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on Corporate Finance |
| By: | Emilia Bonaccorsi di Patti (Bank of Italy); Paolo Finaldi Russo (Bank of Italy) |
| Abstract: | In 2015 bank lending to larger firms expanded whereas it continued to contract for smaller ones; this gap is also observed for companies belonging to the same sector of economic activity or with similar budgetary conditions. Econometric estimates confirm that, taking into account a large number of firms’ characteristics (profitability, liquidity, sales dynamics, capital expenditure, economic sector and geographical area), the contraction in lending was especially pronounced for micro-firms and for riskier companies. The greater financial fragility of micro-firms, particularly due to their higher indebtedness, accounts for more than 70 per cent of the difference in the annual growth rate of loans to large companies and about 40 of that to small and medium-sized enterprises. A non-negligible proportion of these gaps is not explained by the firms’ characteristics considered in the analysis; it may instead reflect supply factors associated with a lower propensity on the part of some banks to finance small firms. |
| Keywords: | credit risk, credit allocation, flight to quality, evergreening |
| JEL: | G21 G32 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_371_17&r=cfn |
| By: | Aminadav, Gur; Massa, Massimo; Zhang, Hong; Zhu, Weikang |
| Abstract: | We study how value affects the bargaining game in the market for corporate control. We focus on business groups and propose a novel approach in which we can directly quantify the difference in value between what the buyer gets and what the seller gives. If a firm helps to retain control of a group through a network of cross-ownership, another firm buying such firm does not necessarily acquire control of the group. This implies that if another firm buys such firm, the seller loses control of the group but the buyer does not necessarily acquire it. Therefore, the value of the firm for the buyer is lower than it is for the seller. In these conditions it is not likely that the deal will ever go though. We argue and show that the difference in the value for the buyer and that for the seller is always strongly negatively related to the target market and offer premia as well as to the probability of completion of the deal. The relative bargaining power of bidder and target also affects the probability of the deal being initiated: a greater bargaining power makes it more likely to bid for another one and less likely to be the target itself of a deal. Our results provide a new way of thinking about the value of control in the M&A bargaining game and more in general about the value of firms, showing a dimension that is not directly related to cash flows and that is linked to the pure value of control within groups. |
| Keywords: | bargaining power; Business Groups; M&As; value of control |
| JEL: | G12 G3 G32 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11986&r=cfn |
| By: | khoo, roushin |
| Abstract: | This study aims at analyzing the relationship between corporate governance, REDtone firm liquidity and internal and external factor. In order to carry out the study a descriptive analysis through quantitative approach was used. Descriptive statistics analysis, we analyzed the firm’s annual report from year 2011 to 2015, SPSS and correlation helped confirm that the company corporate governance, firm performance and risk. Thus, the better the financial performance (ROA, ROE and liquidity) the lower the risk incurred. |
| Keywords: | corporate governance, liquidity, risk, ROA and ROE |
| JEL: | G3 G32 |
| Date: | 2017–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78374&r=cfn |
| By: | Ramarow, Sirivige |
| Abstract: | This study is conducted to investigate the overall performance of Cocoaland Holdings Berhad based on determined risk elements and some other macroeconomic elements to evaluate the profitability performance of the company. The data in this study retrieved from the annual report of the company starting year 2011 until year 2015. This study consists of credit risk ratio, liquidity ratio, profitabilty ratio and operational risk ratio that used to measure the company’s profitability. The risk elements that affects the profitability of the company studied using liquidity (quick) ratio, GDP and the operating ratio. The results scrutinized based on regression and bivariate correlation analysis. |
| Keywords: | Firms specific factor, liquidity risk, profitability and macroeconomic factor |
| JEL: | G0 G1 G2 G3 |
| Date: | 2017–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78625&r=cfn |
| By: | Kiew, sockyan |
| Abstract: | The purpose of this study is to examine the corporate governance, the impacts of firm performances and risk for telecommunication industry. This review additionally analysis the value of profitability and liquidity ratio. The research involved the relationship between the corporate governance, performances of company and the risk of Digi Telecommunication Berhad within a five year period which from 2011 until 2015. The companies were from the telecommunications sector and the data was obtained from the Digi company annual report. The ratios examined were the return on assets (ROA), return on equity (ROE) and current ratio, profitability, liquidity ratio and leverage of the company. A conclusion based solely on the profitability and liquidity ratios of company. The results support the proposition that analysis based on the profitability and liquidity ratios is best before reaching any conclusions regarding the financial liquidity positions and have significant relationship between the firm performances and risk of Digi companies. |
| Keywords: | Macroeconomic, Performance, Profitability, Liquidity, Liquidity Risk |
| JEL: | G3 G32 |
| Date: | 2017–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78313&r=cfn |
| By: | Kamarulzaman, Fadzilah |
| Abstract: | The main purpose of this study is to identify corporate governance and its impact on firm performance of Real Estate Investment Trust over the period between 2011 and 2015. The study is to show how the firm performance influenced by corporate governance and risk performance. The information acquired from yearly report of Pavilion REIT Management Sdn. Bhd.( Pavilion REIT) from 2011 until 2015. The estimation of liquidity ratio and operating ratio used to see the general performance of Pavilion REIT in 5 years. The extra estimation is the asset size, this variable has a negative and no significant relationship with liquidity risk. To see the relationship of risk elements to the firm performances, this paper is using profitability ratio, liquidity ratio, activity ratio, leverage ratio, and Gross Domestic Product (GDP). This study will identify and explore about the risk that the company faced that affect the performances of the company like credit risk, liquidity risk and market risk. At the end of this study, the finding shows that the relationship between the corporate governance and risk performance and its impact on the Pavilion REIT Management Sdn. Bhd.’s financial performances. Thus to address this, the relationship between corporate governance, risk performance and firm performance are observed. |
| Keywords: | Credit Risk, Liquidity Risk, Profitability Risk and Macroeconomics |
| JEL: | G3 |
| Date: | 2017–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78396&r=cfn |
| By: | Mohd Amin, Nurlida |
| Abstract: | This paper analyze the risk and performance of one conventional bank in Malaysia. This study included many variables to determined the risk and performance on that bank using five years (2011-2015) data from the bank’s financial statement and annual report. The method that are used in this paper in examine the data are credit risk ratio, liquidity ratio, operational risk ratio, market risk indicator, return on asset ratio, return on equity ratio, net interest margin ratio. All this ratio will determined the risk associated with CIMB Bank Berhad and also the bank’s performance for the past five years. This study employs SPSS time series regression analysis of the bank from the year 2011 to 2015. This paper outlined the result from the analysis. |
| Keywords: | Credit risk, Liquidity Risk, Operational Risk, Market Risk, GDP, Inflation, Exchange Rate, Unemployment Rate and Profitability |
| JEL: | D8 G3 G32 |
| Date: | 2017–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78334&r=cfn |
| By: | Iftekhar HASAN (Gabelli School of Business, Fordham University); Jean-Loup SOULA (LaRGE Research Center, Université de Strasbourg) |
| Abstract: | This paper generates an optimum bank liquidity creation benchmark by tracing an efficient frontier in liquidity creation (bank intermediation) and questions why some banks are more efficient than others in such activities. Evidence reveals that medium size banks are most correlated to efficient frontier. Small (large) banks - focused on traditional banking activities - are found to be the most (least) efficient in creating liquidity in on-balance sheet items whereas large banks – involved in non-traditional activities – are found to be most efficient in off-balance sheet liquidity creation. Additionally, the liquidity efficiency of small banks is more resilient during the 2007-2008 financial crisis relative to other banks. |
| Keywords: | banks, technical efficiency, liquidity creation, diversification |
| JEL: | G21 G28 G32 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:lar:wpaper:2017-08&r=cfn |
| By: | Bongini, Paola; Ferrando, Annalisa; Rossi, Emanuele; Rossolini, Monica |
| Abstract: | The present paper provides in-depth analysis of SME access to capital markets among Eurozone countries. First, we detect the factors - at the firm and country level - that are able to influence the likelihood of SME access to market-based finance. Second, we construct an index of what we call "market suitability",, i.e., a score that can be measured at the dimensional, sectoral and national level, which provides the percentage of firms potentially fit for market-based finance. Our results highlight that a few Eurozone countries seem to have deployed the "potential" for capital market financing, while there exists a large percentage of unexploited potential for firms fit for market-based finance. It should also be highlighted that overall business conditions - measured by GDP growth, the degree of development of domestic financial markets, and the quality of the legal and judicial enforcement system - greatly influence a firm's market suitability. In the period under consideration (2000-2014), macro factors tended to reduce the likelihood of SME access to market-based finance in most countries in our sample |
| Keywords: | Eurozone; market-based finance; SMEs |
| JEL: | G10 G32 L25 L26 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12006&r=cfn |