• The Korean Journal of Financial Management
• /
• v.6 no.2
• /
• pp.33-69
• /
• 1989

The Purpose of this study is to test empirically the determinants of capital structure of the Korea Listed Firms. In order to accomplish the purpose of this study, both literature survey and empirical test have been made. For the empirical test, agency and asymmetric information factors as well as traditional ones have been throughly reviewed. Traditional factors tested in this study include firm-size, collateral value of the assets, business risk, tax, non-debt tax shields, and industry effects. Agency and asymmetric information factors include growth opportunities, the percentage of outstanding equity held by inside stockholders, and the number of inside stockholders. From the results of the cross-sectional regression analysis, the adjusted R-square is 1931%, and the overall F-value indicates significance. For the analysis period, the signs of the variables except business risk are as predicted. Firm-size, collateral value of the assets, and business risk significant at the.01-.05 level. In order to determine the influence of industry factors on the financial leverage, a total of 8 dummy variables are added to the regression model. The adjusted R-square inclosed by 4.2% for the first analysis period(1983-1985) and 6% for the second analysis period(1986-1987). This suggests that industry factors are significant in explaining the variations in financial leverage across firms. In order to pursue the influence of agency and asymmetric information factors on the financial leverage, again the cross-sectional regression analysis is done for the middle size firms gruop(n=40). The adjusted R-square increased by 9.8% for the first analysis period(1983-1985) and 6.1% for the total analysis period(1983-1987), and all the signs was as predicted. But both the variables except the number of inside stockholders was not significant.

• The Journal of the Korea Contents Association
• /
• v.16 no.3
• /
• pp.553-562
• /
• 2016

Then, it investigated the investment preference through the previous studies to analyze the influence factor of investment satisfaction and demonstrated the effects through the PLS (Partial Least Squares) regression. In addition, it separated the target type to institutional investors and retail investors and carried out the survey for comparing the investment preference of investor type. The result of analysis found out that institutional investors emphasis on investment preference such as the Inflation hedge, Early payback, Financial stability, Leverage risk and etc. Then, general investors emphasis on investment preference such as the Rental income, Facilities and Equipment, Business area and population, Ease of use, Leverage risk, Early payback and etc. In addition, common investment preferences are the Leverage risk, Early payback and Facility accessibility.

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

• Korean small business review
• /
• v.42 no.3
• /
• pp.195-220
• /
• 2020

In this study, we examined the effects of major shareholder's holdings and foreign shareholder's holdings on capital structure with the samples of listed non-financial firms in KOSPI and KOSDAQ. More specifically, we conduct the data on 7,074 large firms and 2,394 SMEs(Small-Medium Enterprises) before and after the adoption of K-IFRS from 2002 to 2019. The main results can be summarized as follows. The results indicate that the adoption of K-IFRS affects the capital structure of large firms more than SMEs. The major shareholder's holdings and the foreign shareholder's holdings of the large and SMEs listed on the KOSPI and the KOSDAQ market have a significant effect on the leverage ratio. It can be seen that major shareholders of large firms and SMEs reduce the leverage ratio by recognizing the use of debt as financial risk. In addition, it can be seen that regardless of whether or not K-IFRS is adopted, foreign shareholders recognize the use of debt as financial risk and reduce the leverage ratio in order to reduce the investment risk.

• Korea Trade Review
• /
• v.46 no.2
• /
• pp.19-38
• /
• 2021

This study aims to analyze the foreign asset leverage effect on Korean oil & gas companies' foreign profits and to maintain the appropriate foreign asset volume for reducing exchange risk. For a long time, large Korean companies, including oil companies, overheld foreign currency liabilities. For this reason, most large companies have been burdened to hedge exchange risk and this excess limit holding deteriorated total profit and reduced foreign currency asset management efficiency. Our paper proceeds in presenting a three-stage analysis considering diversified exchange risk factors through estimation on transformation of foreign transactions a/c including annual trends of foreign asset and industry specifics. We also supplement incomplete the estimation method through a practical hedging case investigation. Our research parts are differentiated on the analyzing four periods considering period-specifics The FER value of the oil firms ranged from -0.3 to +2.3 over the entire period. The results of the FER Value are volatile and irregular; those results do not represent the industry standard comparative index. The Korean oil firms are over the credit limit without accurate prediction and finance high interest rate funds from foreign-owned banks on the basis on a biased relationship. Since the IMF crisis, liabilities of global firms have decreased. Above all, oil firms need to finance a minimum limit without opportunity losses on the demand forecast and prepare for uncertainty in the market. To reduce exchange risk from the over-the-limit position, we must consider factors that affect the corporate exchange risk on the entire business process, including the contract phase.

• 한국지구물리탐사학회:학술대회논문집
• /
• 2005.05a
• /
• pp.273-280
• /
• 2005

Robust magneto-telluric (MT) response function estimators are now in standard use in electromagnetic induction research. Properly devised and applied, these methods can reduce the influence of unusual data (outlier) in the response (electric field) variable, but often not sensitive to exceptional predictor (magnetic field) data, which are termed leverage points. A bounded influence estimator is described which simultaneously limits the influence of both outlier and leverage point, and has proven to consistently yield more reliable MT response function estimates than conventional robust approach. The bounded influence estimator combines a standard robust M-estimator with leverage weighting based on the statistics of the hat matrix diagonal, which is a standard statistical measure of unusual predictors. Further extensions to MT data analysis are proposed, including a establishment of data rejection criterion which minimize the influence of both electric and magnetic outlier in frequency domain based on statistical distribution of electromagnetic field. The rejection scheme made in this study seems to have an effective performance on eliminating extreme data, which is even not removed by BI estimator, in frequency domain. The effectiveness and advantage of these developments are illustrated using real MT data.

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

• Journal of the Korea Academia-Industrial cooperation Society
• /
• v.20 no.12
• /
• pp.502-512
• /
• 2019

To examine the problem structure of balanced regional development policy and identify the causes of the gap between the capital and non-capital areas, this study examined the causal structure in terms of the concentration and distribution of functions in the metropolitan area and non-capital area and explored the policy leverage. As a research method, the causal map was drawn using System Dynamics techniques and policy leverage was derived through an exploration of the feedback structure. In particular, the causes of the problems in balanced regional development policies were approached by system accidents rather than by single-circuit accidents, and causality analysis was performed among the variables constituting balanced regional development policies based on system accidents. In particular, it singled out 31 variables, developed 13 feedback loops, and confirmed four major policy leverages, including relocation of the capital function, local decentralization policies, consistent development, and investment practices centered on the Non­Capital Area. Subsequently, a follow-up study by computer simulation is needed by modeling the structure of the system to identify the ripple effect of the policies of the Capital Area on the Non­Capital Area.

• The Korean Journal of Financial Management
• /
• v.21 no.1
• /
• pp.33-58
• /
• 2004

This paper tests Van Home's hypothesis, a negative correlation between degrees of operating leverage(DOL) and financial leverage(DFL). For an empirical analysis, we extract information from financial statements of manufacturing companies listed in the Korea Stock Exchange. Data extend from 1980 to 2001. The DOL continued to increase until 1997, but decreased dramatically after the IMF financial crisis. However, the DOL has been at a higher level than companies of other countries such as USA and Japan. The DFL has been maintained at a much higher level, as expected. The empirical results indicate a positive correlation between the DOL and the DFL, which is inconsistent with the VanHorne's hypothesis. To further investigate, we divide the whole sample into subgroups according to such management elements as asset size, level of leverages, earnings and cash flow. The results for sub-samples are different from those of whole sample. This indicates we need to incorporate specific managerial factors in order to correctly explain financial decision processes.

• Journal of the Korea Academia-Industrial cooperation Society
• /
• v.13 no.5
• /
• pp.2096-2109
• /
• 2012

This study investigates empirical issues that have received little attention in the previous research in the Korean capital market. It is to find any financial determinants on the capital structure for the firms listed in the KOSDAQ(Korea Securities Dealers Automated Quotation). Another test is performed to find any possible discriminating factors by utilizing a robust methodology, which may distinguish between the firms belonging the 'prime section' and the 'venture section' in terms of their financial aspects. Moreover, the null hypothesis that the changing trend or movement of a firm's capital structure with respect to its industry mean (or median) may be random, is also tested. For the book-value based debt ratios, size(INSIZE), growth(GROWTH), Market to book value of equity(MVBV), volatility(VOLATILITY), market value of equity (MVE) and section dummy (SECTION) showed their statistically significant effects on the book-value based leverage ratios, respectively, while size(INSIZE), growth(GROWTH), market value of equity(MVE), beta(BETA) and section dummy (SECTION) showed their statistically significant effects on the market-value based leverage ratios. This study also found an interesting result that a firm belonging to each corresponding industry has a tendency for reversion toward its mean and median leverage ratios over the five-year tested period.