Non-Financial Firms Hedging Risks in East Asia: The Link Between Financial Derivatives Use, Firm Value and Exposures to Country Risks

2020 ◽  
pp. 595-650
Author(s):  
Trang Kim ◽  
Quang Nguyen
Keyword(s):  
East Asia ◽  
Firm Value ◽  
Financial Derivatives ◽  
Financial Firms

Effect of Enterprise Risk Management on Firm Value: Empirical Evidence from Non-Financial Firms in Pakistan

GIS Business ◽  
1970 ◽  
Vol 13 (2) ◽  
pp. 15-28
Author(s):  
Nouman Nasir
Keyword(s):  
Risk Management ◽  
Firm Value ◽  
Positive Impact ◽  
Stock Exchange ◽  
Enterprise Risk Management ◽  
Least Square ◽  
Return On Equity ◽  
Financial Firms ◽  
Enterprise Risk ◽  
Ordinary Least Square Regression

This research examines the effect of enterprise risk management on firm value in Pakistan. Further, this study empirically examines company characteristics that establish the execution of an enterprise risk management system. Using a sample of final dataset of 83 non-financial firms located in Pakistan. The sample included non-financial firms from the year 1999 to 2015 and so up to seventeen observation years per company. As in context of Pakistan, most of the organizations are already implement an ERM programs and establish specialized ERM departments because the ERM is now a global term and has become increasingly relevant because of the growing difficulty of risk and an additional development of regulatory frame works. For the empirical evidences, data collected from non-financial firms listed at the Pakistan Stock Exchange (PSX). Results of logistic regression shows that Capital Opacity, Profitability, Financial Leverage, Firm Size and Slack have positive impact on the implementation of an ERM system but Industrial diversification, Industry and Return on Equity are negatively related to an ERM engagement. The results of ordinary least square regression finds positive relationship between use of an ERM and firm value.

Determinants of corporate foreign exchange risk hedging

2014 ◽  
Vol 40 (2) ◽  
pp. 176-188 ◽  
Author(s):  
Lee-Lee Chong ◽  
Xiao-Jun Chang ◽  
Siow-Hooi Tan
Keyword(s):  
Exchange Rate ◽  
Descriptive Analysis ◽  
Financial Derivatives ◽  
Content Type ◽  
Risk Hedging ◽  
Financial Firms ◽  
Hedging Strategies ◽  
Factors Influencing ◽  
Financial Hedging ◽  
Exchange Risk

Purpose – The purpose of this study is to delineate the factors influencing the use of financial derivatives by non-financial firms in managing their exchange rate exposure. In total, 219 non-financial firms are surveyed in regard to their financial hedging decision. Design/methodology/approach – This study is conducted via a survey and the questionnaires were sent to the treasurers and financial controller of the firms. Descriptive analysis is employed to assess the profiles of the respondents. Then, factor analysis is carried out to determine the factors influencing the use of financial derivatives in Malaysia. Findings – The results indicate that the hedging decision of non-financial firms is influenced by their assertive level toward the market and regulators and also how flexible they are for derivative instruments. The intellectual capability that firms acquire to perform hedging strategies is also vital in influencing them to make hedging decision. Practical implications – The insights of this survey would assist and prepare firms to hedge their exchange rate risk by employing financial derivatives. Knowing the influences of firms' adoption of currency derivatives would allow policy makers to formulate their policies in boosting the liquidity of Malaysian derivative market. Originality/value – This study presents findings on the factors influencing the execution of financial hedging by non-financial firms in Malaysia. Survey data are used to seek for the feedback from the market players in order to provide empirical evidence on the corporate use of financial hedging.

scholarly journals The Paradox of Managerial Dividend Policy in Corporate Malaysia

2019 ◽  
Vol 5 (1) ◽  
pp. 197-204
Author(s):  
Muhammad Farhan Basheer ◽  
Muhammad Haroon Hafeez ◽  
Raza Ali ◽  
Shahzad Akhtar
Keyword(s):  
Firm Value ◽  
Dividend Policy ◽  
Mail Survey ◽  
Cover Letter ◽  
Listed Firms ◽  
Financial Firms ◽  
Single Pattern ◽  
Managerial Perception ◽  
Primary Means ◽  
Potential Factors

The prime objective of this paper is to survey the managers of Bursa Malaysia listed non-financial firms and to divulge their views regarding the significance of various potential factors that may affect dividend decisions. In addition to that, we are also interested in highlighting that how managerial perception about the importance of these factors varies from country to country. Our next objective is to know the level of importance, Malaysian managers give to dividend processes and pattern, firm value. Dividend policy (DP) and residual dividend policy (RDP). Finally, we are interested in measuring the level of support that Malaysian managers provide for different justifications for the payment of dividends. Survey instrument including a cover letter was mailed to chief finance officers (CFO) and finance managers of 493 Bursa Malaysia listed firms in October 2017. In the cover letter, a request was made to all respondents that in case of their non-involvement in dividend decision the letter must be forwarded to concerned authority involved in dividend decisions. The response rate of the current study is 40.09 percent (202 out of 493 firms). The study has used a mail survey of Bursa Malaysia listed non-financial firms that have paid at least one cash dividend during the period of 2013-2016 as a primary means of collecting data. No single pattern in rankings of factors among different countries has emerged. However, like their American, Canadian and Indonesian counterparts, According to Malaysian managers, dividend decisions have a significant effect on firm value. Although, a great deal of support has already been established with all dividend theories, however clientele and agency theory has proven to be the strongest one. In author’s knowledge, this is the first study designed to explore the views of Malaysian managers on DP in Malaysia.

scholarly journals Corporate governance, institutional investor type and firm performance: Evidence from an emerging market

2021 ◽  
Vol 5 (4) ◽  
pp. 20-27
Author(s):  
Rama Sastry Vinjamury
Keyword(s):  
Firm Performance ◽  
Institutional Investors ◽  
Firm Value ◽  
Fixed Effects ◽  
Stock Exchange ◽  
Emerging Market ◽  
Developed Economies ◽  
Financial Firms ◽  
Pressure Sensitive

The study analyses the role of institutional investors in improving firm performance. Unlike in developed economies where firm ownership is widely dispersed, firms in emerging economies such as India have substantial promoter shareholdings (often in a majority or close to a majority). Given the promoter control of Indian companies, the role of institutional investors as external monitors is analysed. Following Brickley, Lease, and Smith (1988) and Almazan, Hartzell, and Starks (2005), the study categorises institutional investors as pressure-sensitive and pressure-insensitive institutional investors. Panel data for non-financial firms from India included in National Stock Exchange (NSE) 500 over the period 2008–2017 is studied using fixed-effects models. The study finds that the increased ownership of pressure-insensitive institutional investors is positively associated with firm performance. Also, the increased ownership of pressure-sensitive institutional investors is negatively associated with firm performance. These findings are consistent with the view that pressure-insensitive institutional investors are more effective monitors compared to pressure-sensitive institutional investors. The study offers insights into the role of institutional investors in economies where firms have a substantial promoter shareholding. The study documents that even with a substantial promoter shareholding and control, pressure-insensitive institutional investors aid in enhancing firm value

scholarly journals Working Capital Management and the Profitability of Non- Financial Firms Listed on the Zimbabwe Stock Exchange (ZSE)

2014 ◽  
Vol 9 (1) ◽  
Author(s):  
Walter Gachira ◽  
Washington Chiwanzwa ◽  
Dingilizwe Jacob Nkomo ◽  
Runesu Chikore
Keyword(s):  
Firm Value ◽  
Positive Relationship ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Financial Firms ◽  
Cash Conversion Cycle ◽  
The Impact

Working capital is essential for the day-to-day operations of a firm. The study examines the impact of working capital management on the profitability of non-financial firms listed on the Zimbabwe Stock Exchange (ZSE). Using panel data methodology, the direction and extent of the impact of working capital management on profitability is scrutinised. The regression analysis is based on a panel sample of 39 non-financial firms listed on the ZSE from 2009 to 2013, the period under which the Zimbabwean economy has been operating under the multicurrency system. It was found that there is a positive relationship between debtors’ days and firm’s profitability, a negative relationship between creditors’ days and profitability and a positive relationship between firm’s cash conversion cycle and its profitability. There is some negative relationship between current ratio and profitability, while inventory turnover days and profitability are positively related. Debt to asset ratio as a control variable has a significant negative relationship with firm value and profitability. The results of the study show that for the companies included in the sample, there are mixed effects of the components of working capital on firm performance. Managers can thus create value for shareholders by taking note of the existence of such relationships and take measures that enhance firm profitability.

scholarly journals Ownership monitoring mechanism and corporate performance: evidence from banking firms in Asian emerging markets

2008 ◽  
Vol 5 (3) ◽  
pp. 349-357
Author(s):  
Abdul Hadi Zulkafli ◽  
Fazilah Abdul Samad ◽  
Izani Ibrahim
Keyword(s):  
Corporate Governance ◽  
Hong Kong ◽  
Financial Crisis ◽  
Emerging Markets ◽  
Firm Value ◽  
Financial Firms ◽  
Monitoring Mechanism ◽  
Asian Emerging Markets ◽  
Corporate Governance Reforms ◽  
Governance Reforms

Corporate governance is regarded as a major issue during the post-financial crisis period in Asia. These countries have implemented corporate governance reforms to enhance the protection of their shareholders and stakeholders interests. Such reforms may affect the conduct of business of all corporations in the region as it allows for greater monitoring especially by the shareholders. Unlike earlier studies which focused on non-financial firms, this study analyzes the corporate governance involving ownership monitoring mechanism of listed banking firms in nine Asian emerging markets which are Malaysia, Thailand, Philippines, Indonesia, Korea, Singapore, Hong Kong, Taiwan and India. It is found that ownership monitoring mechanisms of the banking firms in Asian emerging markets are negatively related with firm value measured by Tobin’s Q

scholarly journals Does earnings quality matter? Evidence from the Athens Exchange

2020 ◽  
pp. 93-112
Author(s):  
Ioannis Asimakopoulos ◽  
◽  
Athanasios P. Fassas ◽  
Dimitris Malliaropulos
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Earnings Quality ◽  
Banking System ◽  
Governance Framework ◽  
Market Participants ◽  
Financial Firms ◽  
Specific Factors ◽  
The Right

The relation between accounting earnings and firm valuation has long been a topic of interest to academics and stock market participants. The study analyses the relationship between earnings quality and firm value using a sample of non-financial firms with shares listed on the Athens Exchange over the period 2004-2019. The empirical findings indicate that investors value earnings quality, and this is reflected in a better valuation for firms having earnings of higher quality. The results are robust to different methodologies and controls for firm-specific factors. The evidence is of particular importance for Greek firms seeking to expand their sources of financing beyond the Greek banking system. Such a development requires constant monitoring and strengthening of the corporate governance framework, with the aim of improving the quality of information conveyed by the firms to investors. In this respect, the provisions of Law 4706/2020 regarding the Greek corporate governance framework and the operation of the Hellenic Capital Market Commission seem to be in the right direction.

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