Stock Market Liberalisation and Cost of Equity: Firm-level Evidence from Malaysia

Foong, Swee-Sim; Lim, Kian−Ping

doi:10.21315/aamjaf2016.12.s1.2

Cited by 3 publications

(1 citation statement)

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“…Regarding the impact of cash flow, capital account liberalization on investment growth of sampled firms in table 1 and 2, the results show that some the variable met the expected sign and some were also statistically significant these thus corroborating the results from earlier papers (Okungbowa, 2021;Chari & Henry, 2003;Shrestha & Chowdhury, 2005;Alfaro & Charlton, 2006;Noy & Vu, 2007;Asiedu & Gyimah-Brempong, 2008;Sarode, 2012;Okada, 2013;and Mouna & Mondher, 2015). But, they contrast the results of (Bascom, 1994;Montiel & Reinhart, 1999;Lee, 2003;Asiedu & Lien, 2004;Bankole & Ayinde, 2014;Adegbite & Adetiloye, 2013;and Foong & Lim, 2016).…”

Section: Discussionmentioning

confidence: 84%

Cash Flow and Capital Account Liberalization on some Nigerian Firms’ Investment Growth: The Sequel (Disaggregated Approach)

Okungbowa

Monye-Emina

Oyefusi

2022

jeb

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This study examined the impact of cash flow, capital account liberalization (CAL) on investment growth of firms from both the direct and indirect channels, using the disaggregated firm-level data of 44 tradable and 31 non-tradable firms for the period of 2006 to 2016. It employed the differenced dynamic panel regression technique. Among others the results revealed that CAL is positively but insignificantly related to investment growth, and investment growth appeared to be determined by cash flow (internal) thereby indicating the presence of financial constraint for both samples. However, when we compared the level of financial constraint of the tradable and non-tradable firms, judging by the magnitude of the coefficients of cash flows in both samples, non-tradable firms were found to be severely financially constrained. The study also determined that CAL appeared to be sensitive to investment growth for both firm types through the indirect route, precisely the capital/credit availability channel measured as cash flow. The level of capital openness is still low for tradable firms hence the need for more but monitored openness.

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Section: Discussionmentioning

confidence: 84%

Cash Flow and Capital Account Liberalization on some Nigerian Firms’ Investment Growth: The Sequel (Disaggregated Approach)

Okungbowa

Monye-Emina

Oyefusi

2022

jeb

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Foreign Ownership and Stock Return Volatility in Vietnam: the Destabilizing Role of Firm Size

Suzuki

Vuong

et al. 2019

OMEE

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This study aims to examine the relevance of foreign ownership to stock return volatility in the Vietnam stock market over ten years (2008 -2017). After applying the fixed effects regressions and the extended instrumental variable regressions with fixed effects, we find that foreign ownership decreases the volatility of stock returns. However, the stabilizing impact of foreign ownership on stock return volatility becomes weaker in large firms since the coefficient of the interaction term between firm size and foreign ownership turns out to be significantly positive. The estimated results remain robust when we use the future one-year volatility, other than the current one, as an alternative measure of the dependent variable.

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Cash Flow and Profit Impact on Capital Account Liberalization-Investment Growth Nexus in Nigeria: An Aggregated Firm Case

Okungbowa

2021

Economics and Business

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The article examines the firm’s investment growth effect following capital liberalization and financial constraints. It employs firm-level aggregated data of 80 firms for the period of 2006 to 2016. Employing the differenced dynamic panel regression technique, the analysis has revealed among others that investment growth appears to be significantly determined by cash flow (internal), thereby indicating the presence of profound financial constraint among firms in all industries. Second, the capital account liberalization appears to drive investment more through the indirect channel (capital/credit availability channel proxied by cash flow). Third, capital account liberalization-investment growth nexus appears to be less sensitive and significant with high profitability. This could be attributed to “profit flight” or repatriation of profit by foreign investors who may not necessarily prefer ploughing back of profit, which has implication for further expansion of investment among firms. This suggests that the level of capital openness is still low; hence, there is a need for further liberalization of the capital account with some mandate of profit ploughing back.

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Stock Market Liberalisation and Cost of Equity: Firm-level Evidence from Malaysia

Abstract: ABSTRACT

Cited by 3 publications

References 50 publications

Cash Flow and Capital Account Liberalization on some Nigerian Firms’ Investment Growth: The Sequel (Disaggregated Approach)

Cash Flow and Capital Account Liberalization on some Nigerian Firms’ Investment Growth: The Sequel (Disaggregated Approach)

Foreign Ownership and Stock Return Volatility in Vietnam: the Destabilizing Role of Firm Size

Cash Flow and Profit Impact on Capital Account Liberalization-Investment Growth Nexus in Nigeria: An Aggregated Firm Case

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