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 prediction of the pecking order theory in an emerging capital market.
Large French banks have restructured over the last two decades responding to the evolution of the French banking system, European union integration, and globalization. Using financial time‐series and cross‐sectional data of three major French banks (Societe Generale, BNP Paribas, and Credit Lyonnais) from 1993 to 1999, this paper analyzes their performance. Our findings indicate that the French banks’ performance (return on equity capital ratio) was influenced negatively by total assets, the efficiency ratio, the Tier‐1 capital ratio, and loan loss provisions, but not at all influenced by non‐interest income (contrary to our hypothesis). When the French banks were compared their global counterparts, common factors explaining the performance of these banks are efficiency and total assets in at least 3 of the 6 countries.
This study examines bank practices of corporate loan pricing in the Asia‐Pacific region. We find that the all‐in‐spread for loans (mostly term loans with longer maturities) in the Asia‐Pacific region are significantly smaller than those in the US. In addition, foreign banks tend to price their loans favorably in the Asia‐Pacific region, while foreign banks in the US have a higher loan spread. This finding indicates that foreign banks foster more competitive loan pricing in the Asia‐Pacific region, while foreign banks in the US seem to experience a competitive disadvantage compared to domestic lenders.
During the 1990’s, two simultaneous phenomena had converged, greatly changing the financial services industry in Thailand. At the national level, Thai banks had to restructure in response to the financial reforms implemented as a result of the financial crisis of 1997. At the global level, large multinational banks were taking advantage of worldwide, financial deregulation and rapid technological advances by offering a full range of financial products and services in order to fiercely compete, both domestically and globally. Using quarterly financial time-series data of domestic and foreign banks in Thailand from 1997 to 2003, this paper seeks to analyze the cause of their efficiency. The findings indicate that both the efficiency ratio and loan loss provisions influenced the negative performance of domestic banks, while only loan loss provisions had negatively influenced the performance of foreign banks.
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