• The Korean Journal of Financial Management
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• v.26 no.1
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• pp.1-29
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• 2009

As foreign investors' share holdings in Korean firms have dramatically increased since 1998 following the financial deregulation on the limit of foreign stock investment, the concern over the negative impacts the foreign investors would bring on the firms' financial policy has been growing too. Foreign investors were perceived to require the firms of excessive payments of cash dividends sometimes with threat of hostile takeover trials detering the firm from investing its cash flow in the physical facilities and RandD eroding their potential growth capabilities. We examine the impact of foreign investment on the firms' dividend policy using 234 listed firms' panel data over the sample periods of 1998 to 2005 employing various panel regression methodology. Foreign shareholders are found not to be related or even negatively related to the payout ratio(dividend/net income), but positively and statistically significantly related to the ratio of cash dividends to book of asset, negatively to the dividend yields. Considering the payout ratio is the most appropriate measure for the dividend payment, we can not support the arguments that the foreign investors' holdings have induced the excessive dividend level in Korean firms.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.5
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• pp.409-419
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• 2022

This paper examines the post-IPO price volatility in the first trading days after the IPO of SOEs that carry out equitization, on a sample of 76 IPOs on the Hanoi Stock Exchange (Vietnam) in the period 2013-2018. Oversubscription rate, firm size, issuance size, internal equity ownership, and listing delay are all factors that influence IPO price volatility in a primitive stock market. The results showed that the average initial market-adjusted return for the first three trading days was -11.95%; -9.58% and -7.29% and the level of price volatility is related to the rate of oversubscription and company size. Issuance price, issuance size, internal equity holdings, and listing delay do not seem to contribute significantly to post-IPO share prices. Individual investors based their valuation on information released during and after the IPO. In general, the number of IPOs that yield positive and negative returns in the first trading days is about the same, indicating that the two phenomena of undervaluation and overvaluation still occur in the process of valuing shares of Vietnamese SOEs for IPOs.

• KDI Journal of Economic Policy
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• v.32 no.4
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• pp.153-195
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• 2010

The recent global financial crisis has been the outcome of, among other things, the mismatch between institutions and the reality of the market in the current global financial system. The International financial institutions (IFIs) that were designed more than 60 years ago can no longer effectively meet the challenges posed by the current global economy. While the global financial market has become integrated like a single market, there is no international lender of last resort or global regulatory body. There also has been a rapid shift in the weight of economic power. The share of the Group of 7 (G7) countries in global gross domestic product (GDP) fell and the share of emerging market economies increased rapidly. Therefore, the tasks facing us today are: (i) to reform the IFIs -mandate, resources, management, and governance structure; (ii) to reform the system such as the international monetary system (IMS), and regulatory framework of the global financial system; and (iii) to reform global economic governance. The main focus of this paper will be the IMS reform and the role of the Group of Twenty (G20) summit meetings. The current IMS problems can be summarized as follows. First, the demand for foreign reserve accumulation has been increasing despite the movement from fixed exchange rate regimes to floating rate regimes some 40 years ago. Second, this increasing demand for foreign reserves has been concentrated in US dollar assets, especially public securities. Third, as the IMS relies too heavily on the supply of currency issued by a center country (the US), it gives an exorbitant privilege to this country, which can issue Treasury bills at the lowest possible interest rate in the international capital market. Fourth, as a related problem, the global financial system depends too heavily on the center country's ability to maintain the stability of the value of its currency and strength of its own financial system. Fifth, international capital flows have been distorted in the current IMS, from EMEs and developing countries where the productivity of capital investment is higher, to advanced economies, especially the US, where the return to capital investment is lower. Given these problems, there have been various proposals to reform the current IMS. They can be grouped into two: demand-side and supply-side reform. The key in the former is how to reduce the widespread strong demand for foreign reserve holdings among EMEs. There have been several proposals to reduce the self-insurance motivation. They include third-party insurance and the expansion of the opportunity to borrow from a global and regional reserve pool, or access to global lender of last resort (or something similar). However, the first option would be too costly. That leads us to the second option - building a stronger globalfinancial safety net. Discussions on supply-side reform of the IMS focus on how to diversify the supply of international reserve currency. The proposals include moving to a multiple currency system; increased allocation and wider use of special drawing rights (SDR); and creating a new global reserve currency. A key question is whether diversification should be encouraged among suitable existing currencies, or if it should be sought more with global reserve assets, acting as a complement or even substitute to existing ones. Each proposal has its pros and cons; they also face trade-offs between desirability and political feasibility. The transition would require close collaboration among the major players. This should include efforts at the least to strengthen policy coordination and collaboration among the major economies, and to reform the IMF to make it a more effective institution for bilateral and multilateral surveillance and as an international lender of last resort. The success on both fronts depends heavily on global economic governance reform and the role of the G20. The challenge is how to make the G20 effective. Without institutional innovations within the G20, there is a high risk that its summits will follow the path of previous summit meetings, such as G7/G8.

• KDI Journal of Economic Policy
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• v.32 no.2
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• pp.171-216
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• 2010

With the payment and settlement systems becoming more and more complex and interconnected, the issue of their interdependency rises as an important academic issue as well as a policy topic. This study examines causes, forms, and risk management of interdependencies of payment and settlement systems in Korea, and presents their current situation. By way of simulations using BOF-PSS2 developed by the Bank of Finland, we quantify the effects of an operational disruption on the payment and settlement systems so as to figure out the degree of interdependency. As a result, the secondary round effect reaches up to ￦13.6 trillion a day, which amounts to 7.8% of the daily settlement value. Furthermore, if we also consider the amount of direct operational disruption, the volume of operational disruption occupies 22.3% of total value of the daily settlement, evidencing that the interdependencies of the payment and settlement systems in Korea is enormously widespread. The secondary round effects are found to be more severe with security companies rather than with banks, and to be more depended upon when it is perceived rather than it actually happens. In case that we expand the liquidity to include cash holdings and deposits as assets, the secondary round effect dramatically decreases in all types of financial institutions while foreign banks account for more share of all the secondary round effects increases. Based on these results, we suggest various policy tasks and directions to improve the risk management of settlement systems: expansion of off-setting settlements, introduction of a new settlement system for securities transactions, rapid provision of liquidity to financial institutions, more effective monitoring on participant institutions, and intensified information sharing and cooperation among the systems.