• The Journal of Asian Finance, Economics and Business
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• 제7권1호
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• pp.167-181
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• 2020

The relationship between corporate board attributes and dividend payout is already established yet mediating role of leverage in not been examined in Malaysian market. Therefore, this study aims to examine the mediating effect of financial leverage on the relationship between corporate board attributes and the dividend pay-out policy. A sample of 203 non-financial firms listed on the BURSA Malaysia between 2005 and 2018 were analysed using SmartPLS 3.0. The findings show that there is a partial mediating effect of financial leverage on the relationship between board members age, board diversity and dividend pay-out policy. Financial leverage also mediates the relationship between number of women on board, CEO-duality and dividend pay-out policy. However, financial leverage doesn't mediate the relationship between board size and dividend pay-out policy. This study offers insights to policy-makers to develop a better corporate governance as well as a guidance to firms in the construction and implementation of their corporate governance policies in relation to financial leverage. This study also shed light on the influence of efficient corporate board attributes on dividend pay-out policy and financial leverage for firm growth. This study concludes that corporate board attributes impact capital structure and thus, firms may change its payout policy.

• The Journal of Asian Finance, Economics and Business
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• 제8권7호
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• pp.245-254
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• 2021

This paper examines the impact of corporate governance strength on capital structure in an emerging country, namely, Jordan, by constructing a corporate governance score that captures both internal monitoring mechanisms (foreign ownership and institutional ownership) and external monitoring mechanism (audit fees). In addition, this study uses profitability as control variable. This paper uses data of non-financial companies (industrial and services) of 87 listed firms on Amman Stock Exchange (ASE) from 2011 to 2019. Using the random-effects generalized least square (GLS) regression model, the findings reveal that foreign ownership significantly and negatively influences the level leverage, while institutional ownership has a positive and insignificant association with level leverage. Further, audit fees have a positive and strong significant association with level leverage in Jordan. In addition, profitability has a positive and significant association with leverage. These outcomes suggest that foreign ownership should be encouraged in listed companies as it can replace the weakness of other corporate governance mechanisms in Jordan. The outcomes of the current study should be of great interest to regulators and policy-makers. The results, which are robust to a range of alternative proxies and to additional tests, provide new insights into the determinants of level leverage.

• 한국산학기술학회논문지
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• 제22권1호
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• pp.275-284
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• 2021

본 연구에서는 기업규모에 따라 레버리지가 기업실패에 미치는 영향에 차이가 있는가를 생존분석을 이용하여 분석하였다. 이를 위해 1999년부터 2019년까지 한국거래소 유가증권시장과 코스닥시장에 상장된 총 25,250개(연도-기업) 기업을 분석하였다. 레버리지의 대용변수로는 총부채지표인 레버리지비율과 단기부채지표인 매입채무와 유동부채비율, 장기부채지표인 비유동부채비율을 사용하였다. 실증분석결과 첫째, 대체로 레버리지의 증가는 기업실패 가능성을 높이는 요인으로 작용한다는 것을 확인하였다. 다만 매입채무비율의 증가는 기업의 실패 가능성을 낮춘다는 것을 확인하였다. 기업의 매입채무 증가가 기업리스크의 확대로 연결되기 보다는 활발한 영업활동의 전개나 무이자부채의 적극적인 활용으로 인식되어 기업실패 가능성을 감소시키는 요인으로 작용하는 것으로 이해되었다. 둘째, 대기업과 중소기업으로 나누어 분석한 결과, 대기업에서는 레버리지비율과 매입채무비율이 높아지면 기업실패 가능성이 낮아진다는 것을 확인하였다. 중소기업의 경우에는 모든 유형의 레버리지 증가는 기업실패 가능성을 높이는 요인이 된다는 것을 확인하였다. 중소기업에서 레버리지의 증가는 기업위험의 증가로 연결되어 기업실패 가능성을 높이는 것으로 이해할 수 있었다. 그러나 대기업의 경우는 레버리지의 증가가 기업위험으로 연결되기 보다는 레버리지효과나 활발한 사업 활동의 전개로 연결되어 기업실패 가능성을 낮추는 작용을 하는 것으로 이해할 수 있었다. 이러한 분석결과에서 레버리지가 기업실패에 미치는 영향은 기업규모에 따라 차이가 있다는 것을 확인할 수 있었다.

• The Journal of Asian Finance, Economics and Business
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• 제4권1호
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• pp.5-18
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• 2017

Total debt in the People's Republic of China surged to nearly 290% as a ratio to GDP by the second quarter of 2016, mostly on account of non-financial corporate debt. The outpouring of credit to stem the impact of the global financial crisis accentuated industrial overcapacity in traditional sectors, such as steel, cement, and energy, while feeding asset bubbles in the property, equity and bond markets. At the Chinese corporate level, this has translated into weakened fundamentals and a fall in industrial profits, particularly of SOEs. As debtors struggle to service interest payments, non-performing loans (NPLs) have been on the rise. This paper assesses the financial fragility of the Chinese economy by looking at risk factors in the non-financial sector. We apply quantile regressions to a dataset containing all Chinese listed companies in Standard & Poor's IQ Capital database. We find higher sensitivity over time of corporate leverage to some of its key determinants, particularly for firms at the upper margin of the distribution. In particular, profitability increasingly acts as a curb on corporate leverage. At a time of falling profitability across the Chinese non-financial corporate sector, this eases the brake on leverage and may contribute to its continuing increase.

• The Journal of Asian Finance, Economics and Business
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• 제6권3호
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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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• 제9권1호
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• pp.133-142
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• 2022

This study examines the relationship between debt maturity structure and bankruptcy risk. There are various studies of leverage's effect on bankruptcy risk. Debt maturity, however, has not received the attention it deserves, especially in emerging markets with a high degree of information asymmetry. Using Vietnamese listed company data and various estimations, we find that leverage is positively associated with the likelihood of default. Importantly, short-term leverage shows a significantly positive effect on bankruptcy risk, while long-term leverage does not show significant results. The findings highlight that rollover risk firms are exposed to when using short-term debt increases bankruptcy risk. Meanwhile, firms do not cope with this risk in case of long-term debt adoption. High information asymmetry in emerging markets may be the main reason for the difference. The result is robust for subsamples of firms in different financial conditions, in concentrated and competitive industries, as well as for manufacturing and non-manufacturing companies. We also find that firms in a better financial situation and concentrated industries experience a higher short-term leverage effect than their counterparts. We, however, do not find a significant difference in the impact between manufacturing and non-manufacturing companies. This paper is among the first to examine the relation between debt maturity and bankruptcy risk in Vietnam.

• The Journal of Asian Finance, Economics and Business
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• 제8권3호
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• pp.423-431
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• 2021

This study aims to examine the effect of liquidity, activity, leverage, and profitability on firm value, as well as the effect of disclosure of corporate social responsibility (CSR), which in this study is a moderator and company size as a control variable. The sampling technique used in this study is a purposive sampling method with certain criteria, to obtain a sample of 22 LQ45 index companies listed on the Indonesia Stock Exchange in 2014-2019. The data analysis method in this study used was the Multiple Linear Regression Analysis with the SPSS 18 Program. The results show that the ratios of liquidity, activity, leverage, and profitability are significant to firm value in accordance with the initial hypothesis of the study. Corporate Social Responsibility (CSR) plays a role as a moderating variable and company size variable as a control variable on the effect of financial ratios (liquidity, activity, leverage, and profitability) on firm value. The implication of this research is that CSR has a very important role in increasing company value. To attract more investors, companies must pay attention not only to financial performance but also to social performance. Large-scale companies tend to do more CSR so that the company value will increase.

• 정보학연구
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• 제2권2호
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• pp.163-175
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• 1999

본 연구는 자산구조와 자본구조의 결합이 기업의 체계적위험에 미치는 영향과 관련하여 레버리지 상치관계를 밝히는데 있다. 연구결과, 재무레버리지와 영업레버리지간의 상치관계는 본 연구에서 강하게 발견되었다. 즉, 두레버리지 사이에는 유의적인 상관성이 발견되었다. 이러한 발견은 기업의 레버리지와 관련된 의사결정에 많은 도움을 줄 것이다.

• The Journal of Asian Finance, Economics and Business
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• 제8권4호
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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.

• The Journal of Asian Finance, Economics and Business
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• 제7권10호
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• pp.161-169
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• 2020

The condition of mining companies that exploit natural resources in their business processes underline this research to emphasize on social and environmental issues. After twelve years of government regulation on CSR practices, this study investigates the factors that influence mining companies in disclosing information about corporate social responsibility based on legitimacy, stakeholders, and agency theory. Thus, independent variables are foreign ownership, company size, leverage, and the board of commissioners. The dependent variable is the corporate social reporting disclosure that is measured using GRI indexing. For sampling, we have used thirty-four Indonesian mining companies listed in IDX during the 2014-2018. out of which only fifty-two companies meet the sample criteria. All data should pass the classical assumption test to get the best estimator. Multiple linear regression is used to test the hypothesis, and the results show that the model is good, and can explain 60% of the dependent variable. Based on F-test, all four variables affect CSR practices simultaneously. The findings of this study suggest that foreign ownership and firm size influences CSR disclosure in a positive direction. However, this study did not support the hypothesis that leverage negatively affects CSR disclosure and board size measures positively affect CSR disclosure.