• Korean Journal of Human Ecology
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• v.21 no.2
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• pp.225-240
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• 2012

The purpose of this study was to investigate the determinants of households with risky debt loads. The study used financial ratios to determine which households were over-indebted. The 3 ratios used were Debt to Asset ratio, Debt to Financial asset ratio, and Debt Service ratio. Data for this study was the 2011 Survey of Household Finance. Households that demonstrated total debts of 70% or more when compared to total assets were 8.8%. Households that demonstrated a debt load totaling 5 or more times their total financial assets were 19%. Households with monthly repayment obligations of 40% or more of disposable income were 20%. Households that fulfilled all 3 financial ratio criteria were 1.5% of total indebted households. Over-indebted households demonstrated severe economic condition in terms of debt, but not all over-indebted households were categorized as being in economically vulnerable group. The major determinants of households with risky debts were income, asset, purpose of loans, and spending behavior of the households.

• Korean Journal of Human Ecology
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• v.23 no.1
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• pp.47-61
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• 2014

The purpose of this study was to identify the relationship among financial debt burden, psychological factors and financial stress. Data was collected by surveying 450 individuals who were over twenty years old, and 384 were used for the analysis. As the result, first, number of sources of debt, use of each debt, marital status/double income, housing, debt amount and financial stress were found to be significantly different among three groups(debt free, non risky, risky). In addition, marital status/double income, gender, housing and income were found to significantly influence to the probability of being one of the three groups. Second, level of debt burden, age, employment and income were found to significantly influence to financial stress, while psychological factors such as risk tolerance and self-control were not. It might be noteworthy that people in debt were likely to have higher level of stress, while the older, employed, and having higher income were likely to have lower level of stress. This study would provide useful information in terms of debt policy to relieve the financial stress.

• Journal of the Korean Home Economics Association
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• v.30 no.1
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• pp.219-235
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• 1992

This study attempted to examine a theoretical framework which synthesizes risk attitude, type of investment management and investment behavior and to provide the specific investment strategy by analysing several variables which have effect upon the investment behavior. The results of this research were as follow : 1. Risk attitude had significant differences by the variabels such as age, sex, education, income and debt/asset ratio. Also the type of investment management was influenced significantly by the variables such as age, education, occupation, income, total asset, debt/asset ratio, achievement motivation and risk attitude. The ratio of risky asset holdings was affected by the variabels such as age, education, occupation, housing ownership, income, total asset, debt/asset ratio, achievement motivation, risk attitude and type of investment management. 2. Among several variables affecting the ratio of risky asset holding risk attitude, education, type of investment management, debt/asset ratio and achievement motivation had direct effect on it. Besides age had indirect effect through risk attitude and age, achievement motivation and risk attitude had indirect effect through the type of investment management. 3. The results of this study showed that causal relation between input, throughput and output can be applied to household's investment behavior and the concept of risk or risk attitude can be applied to other fields except household's investment. Also it could be attributed to provide the investment strategy for improving level of household's financial well-being.

• Journal of Korean Society of Rural Planning
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• v.14 no.2
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• pp.85-97
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• 2008

The purpose of this paper is to review current state of farm household's debt which is considered as one of the biggest problem in the rural community, to analyze the cause of farm household debt rising in Jeju province, and to make improvement schemes on how this problem of farm household debt could be alleviated. In order to achieve these objectives, raw data are collected from the interviews with 400 farming households in Jeju region. The results of the study are as follows; An average amount of total farm households debt was 42,000 thousand won in 2005, but an average of farm households debt excluding no debt farm households was increased by 10,000 thousand to 51,750 thousand won. But the debt properties are variable according to the farm type. Non-citrus farmers, younger farmers, rural area resident farmers hold more debt problems than other type. Among total farm households, 30 percent showed over 40 percent leverage ratio(debt/total assets), which is considered as risky or heavily indebted. Therefore, I designed a workout program and a program of land liquidation for heavily indebted farm households in Korea.

• The Korean Journal of Financial Studies
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• v.2 no.1
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• pp.189-214
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• 1995

We examine the existence of the investment signaling equilibrium without assuming a specific utility function for the managers of the corporations. We assume the managers have the initial holdings of their own corporations as a form of the executive compensation. Under the different financing schemes to finance the investment, the new equity financing and the risky debt financing, we derive the investment signaling equilibrium and compare the the investment signaling equilibrium under each financing scheme. We show that the investment signaling equilibrium with each financing will obtain with the underinvestment of the high quality firm and that the investment signaling equilibrium with the risky debt financing will dominate the investment signaling equilibrium with the new equity financing.

• Journal of the Korean Home Economics Association
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• v.42 no.10 s.200
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• pp.11-22
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• 2004

The purpose of this study was to examine the structure of financial risk components of households. The financial risk of households was assumed to be composed of risk knowledge, risk attitude and risk management behavior. For this study, a questionnaire was developed and distributed to 700 households in Seoul and Kwangju, and there were 495 responses with usable data. The findings showed that income stability had a positive relationship with the level of risk knowledge and risk attitude. Income stability, household debt, age of the youngest child and risk knowledge were found to have direct effects on risky vs. non-risky asset ratio. Income stability, savings, age of the youngest child and risk knowledge also had significant effects on the number of risky assets owned by households. Risk knowledge was the most important determinant of risk management behavior.

• International Journal of Human Ecology
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• v.14 no.2
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• pp.79-91
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• 2013

The market for a payday advance, regarded as both a convenient and short term-loan for immediate financial help, has grown incredibly since the 1990's. Despite its popularity by borrowers and the possible benefits, it has received negative publicity. Some borrowers have been caught in a debt trap for a long-term period and at tripledigit interest rates. The objective of this study is to shed light on the borrowers' profiles and their demand for a payday advance. Based on the 2010 household level data from the U.S. Federal Reserve Board, this study finds that payday advance users are pronounced as seemingly risky people. Payday advance users tend to be college drop-outs, African Americans, and non-homeowners compared to non-payday advance users. They are more likely to overspend above their income and have a favorable attitude toward conspicuous spending than non-payday advance users. They tend not to shop at all nor perform even moderate shopping for credit before using a payday advance service as opposed to non-payday advance users.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.12
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• pp.39-50
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• 2021

We investigate competition and its impact on borrowers' indebtedness (BI) in South Asian microfinance. Our empirical investigations are based on a comprehensive panel dataset of 355 MFIs located in seven countries in South Asia. The empirical results revealed that microfinance in South Asia is imperfectly competitive and the existing industry shows a monopolistic competition during the period under consideration. Also, the competition increased after the global financial crisis (GFC) in 2007-08 which implies that microfinance uses hostile lending behavior through the adverse selection that is highly risky and it can induce repayment crisis. The empirical findings also show that increased competition has significant negative effects on borrowers' indebtedness, particularly in large-scale and regulated microfinance organizations (MFIs). Instead of using equity financing, debt financing could be a better option. Finally, we find that while competition seems to have some positive effects in economic discourse by channeling technological improvements in products and services, its negative effects in microfinance outweigh the benefits over costs, particularly in poverty-stricken nations. The findings are helpful for the policymakers, microfinance industry, investors, borrowers, and Central Bank of South Asian markets.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.3
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• pp.67-79
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• 2019

This study examines the impact of corporate governance on capital structure decisions based on a large panel of Chinese listed firms. Using the system Generalized Method of Moments (GMM) estimator to control for unobserved heterogeneity, endogeneity, and persistency in capital structure decisions, we document that the ownership structure plays a significant role in determining leverage ratios. More specially, we find that managerial ownership has a positive and significant impact on firms' leverage, consistent with the incentive alignment hypothesis. We also find that managerial ownership only affects the leverage decisions of private firms in the post-2005 split share reform period. State ownership negatively influence leverage decisions implying that SOEs may face fewer restrictions in equity issuance and may receive favourable treatments when applying for seasoned equity ¿nancing, thus use less debt. Furthermore, our results show that while foreign ownership negatively influences leverage decisions, legal person shareholding positively influences firms' leverage decisions only for state controlled firms. We also find that the board structure variables (board size and the proportion of independent directors) do not influence firms' capital structure decisions. Our findings suggest that recent ownership reforms have been successful in terms of providing incentive to managers through managerial shareholdings to take risky financial choices.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.4
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• pp.787-796
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• 2021

This study investigates the effect of chief executive officers (CEO) demographic characteristics such as age, functional experience, education, and gender, on corporate leverage decisions. This study investigates the independent commissioner's role in moderating the relationship between CEO demographic characteristics and leverage decisions. The data used is panel data with a sample of 283 non-financial companies listed on the Indonesia Stock Exchange (BEI) from 2010-2017. Moderated regression analysis is used as an analytical technique, with the selected model fixed effects model. The results showed that male and young CEOs were more risk-averse, so they tended to use debt more. However, this study found no evidence of the effect of CEO experience and education on leverage. This study finds evidence that independent commissioners reduce the influence of CEO age and gender on leverage decisions. It shows the role of independent commissioners in controlling risk-taking from male and young CEOs related to leverage decisions. These results become input for companies to consider demographic characteristics in choosing a CEO. Also, companies need a board (in this study seen from independent commissioners) that is strong enough to control the CEO regarding risky decision making, such as leverage decisions.