Paul Moon Sub Choi
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6 publications
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Sentiment, growth and value investments: evidence from Korean Stock Listings
Investment Management and Financial Innovations Volume 12, 2015 Issue #3 (cont.) pp. 142-148
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Why do firms hold cash? Evidence from Korean stock listings
Investment Management and Financial Innovations Volume 13, 2016 Issue #3 (cont. 2) pp. 311-321
Views: 981 Downloads: 716 TO CITECorporate governance and the availability of external financing can be important determinants of corporate cash holdings. In this research, in line with Opler et al. (1999), the authors find that Korean firms’ cash holdings are affected by firm-level characteristics including firm size, leverage, market to book, cash flow ratio, net working capital, and cash flow volatility in addition to corporate governance. Rather than agency-prone, the authors can ascribe the increase in cash holdings to the precautionary corporate demand for cash (Campbell et al., 2001). The authors also report that operating risks stemming from cash flow volatility, unavailability of external finance, credit rating downgrades, etc., may be associated with precautionary corporate demand for cash. Lastly, it is documented that corporate governance proxied for by block and/or insider ownership stakes is inversely associated with corporate cash holdings.
Keywords: demand for money, corporate governance, corporate cash holding.
JEL Classification: G39, E41, G34 -
How does corporate governace pay off? Evidence from Korean stock listings
Paul Moon Sub Choi , Joung Hwa Choi , Mookyong Son doi: http://dx.doi.org/10.21511/imfi.13(4-1).2016.08Investment Management and Financial Innovations Volume 13, 2016 Issue #4 (cont.) pp. 225-230
Views: 1143 Downloads: 511 TO CITECorporate governance is an envelope for the mechanisms, processes and relations through which corporations are controlled and guided. Consequently, corporate governance affects operational performance and, in turn, stock returns, as Gompers et al. (2003) find. In this research, we use the Korea Corporate Governance Stock Price Index (KOGI) to test a possible linkage between corporate governance and shareholder wealth in Korea.Factor mimicking portfolios sorted per KOGI are constructed to estimate a corporate governance risk factor (“good minus bad”). By augmenting this new factor to the existing factor models (Fama and French, 1993; Carhart, 1997) to fit multiply imputed data, we find evidence that corporate governanceinfluences stock pricing in Korea.
Keywords: CG; Risk factor; Factor-mimicking portfolio; Long-short portfolio; Multiple imputation.
JEL Classification: G11, G12, G34, C11 -
Does insurance hedge macro volatility? Global evidence
Paul Moon Sub Choi , Won Young Chae , Joung Hwa Choi , Young Bin Han doi: http://dx.doi.org/10.21511/imfi.14(2-2).2017.02Investment Management and Financial Innovations Volume 14, 2017 Issue #2 (cont. 2) pp. 307-315
Views: 1128 Downloads: 286 TO CITE АНОТАЦІЯInsurance is known in the literature as a contribution to economic growth. In our cross-country analysis, we found out that insurance density also appears to subdue macro volatility. In other words, an overall expansion of insurance coverage in an economy cushions aggregate risks. This empirical inference remains robust to controlling for other covariates known to co-move with economic activities. Given that the contribution of insurance to economic growth is more impactful in developing countries than in industrialized economies, not only this result is appealing to economic intuition, but also extends the claims in the existing researches.
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Do corporate governance and culture matter in cross-border acquisitions? Some Chinese evidence
Won Young Chae , Jinho Byun , Paul Moon Sub Choi , Ruilin Yang doi: http://dx.doi.org/10.21511/imfi.15(1).2018.09Investment Management and Financial Innovations Volume 15, 2018 Issue #1 pp. 90-105
Views: 1335 Downloads: 188 TO CITE АНОТАЦІЯThe Chinese market for corporate control has recently gained much academic attention. This research constructs a sample of 159 cross-border acquisitions made by 123 Chinese firms between 2010 and 2014 and relates the roles of governance and culture to the wealth effects of mergers. First, the shareholders of Chinese bidders experience gains upon the announcement of overseas mergers. Second, country- and firm-level governance notably affects the cumulative abnormal returns of Chinese acquirers. Lastly, and however, the cultural distance per Hofstede’s (1980) four cultural dimensions does not appear to be a significant factor in determining the shareholder wealth of Chinese purchasers.
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Do firms park capital? Evidence from the U.S. manufacturing sector
Investment Management and Financial Innovations Volume 15, 2018 Issue #2 pp. 194-202
Views: 1032 Downloads: 119 TO CITE АНОТАЦІЯThis study uses the “cost of carry” (CoC) measure to identify the motive for corporate cash holdings. Based on the historical, moving-average holdings of currency and liquid assets, the measure represents the net opportunity cost of corporate demand for money. This study finds that large manufacturing firms in the U.S. park their capital in short-term assets appealing to the agency motive for cash holdings. Because dividend-paying firms can choose to distribute their capital to equity shareholders when their investment opportunities are unfavorable, these firms might show a non-positive association between capital expenditure and the CoC measure, championing the transactions motive. Still, dividend-paying large firms exhibit an overall positive correlation, suggesting that they park their capital on the agency motive. A detailed literature review and discussions are followed.
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