scholarly journals THE IMPACT OF INFORMATION ASYMMETRY, MORAL HAZARD AND THE STRUCTURE OF FUNDING ON CORPORATE U.S. DOLLARS LOAN PRICING: THE EMPIRICAL STUDY IN INDONESIA THE PERIOD 1990-1997

2017 ◽  
Vol 11 (1) ◽  
Author(s):  
Deddy Marciano ◽  
Suad Husnan
Keyword(s):  
Moral Hazard ◽  
Information Asymmetry ◽  
Ordinary Least Squares ◽  
Regression Coefficients ◽  
Special Relationship ◽  
Pricing Model ◽  
Loan Pricing ◽  
Capital Costs ◽  
Increased Risk ◽  
The Impact

This study aims to answer the question: "What factors that influence the price of corporate loans in Indonesia?" And "Are there some differences in loan pricing between several types of creditors?". Furthermore, this research is to develop and test the loan pricing model that was developed in America and Europe to the context or setting in Asia, especially Indonesia. Different conditions and settings of the financial system between America/Europe and Asia, especially Indonesia, causing the loan pricing model that was developed in America/Europe can not be fully implemented for Indonesia. Key issues in this study consisted of: information asymmetry, moral hazard and funding structure. The first issue, information asymmetry consists of the type of creditors, foreign and domestic ownership, public and non-public ownership. The second issue, moral hazard problem consists of variables governmental and non-government ownership, and the special relationship between creditors and debtors. The last issue, creditors’ structure of funding is proxied by the ratio of CD / ML. In addition, this study also adobt the loan pricing models that are developed in America / Europe as control variables. This study also examines the argument of Strahan (1999) whether the loan fees also reflected the condition of the loan as well as loan spreads. The OLS regression (Ordinary Least Squares) with white correction method (White heteroskedasticity correction) for heteroscedasticity problem is conducted to test the model. Various samples and sub samples are prepared to answer various research questions and hypotheses. Testing between regression coefficients are conducted to examine differences in loan pricing between different types of creditors for each variable in the model. The test results generally show that only two new variables suggested by the study, namely: ownership and structure of funding have a significant contribution to the loan pricing model. For variable type of institution consisting of investment banks and commercial banks indicate that generally there is no difference in loan pricing between the two, only in some models of these variables are not significant with signs consistent.Ownership variable show results consistent with the hypothesis and significant effect on loan prices. While the variable special relationship between creditors and debtors have no effect on loan prices, it is due to inter-group loans made by conglomerates. For the case of capital costs of the creditor shows that the variable has a positive effect on lending rates set by creditors. Testing different regression coefficients lead to the conclusion that domestic creditors succeeded in detecting an increased risk of the debtor before the economic crisis of 1997 compared with foreign creditors.

Inter-Firm Connections, Alliance Formation and the Value Created by Alliances

2020 ◽  
Vol 10 (04) ◽  
pp. 2050019
Author(s):  
Yun Liu ◽  
Tomas Mantecon ◽  
Sabatino Dino Silveri ◽  
Wei Sun
Keyword(s):  
Moral Hazard ◽  
Information Asymmetry ◽  
Social Connections ◽  
Opportunistic Behavior ◽  
Alliance Formation ◽  
Board Interlocks ◽  
Valuation Effect ◽  
Ex Post ◽  
The Impact ◽  
Flow Of Information

We investigate the impact of inter-firm connections on alliances. We find that both professional connections and social connections, borne out of board interlocks, employment ties and educational ties, increase the likelihood of alliance formation. In addition, the market reacts more favorably to alliance announcements in the presence of such connections, and this positive valuation effect increases with the degree of information asymmetry between the partner firms. Our findings are consistent with inter-firm connections creating value because they facilitate the flow of information between partner firms, thereby reducing moral hazard concerns and the risk of ex-post opportunistic behavior.

scholarly journals Moral Hazard Assessment in State-subsidized: Renewable Energy Investments

2019 ◽  
Vol 27 (1) ◽  
pp. 37-47
Author(s):  
Olivér Hortay
Keyword(s):  
Renewable Energy ◽  
Theoretical Model ◽  
Moral Hazard ◽  
Information Asymmetry ◽  
Hazard Assessment ◽  
Incentive Structure ◽  
Ceteris Paribus ◽  
Market Prices ◽  
The Impact ◽  
Great Protection

This paper presents the impact of state subsidy programs on moral hazard in renewable energy investments. The purpose of the research is to build a theoretical model which is able to handle the borrower’s behavior under asymmetric information circumstances, thus creating a new aspect in the debate about the choice of the financially ideal incentive structure. The general conclusion of the article is that technology based subsidy mechanisms which provide great protection to the investing companies (ceteris paribus), increase information asymmetry and agency costs. While these systems improve predictability of revenues, they block effective lending or otherwise, the market dependent subsidies moderate the moral hazard, which reduce the risk of fluctuating market prices.

The impact of corporate governance performance on the association between information asymmetry and opportunities' optimal levels: evidence from developed markets

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ehsan Poursoleyman ◽  
Samira Joudi ◽  
Gholamreza Mansourfar ◽  
Saeid Homayoun
Keyword(s):  
Corporate Governance ◽  
Information Asymmetry ◽  
Developed Countries ◽  
Ordinary Least Squares ◽  
Investment Efficiency ◽  
Method Of Moment ◽  
Content Type ◽  
Bid Ask Spread ◽  
The Impact

PurposePrevious literature posits that corporate governance and information asymmetry are the main factors in making efficient investments. Meanwhile, a growing body of studies is of the opinion that corporate governance can also mitigate the problem of information asymmetry and consequently exerts significant impacts on the association between information asymmetry and investment efficiency. This study aims to analyze the impact of corporate governance and information asymmetry on investment efficiency. It also tests the moderating role of corporate governance in the relationship between information asymmetry and investment efficiency.Design/methodology/approachThe sample consists of 4,082 firms domiciled in 20 developed countries over the years from 2003 to 2019, including 33,812 firm-year observations. The bid–ask spread is used as a proxy for information asymmetry. To measure corporate governance performance, a proxy provided by ASSET4 is employed, and to determine the optimal levels of investments, we relied on the growth opportunity. To estimate the models, ordinary least squares and generalized method of moment are used.FindingsThe results reveal that information asymmetry is inversely related to investment efficiency, and, corporate governance mitigates this negative association.Originality/valueThis paper sheds light on the role of corporate governance in firms as a lever for mitigating information asymmetry and tries out information asymmetry and agency theories in relation to the impact of information asymmetry on investment efficiency. It also confirms the theory stating that corporate governance can be considered as a determinant of investment efficiency.

scholarly journals Hard Red Spring Wheat Marketing: Effects of Increased Shuttle Train Movements on Railroad Pricing in the Northern Plains

2015 ◽  
Author(s):  
Elvis Ndembe
Keyword(s):  
Spring Wheat ◽  
Supply And Demand ◽  
Ordinary Least Squares ◽  
Pricing Model ◽  
Rate Reduction ◽  
Grain Elevators ◽  
Hard Red Spring Wheat ◽  
Pricing Behavior ◽  
The Impact ◽  
Over Time

Despite the widespread adoption of shuttle train grain elevators and their potential for reducing rates for grain transport, few studies have evaluated their impact on railroad pricing. The aim of this paper is to assess railroad pricing behavior as well as empirically examine the impact of shuttle train movement on hard red spring wheat transport from North Dakota over time. Ordinary least squares estimation of the pricing model has rate per ton-mile as a dependent variable and supply and demand determinants as regressors. Intermodal competition and shuttle trains were found to have played a significant role in rate reduction over time.

scholarly journals Impact of Non-Performing Loans on Bank’s Profitability: Empirical Evidence from Commercial Banks in Tanzania

2018 ◽  
Vol 6 (01) ◽  
Author(s):  
Peter Stephen Kingu ◽  
Dr Salvio Macha ◽  
Dr Raphael Gwahula
Keyword(s):  
Regression Analysis ◽  
Information Asymmetry ◽  
Commercial Banks ◽  
Fixed Effects ◽  
Ordinary Least Squares ◽  
Descriptive Statistics ◽  
Estimation Methods ◽  
Policy Makers ◽  
Managerial Implications ◽  
The Impact

This study examined the impact of Non-performing loans on bank’s profitability using information asymmetry theory and bad management hypothesis. This study adopted causality research design using panel data (2007 to 2015) of 16 commercial banks in Tanzania. The study employed Descriptive statistics and multiple regression analysis estimation methods. Likewise, Ordinary Least-Squares (OLS) regression technique was also used, and then Fixed Effects (FE) and Random Effects (RE) assumptions were considered. The study found that occurrence of non-performing loans is negatively associated with the level of profitability in commercial banks in Tanzania. The results extend further the information asymmetry theory and bad management hypothesis. The findings of the study have both theoretical and managerial implications for practitioners and policy-makers

scholarly journals Determinants of the Price of Housing in the Province of Alicante (Spain): Analysis Using Quantile Regression

2019 ◽  
Vol 11 (2) ◽  
pp. 437 ◽  
Author(s):  
Raul-Tomas Mora-Garcia ◽  
Maria-Francisca Cespedes-Lopez ◽  
V. Raul Perez-Sanchez ◽  
Pablo Marti ◽  
Juan-Carlos Perez-Sanchez
Keyword(s):  
Multivariate Analysis ◽  
Quantile Regression ◽  
Ordinary Least Squares ◽  
Hedonic Pricing ◽  
Average Price ◽  
Pricing Model ◽  
Hedonic Pricing Model ◽  
Adequate Funding ◽  
The Impact ◽  
The Relationship

After almost a decade of crisis, the housing market in Spain shows significant signs of recovery, with increases in both the average price and the number of sales transactions. Housing is the main asset for the majority of households, and it also has the most resources devoted to it, thus, when it comes to buying a residence, people do not only look at the asset’s intrinsic characteristics, but also consider other particularities such as the neighbourhood, accessibility to services, availability of public transport or adequate funding. The study aimed to analyse and quantify the relationship that exists between the asking price of second-hand housing on the market in Alicante and the attributes that characterise them. This was done using a multivariate analysis to estimate a hedonic pricing model by ordinary least squares and a quantile regression to analyse the impact of the characteristics in different price ranges. The results show the segmentation of the prices in the Alicante market, with higher prices in the northern coastal area over the southern and inland comarcas.

scholarly journals Information asymmetry on the market of non-banking financial services in Ukraine: causes, consequences, methods of control

2016 ◽  
Vol 5 (1) ◽  
pp. 29-37 ◽  
Author(s):  
Valentyna Levchenko ◽  
Myroslav Ostapenko
Keyword(s):  
Moral Hazard ◽  
Information Asymmetry ◽  
Adverse Selection ◽  
Financial Services ◽  
Opportunistic Behavior ◽  
Information Asymmetries ◽  
Key Participants ◽  
The Impact ◽  
Methods Of Control

The article examines the features of the impact of information asymmetry on the key participants of the market of non-banking financial services in Ukraine. It defines the basic reasons of its existence on the market. The analysis of the consequences of information asymmetry for the functioning of non-banking financial services in Ukraine shows that it creates the conditions for opportunistic behavior and leads to adverse selection and moral hazard on the market. Based on the research of existing methods and approaches to the reduction of information asymmetries the paper offers recommendations to overcome this problem on the market of non-banking financial services in Ukraine

Zinc Depletion Increases Readmission in Older Patients: An Example of Interactions Between Nutrition and Disease

2017 ◽  
Vol 87 (1-2) ◽  
pp. 10-16 ◽  
Author(s):  
Salah Gariballa ◽  
Awad Alessa
Keyword(s):  
Nutritional Status ◽  
Inductively Coupled Plasma ◽  
Older Patients ◽  
Controlled Trial ◽  
Prognostic Indicators ◽  
Hospitalised Patients ◽  
Increased Risk ◽  
Co Morbidity ◽  
The Impact ◽  
Poor Nutrition

Abstract. Background: ill health may lead to poor nutrition and poor nutrition to ill health, so identifying priorities for management still remains a challenge. The aim of this report is to present data on the impact of plasma zinc (Zn) depletion on important health outcomes after adjusting for other poor prognostic indicators in hospitalised patients. Methods: Hospitalised acutely ill older patients who were part of a large randomised controlled trial had their nutritional status assessed using anthropometric, hematological and biochemical data. Plasma Zn concentrations were measured at baseline, 6 weeks and at 6 months using inductively- coupled plasma spectroscopy method. Other clinical outcome measures of health were also measured. Results: A total of 345 patients assessed at baseline, 133 at 6 weeks and 163 at 6 months. At baseline 254 (74%) patients had a plasma Zn concentration below 10.71 μmol/L indicating biochemical depletion. The figures at 6 weeks and 6 months were 86 (65%) and 114 (70%) patients respectively. After adjusting for age, co-morbidity, nutritional status and tissue inflammation measured using CRP, only muscle mass and serum albumin showed significant and independent effects on plasma Zn concentrations. The risk of non-elective readmission in the 6-months follow up period was significantly lower in patients with normal Zn concentrations compared with those diagnosed with Zn depletion (adjusted hazard ratio 0.62 (95% CI: 0.38 to 0.99), p = 0.047. Conclusions: Zn depletion is common and associated with increased risk of readmission in acutely-ill older patients, however, the influence of underlying comorbidity on these results can not excluded.

Thrombophilia and risk of VTE recurrence according to the age at the time of first VTE manifestation

VASA ◽  
2015 ◽  
Vol 44 (4) ◽  
pp. 313-323 ◽  
Author(s):  
Lea Weingarz ◽  
Marc Schindewolf ◽  
Jan Schwonberg ◽  
Carola Hecking ◽  
Zsuzsanna Wolf ◽  
...  
Keyword(s):  
Factor V Leiden ◽  
Cox Proportional Hazards ◽  
First Episode ◽  
Factor V ◽  
Factor V Leiden Mutation ◽  
Younger Patients ◽  
Risk Of Recurrence ◽  
G20210a Mutation ◽  
Increased Risk ◽  
The Impact

Abstract. Background: Whether screening for thrombophilia is useful for patients after a first episode of venous thromboembolism (VTE) is a controversial issue. However, the impact of thrombophilia on the risk of recurrence may vary depending on the patient’s age at the time of the first VTE. Patients and methods: Of 1221 VTE patients (42 % males) registered in the MAISTHRO (MAin-ISar-THROmbosis) registry, 261 experienced VTE recurrence during a 5-year follow-up after the discontinuation of anticoagulant therapy. Results: Thrombophilia was more common among patients with VTE recurrence than those without (58.6 % vs. 50.3 %; p = 0.017). Stratifying patients by the age at the time of their initial VTE, Cox proportional hazards analyses adjusted for age, sex and the presence or absence of established risk factors revealed a heterozygous prothrombin (PT) G20210A mutation (hazard ratio (HR) 2.65; 95 %-confidence interval (CI) 1.71 - 4.12; p < 0.001), homozygosity/double heterozygosity for the factor V Leiden and/or PT mutation (HR 2.35; 95 %-CI 1.09 - 5.07, p = 0.030), and an antithrombin deficiency (HR 2.12; 95 %-CI 1.12 - 4.10; p = 0.021) to predict recurrent VTE in patients aged 40 years or older, whereas lupus anticoagulants (HR 3.05; 95%-CI 1.40 - 6.66; p = 0.005) increased the risk of recurrence in younger patients. Subgroup analyses revealed an increased risk of recurrence for a heterozygous factor V Leiden mutation only in young females without hormonal treatment whereas the predictive value of a heterozygous PT mutation was restricted to males over the age of 40 years. Conclusions: Our data do not support a preference of younger patients for thrombophilia testing after a first venous thromboembolic event.

Sign in / Sign up

Export Citation Format

Share Document