ijcrb.com INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS OCTOBER 2014 VOL 6, NO 6
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- Juliet Marsh
- 8 years ago
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1 T h e r e l a t i o n s h i p b e t w e e n m e a s u r e s o f c o r p o r a t e g o v e r n a n c e a n d b a n k l o a n s as c a p i t a l s t r u c t u r e 1 - G h a s e m R a y a t i S h a v a z i, d e p a r t m e n t o f a c c o u n t i n g, K h o r a s a n R a z a v i S c i e n c e a n d R e s e a r c h B r a n c h, N e y s h a b u r, I r a n 2 - D r M o h a m m a d R e z a S h o r v a r z i ( c o r r e s p o n d i n g a u t h o r ), F a c u l t y m e m b e r o f K h o r a s a n R a z a v i S c i e n c e a n d R e s e a r c h B r a n c h, I s l a m i c A z a d U n i v e r s i t y, N e y s h a b u r, I r a n D e p a r t m e n t o f a c c o u n t i n g, K h o r a s a n R a z a v i S c i e n c e a n d R e s e a r c h B r a n c h, I s l a m i c A z a d U n i v e r s i t y, N e y s h a b u r, I r a n A b s t r a c t T h i s r e s e a r c h e x a m i n e s t h e a s s o c i a t i o n b e t w e e n C o r p o r a t e G o v e r n a n c e M e c h a n i s m s & B a n k l o a n s. P r i o r r e s e a r c h s u g g e s t s s h o w e d t h a t C o r p o r a t e G o v e r n a n c e i n f l u e n c e o n C a p i t a l S t r u c t u r e. T h i s e s s a y i n v e s t i g a t e s w h e t h e r o f c o r p o r a t e g o v e r n a n c e m e c h a n i s m s a r e c o n s t r a i n e d f r o m P r i n c i p a l s h a r e h o l d e r, I n s t i t u t i o n a l o w n e r s h i p, t h e o w n e r s h i p ofs t a t e - o w n e d e n t e r p r i s e s a n d B a n k l o a n s i s t h e k e y g a u g e o f C a p i t a l S t r u c t u r e. F o r i n v e s t i g a t i n g t h i s r e l a t i o n s h i p ; w e u s e d a t a f o r 9 0 l i s t e d c o m p a n i e s o n T e h r a n S t o c k E x c h a n g e f o r p e r i o d o f I n t h i s r e s e a r c h,, P r i n c i p a l s h a r e h o l d e r, I n s t i t u t i o n a l o w n e r s h i p, t h e o w n e r s h i p o f s t a t e - o w n e d e n t e r p r i s e s a r e t h e M e c h a n i s m s o f C o r p o r a t e G o v e r n a n c e, B a n k l o a n s i s t h e b a s i c g a u g e o f c a p i t a l i n s t r u c t o r. T h e r e s u l t s o f t h i s r e s e a r c h, s h o w s t h a t t h e r e i s n o t a r e a s o n a b l e r e l a t i o n b e t w e e n I n s t i t u t i o n a l o w n e r s h i p a n d B a n k l o a n s. T h e r e i s r e a s o n a b l e r e l a t i o n b e t w e e n, P r i n c i p a l s h a r e h o l d e r, t h e o w n e r s h i p o f s t a t e - o w n e d e n t e r p r i s e s a n d B a n k l o a n s. K e y w o r d s : C a p i t a l S t r u c t u r e, C o r p o r a t e G o v e r n a n c e, B a n k l o a n s, I n s t i t u t i o n a l o w n e r s h i p I n t r o d u c t i o n At a b o u t t h e i m p o r t a n c e o f c o r p o r a t e g o v e r n a n c e a n d i t s i m p a c t on c o m p a n i e s, t h e r e i s a l m o s t a c o n s e n s u s a mo n g e x p e r t s in t h e f i e l d. C o r p o r a t e g o v e r n a n c e c o u l d s i g n i f i c a n t l y COPY RIGHT 2014 Institute of Interdisciplinary Business Research 33
2 a f f e c t the c o m p a n y ' s p e r f o r m a n c e. G o o d c o r p o r a t e g o v e r n a n c e c a n a c t a s a r e d u c i n g a g e n t o f a g e n c y c o s t s t h a t a r i s e i n c o n n e c t i o n w i t h t h e s e p a r a t i o n o f o w n e r s h i p f r o m m a n a g e m e n t. T h e c o r p o r a t e g o v e r n a n c e h a s a c r i t i c a l r o l e in p r e v e n t i n g t h e e x p r o p r i a t i o n o f m i n o r i t y s h a r e h o l d e r s. S t u d i e s c o n d u c t e d h a v e s h o w n t h a t t h e c o r p o r a t e g o v e r n a n c e h a s c u m u l a t i v e e f f e c t on t h e v a l u e f u n c t i o n. H a s a s Y e g a n e ( ) s t a t e s d i f f e r e n t p a t t e r n s o f c o r p o r a t e g o v e r n a n c e s u g g e s t t h a t a s i n g l e a n d s a m e m o d e l w o u l d not w o r k t h e f o r a l l c o u n t r i e s e a c h c o u n t r y b a s e d o n e c o n o m i c, s o c i a l, c u l t u r a l a n d p o l i t i c a l s t r u c t u r e a p p r o p r i a t e p a t t e r n to be a c l o s e.. T s a i a n d G u ( ) r e v i e w e d t h e r e l a t i o n s h i p b e t w e e n i n s t i t u t i o n a l o w n e r s h i p a n d f i r m p e r f o r m a n c e a n d I n d i c a t e d t h a t i n s t i t u t i o n a l i n v e s t o r s h e l p s c o m p a n i e s u n t i l a r i s i n g i s s u e s f r o m r e p r e s e n t a t i o n t h a t a r i s e b e t w e e n t h e m a n a g e m e n t a n d o w n e r s h i p o f t h e c u t. A l w i ( ) d u r i n g h i s i n v e s t i g a t i o n to the c o n c l u s i o n t h a t i n s t i t u t i o n a l s h a r e h o l d e r s a t t h e c o m p a n y i n a l s o a p p e a r s t o i n t h e i n t e r e s t o f m i n o r i t y s h a r e h o l d e r s a n d good c o r p o r a t e g o v e r n a n c e can s o l v e p r o b l e m s r e l a t e d t o s h a r e h o l d e r s a n d m a n a g e r s a n d t o i n c r e a s e t h e i n t e r e s t o f t h e c o m p a n y a n d m i n o r i t y s h a r e h o l d e r s ( M D G s ). L i t e r a t u r e a n d t h e o r e t i c a l f r a m e w o r k A b o r a n d B i e k p e, ( ) s t a t e d t h a t b o a r d m e m b e r s c a n b e c o n s i d e r e d t h e h i g h e s t a u t h o r i t y o n m o s t d e c i s i o n s m a d e b y t h e c o m p a n y o r c o m p a n i e s i n v o l v e d w i l l h a v e d i r e c t s u p e r v i s i o n. W e c a n a l s o c o n s i d e r t h e b o a r d m e m b e r s o f t h e c o m p a n y a s t h e h i g h e s t p o s i t i o n o f t h e c o m p a n y, h a v i n g t h e d i r e c t c o n t r o l a n d h a n d o n t h e m a j o r d e c i s i o n m a k i n g s i n t h e c o m p a n y. W o n g ( ) s h o w e d t h a t t h e r e i s a c l o s e r e l a t i o n b e t w e e n t h e c a p i t a l s t r u c t u r e a n d t h e b o a r d m e m b e r s, t h e i r s c e n e o f r e s p o n s i b i l i t y a n d a l s o t h e m e m b e r s h i p o f t h e c h a i r m a n i n t h e s t r u c t u r e o f t h e b o a r d. G e l l a t l y, G. ( ) s h o w e d t h a t c o m p a n i e s w h o h a v e m o r e e x p e r i e n c e a n d k n o w l e d g e a b o u t t h e d e n s i t y s t r u c t u r e a n d d e b t p r o b l e m s a r e U s e l e s s d e b t a n d t o r e i n v e s t p r o f i t s f r o m i t s o p e r a t i o n s b a c k. B h a d u r i, S ( ) a s t h e y t h e e f f e c t o f p o s s e s s i n g s t a t e c o m p a n i e s a s a n i m p o r t a n t c r i t e r i o n i n c o r p o r a t e g o v e r n a n c e COPY RIGHT 2014 Institute of Interdisciplinary Business Research 34
3 c o u l d n t b e i g n o r e d. T h e r e i s a d i r e c t r e l a t i o n b e t w e e n t h e o w n e r s h i p o f t h e s t a t e c o m p a n i e s a n d t h e d e b t r a t i o w h i c h m e a n s t h e m o r e p o s i t i o n o f t h e s t a t e c o m p a n i e s l e a d s t o i n c r e a s e o f s u p e r v i s i o n f o r t h e c o m p a n y. S y k e s, J ( ) t h e r o l e o f t h e m a i n s t o c k h o l d e r i s a n o t h e r c r i t e r i o n i n c o r p o r a t e g o v e r n a n c e w h i c h h a s a v e r y i m p o r t a n t s u p e r v i s o r y r o l e i n a f i r m. T h e c o m p a n i e s o w n i n g m a i n s t o c k h o l d e r g o t h r o u g h t h e a b s o r b a n c e o f n e w i n v e s t o r s, p a y i n g a t t e n t i o n t o t h e i r s a l e s a n d m a r k e t i n g s y s t e m. S o t h e r e i s a m e a n i n g f u l i n v e r s e r e l a t i o n b e t w e e n t h e i n t e n s i t y o f d e b t s t r u c t u r e a n d t h e m a i n s t o c k h o l d e r. L i t e r a t u r e r e v i e w K u m a r ( ) s t a t e d, d i s t r i b u t i n g t h e s h a r e s b e t w e e n t h e m a n a g e r s a n d f o r m e r a n d n e w s t o c k h o l d e r s h a v e a d i r e c t r e l a t i o n w i t h t h e i n t e n s i t y o f t h e d e b t s t r u c t u r e w h i c h l e a d s t o t h e m o r e s t o c k h o l d e r s s u p e r v i s i o n o n t h e m a n a g e r s. S o t h e h i g h e r d e b t r a t i o i s t h e s i g n o f w e a k e r c o r p o r a t e g o v e r n a n c e a n d l e a d s t o t h e d e c r e a s e o f s t o c k h o l d e r s o w n e r s h i p i n t h e f i r m. I t w a s a l s o s p e c i f i e d t h a t t h e a n a l ys i s o f t h e c o r p o r a t e g o v e r n a n c e s t r u c t u r e a n d i t s e f f e c t s o n t h e c a p i t a l s t r u c t u r e h a s a g r e a t e f f e c t o n t h e w a y o f s e c u r i n g i t s c a p i t a l. Q i a n a n d e t a l. ( ) i n a r e s e a r c h w i t h t h e t i t l e o f c a p i t a l s t r u c t u r e a n d c o r p o r a t e g o v e r n a n c e i n C h i n a c o n c l u d e d t h e s i z e o f t h e c o m p a n y a n d t h e p o s i t i o n s s t r u c t u r e, t a n g i b i l i t y, h a s a p o s i t i v e a n d m e a n i n g f u l r e l a t i o n w i t h t h e d e b t r a t i o. Y u n g b y u n ( ) s c r u t i n i z e d t h e d e b t i n t e n s i t y r a t i o a n d t h e c o r p o r a t e g o v e r n a n c e c r i t e r i a a n d c o n c l u d e d : s u i t a b l e m e t h o d o f c o r p o r a t e g o v e r n a n c e d e c r e a s e s t h e i n f o r m a t i o n a s y m m e t r y o f t h e c o m p a n i e s a n d a l s o d e c r e a s e s t h e d e b t r a t i o o f t h e m. B e s i d e s t h a t t h e e f f e c t o f c o m p a n y s s i z e w a s c o n s i d e r e d d u r i n g t h e r e s e a r c h i n K o r e a a n d s p e c i f i e d t h a t t h e e f f e c t o f c o r p o r a t e g o v e r n a n c e i s b i g g e r o n t h e g r e a t e r c o m p a n i e s. O d e c k a n d S u n d e, ( ) e s t a b l i s h e d a r e s e a r c h i n I n d o n e s i a n w i t h t h e t i t l e o f p r o f i t division and debt ratio and concluded that the main s t o c k h o l d e r s h a v e n e g a t i v e d i r e c t r e l a t i o n w i t h t h e d e b t r a t i o. R a m i z a n d R a o o f. ( ), a c c o r d i n g t o h i s r e s e a r c h w e a t h e r t h e c o r p o r a t e g o v e r n a n c e h a s a n y e f f e c t o n t h e c a p i t a l COPY RIGHT 2014 Institute of Interdisciplinary Business Research 35
4 s t r u c t u r e o r n o t? c o n c l u d e d t h a t t h e r e i s a w e a k p o s i t i v e r e l a t i o n b e t w e e n t h e c a p i t a l s t r u c t u r e a n d c o r p o r a t e g o v e r n a n c e. M e t h o d o l o g y T h e p r e s e n t r e s e a r c h m e t h o d o l o g y a c c o r d i n g t o i t s u s a b l e a i m a n d i t s i m p l e m e n t a t i o n i s d e s c r i p t i v e. A n d a c c o r d i n g t o t h e s c r u t i n i z i n g t h e r e l a t i o n s h i p b e t w e e n t h e v a r i a b l e s i t i s c o r r e l a t i o n. I t i s l o o k i n g f o r t h e r e l a t i o n s h i p b e t w e e n t h e d e b t s t r u c t u r e a n d t h e m e c h a n i s m s o f t h e c o r p o r a t e g o v e r n a n c e. S o a c c o r d i n g to t h e f a c t t h a t, t h a t t h e I n s t i t u t i o n a l s h a r e h o l d e r s, o u t - d i r e c t o r s, t h e a m o u n t o f c o r p o r a t e g o v e r n m e n t I n s t i t u t i o n a l a n d m a j o r s h a r e h o l d e r a r e t h e v a r i a b l e s o f c o r p o r a t e g o v e r n a n c e, a n y o f t h e r e s e a r c h h y p o t h e s e s a r e e v a l u a t e d a c c o r d i n g t o t h e c r i t e r i a a n d t h e i n t e n s i t y r a t i o o f t h e s t r u c t u r e. F i r s t h y p o t h e s e s : " t h e r e i s a s i g n i f i c a n t r e l a t i o n b e t w e e n t h e d e b t s t r u c t u r e a n d t h e I n s t i t u t i o n a l s h a r e h o l d e r s o f t h e f i r m. " S e c o n d h y p o t h e s e s : " t h e r e i s a s i g n i f i c a n t r e l a t i o n b e t w e e n t h e d e b t s t r u c t u r e a n d t h e out- d i r e c t o r s o f t h e f i r m. ' ' T h i r d h y p o t h e s e s : " t h e r e i s a s i g n i f i c a n t r e l a t i o n b e t w e e n t h e d e b t s t r u c t u r e a n d t h e a m o u n t o f c o r p o r a t e g o v e r n m e n t I n s t i t u t i o n a l o f t h e f i r m. " F o r t h h y p o t h e s e s " t h e r e i s a s i g n i f i c a n t r e l a t i o n b e t w e e n t h e d e b t s t r u c t u r e a n d t h e m a i n s h a r e h o l d e r s o f t h e f i r m " I n t h e p r e s e n t r e s e a r c h t h e d a t a h a d b e e n c o l l e c t e d q u a n t i t a t i v e l y, a n d b y t h e m e a n s o f e x i s t i n g i n f o r m a t i o n o f s t o c k a n d s o f t w a r e. A c c o r d i n g t o t h e c a l c u l a t i v e f o r m o f d e b t s t r u c t u r e i n t e n s i t y, d i s t r i b u t i o n s t r u c t u r e i n t e n s i t y a n d t h e t a n g i b i l i t y w e u s e t h e d a t a f r o m t h e f i n a n c i a l s t a t e m e n t s o f t h e c o m p a n i e s p r e s e n t e d b y t h e m i n t h e s t o c k a n d t h e s i t e. I n t h e r e s e a r c h w e u s e d t h e d e s c r i p t i v e s t a t i s t i c s t o d e s c r i b e t h e d a t a a n d f o r t h e a n a l y s i s o f t h e h y p o t h e s i s t h e m u l t i v a r i a t e r e g r e s s i o n t e c h n i q u e s h a d b e e n u s e d. F o r t h e a n a l y s i s o f t h e d a t a t h e S P S S 1 7 w a s u s e d w h i c h p r o m o t e d t h e a c c u r a c y o f t h e r e s u l t s. T h e r e s e a r c h p r o c e s s i n c l u d e s a s s u m p t i o n s o f t h e r e g r e s s i o n m o d e l, s i g n i f i c a n t i n d e p e n d e n t v a r i a b l e s a n d t e s t i n g t h e f i t n e s s o f d a t a o n t h e l i n e a r m o d e l. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 36
5 M a t e r i a l s a n d M e t h o d s T h e a i m o f t h e p r e s e n t s t u d y f u n c t i o n a l a n d i n t e r m s o f i t s i m p l e m e n t a t i o n i s c r o s s. A l s o i n v e s t i g a t i n g t h e r e l a t i o n s h i p b e t w e e n t h e v a r i a b l e s i s c o r r e l a t i o n m e t h o d.. B e c a u s e t h e r e s u l t s c a n b e a p p l i e d i n p r a c t i c e. K i n d o f q u a n t i t a t i v e d a t a a n d i n f o r m a t i o n r e l a t e d t o t h i s d a t a h a s b e e n c o l l e c t e d t h r o u g h c o m p a c t d i s c s o f S t o c k E x c h a n g e. V a r i a b l e s I n d e p e n d e n t V a r i a b l e s A c c o r d i n g t o t h e K u m a r s s t u d y, ( ) a n d c o n s i d e r d i f f e r e n t s t a n d a r d s o f c o r p o r a t e g o v e r n a n c e i n t h i s s t u d y c o n s i d e r e d a n u m b e r o f c r i t e r i a c o r p o r a t e g o v e r n a n c e t h a t i n c l u d e : 1 - I n s t i t u t i o n a l o w n e r s h i p ( s h o w t h e m o s t i m p o r t a n t m e a s u r e s o f c o r p o r a t e g o v e r n a n c e i s c a p i t a l m a r k e t a n d s h a r e h o l d e r s w h o hold m o r e t h a n 5 % s t a k e ) 2 - The o w n e r s h i p of s t a t e - o w n e d e n t e r p r i s e s ( r e p r e s e n t i n g t h e s h a r e o f s t a t e - o w n e d c o m p a n i e s in t h e s t u d i e d c o m p a n i e s ) 3 - P r i n c i p a l s h a r e h o l d e r ( r e p r e s e n t i n g s h a r e h o l d e r s a t l e a s t h a s h a l f s t o c k c o m p a n y plus o n e s h a r e o f t h e c o m p a n y ) T h e d e p e n d e n t v a r i a b l e K u m a r ( ) d u r i n g h i s r e s e a r c h o n t h e r e l a t i o n s h i p b e t w e e n c o r p o r a t e g o v e r n a n c e a n d c a p i t a l s t r u c t u r e, w e r e c o n s i d e r e d b a n k l e n d i n g as o n e o f his d e p e n d e n t v a r i a b l e s a n d b a n k l o a n s a s t h e d e p e n d e n t v a r i a b l e in t h i s s t u d y is i n t e n d e d a n d as a m e a s u r e o f c a p i t a l s t r u c t u r e. W i t h r e g a r d t o t h e i s s u e o f f u n d i n g t h e c o m p a n y c a n b e d o n e t h r o u g h e q u i t y o r d e b t ( b o r r o w i n g ) o r both T h u s, a c c o r d i n g t o m o r t g a g e c o m p a n i e s a s a m e a s u r e o f c a p i t a l s t r u c t u r e c a n a c h i e v e t h e o p t i ma l c a p i t a l s t r u c t u r e i s p o s s i b l e. C o n t r o l v a r i a b l e s V a r i a b l e s t h a t p r o v i d e s a c o n t r o l l e d e n v i r o n m e n t f o r r e s e a r c h i n c l u d e : 1 - S a l e, 2 - E a r n i n g s p e r s h a r e, 3 - R a t i o o f F i x e d a s s e t s t o t o t a l a s s e t s S o c i e t y a n d t h e s t a t i s t i c a l s a m p l e T h e p o p u l a t i o n i s f i r m s l i s t e d i n T e h r a n s t o c k e x c h a n g e e x c e p t, i n v e s t m e n t f i r m s, b a n k s a n d i n s u r a n c e c o m p a n i e s t r a n s i t i o n. O f a l l c o m p a n i e s, 9 0 c o m p a n i e s s c r e e n i n g COPY RIGHT 2014 Institute of Interdisciplinary Business Research 37
6 m e t h o d ( F A ) w a s c h o s e n f r o m a m o n g a l l t h e c o m p a n i e s t h a t h a v e a l l t h e f o l l o w i n g i t e m s w e r e s e l e c t e d as s a m p l e s. T h e s e i n c l u d e : ( 1 ) T h e f i s c a l y e a r o f t h e s t u d i e d c o m p a n i e s e n d t o t h e e n d o f M a r c h. ( 2 ) F i n a n c i a l s t a t e m e n t s f o r a l l y e a r s o f s t u d y a r e a v a i l a b l e. ( 3 ) C o m p a n i e s t h a t are l i s t e d o n t h e S t o c k E x c h a n g e p r i o r to2008. ( 4 ) C o m p a n i e s t h a t h a v e n o t c h a n g e d t h e i r f i s c a l y e a r as t h e i r s h a r e s a r e t r a d e d c o n t i n u o u s l y. ( 5 ) All m a n u f a c t u r i n g c o m p a n i e s h a v e b e e n s t u d i e d a n d i n v e s t m e n t f i r m s, b a n k s a n d i n s u r a n c e c o m p a n i e s h a v e n o t b e e n i n v e s t i g a t e d i n t h e r a n g e. A s s u m p t i o n s ( 1 ) T h e r e w a s a s i g n i f i c a n t r e l a t i o n s h i p b e t w e e n the I n s t i t u t i o n a l o w n e r s h i p a n d t h e b a n k l o a n, t h e r e w a s a s i g n i f i c a n t r e l a t i o n s h i p ( 2 ) T h e r e w a s a s i g n i f i c a n t r e l a t i o n s h i p b e t w e e n the o w n e r s h i p o f s t a t e - o w n e d e n t e r p r i s e s a n d t h e a m o u n t o f b a n k l o a n s ( 3 ) T h e r e w a s a s i g n i f i c a n t r e l a t i o n s h i p b e t w e e n P r i n c i p a l s h a r e h o l d e r a n d the b a n k l o a n H y p o t h e s e s t e s t S t e p s o f t e s t i n g t h e h y p o t h e s i s D e s c r i p t i v e s t a t i s t i c s t o d e s c r i b e t h e d a t a u s e d a n d w e r e u s e d m u l t i p l e r e g r e s s i o n a n d a n a l y s i s o f v a r i a n c e f o r a s s u m p t i o n s a n a l y s i s. A l s o, i n t h i s s t u d y u s e s t a t i s t i c a l s o f t w a r e spss19 f o r d a t a a n a l y s i s a n d i s e x a m i n e d a n d b e r e v i e w e d d u r i n g t h e i n v e s t i g a t i o n s h a l l. 1. C h e c k t h e m o d e l a s s u m p t i o n s 2. T h e s i g n i f i c a n c e o f t h e i n d e p e n d e n t v a r i a b l e s 3. T h e l i n e a r f i t t o t h e d a t a COPY RIGHT 2014 Institute of Interdisciplinary Business Research 38
7 T e s t h y p o t h e s e s m e t h o d P e r f o r m a s t a t i s t i c a l t e s t due to t h e p o s s i b i l i t y t o r e j e c t i o n o r non- r e j e c t i o n c a n b e d e d u c e d s t a t i s t i c a l h y p o t h e s e s. T h e p r o b a b i l i t y o f d a t a c o n s i s t e n c y o f r a n d o m s a m p l e s t a t e s w i t h t h e h y p o t h e s i s H 0. I n o t h e r w o r d s, i f the p r o b a b i l i t y o f a s i g n i f i c a n t l e v e l o f t h e t e s t ( α ) i s g r e a t e r H 0 h y p o t h e s i s i s n o t r e j e c t e d a n d i f t h e l i k e l i h o o d o f a s i g n i f i c a n t l e v e l o f t h e t e s t ( α ) is l e s s H 0 h y p o t h e s i s i s r e j e c t e d. M u l t i v a r i a t e r e g r e s s i o n w a s u s e d to t e s t t h e h y p o t h e s e s t h a t f o l l o w p r o v i d e e l d e r l y : M o d e l ( 1 ) - T h e f i r s t h y p o t h e s i s B a n k l o a n s = α + β 1 ( i n s ) + β 2 ( s a l ) + β 3 ( e p s ) + β 4 ( T a n ) + ε The s i g n i f i c a n t f a c t o r i s t h e I n s t i t u t i o n a l o w n e r s h i p (α_ 1 ) in t h e m o d e l is s t a t i s t i c a l l y s i g n i f i c a n t r e l a t i o n s h i p. B ) T h e s e c o n d h y p o t h e s i s t e s t. T h e r e i s a s i g n i f i c a n t r e l a t i o n s h i p b e t w e e n s t a t e - o w n e d e n t e r p r i s e s a n d b a n k l o a n s, a n d to t e s t t h e h y p o t h e s i s i s u s e d m o d e l ( 2). M o d e l ( 2 ) - T h e s e c o n d h y p o t h e s i s B a n k l o a n s = α + β 1 ( o w n s t a t ) + β 2 ( s a l ) + β 3 ( e p s ) + β 4 ( T a n ) + ε The s i g n i f i c a n t c o e f f i c i e n t f o r s t a t e - o w n e d e n t e r p r i s e s ( α _ 1 ) i n t h e m o d e l is s i g n i f i c a n t r e l a t i o n s h i p C ) T h e t h i r d h y p o t h e s i s T h e r e i s a s i g n i f i c a n t r e l a t i o n s h i p b e t w e e n P r i n c i p a l s h a r e h o l d e r a n d b a n k l o a n a n d t o t e s t t h e h y p o t h e s i s c a n b e u s e d t h e m o d e l ( 3 ) M o d e l ( 3) B a n k l o a n s = α + β 1 ( p r i n s h ) + β 2 ( s a l ) + β 3 ( e p s ) + β 4 ( T a n ) + ε T h e i n d e x o f P r i n c i p a l s h a r e h o l d e r ( α _ 1 ) i n t h e m o d e l is s i g n i f i c a n t r e l a t i o n s h i p. R e s e a r c h f i n d i n g s D e s c r i p t i v e s t a t i s t i c s : i t i s c o n s i s t o f b r a n c h e s, u s i n g f o r t h e b e t t e r d e s c r i p t i o n a n d a n a l y s i s o f t h e d a t a. T h e b r a n c h e s p r o v i d e d b y t h e s o f t w a r e, i n c l u d e : t h e m a x i m u m a n d m i n i m u m f o r s p e c i f y i n g h i g h e s t a n d l o w e s t o b s e r v a t i o n s, m e a n a n d m e d i a n a s t h e c e n t r a l i n d e x e s, s t a n d a r d d e v i a t i o n a n d t h e r a n g e o f v a r i a t i o n s f o r e v a l u a t i n g t h e d i s t r i b u t i o n. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 39
8 LOAN EPS SAL Ins lnloa N lnsal lneps tan Number Average Middle SD Elongationfactor The coefficient ofskewers min max 13.07% 65.57% 28.61% % % % % 82.03% Coefficient of Variation A v e r a g e s a l e s of 1, 5 9 7, a n d t h e s a m p l e s t a n d a r d d e v i a t i o n a r e 4 5 7, units. A s y o u c a n s e e, t h e low e s t n u m b e r o f s a l e s r e c o r d e d i s a n d h i g h e s t i s 7 0, 6 8 3, D u e t o p o s i t i v e s k e w e r s c o e f f i c i e n t e q u a l t o , i t c a n b e s a i d is t h a t t h e d i s t r i b u t i o n is s k e w t o t h e r i g h t o f ( m e a n > m e d i a n > m o d e ). T r a c t i o n c o e f f i c i e n t f o r t h i s v a r i a b l e i s , w h i c h show s t h e v o l u m e a n d t o n e f u r t h e r d i s t r i b u t i o n is a n o r m a l d i s t r i b u t i o n. E l o n g a t i o n f a c t o r w a s a b o u t t h r e e a t n o r m a l l y d i s t r i b u t e d a n d m o s t of t h e c o e f f i c i e n t s i n d i c a t e m o r e s t r a i n a n d, c o n v e r s e l y, t h e l o w e r t h e r a t i o of t h e n u m b e r t h r e e r e p r e s e n t s t h e e l o n g a t i on is l e s s t h a n t h e n o r ma l d i s t r i b u t i o n. T h e c o e f f i c i e n t of v a r i a t i o n f o r e a c h v a r i a b l e r e p r e s e n t s t h e n u m b e r of v a r i a b l e s t h a t a r e not a s s e s s e d on a n d p r o p e r t h e a b i l i t y to c o m p a r e t h e d i s p e r s i o n b e t w e e n v a r i a b l e s. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 40
9 T e s t t h e h y p o t h e s i s H y p o t h e s i z e d m o d e l o f f i r s t, s e c o n d a n d t h i r d T h e r e s e a r c h h y p o t h e s i s i s a s f o l l o w s. " I n s t i t u t i o n a l o w n e r s h i p a n d t h e b a n k l o a n, t h e r e i s a s i g n i f i c a n t r e l a t i o n s h i p. " T o t e s t t h i s h y p o t h e s i s, t h e f o l l o w i n g m o d e l i s e v a l u a t e d a n d d e s c r i b e d t h e r e g r e s s i o n l i n e f i t t e d t o t h e m o d e l. W e h a v e i n t h i s m o d e l ins: I n s t i t u t i o n a l o w n e r s h i p S A L : s a l e : E P S : E a r n i n g s p e r s h a r e T A N : r a t i o o f f i x e d a s s e t s t o t o t a l a s s e t s If a c c e p t e d, t h e r e l e v a n t c o e f f i c i e n t s a r e n o n z e r o, t h e n u l l h y p o t h e s i s i s r e j e c t e d a n d a l t e r n a t i v e h y p o t h e s i s i s a c c e p t e d. T o i n v e s t i g a t e t h e h y p o t h e s i s t h a t a f t e r d e t e r m i n i n g t h e c r o s s - s e c t i o n a l r e g r e s s i o n a n a l y s i s i s b a s e d o n s t a t i s t i c a l t e s t s f o r t h e c o e f f i c i e n t s o f t h e c o m m e n t s, If t h e r e l e v a n t c o e f f i c i e n t s a r e n o n z e r o a c c e p t e d, t h e n u l l h y p o t h e s i s i s r e j e c t e d a n d a l t e r n a t i v e h y p o t h e s i s i s a c c e p t e d. Z s t a t i s t i c s a n d p r o b a b i l i t y v a l u e s w e r e c a l c u l a t e d t o e v a l u a t e t h e i r a c c e p t a n c e s h o w t h a t t h e p r o b a b i l i t y o f r e j e c t i n g t h e n u l l h y p o t h e s i s v a r i a b l e s i s 9 5 % a n d h i g h e r. A c c o r d i n g t o t h e i n f o r m a t i o n b e l o w c a n b e c o n c l u d e d t h a t t h e r e l i a b i l i t y o f s o m e v a r i a b l e s u s e d i n t h i s s t u d y i s 9 5 p e r c e n t c o u l d n o t b e r u l e d. HARDI TEST P-VALUE STAT BANK LOAN P-vaLue df1,df F COPY RIGHT 2014 Institute of Interdisciplinary Business Research 41
10 Regression Statistics Significanttest The estimated ofparameters The correlation coefficient The coefficient of determination determinationcoefficient of Adjusted dorbin-watson statistic F- statistic Probability P_value T_value Standard deviation Estimate C Ins LNSAL LNEPS TAN ANOVA p e r f o r m e d on F i s h e r t e s t v a l u e i s l e s s t h a n t h e t a b l e v a l u e is n o t s i g n i f i c a n t m o d e l. J a k o b - s t a t i s t i c t o t e s t t h e a s s u m p t i o n o f n o r m a l i t y f o r t h e r e m a i n i n g v a r i a b l e s i n t h e m o d e l a r e e v a l u a t e d. I f t h e p r o b a b i l i t y v a l u e i s l e s s t h a n ( P r o b ), r e j e c t t h e n u l l h y p o t h e s i s o f n o r m a l i t y o f t h e d e p e n d e n t v a r i a b l e, a n d i f t h e l i k e l i h o o d s t a t i s t i c o f ( l e v e l o f s i g n i f i c a n c e ) i s ( P r o b ), i n d i c a t e s t h e n o r m a l i t y o f t h e d a t a. T h e s e c o n d h y p o t h e s i s mo d e l T h e r e s e a r c h h y p o t h e s i s i s a s f o l l o w s. " T h e r e w a s a s i g n i f i c a n t r e l a t i o n s h i p b e t w e e n s t a t e - o w n e d e n t e r p r i s e s a n d t h e a m o u n t o f b a n k l o a n s. " COPY RIGHT 2014 Institute of Interdisciplinary Business Research 42
11 T o t e s t t h i s h y p o t h e s i s, t h e f o l l o w i n g m o d e l i s a d a p t e d to f i t l i n e a r r e g r e s s i o n m o d e l s t o e v a l u a t e. We have in this model Ownstat :state-owned enterprises SAL: sale EPS:Earnings per share TAN: ratio of fixed assetsto total assets P-value df1,df2 F Correlated Random Effects - Hausman Test Test period random effects Test Summary Chi-Sq. Statistic Chi-Sq. d.f Prob. Period random Ifaccepted, therelevantcoefficients arenonzero, the null hypothesisis rejectedandalternativehypothesisis accepted. T o i n v e s t i g a t e t h e h y p o t h e s i s t h a t a f t e r d e t e r m i n i n g t h e c r o s s - s e c t i o n a l r e g r e s s i o n a n a l y s i s i s b a s e d o n s t a t i s t i c a l t e s t s f o r t h e c o e f f i c i e n t s o f t h e c o m m e n t s, i f t h e r e l e v a n t c o e f f i c i e n t s a r e n o n z e r o a c c e p t e d, t h e n u l l h y p o t h e s i s is r e j e c t e d a n d a l t e r n a t i v e h y p o t h e s i s i s a c c e p t e d. A c c o r d i n g t o t h e r e s u l t s o f t h e f i x e d e f f e c t s or r a n d o m e f f e c t s, o n e c a n not r e j e c t t h e n u l l h y p o t h e s i s t h a t t h e r a n d o m e f f e c t s. T h e r e f o r e, i t i s n e c e s s a r y t h a t t h e m o d e l b e e s t i m a t e d as r a n d o m e f f e c t s. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 43
12 Regression Statistics Significanttest The estimated ofparameters The correlation coefficient The coefficient of determination Determination coefficient of Adjusted dorbin-watson statistic F- statistic Probability P_value T_value Standard deviation estimated C SIZE LNSAL LNEPS TAN ANOVA p e r f o r m e d on F i s h er t e s t v a l u e i s l e s s t h a n t h e t a b l e v a l u e is n o t s i g n i f i c a n t m o d e l. J a k o b - S T A T I S T I C t o t e s t t h e a s s u m p t i o n o f n o r m a l i t y f o r t h e r e m a i n i n g v a r i a b l e s i n t h e m o d e l is e v a l u a t e d. I f t h e p r o b a b i l i t y v a l u e i s l e s s t h a n ( P r o b ), r e j e c t t h e n u l l h y p o t h e s i s o f n o r m a l i t y o f t h e d e p e n d e n t v a r i a b l e, a n d i f t h e l i k e l i h o o d s t a t i s t i c o f ( l e v e l o f s i g n i f i c a n c e ) i s ( P r o b ), i n d i c a t e s t h e n o r m a l i t y o f t h e d a t a E x a mi n e t h e t h i r d h y p o t h e s i s T h e r e s e a r c h h y p o t h e s i s is a s f o l l o w s : P r i n c i p a l s h a r e h o l d e r a n d t h e b a n k l o a n, t h e r e i s a s i g n i f i c a n t r e l a t i o n s h i p. " COPY RIGHT 2014 Institute of Interdisciplinary Business Research 44
13 T o t e s t t h i s h y p o t h e s i s, t h e f o l l o w i n g m o d e l i s a d a p t e d t o f i t l i n e a r r e g r e s s i o n m o d e l s t o e v a l u a t e. We have in this model prinsh :Principal shareholder SAL: sale: EPS: Earnings per share TAN: ratio of fixed assetsto total assets If accepted, the relevant coefficients are non zero, the null hypothesis is rejected and alternative hypothesis is accepted. T o i n v e s t i g a t e t h e h y p o t h e s i s t h a t a f t e r d e t e r m i n i n g t h e c r o s s - s e c t i o n a l r e g r e s s i o n a n a l y s i s i s b a s e d o n s t a t i s t i c a l t e s t s f o r t h e c o e f f i c i e n t s o f t h e c o m m e n t s, i f t h e r e l e v a n t c o e f f i c i e n t s a r e non z e r o a c c e p t e d, t h e n u l l h y p o t h e s i s is r e j e c t e d a n d a l t e r n a t i v e h y p o t h e s i s i s a c c e p t e d. P-vaLue 0/00310 df1,df F Correlated Random Effects - Hausman Test Test period random effects Test Summary Chi-Sq. Statistic Chi-Sq. d.f. Prob. Period random COPY RIGHT 2014 Institute of Interdisciplinary Business Research 45
14 A c c o r d i n g t o t h e r e s u l t s o f t h e f i x e d e f f e c t s o r r a n d o m e f f e c t s, o n e c a n n o t r e j e c t t h e n u l l h y p o t h e s i s t h a t t h e r a n d o m e f f e c t s. T h e r e f o r e, i t i s n e c e s s a r y t h a t t h e m o d e l b e e s t i m a t e d a s r a n d o m e f f e c t s. Significanttest dorbin-watson statistic F- statistic Probability The estimated ofparameters P_value T_value Standard deviation estimated C DICH LNSAL LNEPS TAN A N O V A p e r f o r m e d o n F i s h e r t e s t v a l u e i s l e s s t h a n t h e t a b l e v a l u e a n d m o d e l isn o t s i g n i f i c a n t. C o n s t r a i n t s I n a l m o s t a l l s t u d i e s, t h e r e a r e l i m i t a t i o n s t h a t v a r y i n s p a c e a n d t i m e r e s t r i c t i o n s, a l t h o u g h t h e r e a r e i n h e r e n t l i m i t a t i o n s i n t h e r e s e a r c h a r e n o t r e l a t e d t o t h e t i m e a n d p l a c e, s o m e o f t h e l i m i t a t i o n s w e f a c e i n t h i s s t u d y a r e a s f o l l o w s : T h e l i m i t a t i o n s o f t h i s s t u d y, i t c a n b e n o t e d t h a t, d i f f e r e n t i n d u s t r i e s a r e n o t e q u a l l y a f f e c t e d b y p o l i t i c a l a n d e c o n o m i c d e v e l o p m e n t s a n d t h e i m p a c t o f t h e s e f a c t o r s o n e a c h i n d u s t r y a r e d i f f e r e n t. U n a b l e t o c o n t r o l t h e c o u n t r y ' s p o l i t i c a l a n d e c o n o m i c c o n d i t i o n s i n s e v e r a l c o n s e c u t i v e y e a r s a s w e l l a s t h e i m p a c t o f v a r i a b l e s s u c h a s t h e g l o b a l e c o n o m i c c r i s i s, r u l e s, r e g u l a t i o n s, e c o n o m i c c o n d i t i o n s, p o l i t i c a l c o n d i t i o n s a n d.... O u t s i d e o f f o r e c a s t s r e s e a r c h e r i s c o n d u c t i n g r e s e a r c h i s on t h e i m p a c t o f r e s e a r c h r e s u l t s. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 46
15 R e c o m m e n d a t i o n s b a s e d o n r e s e a r c h r e s u l t s I t w a s o b s e r v e d ase x p e c t e d, d e s p i t e t h a t w a s n o t o b s e r v e d r e l a t i o n s h i p b e t w e e n t h e t h e o r e t i c a l c o n c e p t s o f t h e m e c h a n i s m s o f i n s t i t u t i o n a l s h a r e h o l d e r s a n d d i r e c t o r s o f n o n - r e s p o n s i b i l i t y, f i r m s i z e, a n d d u a l i t y o f l i a b i l i t y C E O w i t h r a t e o f m o r t g a g e ( c a p i t a l s t r u c t u r e ). T h i s s h o w s a l a c k o f t h e p r o p e r r o l e o f t h e f o u r m e c h a n i s m s o f c o r p o r a t e g o v e r n a n c e I t i s r e c o m m e n d e d t o i n s t i t u t i o n a l i n v e s t o r s i n t e r m s o f t h e i r r i g h t s i n t h e r e a n d o t h e r s t a k e h o l d e r s e f f o r t s t o f u l f i l l t h e i r r o l e s m o r e a c c u r a t e. A r e r e c o m m e n d e d t o C o m p a n i e s p a y s p e c i a l a t t e n t i o n w h e n c h o o s i n g n o n - s h a l l m e m b e r s o f t h e B o a r d, O t h e r n o n - r e s p o n s i b i l i t y a p p o i n t e e s o n t h e b o a r d, p l a y w e l l s u p e r v i s o r y r o l e. G i v e n t h a t t h e r e i s a s i g n i f i c a n t r e l a t i o n s h i p w i t h t h e b a n k l o a n i s d o m i n a t e d b y s t a t e - o w n e d c o m p a n i e s a n d a c c o r d i n g t o r e s e a r c h, t h e s e c o m p a n i e s h a v e m o r e i n f l u e n c e i n t h e i r c a p i t a l s t r u c t u r e o f c o r p o r a t e d e b t i s h i g h e r t h a n a n y o t h e r. S o s h o u l d s h a r e h o l d e r s a n d o t h e r m e m b e r s o f t h e b o a r d s h a l l a l s o s t a t e - o w n e d c o m p a n i e s h a v e s h a r e s, t o p l a y a s t r o n g s u p e r v i s o r y r o l e t o p r e v e n t a n y m i s u s e. S o s h o u l d s h a r e h o l d e r s a n d o t h e r m e m b e r s o f t h e b o a r d s h a l l a l s o s t a t e - o w n e d c o m p a n i e s h a v e s h a r e s, t o p l a ya s t r o n g s u p e r v i s o r y r o l e t o p r e v e n t a n y m i s u s e. S o i f t h e c o m p a n y p l a n s t o e x p a n d a n d d e v e l o p i t s a c t i v i t i e s a r e o f f e r e d t o c r e a t e a b a l a n c e i n t h e i r c a p i t a l s t r u c t u r e a n d t h e b a l a n c e b e t w e e n d e b t a n d e q u i t y. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 47
16 R e f e r e n ces 1 - A b o r, J o s h u a. a n d B i e k p e, N i c h o l a s. ( ), (( D o e s C o r p o r a t e G o v e r n a n c e A f f e c t t h e C a p i t a l S t r u c t u r e D e c i s i o n s o f G h a n a i a n S M E s? )), U n i v e r s i t y o f S t e l l e n b o s c h B u s i n e s s S c h o o l, S o u t h A f r i c a. 2 - A h m a d p o o r, A., M e l i k i a n, E s f a n d i a r a n d K o r d e t b a r, H o s s e i n. ( ), T h e e f f e c t o f n o n - r e s p o n s i b l e m a n a g e r s a n d i n s t i t u t i o n a l i n v e s t o r s o n e a r n i n g s m a n a g e m e n t b e h a v i o r ( t h r e s h o l d m o d e l - b a s e d e a r n i n g s m a n a g e m e n t, a c c o u n t i n g r e s e a r c h, t h i r d e d i t i o n. 3 - A l w i, S y a f a r u d i n. ( ), (( D i v i d e n d a n d D e b t P o l i c y a s C o r p o r a t e G o v e r n a n c e M e c h a n i s m : I n d o n e s i a n E v i d e n c e )), J u r n a l P e n g u r u s a n 2 9, A s a d i, G H ; M o h a m m a d i, S h a p o o r, K h o r a m, E s m a i e l. ( ), t h e r e l a t i o n s h i p b e t w e e n c a p i t a l s t r u c t u r e a n d o w n e r s h i p s t r u c t u r e, K n o w l e d g e M a n a g e m e n t, I s s u e 4, p B h a d u r i, S a u m i t r a. ( ), (( D e c o m p o s i t i o n o f D e b t I n t e n s i t y : A G e n e r a l P a r a m e t r i c D i v i s i a M e t h o d )), M u m b a i B y u n, Y o u n g. ( ), (( T h e C o s t o f D e b t C a p i t a l a n d C o r p o r a t e G o v e r n a n c e P r a c t i c e s )), A s i a - P a c i f i c J o u r n a l o f F i n a n c i a l S t u d i e s, S e o u l N a t i o n a l U n i v e r s i t y, S e o u l, K o r e a, v 3 6 n 5 p p D r o b e t z, D., S c h i l l h o f e r, A. a n d Z i m m e r m a n n, H. ( ), (( C o r p o r a t e G o v e r n a n c e a n d E p e c t e d S t o c k R e t u r n s : E v i d e n c e f r o m G e r m a n y )), E u r o p e a n F i n a n c i a l M a n a g e m e n t, V o l. 1 0, N o. 2, p p H a s a Y e g a n e, Y a h y a, M a d a h i, A z a d e. ( ), ( ( c h a l l e n g e s t o t h e e s t a b l i s h m e n t o f c o r p o r a t e g o v e r n a n c e i n t h e c a p i t a l m a r k e t o f I r a n ) ), T h e W o r l d E c o n o m y, N o , 2 6 / 1 1 / K u m a r, J a y e s h. ( ), (( C a p i t a l S t r u c t u r e a n d C o r p o r a t e G o v e r n a n c e )), X a v i e r I n s t i t u t e o f M a n a g e m e n t, B h u b a n e s w a r, I n d i a Q i a n, Y a n m i n., T i a n, Y a o. a n d W i r j a n t o, T o n y. ( ), (( C a p i t a l S t r u c t u r e a n d C o r p o r a t e G o v e r n a n c e i n C h i n a )). 11- R e h m a n, R a m i z a n d R a o o f. ( ), (( D o e s c o r p o r a t e g o v e r n a n c e l e a d t o a c h a n g e i n t h e c a p i t a l s t r u c t u r e? )), A m e r i c a n J o u r n a l o f S o c i a l a n d M a n a g e m e n t S c i e n c e s, L a h o r e COPY RIGHT 2014 Institute of Interdisciplinary Business Research 48
17 B u s i n e s s S c h o o l, U n i v e r s i t y o f L a h o r e, P a k i s t a n, I S S N P r i n t : S y k e s, J. ( ), (( M i n o r i t y s h a r e h o l d e r s a n d t h e i r r i g h t s )), L o n d o n E C 4 M 7 R D. 13- Z a r e, H., T a l e b i, S., a n d S e i f M o h a m e d H u s s e i n. ( ), a d v a n c e d i n f e r e n t i a l s t a t i s t i c s, P a y a m e N o o r U n i v e r s i t y, D e p a r t m e n t o f E d u c a t i o n a l S c i e n c e s. 14- Wo n g, K i t P o n g. ( ), (( O n t h e n e u t r a l i t y o f d e b t i n i n v e s t m e n t i n t e n s i t y )), S c h o o l o f E c o n o m i c s a n d F i n a n c e, U n i v e r s i t y o f H o n g K o n g. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 49
Week TSX Index 1 8480 2 8470 3 8475 4 8510 5 8500 6 8480
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