HOW BANK LOANS ARE PRICED: A COMPARATIVE STUDY BETWEEN ASIA AND WESTERN EUROPE

Tosporn Chotigeat,Maretno A Harjoto,Ha Chin Yi People&Global Business Association 2008 Global Business and Finance Review Vol.13 No.2

Syndicated loan volume has grown tremendously not only domestically but also internationally. This empirical study compares loan pricing between two important segments of the global financial market, Asia and Europe, using pooled GLS regression analysis on data of 3,425 service loans over the 17-year period from 1990 to 2006. On average, loan spread in Asia are narrower. although loan fees are larger. All-in-spreads (the sum of loan spread and loan fees) are comparable, so lenders may earn income competitively across continents, but Asian lenders favor more upfront fees over a continuous stream of interest income Information asymmetry and agency cost are common factors on both continents, although the degree-of-information problem varies. The proportion of' secured loans is higher in Asia. a fact which may be a manifestation of borrowers' credit risk. Interestingly. European loans are more heavily used to finance higher levels of moral hazard, i.e., severe events such as leverage buyouts (LBO).

HAVE ASIAN BANKS RECOVERED FROM THE FINANCIAL CRISIS AND RETURNED TO PROFITABILITY?: EVIDENCE FROM THAI BANKS

T Chotigeat People&Global Business Association 2007 Global Business and Finance Review Vol.12 No.3

COMOVEMENT OF ASIA-PACIFIC AND MAJOR STOCK MARKETS

T Chotigeat,Pochara Theerathorn,David J Kim People&Global Business Association 1996 Global Business and Finance Review Vol.1 No.1

This paper investigates the comovement of Asia-Pacific and major stock markets (a total of seven developed as well as emerging markets) with the cointegation test and error-correction modeling, using daily market index data from January 1988 to April 1992. Similar to previous studies, all markets show the presence of unit roots for non-stationarity (efficient market in the weak sense). Appearing in the system is only one cointegrating vector-one linear combination of the seven market indices constituting a stable interrelationship. However, when the equilibrium relationship is employed, the resultant models exhibit a stronger tendency toward autoregressivity than the error-corrective representation. The results seem to indicate that Asia-Pacific and major stock markets are neither completely integrated nor entirely segmented and thus warrant investors' utilization of an international capital market diversification strategy.

THE CAPITAL STRUCTURE OF ASIAN FIRMS

I M Pandey,T Chotigeat People&Global Business Association 2006 Global Business and Finance Review Vol.11 No.1

Although extensive empirical studies have been conducted on capital structure in the context of developed countries, few have been carried out on emerging markets using large pools of data with comprehensive modeling techniques. This paper examines the financial characteristics of Malaysian companies and their debt policies using data of 106 firms from 1992 to 1999. The results of pooled GLS regressions show that all types of debt (short-term, long-term, and total) are influenced by the variables for profitability, size, and tangibility--but not by growth, risk, and investment opportunity (market-to-book-value ratio). Thus, the latter results are contrary to evidence from developed markets. However, when the data are classified into two sub-periods, only in the first (1992-95) does the risk variable reveal the hypothesized positive influence on all debt ratios, reflecting Malaysia 's economic uncertainty in the throes of the Asian financial crisis and implementation during the second sub-period (1996-99) of the domestic capital control policy. Profitability has a persistent and consistent negative relationship with all types of debt ratios in both periods; this confirms the capital structure.

CORPORATE LEVERAGE AND FUTURE GROWTH: EVIDENCE FROM INDONESIA'S EMERGING CAPITAL MARKET

J Barry Lin,T Chotigeat,Bing sheng Yi People&Global Business Association 2004 Global Business and Finance Review Vol.9 No.2

This study investigates the relationship between leverage and future corporate growth, using a ten-year sample of Indonesian firms. The leverage effect is found to be insignificant for the overall sample, unlike the earlier findings by Lang et al. (1996) for firms in a well-developed market such as the U.S. However, when firms are sorted by size and Tobin's q, only the small low-q firms indicate a statistically significant negative effect of leverage on future corporate growth. This is evidence consistent with the fact that the Indonesian economy has been dominated by large firms which have better access to capital markets, and also that small firms with high growth potential do not suffer from debt-overhang, although small firms with low growth potential do.

DOES GROWTH CAUSE INFLATION IN EAST ASIA?: EMPIRICAL EVIDENCE FROM SIX COUNTRIES, 1975-99

Dang T Tran,T Chotigeat 사람과세계경영학회 2002 Global Business and Finance Review Vol.7 No.2

The causative chain between growth and inflation has been rigorously postulated and analyzed in several disparate theories. Nevertheless. evidence to support it has been mixed. This paper endeavors empirically to shed more light on this relationship by testing it with pooled data during a 25-year period on six East Asian countries. an area known for its astoundingly rapid economic growth and industrialization. By the Granger-causality test. growth was found to cause inflation for Thailand and Indonesia while the same cannot be said of Korea, Malaysia. Singapore, and the Philippines. As to the reverse causation between inflation and growth. only Indonesia exhibits the phenomenon, indicating how inflation influences captial accoumulation (both physical and human). However, when panel data are used in various estimating models (OLS, GLS, SUR). growth is found to cause inflation in these countries while the reverse is seriously in doubt.

OVERREACTION AND SHORT-TERM MARKET FACTORS IN THE INTEREST RATE FUTURES MARKETS

J Barry Lin,T Chotigeat People&Global Business Association 2000 Global Business and Finance Review Vol.5 No.2

Evidence of stock price overreaction is well documented in most stock markets, but it is quite limited in interest rate futures markets. This paper empirically investigates whether and to what degree, overreaction in interest rate future markets is influenced by recent information (short-term market factors). Using daily data from the interest rates of Eurodollar futures and U.S. T-bond futures, some degree of overreaction was found to be related to short-term market factors. These results have important implications for practitioners, i.e., the opportunity to gain abnormal returns by adopting a "contrarian" investment strategy. For hedgers, transactions are better conducted in days with normal levels of trading activity, as measured in terms of trading volume, intraday volatility, and market movement. On the contrary, professional traders, arbitrageurs, and speculators would find it more attractive to concentrate on days with abnormal levels of trading activity to exploit the larger degree of inefficiency in prices.

THE GOLD AND SILVER FUTURES MARKETS: AN ANALYSIS OF SHORT-TERM PRICE REVERSAL BEHAVIOR

J Barry Lin,T Chotigeat,Amy Ho People&Global Business Association 2003 Global Business and Finance Review Vol.8 No.2

Many studies of stock markets provide evidence of overreaction and price reversals. Using a contrarian-trading scheme, this study provides evidence that price reversals in the gold and silver futures markets are related to information flow, change in trading volume, and intraday volatility. A larger information flow is associated with larger price reversals. Large price reversals also tend to occur on days with lower trading volume and days with a sharp change in trading volume from the prior day. Negative market movements are associated with larger price reversals than positive market movements. Larger price reversals also tend to occur on days with high intraday volatility.

BOARD STRUCTURE AND AGENCY COSTS

Bing sheng Yi,Chia Wei Chen,T Chotigeat People&Global Business Association 2007 Global Business and Finance Review Vol.12 No.1

Several features are used to measure board structure: board size. leadership. inside director ownership. outside director ownership, and proportion of outside directors. Among these features. only inside director ownership significantly affects agency costs. and its effect is non-linear. In addition, the paper shows that small firms tend to have lower agency costs than large firms when the CEO also acts as chairperson of the board. Direct evidence on the relationship between hoard structure and agency costs is provided: the findings have important implications to shareholders and policy makers

APPRAISING INVESTMENTS IN COMMON SHARES: THE CASE OF MALAYSIA

Shamsher Mohamad,Annuar Md Nassir,T Chotigeat People&Global Business Association 1998 Global Business and Finance Review Vol.3 No.2

This paper is an attempt to provide some insight into the methods used by investment analysts in brokerage firms in the emerging capital market of Malaysia to appraise the value of ordinary shares before advising their clients. A postal questionnaire survey was conducted in 1996 to obtain the relevant research information from investment analysts representing all 58 brokerage houses in Malaysia. The empirical results indicate that although the principal technique used by Malaysian investment analysts is fundamental analysis (supplemented by technical analysis), a vast majority still practice the "gut feeling" technique and only provide brokerage services to their clients without employing analyst to conduct an analysis of the relevant information. For future research, the question of how the analysts' recommendations regarding a particular share are arrived at must be addressed.