عنوان

Financial liberalization and dynamics of firm-level financing and investment decisions in the Southeast Asian countries

Number

TLets434781

Title Proper

Financial liberalization and dynamics of firm-level financing and investment decisions in the Southeast Asian countries

General Material Designation

[Thesis]

First Statement of Responsibility

Ameer, Rashid

Name of Publisher, Distributor, etc.

Aston University

Date of Publication, Distribution, etc.

2007

Dissertation or thesis details and type of degree

Thesis (Ph.D.)

Text preceding or following the note

2007

Text of Note

This thesis examines the dynamics of firm-level financing and investment decisions for six Southeast Asian countries. The study provides empirical evidence on the impacts of changes in the firm-level financing decisions during the period of financial liberalization by considering the debt and equity financing decisions of a set of non-financial firms. The empirical results show that firms in Indonesia, Pakistan, and South Korea have relatively faster speed of adjustment than other Southeast Asian countries to attain optimal debt and equity ratios in response to banking sector and stock market liberalization. In addition, contrary to widely held belief that firms adjust their financial ratios to industry levels, the results indicate that industry factors do not significantly impact on the speed of capital structure adjustments. This study also shows that non-linear estimation methods are more appropriate than linear estimation methods for capturing changes in capital structure. The empirical results also show that international stock market integration of these countries has significantly reduced the equity risk premium as well as the firm-level cost of equity capital. Thus stock market liberalization is associated with a decrease in the cost of equity capital of the firms. Developments in the securities markets infrastructure have also reduced the cost of equity capital. However, with increased integration there is the possibility of capital outflows from the emerging markets, which might reverse the pattern of decrease in cost of capital in these markets.

Business and Administrative studies

Ameer, Rashid

Aston University

Electronic name

p

[Thesis]

276903

a

Y