The Effect of Financial Leverage on the Earnings Response Coefficient: Evidence from Australian Stock Market

김요환,김민철 한국회계정책학회 2006 회계와 정책연구 Vol.11 No.1

Studies of factors affecting the earnings response coefficient (ERC) have long been a theme in capital market research. We hypothesize that the ERCs would be larger for low-leverage firms than for high-leverage firms as examined by Dhaliwal, Lee and Fargher (1991). We test this hypothesis by comparing the ERCs according to the level of low-leverage versus high-leverage firms, using a sample of 345 Australian firms during 1991-2000 period. In particular, based upon an option theory of risky debt, the empirical results indicate that the ERCs would be larger for low-leverage firms than for high-leverage firms. Overall, our findings provide directly support to the hypothesis that the ERC is a negative function of the firm's default risk as measured by financial leverage. 본 연구는 지급불능위험(default risk)의 대용변수로서 부채비율(financial leverage)이 이익변동계수(Earnings Response Coefficient: ERC)에 영향을 미치는지를 검증한다. 즉, 부채비율이 높은 기업보다 부채비율이 낮은 기업의 ERC가 크게 나타날 것 이라는 가설을 세운다. 선행연구(Dhaliwal, Lee and Fargher, 1991)에서 검증한 방법을 기초로 1991년부터 2000년까지 부채비율이 높은 기업과 부채비율이 낮은 기업으로 나누어 345개의 호주 상장기업 들을 대상으로 실증분석을 하였다. 본 연구의 분석결과 부채비율이 높은 기업보다 부채비율이 낮은 기업의 ERC가 크게 나타났으며, 아울러 잔차분석 및 'omitted variables'에 대한 검증을 하였다. 결론적으로 default risk는 ERC의 중요한 변수가 될 수 있을 것으로 제시한다.

The Effect of Corporate Debt on Default Risk

김요환 한국국제회계학회 2014 국제회계연구 Vol.0 No.54

The purpose of this study is to examine if there is any systematic relationship between the default risk and financial performance. From analytical results, this study develops the hypothesis by comparing the financial performance between pre-change and post-change period, using a sample of 173 Korean firms that experienced changes in their capital structures through the issue of debt during 2001-2010 period. The empirical results indicate that the financial performance has decreased for the issue of new debt from pre-change to post-change period, but the issue of debt is positively related to the cost of capital. These results hold up even after controlling for the differences in the financial leverage and size between pre-change and post-change period. Overall, the findings provide directly support to the hypothesis that the issue of debt is a negative function of the firm's financial performance as measured by the firm’s profitability( ROA) and WACC.

The Effect of Corporate Governance on Financial Performance: Evidence from Korean Firms

김요환,박준령 한국회계정보학회 2014 회계정보연구 Vol.32 No.4

This paper is to examine if there exists any systematic relationship between corporate governance and financial performance. Based on the argument that corporate governance would play the role of reducing the agency cost producing by the separation of ownership, this study hypothesized that corporate governance would improve the firms’ financial performance. Specifically, the firms with high corporate governance are predicted to have higher profitability and firm value than those with the firms of lower corporate governance. This study examined theses hypotheses, using a sample of 5,343 on Korean firms over nine-year period (2004-2012). An index published by Korean Corporate Governance Service (KCGS) was used as the measure of corporate governance performance. The results of this study find that the firms with high corporate governance performance exhibit better financial performance as measured by return on asset(ROA) and Tobin’s Q. These results are robust across different measures of variables and testing methodologies.

The Relationship between Financial Leverage and Beta on Equity Valuation Model

김요환 한국회계정책학회 2008 회계와 정책연구 Vol.13 No.1

Modigliani and Miller's(MM's) second proposition allows us to infer that leverage is directly related to expected returns to equity through its impact on equity beta. Hence, if CAPM is sound, we would not expect to find leverage to be a significant explanatory variable in a multiple regression of returns on earnings, beta and leverage, assuming that the model was otherwise well-specified. The results from a regression of returns on earnings, Beta and leverage following the model show that the coefficient on earnings is of the predicted sign and significant at the one percent level. The coefficients on the Beta and leverage variables are negative and positive respectively, but insignificant. This is only partially consistent with CAPM and MM interpretation, therefore. Modigliani and Miller's(MM's) second proposition allows us to infer that leverage is directly related to expected returns to equity through its impact on equity beta. Hence, if CAPM is sound, we would not expect to find leverage to be a significant explanatory variable in a multiple regression of returns on earnings, beta and leverage, assuming that the model was otherwise well-specified. The results from a regression of returns on earnings, Beta and leverage following the model show that the coefficient on earnings is of the predicted sign and significant at the one percent level. The coefficients on the Beta and leverage variables are negative and positive respectively, but insignificant. This is only partially consistent with CAPM and MM interpretation, therefore.

Default Risk as a Factor affecting the Earnings Response Coefficient : Evidence from South Korean Stock Market

김요환 대한경영학회 2004 大韓經營學會誌 Vol.17 No.6

Studies of factors affecting the earnings response coefficient (ERC) have long been a theme in capital market research. One lesser researched factor suggested in a series of paper by Dhaliwal, Lee and Fargher (1991) as possibly affecting the ERCis the variable of default risk. In particular, based upon an option theory of risky debt, they predicted the issue of debt increasing default risk would be associated with reduced ERCs and redemption of debt decreasing default risk would be associated with increased ERCs. The Korean data is weakly consistent. Issues and redemptions of debt appear to be associated with factors other than default risk and are therefore probably not reliable indicators of that construct. The study discusses possible alternative explanation for the results. 본 연구는 자본구조변동으로 지급불능위험(default risk)이 증감함에 따라 이익변동계수(Earnings Response Coefficient :ERC)에 영향을 미치는지를 검증한다. 선행연구(Dhaliwal and Reynolds, 1994)에서 default risk의 대용변수로서 bond ratings을 사용하였으나 본 연구에서는 1984년부터 1998년까지 새로운 부채의 발행과 기존부채의 상환을 한 186개 한국기업 들을 대상으로 실증분석을 하였다. 즉, 새로운 부채의 발행은 default risk를 증가시켜 ERC를 감소시키고, 반대로 기존부채의 상환은 default risk를 감소시켜 ERC를 증가시키려는 가설을 설정하였다. 본 연구의 분석결과 자본구조변동으로 default risk의 증감에 의한 ERC가 weakly 변동하는 것으로 나타났다. 따라서 앞으로 다른 대용변수로 측정한 default risk와 ERC의 연구가 요구된다.

소화 노즐 내부 다중격벽의 방출구 직경이 방출소음에 미치는 영향

김요환,유한솔,김상원,김윤제 한국유체기계학회 2019 한국유체기계학회 논문집 Vol.22 No.4

Fire extinguishing facilities are built differently depending on the object and purpose of protection. Gaseous extinguishing equipment is generally used to suppress the fire generated by electronic equipment. Electronic equipment is sensitive to vibrational energy. Therefore, the extinguishing ability of the fire extinguishing equipment and the flow noise are considerable factors. However, this subject has not yet been considerably investigated. In this study, the effect of multiple partitions in the fire extinguishing nozzle on the discharge noise was numerically investigated. Further, modified models with diameter ratios of 1.25, 1.0, and 0.75 and a reference model were compared, and the pressure and velocity distributions were graphically depicted using variables. Furthermore, the model with a diameter ratio of 0.75 exhibited a noise level that was approximately 17.54% lower than that exhibited by the reference model.

The Relationship between Corporate Governance and Firm Value -A Comparative Study-

김요환,박준령 차세대컨버전스정보서비스학회 2020 차세대컨버전스정보서비스기술논문지 Vol.9 No.1

This paper mainly discuss about that explain if there exists any relationship between corporate governance and firm value. Based on the prior research that corporate governance would play a role reducing the agency cost producing by the separation of ownership, this study to verify that corporate governance would reduce the firms’ financing cost. Specifically, the firms with high corporate governance are predicted to have higher profitability and firm value measured by Tobin’s Q. This study examined theses hypotheses, using a sample of 5,785 on Korean firms over ten-year period (2004-2013) and a number of 7,777 for the Chinese sample data over. An index published by Korean Corporate Governance Service (KCGS) and a RKS of China were used as the measure of corporate governance. The results of this paper find that the good corporate governance enhance the firm value measured by Tobin’s Q.

The Relationship between Default Risk and Non-Financial Information

김요환 한국국제회계학회 2016 국제회계연구 Vol.0 No.69

The purpose of this paper is to examine whether there is any significant shift in default risk on corporate social responsibility(CSR) as a proxy measure of non-financial information on KOSDAQ firms. Default risk affects virtually every financial contract. Based on the argument that CSR would play the role of reducing conflicts between firms and society, this study hypothesized that corporate social responsibility would be concerned in the firms credit rating as an alternative measure of default risk. Specifically, the firms with higher CSR activities are predicted to have higher credit rating, higher firm values than those with lower CSR activities. This study examined theses hypotheses, using a sample of 448 on Kosdaq firms over three-year period (2010-2012). An ESG(Environment, Social, Governance) index published by Korean Corporate Governance Service (KCGS) was used as the measure of corporate social responsibility. The results of this study find that the firms with high corporate governance performance exhibit better credit rating as a proxy variable of default risk. These results are robust across different measures of variables and testing methodologies.

The Impact of Default Risk on Corporate Social Responsibility: Evidence from Korean Firms

김요환,김민철 한국산업경제학회 2014 산업경제연구 Vol.27 No.5

This paper examines the empirical association between corporate social responsibility(CSR) and default risk. Default risk affects virtually every financial contract. Based on the argument that CSR would play the role of reducing conflicts between firms and society, this study hypothesized that corporate social responsibility would be concerned in the firms’ credit rating as a proxy measure of default risk. Specifically, the firms with higher CSR activities are predicted to have higher credit rating, higher firm values than those with lower CSR activities. This study examined theses hypotheses, using a sample of 1,879 on Korean firms over three-year period (2010-2012). An ESG(Environment, Social, Governance) index published by Korean Corporate Governance Service (KCGS) was used as the measure of corporate social responsibility. The results of this study find that the firms with high corporate governance performance exhibit better credit rating as a proxy variable of default risk. These results are robust across different measures of variables and testing methodologies.

The Effect of Environmental, Social and Governance (ESG) on Credit Ratings: A Comparative Study of Kospi and Kosdaq Firms

김요환 한국경영교육학회 2022 경영교육연구 Vol.37 No.6

[Purpose]This paper investigates the relationship between environmental, social and governance (ESG) and the credit ratings in a comparative study using Kospi and Kosdaq firms. [Methodology]Based on the argument that ESG practices would benefit shareholders by reducing firms’ risk, measured using the lower partial moment and value at risk, this study hypothesized that ESG practices would affect the credit ratings. This study examined the effect of ESG practices on the credit ratings using a large sample of Korean Kospi and Kosdaq firms over 10-year period (2012-2021). An ESG(Environment, Social, Governance) index published by Korean Corporate Governance Service (KCGS) was used as the measure of ESG information. [Findings]The results of this study found that the firms with ESG practices show the positive on the credit ratings. The coefficient of ESG with Kospi firms was positive and significant at the one percent level and higher than those with Kosdaq firms. [Implications]This presents that the effect of ESG on credir rankings in Kospi firms is larger than those in Kosdaq firms. The results of this paper were robust across different measures of variables and testing methodologies.