Asia-Pacific Journal of Financial Studies
- Publication date:
- Nbr. 47-2, April 2018
- Nbr. 47-1, February 2018
- Nbr. 46-6, December 2017
- Nbr. 46-5, October 2017
- Nbr. 46-4, August 2017
- Nbr. 46-3, June 2017
- Nbr. 46-2, April 2017
- Nbr. 46-1, February 2017
- Nbr. 45-6, December 2016
- Nbr. 45-5, October 2016
- Nbr. 45-4, August 2016
- Nbr. 45-3, June 2016
- Nbr. 45-2, April 2016
- Nbr. 45-1, February 2016
- Nbr. 44-6, December 2015
- Nbr. 44-5, October 2015
- Nbr. 44-4, August 2015
- Nbr. 44-3, June 2015
- Nbr. 44-2, April 2015
- Nbr. 44-1, February 2015
- Customer‐based Concentration and Firm Innovation
Based on a sample of listed companies in Shanghai and Shenzhen, China from 2007 to 2015, this paper discusses the relationship between customer concentration and corporate innovation. The results show that this relationship is nonlinear and U‐shaped. In addition, this paper finds that when the bargaining power of large customers is weak and the level of supply chain integration is high, the U‐shaped relationship becomes more significant. Additional analyses show that the U‐shaped relationship between customer concentration and corporate innovation is more significant for non‐state‐owned enterprises and those with lower levels of cash holding.
- Ethnic Ties in US Venture Capital Stage Financing
This paper examines the effect of ethnic ties on venture capital (VC) stage financing in the US market. After dealing with the endogeneity problem, the paper shows that VC investors who share ethnicity with an entrepreneur tend to finance the company using a smaller number of rounds, longer durations between successive rounds, and a larger amount in each round. The effect is more pronounced when the startup company and the VC firm are not located in the same city or the VCs lack industry‐specific expertise. My findings also suggest that such trust due to co‐ethnicity leads to bad investment performance.
- Issue Information
- Finance and Corporate Innovation: A Survey
Corporate innovation is an increasingly important topic that has attracted great attention from academic researchers in financial economics in recent years. Although the top three finance journals (i.e. the Journal of Finance, the Journal of Financial Economics, and the Review of Financial Studies) together published a total of only five papers on corporate innovation from 2000 to 2008, the number of such papers published by these three journals skyrocketed to 56 from 2009 to the third quarter of 2017. The purpose of this survey is to provide a synthetic and evaluative monograph of academic papers that examine the drivers and financing sources of corporate innovation.
- Does Managerial Ability Matter in Private Firms? Evidence from Korea
Using a large dataset of Korean private firms, we examine the value consequences of managerial ability. We document that private firms with more able managers achieve better performance, are less likely to over‐invest, and are more likely to go public. However, we find that these firms experience more severe underperformance following an IPO than firms with less able managers. We provide evidence of more capable managers exhibiting lower earnings quality before an IPO, which is a potential explanation for our findings. The results are consistent with the notion that in the absence of effective monitoring mechanisms, owner‐managers in private firms can use their discretion in an opportunistic way.
- Firms’ Technology Innovation Activity: Does Financial Structure Matter?
In this paper we estimate the extent to which financial structure influences technology innovation activity (TIA) in China. Based on a variety of specifications and by employing panel data estimation techniques, we find that a capital‐market‐based financial structure supports TIA more efficiently than a bank‐bases financial structure does. Chinese firms in high‐tech industry are getting privilege from overwhelming financial development in China to enhance their TIA. Private firms in particular are becoming more and more active in TIA by taking advantage of China's developing capital market, whereas state‐owned enterprises are advancing in technological innovation owing to continuous financial support from the state‐owned credit market.
- Issue Information ‐ Call for Papers
- Patent as a Quality Signal in Entrepreneurial Finance: A Look Beneath the Surface
We examine the value of patents on Chinese firms’ access to venture capital (VC). We find that the patent applications (grants) of firms significantly increase their likelihood of obtaining VC funding in the following year(s), particularly for high‐quality patents in high‐tech industries. Depending on investment, patent quantity significantly improves the size of VC investment and firm valuation. This effect is pronounced in first‐round investment, strong intellectual property protection regions, during periods of loose monetary policy, and state/corporate VC. Overall, we support the use of patent as a quality signal in attracting entrepreneurial finance outside the US and warrant the conditions it holds.
- Issue Information ‐ Call for Papers
- Institutional Ownership and Stock Liquidity: International Evidence
This paper investigates the relation between institutional ownership and stock liquidity, and explores whether this relation differs across institutional settings. Using a comprehensive data set across 41 countries from 2000 to 2010, we find that institutional ownership is positively correlated with stock liquidity. Importantly, the positive association between institutional ownership and stock liquidity is stronger (weaker) for firms in countries with opaque (transparent) information environments or poor (good) institutional characteristics. Our additional analysis reveals that the positive association between institutional ownership and liquidity is attributable to non‐block institutional investors.
- Stock Price Reactions to News and the Momentum Effect in the Korean Stock Market
By analyzing how stock prices respond to public news, this paper examines the momentum effect in the Korean stock market. It is true that, as a whole, the momentum strategy generates no profits in Korea. However, among the stocks in a momentum portfolio, loser stocks with news headlines make...
- How Does Diversification Impact Bank Stability? The Role of Globalization, Regulations, and Governance Environments
This paper examines the impact of bank diversification on stability, using bank‐level data for 22 Asian countries over the period from 1995 to 2009. We empirically investigate whether country characteristics, economic structure, regulatory and governance environments, and globalization have...
- Size, Value, and Momentum in Emerging Market Stock Returns: Integrated or Segmented Pricing?
In this paper, we examine size, value, and momentum patterns in the stock returns of four emerging market regions—Latin America, EMEA, Asia, and BRIC. We document a strong and highly significant value effect, and a strong but less significant momentum effect. Substantial value and momentum premiums ...
- What Drives Credit Rating Changes? A Return Decomposition Approach
This paper examines the relative importance of a shock to expected cash flows (i.e., cash‐flow news) and a shock to expected discount rates (i.e., discount‐rate news) in credit rating changes. Specifically, we use a Vector Autoregressive model to implement the return decomposition of Campbell and...
- Agency Costs and Equity Mispricing
We investigate a link between agency costs and equity mispricing. We employ comprehensive, multi‐dimensional measures of agency costs and mispricing, and find that mispricing is significantly and positively related to agency costs. We also explore the effect of equity‐based compensation on the...
- Top Managers' Academic Credentials and Firm Value
This study investigates whether top management teams' (TMTs) academic credentials from prestigious universities can be a source of competitive advantage. We examine the academic backgrounds of 72,165 top managers in 590 non‐financial firms in South Korea from 1990 to 2006. We find that firms with a ...
- Is Money Smart When Funds are Young?
Researchers have explored whether fund flows can predict future fund performance with mixed results. We investigate the smart money effect in light of a rational agent model built on Berk and Green (2004, Journal of Political Economy, 112). When investors infer the managerial abilities of funds...
- Debt and Taxes: Evidence from Foreign versus Domestic Subsidiaries in an Emerging Market
Foreign subsidiaries in Korea operate under a classical system where double taxation of corporate and personal income provides interest tax shields, while domestic subsidiaries are under an imputation system where preference for debt is largely eliminated. We find that foreign subsidiaries’ overall ...
- Analyst Following, Information Environment and Value Relevance of Comprehensive Income: Evidence from China
This study investigates the value relevance of comprehensive income (CI) reporting contextual to the specific market and financial reporting environment in China. We posit the information content of CI or other comprehensive incomes (OCI) is affected by the information environment. By applying...
- Changing Dividend Policy in Korea: Explanations Based on Catering, Risk, and the Firm's Lifecycle
We examine the dividend payment patterns of Korean firms and test competing hypotheses that explain the decreasing dividend patterns since the Asian crisis. We run a horse race to explain this decreasing propensity to pay dividends (PPD). Although catering theory, when used alone, explains 22% of...