Finance and Financial Management Commons^™

The Covid-19 Pandemic And The Importance Of Financing The Biotechnology Industry In South Africa, Ramazan Uctu, Karen Eksteen

The Journal of Entrepreneurial Finance

Whether it is a government research institution, a public-private partnership, or a private enterprise, the South African biotechnology industry requires funding for the biotechnology industry. Our goal with this research is to look into the role of venture capital (VC) in financing biotech enterprises and demonstrate how VC finance could aid in the development of diagnostic kits and vaccines for Covid-19 or future pandemics in South Africa.

The study aims to provide policymakers with a clear image of the importance of funding the biotechnology sector, notably during the Covid-19 period, as recognized by the industry's key players. We employed a …

Sme’S Cost Of Debt: A Meta-Analysis Of Borrower, Creditor And Financial Statement Verification Attributes, Thomas R. Loy, Stefan Mohrmann

The Journal of Entrepreneurial Finance

Private firm financing, given the far-reaching importance of non-publicly traded companies for global output and employment, is still a relatively underexplored area. Since the seminal work of Petersen and Rajan (1994), only a small branch of research into private firms’ cost of debt has been established. We aggregate the full body of this research that has empirically investigated antecedents of private firms’ cost of debt in a meta-analysis. The foremost antecedents can be categorized into either borrower, creditor or financial statement verification attributes. Our results reveal a set of 11 highly significant and robust determinants.

Entrepreneurial Investment Evaluation Decision-Making: A Focus On Venture Capitalists, Business Angels And Early-Stage Entrepreneurs In South Africa, Boris Urban, Marco Antonio Moreno

The Journal of Entrepreneurial Finance

Business angels (BAs) and venture capitalists (VCs) are important sources of finance for entrepreneurs in emerging markets for raising start-up and growth capital. Recognising that entrepreneurial investment evaluation decision-making is a highly complex process, and that there are limited studies focused on evaluation criteria used by both BAs and VCs’, this article undertakes an empirical investigation by identifying, classifying and statistically testing the rank importance of investment criteria in South Africa from an early-stage entrepreneurial perspective. Results indicate that the rank importance for the different investment criteria is relatively similar for VCs and BAs, and the only ranking difference observed …

Establishing A Management Performance Measurement System; Defining And Selecting Kpis, Dimitrios V. Siskos

Publications

Managers and constituents of industries are increasingly concerned about measuring and managing organizational performance. However, launching a new measurement system goes beyond defining new metrics or developing new displays of existing data. However, as Bourne and Neely (2003) point out, there is some evidence that many of these implementations are not successful. This paper initially examines the most difficult elements in establishing and launching a management performance measurement system. The next step after the establishing of a performance measurement system, is to specify the essential elements in defining and selecting KPIs. Unfortunately, different people have very clear and different definitions …

The Effect Of Sustainability Index Inclusion On Equity Fund Allocation Evidence From Thailand, Tanakorn Makarabhiromya

Chulalongkorn University Theses and Dissertations (Chula ETD)

The concept of sustainability index has been accepted widely in the global investment context. However, sustainable investments are relatively underexplored in an emerging market as in Thailand. This study analyzes the relationship between corporate sustainability performance (proxy by announcement events of the Stock Exchange of Thailand Sustainability Index SETTHSI) and institutional investors’ awareness toward sustainability investment. An event studies on index announcement are applied to analyze the short-term effect from investors in stock market. The results indicate that there is only weak evidence that inclusion into the sustainability index has a positive impact to cumulative abnormal returns during release-related period, …

Forecasting Stock Volatility With Neural Network On Time Varying Transition Probability, Wasit Norakarntiansin

Chulalongkorn University Theses and Dissertations (Chula ETD)

Forecasting volatilities of financial security returns are important for many financial applications e.g., portfolio investment construction, risk management and trading strategy. The GARCH model has long been refined to capture the true dynamic of volatility on a security return. By applying the Markov switching to the GARCH model, the source of the temporary high volatility and high persistence of a shock to the volatility can be captured. In this study, we refine the Markov switching GARCH model further by applying the notion of the neural network to approximate the time varying transition probabilities. We aim to achieve a model that …

Three Essays On Splits, Insiders, And Retail Traders, Paul Van Nes

Theses and Dissertations (Comprehensive)

The first essay tests the split signaling hypothesis by examining the reaction of sophisticated investors to stock split announcements. Return-based tests of signaling used in earlier studies produce conflicting results and have been criticized as unreliable. I bypass this criticism by focusing on long-term post-split behavior of short sellers who are generally recognized as sophisticated investors. Upon controlling for alternative hypotheses and conventional short selling determinants, I show that short interest permanently declines in reaction to split announcements. Furthermore, consistent with signaling, the degree of the decline is positively related to signal strength and to the splitter’s level of information …

Three Essays On Corporate Finance And Applied Econometrics, Pan Jiang

Theses and Dissertations (Comprehensive)

This dissertation comprises three essays that investigate topics in corporate finance and applied Econometrics.

The first essay examines how digital credit, a Fintech technology, improves micro-business owners' performance by comparing an economically important but often financially disadvantaged group, migrants, with their comparable natives. Using the data on micro-business owners registered with the largest Fintech firm in China, we find that with the access to microloans, migrants achieve greater business revenues compared to their native counterparts. The differential impact of Fintech on migrants versus natives is more pronounced in the businesses with more financial constraints, in more economically developed areas, for …

Crime And The Effects It Has On Business Development, Alexis Pimental

Honors Theses and Capstones

This reading highlights the topic of crime through exploring what crime is as well as the different types of crimes in our everyday lives. Specifically, this research paper wants to highlight the crimes that may affect businesses, as well as the relationships between crime and business development. By using facts and statistics, we will dive into the relationship between the two and see why certain businesses may find success while other businesses struggle. We will also be looking at different pieces of literature, reviewing them, and drawing conclusions from the literature being discussed. The literature review as well as assessments …

The Influence Of International Oil Price Fluctuation On The Exchange Rate Of Countries Along The “Belt And Road”, Yijing Wang, Xueqing Geng, Kun Guo

Research Collection Lee Kong Chian School Of Business

In recent years, the international crude oil price has become increasingly volatile. It influences the exchange rate changes of relevant countries through economic growth, price level, international balance of payments, and other channels. Such exchange rate fluctuations have caused certain risks for the development of China’s “Belt and Road” Initiative. This article analyzes the impact of oil price changes on the exchange rates of countries. Because the fluctuation of oil prices and exchange rates has shown the characteristics of multiple time scales, this study used the empirical mode decomposition (EMD) method to obtain the long-cycle and short-cycle sequences of oil …

A Comparison Of Ncreif, Inrev, And Anrev Open-End Core Fund Indices, Barrett A. Slade, Jeffrey D. Fisher, Joe D’Alessandro

Faculty Publications

Cross-border investment in non-listed real estate is on the rise. This article aims to compare the U.S. NFI-ODCE index with the European INREV ODCE index and the recently released Asian ANREV ODCE index with the hope that this study will be helpful to cross-border investors in these major markets. From 2016 through 2020 (five years), we found that the NCREIF fund count remained relatively flat, but the INREV and ANREV fund count increase steadily. At the end of 2020, NCREIF’s GAV was 270 billion dollars compared with INREVs 39 billion dollars and ANREV’s 16 billion dollars, a considerable size difference …

Borrowing To Save? The Impact Of Automatic Enrollment On Debt, John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian, William L. Skimmyhorn

Faculty Publications

Does automatic enrollment into a retirement plan increase financial distress due to increased borrowing outside the plan? We study a natural experiment created when the U.S. Army began automatically enrolling newly hired civilian employees into the Thrift Savings Plan. Four years after hire, automatic enrollmentincreases cumulative contributions to the plan by 4.1% of annual salary, but we find little evidence ofincreased financial distress. Automatic enrollment causes no significant change in credit scores, debt balances excluding auto debt and first mortgages, or adverse credit outcomes, with the possible exception of increasedfirst-mortgage balances in foreclosure.

Can Gambling Increase Savings? Empirical Evidence On Prize- Linked Savings Accounts, Shawn Cole, Benjamin Iverson, Peter Tufano

Faculty Publications

This paper studies the adoption and impact of prize-linked savings (PLS) accounts, which offer lottery-like payouts to individual account holders in lieu of interest. Using microlevel data from a bank in South Africa, we show that PLS is attractive to a broad group of individuals, with financially constrained individuals and those with no other deposit accounts particularly likely to participate. Individuals who choose to use PLS increase their total savings on average by 1% of annual income. Exploiting the random assignment of prizes,we present causal evidence that PLS substitutes for lottery gambling but is a complement to standard savings.

Treasury Inconvenience Yields During The Covid-19 Crisis, Zhiguo He, Stefan Nagel, Zhaogang Song

Research Collection Lee Kong Chian School Of Business

In sharp contrast to most previous crisis episodes, the Treasury market experienced severe stress and illiquidity during the COVID-19 crisis, raising concerns that the safe-haven status of US Treasuries may be eroding. We document large shifts in Treasury ownership and temporary accumulation of Treasury and reverse repo positions on dealer balance sheets during this period. We build a dynamic equilibrium asset pricing model in which dealers subject to regulatory balance sheet constraints intermediate demand/supply shocks from habitat agents and provide repo financing to levered investors. The model predicts that Treasury inconvenience yields, measured as the spread between Treasuries and overnight-index …

What Problem Do Intermediaries Solve? Evidence From Real Estate Markets, Darren Aiello, Mark Garmaise, Taylor Nadauld

Faculty Publications

We study intermediation in the housing market. Using data from an online platform used by real estate agents to generate leads, we identify exogenous intermediary attention arising from the quasi-randomized ordering of potential listings. Greater intermediary attention leads to an increased probability of listing with an agent and selling quickly, and a higher transaction price. The listing and transaction probabilities of neighboring properties decrease in intermediary attention. These results provide causal evidence supporting search theories of intermediation, contrast sharply with endogenous correlations, and indicate that agents in this market serve mainly to facilitate search rather than to reduce information asymmetries.

A Textual Analysis Of Logograms In Chinese Ipo Roadshows: How Agreement Between Investors And Management Relates To Pricing And Performance, James C. Brau, James Cicon, Stephen R. Owen

Faculty Publications

We analyze the interaction between management and investors during Chinese IPO roadshows through Jaccard Similarity analysis of written Chinese logograms. We provide evidence that when agreement is high, investor optimism increases, leading to relatively large first-day underpricing. We further show that high agreement biases investors to systematically overestimate IPO prospects leading to poor long-run abnormal performance. Jaccard Similarity is different from current content analysis methodologies because it is language and culture agnostic, requiring no a priori construction of thematic dictionaries. Elimination of such dictionaries removes the danger that the researcher has imposed predispositions upon the study.

Young Firms, Old Capital, Song Ma, Justin Murfin, Ryan Pratt

Faculty Publications

Across a broad range of equipment types and industries, we document a pattern of local capital reallocation from older firms to younger firms. Start-ups purchase a disproportion- ate share of old physical capital previously owned by more mature firms. The evidence is consistent with financial constraints driving differential demand for vintage capital. The local supply of used capital influences start-up entry, job creation, investment choices, and growth, particularly when capital is immobile. Meanwhile, as suppliers of used capital, in- cumbents accelerate capital replacement in the presence of younger firms. The evidence suggests previously undocumented benefits to co-location between old and …

Determinants Of Capital Structure: An Expanded Assessment, Toshinori Fukui, Todd Mitton, Robert Schonlau

Faculty Publications

Using a standardized methodology, we empirically evaluate 55 proposed determinants of capital structure in terms of statistical significance, economic significance, and identification. We find that robust and economically important determinants of debt ratios are relatively few in number. Nevertheless, because each determinant relates to one of five market imperfections—taxes, distress costs, information asymmetry, agency costs, or supply frictions—we draw conclusions from the evidence as a whole regarding the explanatory power of different capital structure theories. We find greater support for pecking order theory and supply-related theories, with less support for traditional tradeoff theory and agency theory.

Editor's Note, Marites Tiongco

DLSU Business & Economics Review

No abstract provided.

Does Capital Adequacy Affect Bank Performance? A Comparative Study Of Select Public And Private Sector Banks In India, Shakeeb Mohammad Mir, Farooq Ahmad Shah

DLSU Business & Economics Review

Purpose – The purpose of this paper is to investigate the relationship between capital adequacy (CA) and the performance of select public and private sector banks and thereby to attain an insight of whether the capital adequacy maintenance affects bank performance differently or not based on their nature of concern.

Design/methodology/approach – The study utilized a balanced panel data set using bank level data of 37 banks indexed at Bombay stock exchange (BSE) across public and private sector for the period of 10 years (2009-2018). The study takes 370 observation into consideration (i.e.,37 banks over time frame of 10 years). …

Small Area Estimates Of Poverty In Region Iii, Caesar B. Cororaton, Arlene B. Inocencio, Alellie B. Sobreviñas, Emmanuel Dc. Barnedo

DLSU Business & Economics Review

Official estimates of the Philippine Statistical Authority (PSA) poverty incidence prior to 2018 are reliable up to the regional level as these are consistent with the sampling domain of the data used for estimation. Below this level, the PSA poverty estimates are unreliable because of very large sampling errors. The high level of unreliability makes the estimates less useful for poverty policy targeting. This paper addresses this concern by combining the Family Income and Expenditure Survey (FIES) and the Census of Population and Housing (CPH) data and using an increasingly accepted technique for small area estimation (SAE). We estimate the …

Grey Directors On Philippine Corporate Boards, Ailyn A. Shi, Evan Lance C. Li Liao, Angelo A. Unite, Michael J. Sullivan

DLSU Business & Economics Review

Independent directors on a firm’s board are theorized to enhance corporate governance by mitigating agency conflicts. However, some independent directors, referred to as grey directors, have prior relationships with managers that may hamper this role. Using data for Philippine firms, we construct a measure that categorizes independent directors as truly independent or grey, based on the 12 criteria used to define board independence as stipulated in the 2017 Philippine Corporate Governance Code. This measure is used to examine which firms are more likely to appoint grey directors and how the presence of grey directors affects firm performance. Consistent with agency …

An Experimental Study: Audit Quality Importance On Selecting A Public Accountant Firm (Paf), Ruth Samantha Hamzah, Efva Octavina Donata Gozali, -- Patmawati

DLSU Business & Economics Review

The study aims to emphasize the importance of knowledge of audit quality on Public Accountant Firm (PAF) selection for a company by employing a 2x1 factorial design between-subject. To achieve this goal, we identified differences between the experimental and control groups. The experimental group was given knowledge of audit quality, whereas the control group had no treatment during the process selection of PAF. There were 10 indicators used in term of audit quality, namely audit workload, business expertise, audit turnover, audit hours, result of employee satisfaction surveys, partner compensation, result of client satisfaction surveys, PCAOB inspection results, restatements on audit …

A Light Purse Is A Heavy Curse: A Systematic Review, Evan Lau, Suzie Adee

DLSU Business & Economics Review

The high level and rising cost in living standard conditions are affecting the individual’s and household’s savings behavior vividly in their day to day life. The general concern arises when individuals fail to address their retirement planning, problem that might affect the next generation. The need to boost financial knowledge and nurture savings behavior are essential to financial planning for retirement well-being. This current research establishes the understanding of how financial literacy influences savings habits for retirement well-being. Systematic review analysis was conducted, traced and implemented on academic databases from the period of 2006 to 2021. A total of 280 …

Impact Of Cooperative Membership On Technical Efficiency And Marketing Efficiency: The Case Of Dairy Buffalo Farmers In The Philippines, Ceptryl S. Mina, Agham C. Cuevas

DLSU Business & Economics Review

Collective action by smallholder farmers through cooperative membership is regarded as one of the approaches to overcome production and marketing inefficiencies. This study investigates the impact of cooperative membership on the technical efficiency (TE) and marketing efficiency (ME) of dairy buffalo farmers in the Philippines. A total of 351 (249 cooperative members and 102 non-cooperative members) randomly selected farmers from Regions II, III, IV-A, and VII were interviewed. Using cross-sectional farm household data of dairy buffalo farmers, technical and marketing efficiencies were estimated. Linear regression with endogenous treatment was performed to determine the impact of cooperative membership on the TE …