• The Journal of Asian Finance, Economics and Business
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• v.7 no.5
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• pp.1-7
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• 2020

This paper investigates the determinants on decision to conduct seasoned equity offerings (SEOs) of listed companies on the Ho Chi Minh Stock Exchange in Vietnam. Seasoned equity offerings (SEOs) are defined as the issue of more stocks by a firm to raise more capital after a primary issue. Using panel data collected from audited financial statements of 99 listed companies on the Ho Chi Minh Stock Exchange during 2014-2018, the study employs a logit regression model by fixed effects method to examine factors that affect the decision to implement seasoned equity offerings of those companies. The findings of this study show that profit, revenue growth and company's size have a positively significant impact on the decision, while dividend pay-out ratio negatively significantly influences the equity issuing decision. Furthermore, these results are robust after controlling for the forms of equity offerings, i.e. bonus stocks, stock dividends and rights to buy shares. These findings are consistent with economic theories such as agency theory, pecking order theory, and growth opportunity theory, and also could be explained by the real situations of the Vietnamese stock exchange. This study has important implications for corporate managers, policy makers and investors.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.11-21
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• 2021

In the last few years, there is growing interest in the field of simultaneous equation estimation in finance due to the endogeneity problem caused by measurement errors, simultaneity, or omitted variables. This study aims to discuss the endogeneity problem in corporate financing decisions and investigate the interrelationship of financial decision-making such as investment decision, dividend decision, and external financing decision in Pakistan Stock Exchange (PSX) using two-stage least squares (2SLS) and generalized method of moment (GMM) estimation. The Bruech-Pagan test shows that the data has no heteroskedasticity issue and 2SLS is a better approach in the context of this study as compared to the GMM approach, and internal instruments are also sufficiently strong and valid. The three financial decision-making attributes are not jointly determined, and the dividend is influenced by one-sided investment. In the emerging stock market context, external financing and investment are not inter-related and did not affect each other. The question of whether the simultaneous equation estimation can be useful in the context of the emerging stock markets and newly-growing firms remains unanswered. The inclusive evidence shows that the theoretical link in the emerging stock market is difficult to prove like in developed stock markets.

• The Journal of Economics, Marketing and Management
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• v.7 no.3
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• pp.43-49
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• 2019

Purpose - This paper empirically investigates what factors contribute to management decisions by corporate governance in the Korean stock market. In the paper, dividends and investments were imployed as management decisions and major stockholders' shares and foreign investors' shares were used as corporate governance. Research design, data, and Methodolog - Samples are constructed by manufacturing firms listed on the stock market of Korea as well as those who settle accounts in December from 2001 to 2018. Financial institutions are excluded from the sample as their accounting procedures, governance and regulations differ. This study adopted the panel regression model to assess the sample construction including yearly and cross-sectional data. Results - This results support the literatures that major shareholders showed insignificance to dividends, positive significance to investment in financially unconstrained firms and negative significance to investment in financially constrained firms. Whereas foreign investors favor firms to increase dividends but they decrease investments only in financially constrained firms. Conclusion - This paper documented evidence that financial constrained firms use dividends for their investment and foreign investors decrease investments under financial constraints. But for dividends decisions, foreign investors give significant positive impacts irrespective of financial constraints.

• Asia-Pacific Journal of Business
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• v.10 no.3
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• pp.1-16
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• 2019

This paper examines how firm's investment has been affected by offshoring and financialization in Korea over the period 2000-2014 by using industry-level data collected from World Input Output Database (WIOD) and firm-level data collected from the KIS-Value Database. The findings are summarized as follows. First, offshoring index as expected shows a negative relationship with real investment. This negative impact is stronger in a large firm group. Second, there is a positive relationship between dividend payments and real investment. The positive relationship is greater in a small & medium-sized firm group. Third, the purchase of financial assets and the income generated from financial assets are positively related to real investment. The positive relationship is stronger in the small & medium-sized firm group. The empirical results show that firm size is a factor that effectively affects firm's real investment. This paper suggests that the influence of financialization and offshoring on firm's real investment should be assessed in various contexts rather than in a unilateral context.

• Journal of Distribution Science
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• v.17 no.12
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• pp.5-12
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• 2019

Purpose - In this paper, we examine the effect of accrual earnings management and real earnings management on the corporate value of retail corporations. Research design, data, and Methodology - The sample cover firms whose settlement is December among retail companies listed on the Korea Stock Exchange's securities market and KOSDAQ market from 2001 to 2016. Of these, the targets were companies with operating profit and equity capital of zero or higher and with sales data. The secondary data was collected through KIS-VALUE data base. The Jones model and the modified Jones model were used for the calculating the accrual-based earnings management and the real earnings management. Result - According to the empirical results, the relationship between accrual earnings management, real earnings management and firm value is positively significant in the retail industry as in manufacturing industry. These results are also significant when controlling the size, profitability, investment, debt ratio, dividend, and growth potential of a company. Conclusions - The characteristics of the distribution business can be identified and the influence of the various kinds of earnings management, which is being researched around the manufacturing industry, can be studied in the distribution industry to give practical implications to investors.

• Journal of Distribution Science
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• v.14 no.5
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• pp.27-37
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• 2016

Purpose - Prior theories expect a lower marginal value of cash for weak governance firms. To test this hypothesis, we examine the relationship between corporate governance structures and marginal cash values in Korean retail firms. Research design, data, and methodology - We estimate marginal cash values based on the model of Faulkender & Wang (2006). The retail firms listed in Korean Stock Exchange from 2005 to 2013 are analyzed. Corporate governance scores are provided by Korean Corporate Governance Services. Results - We show a higher marginal value of cash for the weak governance retail firms in terms of total governance score. Our analysis on a detailed set of governance scores generally confirms this tendency. Yet, a higher marginal cash value is obtained for the firms with better board structures and dividend policies. Conclusions - Our findings argue against the agency view of cash policy predicting a negative relationship between corporate governance scores and marginal cash values. A low marginal value of cash, widely observed in the sample firms, also supports severe resource diversion problem in Korean corporations.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.13 no.2
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• pp.878-884
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• 2012

This study presents a portfolio selection strategy focusing on construction corporations by taking into accounts managerial efficiency and growth potential of a company. Data envelopment analysis(DEA) methodology and dividend scoring table are adopted for evaluating the managerial efficiency and growth potential of a company respectively. In order to show the effectiveness of the portfolios selected by the strategies proposed in this study, we constructed 3 portfolios for every 4 years (2007-2010) out of 56 listed construction corporations in KOSPI and KOSDAQ, and proved that our portfolios are superior to benchmark portfolios in terms of portfolio evaluation measures.

• Korean Management Science Review
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• v.31 no.3
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• pp.1-12
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• 2014

This study suggests the two types DEA models such as DEA CCR model and Super Efficiency model to evaluate the value of a company and to apply them for the investments. 14 kinds of real data of companies such as EV/EBITDA, EPS growth rate, PCR, PER, dividend yield, PBR, stock price/net current asset, debt ratio, current ratio, ROE, operating margin, inventory turnover, accounts receivable turnover, and sales growth ratio were used as input variables of DEA models. 12 year data from December 30, 2000 up to December 30, 2012 were collected, and the data with negative, missing and 0 values were removed reflecting the characteristics of the DEA. In order to verify the effectiveness of the models, we compared the historical variability and rate of return of both models those of the market. Study results are as follows. First, two DEA models are more stable than market in terms of rate of return because the historical variability of both models are less than that of market. Second, Super Efficiency model is more stable than CCR model. Lastly, the cumulative rate of return of Super Efficiency model (434%) is greater than that of the CCR model (420%) and that of the market (269%).

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.12 no.1
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• pp.133-144
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• 2017

This study investigates firm-specific financial variables that determine investment or speculative grades from the viewpoint of firms, which are one of the major stakeholders related to the credit rating. We employ an ordered probit model for our analysis with the sample data from 1999 to 2015 for listed firms in the Korean stock markets. For investment grades, operating margin, sales, market-to-book, dividend payment, capital expenditure ratio, and tangible asset ratio have a significantly positive impact on credit ratings. In the subsample for speculative grades, the coefficients of the dividend payment, retained earnings ratio, and capital expenditure ratio are significantly positive while short-term debt ratio and R&D expenditures have a significantly negative impact on credit ratings. For the analysis before and after 2009, when the Credit Information Use and Protection Act was strengthened after the global financial crisis, the coefficients of the capital expenditure ratio, cash ratio, and tangible asset ratio are significantly positive in the subsample for investment grades before 2009, but not significant after 2010. The coefficient of the long-term debt ratio is more significantly negative than that of the short-term debt ratio before 2009, for speculative grades, but short-term debt ratio has a more negative effect on ratings than long-term debt ratio after 2010. Surprisingly, the coefficient of the R&D expenditures is significantly negative in both investment and speculative grades since 2010. Our findings are inconsistent with the conjecture that the increase in R&D expenditures enhances the possibility of creating cash-flow by raising the investment growth opportunity, and thus affects positively the credit rating.

• Korea Trade Review
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• v.45 no.2
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• pp.229-262
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• 2020

The price-to-earnings ratio (PER) is an important indicator to measure the stock price and profitability of a firm; it is also the most used valuation indicator among investors. When using the PER to compare the investment values of different stocks, these stocks must come from the same sector. This study mainly focuses on the China's listed manufacturing firms. By learning from previous research results and analyzing the current situation, we studied the correlation between the manufacturing sector's PER and its influencing factors from both macro and micro perspectives, the combination of which eventually sheds light on such correlation. Analyzing GDP growth rate data, Manufacturing Purchasing Managers' Index, and other macroeconomic variables from 2008 to 2018, we conclude that these variables jointly have a certain impact on the average PER of the manufacturing sector. We then form panel data based on relevant (2014-2018) data gathered from 317 of China's A-listed manufacturing firms to study the impact of micro-variables on PER. By using Stata and other software to analyze the panel data, we reach the conclusion that the Debt to Asset Ratio, Return on Equity, EPS growth rate, Operating Profit Ratio, Dividend Payout Ratio, and firm size have a significant impact on PER. The Current Ratio, Treasury Stock ratio and Ownership Concentration have no distinct effect on PER. Based on our empirical findings, we design a theoretical model that affects the PER.