asset returns. The result is consistent with the hypothesis that a stock with higher average illiquidity will have a higher expected return. Second, we focus on the argument that liquidity has a non-diversifiable systematic component. If systemic liquidity has a different impact across individual securities, a stock that is more sensitive to systematic liquidity will have a higher expected return. The results of various tests are inconsistent with each other, not completely supporting the argument. Finally, the intra-market tests in Korea support the behavioral explanation for the liquidity premium, and the effect is stronger in the liquidity level than in the liquidity beta related to systematic liquidity.

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A Study on the Impact of ESG Performance on Firm Risk (ESG 성과가 기업위험에 미치는 영향에 관한 연구)

  • Jung-Hyuck Choy
    • The Journal of the Convergence on Culture Technology
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    • v.9 no.3
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    • pp.19-26
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    • 2023
  • The impact of environmental, social and governance (ESG) performance on investors' decision-making is growing. Investors' focus on the financial performance of firms in the past is expanding to the non-financial performance of the interests of stakeholders surrounding firms. Against this backdrop, this study conducted a panel regression analysis on firms evaluated by Korea Corporate Governance Service to analyze the impact of ESG performance, a firm's non-financial performance, on firm risk. According to the analysis, ESG performance has a negative (-) effect on all three firm risks (systematic risk, unsystematic risk, and total risk), indicating that the stakeholder theory and risk management theory are supported. The implications of this study are: First, ESG reduces not only unsystematic risk but also broad and indiscriminate systematic risk; Second, investors can reduce the risk of their investment portfolio by executing ESG investments; Third, companies can achieve stable financial performance even in adverse circumstances by utilizing the insurance function of ESG management; Lastly, the government can enhance the stability of the financial market while improving the financial soundness of firms through reasonable ESG-related regulations.