nep-cfn New Economics Papers
on Corporate Finance
Issue of 2019‒05‒27
six papers chosen by
Zelia Serrasqueiro
Universidade da Beira Interior

  1. Corporate Ownership and Managerial Turnover in China and Eastern Europe: A Comparative Meta-Analysis By Iwasaki, Ichiro; Ma, Xinxin; Mizobata, Satoshi
  2. Bankruptcy and Corporate Governance: The impact of firm specific factors and macroeconomic By Yim, Chin Shin
  3. The Rise and Decline of Private Foundations as Controlling Owners of Swedish Listed Firms: The Role of Tax Incentives By Henrekson, Magnus; Johansson, Dan; Stenkula, Mikael
  4. Asset-Based Lending By Suzanne Bijkerk; Casper de Vries
  5. Evaluating Factors of Small and Medium Hospitality Enterprises Business Failure: a conceptual approach By Spyridou, Anastasia
  6. A long time ago in a galaxy far, far away… How microfinance evolved and how research followed By Marek Hudon; Marc Labie; Ariane Szafarz

  1. By: Iwasaki, Ichiro; Ma, Xinxin; Mizobata, Satoshi
    Abstract: In this paper, we perform a meta-analysis of 736 estimates extracted from 31 previous studies to compare China and Eastern Europe from the viewpoint of the relationship between corporate ownership and managerial turnover. Our results strongly suggest the presence of asymmetric circumstances between the two: Namely, in Eastern Europe, private outside investors and large shareholders exert a positive influence on managerial discipline of the companies they invest in, and the government is also actively involved in the corporate governance of state-owned enterprises. In contrast, the Chinese government and the Communist Party of China have such significant control over companies as corporate owners that private shareholders only have limited influence over top management. In this sense, Chinese firms are more likely than their East European counterparts to face a greater problem in corporate governance.
    Keywords: corporate ownership, managerial turnover, meta-analysis, publication selection bias, China, Eastern Europe
    JEL: D22 G32 G34 G38 P21 P31
    Date: 2019–04
  2. By: Yim, Chin Shin
    Abstract: The aim of this study is to identify the cause of scandals that faced by Malaysia Airlines Berhad (MAS) in year 2001. One of the causes of this scandals is about corporate scandals. A corporate scandal means that it is involves alleged or actual unethical behavior by people acting within or on behalf of a corporation. Many recent corporate collapses and scandals have involved false or inappropriate accounting of some sort. Besides that, this study was carried out using the secondary data which was obtained from annual report for five years that is from years 1999 until year 2003. Return on asset (ROA) has been as the dependent variable to study its relationship with the independent variables such as Return on equity (ROE), Unemployment rate, Exchange rate, corporate governance index, Tobin Q and Altman Z. The enter method was used to obtain the correlation and regression result to observe significance level of the risk with the profits. And the Altman Z data is used to identify the probability of bankruptcy in this five years because of the scandals that face by MAS. Based on the result attained, the regression result show that the company of MAS might facing the bankruptcy problem in year 2000 until 2002 where the financial performance is low. While the loan of the company is higher. This causes can refers to data of ROA, ROE and Altman Z where the data of Altman Z show that in year 2002 is lower.
    Keywords: Corporate Governance Index, ROA, ROE, Altman Z, Tobin Q, Unemployment rate, Exchange rate.
    JEL: B22 G3 G33
    Date: 2019–05–04
  3. By: Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Johansson, Dan (Örebro University School of Business); Stenkula, Mikael (Research Institute of Industrial Economics (IFN))
    Abstract: Private foundations became a vehicle for the corporate control of large listed firms in Sweden during the post-war era, but in the 1990s, they were replaced by wealthy individuals who either directly own controlling blocks or who own them through holding companies. We study potential explanations for this change and pro­pose two taxation-related candidates: shifts in the relative effective taxation across owner types and the dismantling of the inheritance taxation that prevented the genera­tional transfer of the ownership of large controlling blocks. Our analysis exploits newly computed marginal effective capital income tax rates across capital owners, accounting for all relevant factors, including rules governing tax exemptions. We show that the 1990–91 tax reform, abolition of the wealth tax for controlling owners in 1997, 2003 tax exemption of dividends and capital gains on listed stock for holding companies with a voting or equity share of at least 10 percent, and abolition of the inheritance and gift taxes in 2004 reversed the rules of the game. Recently, control has largely been wielded through direct ownership, and the role of foundations is rapidly declining. These find­ings point to the importance of tax incentives for the use of foundations as the control vehicles of listed firms.
    Keywords: Corporate governance; Entrepreneurship; Family firms; Foundations; Owner-level taxation
    JEL: H20 K34 L26 N44
    Date: 2019–05–20
  4. By: Suzanne Bijkerk (Erasmus University Rotterdam); Casper de Vries (Erasmus University Rotterdam)
    Abstract: Asset-based lending, the supply of loans based on floating collateral, is an important source of funding for small firms. We analyze the effect of competition on asset-based loan markets on interest rate distributions and the mobility of small firms. Close monitoring of collateral by lenders results in an informational advantage for the incumbent lender and third-degree price discrimination. We find that adverse selection results in a unique equilibrium in which lenders randomize interest rates and firms switch lender with positive probability. Increased competition between lenders does not benefit firms through lower expected interest rates, neither does it improve their mobility.
    Keywords: asset-based lending, floating collateral, adverse selection
    JEL: D82 D53
    Date: 2019–05–06
  5. By: Spyridou, Anastasia
    Abstract: The aim of this paper is to present a comparison between macro and micro economic factors as they are suggested by the current literature in corporate failure field. Present study answers two research questions, firstly which the causes of corporate bankruptcies in tourism are, and secondly which metrics could help more on effectively predict a corporate failure. Based on a conceptual approach authors analyze and collect different macro and micro economic factors. Results indicates how strongly the various factors affect the quantity and intensity of bankruptcy applications and suggestions are given on how different models could be developed to predict the risk of bankruptcy in a macro or micro aspect. This is one of the first studies that investigates the effectiveness of different types of Corporate Failure metrics, which has, until now, suffered a dearth of conceptual studies in the field, especially in the context of national economies due to the economic recession.
    Keywords: Corporate Failure; Metric;Micro SMTEs
    JEL: L83 M13 M21 M40
    Date: 2019–04–15
  6. By: Marek Hudon; Marc Labie; Ariane Szafarz
    Abstract: This article is the introductory chapter of the book A Research Agenda for Financial Inclusion and Microfinance, edited by Marek Hudon, Marc Labie and Ariane Szafarz, and forthcoming in 2019 with Elgar Research Publishing. This introductive article written by the editors explains how research in microfinance and financial inclusion evolved together with field practices. It identifies the four periods in the life of the microfinance sector that match four steps in research development: genesis, childhood, adolescence, and maturity. The article discusses whether this evolution could lead to a decline. Finally, it presents the monograph, which is organized along thematic groups of chapters. The titles of the four parts of the book are: “Framing research on microfinance and financial inclusion,” “Social, environmental and financial performance,” “Targets for financial inclusion,” and “Institutional and technological design.” Each chapter is written by scholars whose expertise on financial inclusion and microfinance is recognized internationally.
    Keywords: Microfinance; Microcredit; Financial inclusion; Development; Social finance
    JEL: G21 G23 O16 G32 O19
    Date: 2019–05–17

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