• Journal of the Economic Geographical Society of Korea
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• v.22 no.4
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• pp.592-609
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• 2019

This study attempts to expand the leverage cycle theory using the subprime real estate investors. The leverage cycle theory has demonstrated asset price fluctuations irrelevant to changes in fundamentals through the restructuring of transaction composition centered on optimistic buyers. However, it needs to understand how this theory works in the depressed housing market with low-income residential regions to explain the geographic origins of the financial crisis. In the depressed housing market, the subprime real estate investors focused on low-income residential regions. Through this spatial focus, the low-income residential regions solely have real estate investor-oriented composition of new purchase transactions in the depressed housing market. The discovery of the subprime real estate investors as new actors lays the foundation for applying the leverage cycle theory to the depressed housing market which has been a underserved area for capital investment. This attempt illustrates how the geographical reinterpretation of an economic theory reestablishes spatio-temporal context of economic phenomena.

• The Korean Journal of Financial Management
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• v.24 no.1
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• pp.109-147
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• 2007

According to the perspective of capital structure theory, we analyzed the dynamism of the capital structure determinants by using panel data of 244 KOSDAQ firms based on two-step GMM system methodology suggested by Blundell Bond(1998). This dynamic methodology had not been used to analyse capital structure determinants in Korea. In the dynamic model of capital structure, profit had negative effect on the book leverage and market leverage, which meant supporting pecking order theory. Growth opportunity (MBR) affected negatively to the market leverage. For the determinants of leverage, earnings volatility had significantly positive effect on KOSDAQ 50 firms. KOSDAQ and KOSDAQ 50 firms had the target leverage. The adjustment speed in KOSDAQ firms was 0.4958 on the book leverage, it was faster than in KOSDAQ 50 firm's 0.2863 on the book leverage and the adjustment speeds for the market leverage were 0.7651 for KOSDAQ firms and 0.5643 for KOSDAQ 50 firms. There was difference in adjustment cost between KOSDAQ firms and KOSDAQ 50 firms.

• Korean journal of food and cookery science
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• v.23 no.2 s.98
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• pp.270-279
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• 2007

The purposes of this study were to analyze the profitability of audited restaurant franchise firms and to investigate the financial variables affecting profitability. This study decomposed profit variation into the three main factors comprising the Du Pont Identity (operating efficiency, asset use efficiency and financial leverage). The operating efficiency of restaurant franchise firms was on the rise until 2004, but dropped dramatically in 2005. Especially, the profit margin dropped from 13.46% in 2004 to 6.54% in 2005. The asset use efficiency has been decreasing since 2003. The total asset turnover ratio, which can be indicative of over-investment, dropped from 1.55 in 2003 to 1.50 in 2005. The financial leverage remained stable after 2002. There were major differences in debt accumulation among the firms, and the current level of debt was thought to be higher in the restaurant industry than in other industries. Based on the results of a multiple regression analysis, we concluded that the factors affecting ROE were the debt-equity ratio, total asset turnover and the size of the firm. The debt-equity ratio and total asset turnover had a significantly positive effect on ROE, while the firm size had a significantly negative effect on ROE. However, the current ratio and sales growth rate were not significant. The finding that firm size and profitability were negatively related implied that restaurant franchise firms should pursue qualitative growth rather than quantitative growth. There was no major difference in profitability between domestic brands and foreign brands. However, the domestic brand was more efficient in terms of asset usage than the foreign brand.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.3
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• pp.41-53
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• 2019

Building a target capital structure is one of the most important decisions in corporate financial management. The purpose of this article is to identify the determinants of capital structure and adjustment mechanism toward the target leverage. The partial adjustment model was applied on a sample of 306 non-financial companies listed on Vietnam stock exchange market during the period of 2008-2017. By the fixed effect model estimation method, the research results have discovered the factors of growth opportunities, firm size, tangible fixed assets and firm's unique characteristics have a positive effect on the target capital structure of enterprises. Besides, profitability and dividend payment have a negative effect on the target capital structure of enterprises. Accordingly, the research results show that the average adjustment speed toward target leverage of the firms is 90.03%. Research results also demonstrate firms have higher or lower debt ratio than the target debt ratio, capital surplus or capital deficit also have an impact on the adjustment rate toward the target capital structure. The research results are consistent with the Dynamic Trade-off Theory. From this result, this article has provided policy implications for non-financial companies listed on Vietnam's stock market in building a reasonable target capital structure according to operating timeline to maximize enterprise value.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.3
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• pp.87-99
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• 2020

The study aims to investigate factors that determine dividend payout policy using 336 non-financial firm year observations covering the period 2005 to 2016 in Malaysia. We found a significant positive relationship between corporate board size, board members average age, board tenure and dividend payout policy. We also found a strong negative effect and statistically insignificant relationship of board diversity, board independence, CEO duality and dividend payout policy. Additional, financial leverage has a negative effect on dividend payout policy. It is also noticed that firms with diverse boards are more likely to pay dividends and tend to pay larger dividends than those with non-diverse boards. Our results suggest that board diversity has a significant impact on dividend payout policy. Impact of board diversity on dividend payout policy is particularly conspicuous for firms with potentially greater agency problems. Our findings are consistent with the argument that corporate board traits enhancement positively affect the dividend payout policy which is beneficial for shareholders. This study offers useful insights into the current global debate on board traits and its implications for firms. The dividend payout policy signals good news to investors. Corporate board traits and firm's financial decision are the factors that disrupt the dividend decision.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.885-894
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• 2021

This study aims to analyze the effect of the ratio of profitability and solvability (leverage) on the variable stock price, which is mediated (intervening) by the variable dividend policy. Using the financial reports of manufacturing companies in the consumer goods sector, we take profitability data (ROA, ROE, GPM, and NPM), solvability data (DAR, LTDER, and DER), dividend policy (DPR), and stock price (closing price) from 24 companies, which were selected as samples, from 2011 to 2018. Data was analyzed using the Structural Equation Modeling (SEM) method. The results show that profitability, solvability, and dividend policy affect changes in stock prices, respectively. On the other hand, profitability and solvability do not affect dividend policy. The indirect relationship (intervening) is assessed using a single test, resulting in a dividend policy that can intervene in the relationship between profitability and stock prices but cannot mediate the relationship between solvability and stock prices. The implication of this research is to provide knowledge to investors about the importance of knowing the company's financial performance. Companies with good financial performance will easily develop because there are sufficient funds for company operations. By analyzing financial ratios, investors can get signals to decide whether to invest in the company they want.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.1
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• pp.91-105
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• 2019

The paper aims to combine balance sheet analysis at the firm level with the International Monetary Fund's public debt sustainability assessment framework to assess state-owned enterprises' (SOE) leverage as a contingent liability to the public sector. Based on company data and the interest coverage ratio as a measure of debt at risk, aggregate baseline scenarios are projected to gauge the magnitude of SOE debt as a contingency. SOE's financial and debt ratios are first bootstrapped to generate firm-level distributions and then averaged into a fan chart of the economy-wide SOE contingent liability. Applied to the People's Republic of China as an example, the study finds that by the end of 2015 SOE leverage had grown to a substantial liability. However arbitrary the assumptions underlying these projections, it would appear that even if authorities had to mop up as much as 20% of SOE debt at risk gone bad, this would have been manageable at roughly 2.7% of the gross domestic product in 2016 or 5.5% by 2021. This projection framework is fully amenable to alternative assumptions and settings, which makes it a useful analytical tool to monitor contingent liabilities from non-financial corporate debt that have been building in emerging and advanced economies alike.

• The Journal of the Korea Contents Association
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• v.13 no.11
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• pp.829-844
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• 2013

This study performed comprehensive tests on the four hypotheses on the capital structures for the firms listed in the KOSPI during the period from 2006 to 2011. It may be of concern to find any financial profiles on firms' leverage across the book- and market-value bases since there was relatively little attention drawn to any financial changing profile of the leverage surrounding the period of the pre-and the post-global financial crises. The findings of this study may also be compared with those of the previous related literature, by which it may be expected to enhance the robustness and consistency of the results across the different classifications on capital markets. It was found that three explanatory variables such as PFT, SIZE, and RISK, were found to be the statistically significant attributes on leverage during the tested period. Moreover, the outcome by the Fisher Exact test showed that a firm belonging to each corresponding industry may possess its reversion tendency towards the industry mean and median leverage ratios.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.3
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• pp.27-40
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• 2019

The study examines the effects of growth opportunities, debt maturity and liquidity risk on leverage, making use of a large panel of Chinese listed firms. Research on capital structure has broadened its scope from a single capital structure decision (the debt/equity choice) to various attributes of the debt in firms' capital structure. We use the system Generalized Method of Moments estimator to control for unobserved heterogeneity and the potential endogeneity of regressors. We find a negative relationship between growth opportunities and leverage. Further, we find that while the proportion of short-term debt attenuates the negative effect of growth opportunities on leverage, it negatively affects leverage as predicted by the liquidity risk hypothesis. When we distinguish between state owned firms and private controlled firms, we find evidence that these effects are only relevant to private controlled firms. However, our analysis indicates that the economic implication of liquidity risk effect is much lower for Chinese firms than that observed in the literature for US firms. Our study suggests that these differences can be explained by differences in the institutional environment in which firms operate. This finding related to Diamond's (1991) liquidity risk hypothesis extends our understanding of the relationship between liquidity risk and the debt maturity choice.

• The Korean Journal of Applied Statistics
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• v.25 no.6
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• pp.889-896
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• 2012

In this paper, we propose a statistic to measure investor sentiment. It is a usual phenomenon that an asymmetric volatility (referred to as the leverage effect) is observed in financial time series and is more sensitive to bad news rather than good news. In a bubble state, investors tend to continuously speculate on financial instruments because of optimism about the future; subsequently, prices tend to abnormally increase for a long time. Estimators of the transformation parameter and the skewness based on Yeo-Johnson transformed GARCH models are employed to check whether a bubble or abnormality exist. We verify the appropriacy of the proposed interpretation through analyses of KOSPI and NIKKEI.