• Title/Summary/Keyword: financial leverage

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Determinants of Tax Aggressiveness: Empirical Evidence from Malaysia

  • JAFFAR, Rosmaria;DERASHID, Chek;TAHA, Roshaiza
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.5
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    • pp.179-188
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    • 2021
  • The purpose of this study is to examine the level of aggressive tax planning (ATP) among companies listed in the Access, Certainty, Efficiency (ACE) Market of Bursa Malaysia. On top of that, this study also investigates the relationship between company characteristics, ethnicity, and ATP. This study uses a balanced pooled sample of 105 firm years-observations for the period from 2014 to 2018. These samples were selected to provide new insight into this market and to explore the attitude of small firms toward ATP in Malaysia. The data was retrieved from DataStream and the downloaded annual reports. The finding shows that profitability and financial distress have a significant relationship with ATP. Other variables including size, capital intensity, inventory intensity, leverage, and ethnicity, were not determinants of ATP. The result in this study may assist the reader in understanding the nature of companies in the ACE market, particularly on its behavior toward tax planning. A strict requirement is needed to be adopted in the sample selection process, thus limiting the sample size. Further, since the previous study focused on large companies, the discussion of this paper will provide new insight into the nature of tax planning within the small- and medium-sized companies in Malaysia.

Asymmetric and non-stationary GARCH(1, 1) models: parametric bootstrap to evaluate forecasting performance (비대칭-비정상 변동성 모형 평가를 위한 모수적-붓스트랩)

  • Choi, Sun Woo;Yoon, Jae Eun;Lee, Sung Duck;Hwang, Sun Young
    • The Korean Journal of Applied Statistics
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    • v.34 no.4
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    • pp.611-622
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    • 2021
  • With a wide recognition that financial time series typically exhibits asymmetry patterns in volatility so called leverage effects, various asymmetric GARCH(1, 1) processes have been introduced to investigate asymmetric volatilities. A lot of researches have also been directed to non-stationary volatilities to deal with frequent high ups and downs in financial time series. This article is concerned with both asymmetric and non-stationary GARCH-type models. As a subsequent paper of Choi et al. (2020), we review various asymmetric and non-stationary GARCH(1, 1) processes, and in turn propose how to compare competing models using a parametric bootstrap methodology. As an illustration, Dow Jones Industrial Average (DJIA) is analyzed.

Influence of Corporate Governance on Dividend Policy in Vietnam

  • NGUYEN, Ha Viet;DANG, Hung Ngoc;DAU, Hung Hoang
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.2
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    • pp.893-902
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    • 2021
  • The paper examines the impact of corporate governance (CG), on dividend policy (DP) of enterprises in Vietnam. The paper studies the impact of CG on DP of businesses listed on Vietnam's stock exchange in the period 2008-2018 with 2,937 observations. The data of these companies is collected from the financial statements of businesses and Vietstock data sets, as well as aggregated from the data published on some reputable securities websites. The study used GLS regression method for data collected at listed companies in Vietnam in the period of 2008-2018. The research results have found that CG, the chairman of the board of directors (BOD), and the managing director have a negative effect on the DP. Specifically, companies with strong BODs tend to pay low dividends. At the same time, research shows that factors such as profitability, financial leverage, firm size, and investment opportunities affect DP. This result underscores the importance of corporate governance (both internal and external) to the income distribution decision and provides policy implications for investors and company executives. The study finds solid evidence that alternative theory explains better the relationship between corporate governance and dividend policy. Accordingly, companies with weak corporate governance will pay more dividends.

How Does Internal Control Affect Bank Credit Risk in Vietnam? A Bayesian Analysis

  • PHAM, Hai Nam
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.1
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    • pp.873-880
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    • 2021
  • The purpose of this study is to investigate the impact of internal control on credit risk of joint stock commercial banks in Vietnam from 2007 to 2018. Furthermore, we specify bank-specific characteristics and macroeconomic conditions, and analyze how these factors affect credit risk of banks: the number of board members, the number of board members with banking or finance background as ratio of total board members, loans to total assets ratio, loans to deposit ratio, the number of days between the year-end and the publication of the financial statements, and the use of top four auditing firms proxy for five elements of internal control. By using the dataset of 30 Vietnamese joint stock commercial banks and Bayesian linear regression via Random-walk Metropolis Hastings algorithm, the results of this study show that five elements of internal control have a impact on bank credit risk, namely, control environment, risk assessment, control activities, information and communication, and monitoring activities. For factors of banks' characteristics, bank size and financial leverage have a negative impact on banks' credit risk, and bank age has a positive effect. For macroeconomic factors, inflation has a positive impact and economic growth has a negative impact on banks' credit risk.

Managerial Ability, Managerial Incentives and Firm Performance: Empirical Evidence from Vietnam

  • PHAN, Nghi Huu
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.4
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    • pp.193-200
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    • 2021
  • This study investigates the impact of managerial ability and managerial incentives on firm performance. In particular, it studies how managerial ability factor can exert significant influence on the profitability and the risk of firms. By doing this, the study can provide several policy implications about how managerial ability can influence firm decisions and its corresponding business policies. Data of the study was collected from the Annual Enterprises Survey (AES), which is conducted by the General Statistics Office of Vietnam (GSO) during the 2009-2013 period. After removing firms with insufficient financial information, our final dataset includes over 50,000 firms in Vietnam. The main result of the study shows that there is a significant and positive relationship between managerial ability and firm leverage. This finding indicates that managerial ability significantly plays an important role in making financial decisions. In addition, our study provides empirical evidence about the causal relationship between managerial compensation and firm risk-taking behavior. Specifically, we find that firm risks are significantly associated with compensation schemes including lower delta and higher vega. In other words, our study implies that the sensitivity of CEO wealth to stock volatility can positively affect both delta and vega or managerial incentives schemes.

Does Bankruptcy Matter in Non-Banking Financial Sector Companies?: Evidence from Indonesia

  • DWIARTI, Rina;HAZMI, Shadrina;SANTOSA, Awan;RAHMAN, Zainur
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.3
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    • pp.441-449
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    • 2021
  • Bankruptcy is indicated by the inability of the company to meet its maturity obligations. The Covid-19 pandemic has had a terrible impact on the economy and businesses. The aim of this study to determine the effect of the ratios of activity, growth, leverage, and profitability in predicting bankruptcy projected by earnings per share (EPS). The sample of this research was non-banking financial sector companies listed on the Indonesia Stock Exchange in 2015-2019 and the purposive sampling technique was used. The data analysis method used was the logistic regression method to test the hypotheses. Company growth shows the company's ability to manage sales and generate high company profits, as such, the probability of the company experiencing bankruptcy will be lower. The results of this study showed that the debt to assets ratio (DAR), debt to equity ratio (DER), and return on assets (ROA) can predict bankruptcy. Meanwhile, this research found that the total assets turnover (TATO) ratio, sales growth, and net profit margin (NPM) cannot be used to predict bankruptcy.

Volatility analysis and Prediction Based on ARMA-GARCH-typeModels: Evidence from the Chinese Gold Futures Market (ARMA-GARCH 모형에 의한 중국 금 선물 시장 가격 변동에 대한 분석 및 예측)

  • Meng-Hua Li;Sok-Tae Kim
    • Korea Trade Review
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    • v.47 no.3
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    • pp.211-232
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    • 2022
  • Due to the impact of the public health event COVID-19 epidemic, the Chinese futures market showed "Black Swan". This has brought the unpredictable into the economic environment with many commodities falling by the daily limit, while gold performed well and closed in the sunshine(Yan-Li and Rui Qian-Wang, 2020). Volatility is integral part of financial market. As an emerging market and a special precious metal, it is important to forecast return of gold futures price. This study selected data of the SHFE gold futures returns and conducted an empirical analysis based on the generalised autoregressive conditional heteroskedasticity (GARCH)-type model. Comparing the statistics of AIC, SC and H-QC, ARMA (12,9) model was selected as the best model. But serial correlation in the squared returns suggests conditional heteroskedasticity. Next part we established the autoregressive moving average ARMA-GARCH-type model to analysis whether Volatility Clustering and the leverage effect exist in the Chinese gold futures market. we consider three different distributions of innovation to explain fat-tailed features of financial returns. Additionally, the error degree and prediction results of different models were evaluated in terms of mean squared error (MSE), mean absolute error (MAE), Theil inequality coefficient(TIC) and root mean-squared error (RMSE). The results show that the ARMA(12,9)-TGARCH(2,2) model under Student's t-distribution outperforms other models when predicting the Chinese gold futures return series.

Determinants of Information Technology Personnel Size in Korean Listed Companies:A Cross-Sectional Analysis (한국상장기업 정보기술의 인력집중도 결정요인)

  • Hong, Changmok;Jung, Jin-Hyang
    • Journal of Information Technology Services
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    • v.12 no.4
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    • pp.91-108
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    • 2013
  • In this study, we empirically examine cross-sectional determinants of IT personnel size of Korean listed companies from year 2004 to year 2009. Also, cross-sectional determinants of IT personnel size involved in managing internal control over financial reporting (hereafter, "ICFR") were examined. IT personnel or IT workers are recognized as critical intangible resources comprising firm's IT capability. Although IT personnel are regarded as important resources, there are not much information about factors explaining the size of firms' IT personnel. Fortunately, the Korean governmant regulates that every listed companies should dislclose the number of IT workers and ICFR-related IT personnel in their annual reports. This study utilizes the mandatorily disclosed IT personnel data to analyze cross-sectional determinants of korean listed companies' IT personnel size. Empirical results show that profitability, uncertainty, leverage, industry types are statistically significant factors associated with the size of IT personnel.

The Effect of Corporate Governance Practices on Firm Performance: Evidence from Pakistan

  • Muhammad, Hussain;Rehman, Ashfaq U.;Waqas, Muhammad
    • Asian Journal of Business Environment
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    • v.6 no.1
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    • pp.5-12
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    • 2016
  • Purpose - The purpose of this study is to investigate the effect of corporate governance practices such as (board size, board composition, CEO duality and audit committee) on the performance of selected Pakistani firms. Research design, data, and methodology - This study examines corporate governance structure by using the data of 80 non-financial firms listed on Karachi Stock Exchange Pakistan during 2010-2014. Hypotheses of the study were tested by using both descriptive and inferential statistics. Result - The findings indicate that board size and audit committee is positively related to the firm performance (ROA & ROE). In contrast, board composition and CEO duality are negatively related to the firm performance (ROA & ROE). As far as controlling variables is concerned, leverage is negative, whereas firm size is positively related to all measures of performance. Conclusions - Empirical findings concluded that corporate governance practices affect the firm performance. Therefore, it is suggested that managers should understand the governance mechanisms to work more efficiently in the firm.

Building A System Dynamics Model for Strategic Knowledge Management in IT Company (IT 기업의 전략적 지식관리를 위한 SD 모델 구축 사례)

  • 박상현;연승준;김상욱
    • Korean System Dynamics Review
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    • v.3 no.1
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    • pp.105-129
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    • 2002
  • IT companies make a lot of efforts for sharing and utilizing of experiences of their members and transforming them into the organizational knowledge as a competitive core. But they face a dilemma that they have to spend time and financial resource to perform activities around knowledge management for the long-term gains, while carrying field-works for making short-term profits. As an initial attempt to tackle this managerial problem, this paper try to investigate the mechanism of knowledge management in a small IT company in Korea with a synthetic view-point using system dynamics simulation model. It depicts the dynamic behaviors of knowledge management and presents some findings of political leverage. Although it has to be replenished further, the scheme for the dynamism of knowledge management and the findings presented in the paper could be useful for the decision makers particularly of knowledge-intensive organizations

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