Papers by JAVIS E B U A OTIA
< Abstract > This study addresses one of the ongoing issues in contemporary finance, which invest... more < Abstract > This study addresses one of the ongoing issues in contemporary finance, which investigates financial aspects on the levels of the chaebol firms' cash hoardings in the domestic capital market. To specify, it may be imperative to search for an optimal level of cash holdings for the domestic firms as well as identifying any changes or trend on the factors to determine the corporate cash reserves in the post-era of the global financial turmoil, taking into account the fact that interest parties at the government and corporate levels, still seem to have a controversy or debate on excess cash savings which may be fundamentally affected or theorized by the rationale of the 'precautionary' and 'transactional' motives. Three hypotheses were postulated and empirically tested for the chaebol firms in the study, such as any transitional changes of the relevant factors on cash holdings, unique attributes of financial factors discriminating between the different type of domestic bourses, and finally any existence of 'optimal' level of corporate cash hoardings, as discussed in sequence.
In this article, we develop a bankruptcy prediction model for Korean firms that utilize logit reg... more In this article, we develop a bankruptcy prediction model for Korean firms that utilize logit regression. We find that not only financial accounting ratios but equity market inputs and macro-economic variables are also important predictors of bankruptcy. However, unlike the findings in Campbell et al. , using market value of equity in computing total assets did not improve the model. We compare the model with a Merton type structural model and find that our model demonstrates a higher prediction power in distinguishing distressed firms from healthy firms. Though our model proves to perform better, we are careful to make a conclusion and rather suggest to use several models for the purpose of risk management to reduce model risk.
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Papers by JAVIS E B U A OTIA
Drafts by JAVIS E B U A OTIA