• Korea Trade Review
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• v.43 no.2
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• pp.181-204
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• 2018

This study examines the existence of a target leverage and determinants of book and market leverage. A data set of shipping firms from 2009 to 2016 was used to conduct an empirical study. The target leverage which cannot be observed in the market is estimated using a partial-adjustment model of firm capital structure. This study found that factors affecting the capital structure differ with respect to firm size, book value leverage and market value leverage. Shipping firms have a target leverage, adjust the actual leverage toward that target leverage, and consider the target leverage as an optimum leverage. The deviation of the leverage from the target leverage plays an important role to explain changes of leverage level. The greater the deviation results in greater adjustment of shipping firms toward targets. A high level of initial debt reduces leverage changes.

• Management & Information Systems Review
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• v.35 no.2
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• pp.1-12
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• 2016

In this study, price discovery between the KOSPI200 spot, and leveraged ETFs(Leveraged KODEX, Leveraged TIGER, Leveraged KStar) is investigated using the vector error correction model(VECM). The main findings are as follows. Leveraged KODEX(Leveraged TIGER, Leveraged KStar) and KOSPI200 spot are cointegrated in most cases. There is no interrelations between the movement of Leveraged KODEX(Leveraged TIGER, Leveraged KStar) and KOSPI200 spot markets in case of daily data. Namely, in daily data, Leveraged KODEX(Leveraged TIGER, Leveraged KStar) doesn't plays more dominant role in price discovery than the KOSPI200 spot.

• Journal of Digital Convergence
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• v.16 no.4
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• pp.79-85
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• 2018

The objective of this study focuses on the relationship between increasing of leverage and income, asset purchase. For empirical test, regression analysis was conducted using panel data of the household financial welfare survey. The results of the analysis are as follows: First, increasing of leverage is determined by the asset purchase. Deleveraging can be realized by reducing the size of the assets. Second, increase of leverage has positively affected on the increase of asset. Also, the increase of income has significantly positive influence on the increase of assets. These results provide practical guidance as research in increasing of leverage and increase of asset and the limitations of the research and future study are discussed as well.

• Management & Information Systems Review
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• v.30 no.4
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• pp.175-193
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• 2011

This paper tests a correlation between degrees of operating leverage(DOL) and financial leverage(DFL). For an empirical analysis, this paper extracted information from financial statements of manufacturing companies listed in the Korea Stock Exchange. Data extend from 1990 to 2009. 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. To further investigate, we divide the whole sample into subgroups according to such management elements as asset size, IMF crisis. 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.

• The Journal of Information Technology
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• v.2 no.2
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• pp.163-175
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• 1999

The unique aspect of this study is its explicit introduction of the degrees of operating leverage and financial leverage in investigating the joint impact of both asset structure and capital structure on systematic risk. This study found a significant correlation between the two. These findings can help us in prediction of corporate behavior.

• The Korean Journal of Financial Management
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• v.21 no.1
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• pp.33-58
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• 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 Korea Port Economic Association
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• v.38 no.4
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• pp.13-23
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• 2022

In this study, from January 2015 to April 2020, we propose a stochastic volatility model to capture the leverage effect on daily freight yields in the dry cargo market and analyze the freight yields. Estimation involving the Bayesian Markov Chain Monte Carlo method for the leverage effect based on the negative correlation that exists between returns and volatility in stochastic volatility analysis yields similar estimates, and the statistcs indicates significant. That is, the results of the empirical analysis show that the degree of correlation between returns and volatility, and the magnitude and sign of fluctuations differ, which suggests that taking into account the leverage effect in the SV model improves the goodness of fit of the estimates. In addition to the statistical significance of the estimated model's leverage effect, the analysis by log predictive power score presents the estimated results with improved predictive power of the model considering the leveraged effect. These astatistically significant empirical results show that the stochastic volatility model considering the leverage effect is important for freight rate risk modeling in the marine industry.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.22 no.1
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• pp.275-284
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• 2021

Survival analysis was used to analyze whether there is a difference in the effect of leverage on corporate failure according to the firm size. A total of 25,250 (year-company) companies listed on the Korea Stock Exchange and KOSDAQ market from 1999 to 2019 were analyzed. First, the increase in leverage generally acts as a factor that increases the possibility of corporate failure. On the other hand, the increase in the trade payable ratio lowered the possibility of failure of the company. The increase in corporate trade payable was perceived as a factor in reducing the possibility of corporate failure because it was considered the active development of business activities or active use of interest-free debt rather than leading to an increase in corporate risk. Second, a higher leverage ratio and trade payable ratio in large firms lowered the possibility of corporate failure. In the SMEs, all types of leverage increases are a factor that increases corporate failure. Overall, the effect of leverage on corporate failure differs according to the size of the company.

• The Korean Journal of Financial Management
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• v.24 no.2
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• pp.81-111
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• 2007

The agency relationship between managers and shareholders has the potential to influence decision-making in the firm which in turn potentially impacts on firm characteristics such as value and leverage. Using an agency framework, we examine the relation between ownership structure and capital structure during post-IMF period. We used the balanced panel data for 378 korean listed companies during the 1999-2005. The panel data sets consist of time-series observation on each of 378 cross-sectional units. The results indicate a non-linear U-shaped relation between the level of managerial share ownership and leverage with the relation reaching a minimum at 58.48 per cent of management share ownership. As managerial share ownership increase from a low level, managers have incentive to reduce the debt level for decreasing the financial risk, resulting in a lower lever of debt. However, when corporate managers hold a significant proportion of a firm's shares, managers have incentive to increase the debt level for leverage effects, resulting in a higher lever of debt.

• Management & Information Systems Review
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• v.38 no.1
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• pp.141-153
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• 2019

This study attempts to analyze the role of price discovery and the dynamic interdependence between KOSPI200 Index and KODEX Leverage(KODEX inverse), which are Korea's representative ETFs, using the vector error correction model. For the empirical analysis, one minute data of KODEX leverage, KODEX inverse and KOSPI200 index from April 10, 2018 to July 10, 2018 were used. The main results of the empirical analysis are as follows. First, between KODEX Leverage and KOSPI200 index, we found evidence that KODEX leverage plays a dominant role in price discovery. In addition, the KOSPI200 index is superior to price discovery between KODEX inverse and KOSPI200 index. Second, the KOSPI200 index has a relatively strong dependence on KODEX leverage, which is consistent with the KODEX leverage index playing a dominant role in price discovery compared to the KOSPI200 index. On the other hand, KOSPI200 index has a dependency on KODEX inverse index, but it is weaker than KODEX leverage index. These results are expected to be useful information for investors in capital markets.