Capital Market Openness and Output Volatility

Hwang, Kwang‐Myoung; Park, Donghyun; Shin, Kwanho

doi:10.2139/ssrn.2579529

Cited by 7 publications

(8 citation statements)

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“…Despite its benefits of accelerating economic growth, financial openness can be viewed as harmful to developing countries. It restricts monetary policy independence, increases the volatility of interest rates and stock market volatility, as well as causing increases in economic volatility due to large and varying inflows of foreign capital (Hwang et al, 2013). A majority of the countries in ASEAN suffered from the financial crisis; however, they recovered quite rapidly by strengthening the banking sector and financial system as well as developing the domestic debt market and bond market (Sheera and Bishnoi, 2013).…”

Section: Research Settingmentioning

confidence: 99%

The relationship between intellectual capital, firms’ market value and financial performance

Nimtrakoon

2015

Journal of Intellectual Capital

340

455

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Purpose – The purpose of this paper is to explore and compare the extent of intellectual capital (IC) and its four components among ASEAN countries, and examine the relationship between firms’ IC, market value, and financial performance. Design/methodology/approach – The study uses the data of 213 technology firms listed on five ASEAN stock exchanges. Pulic’s Value Added Intellectual Coefficient model is modified by adding an extra component, namely, relational capital efficiency (RCE). The Kruskal-Wallis one-way ANOVA and multiple regression analysis have been utilized to test the hypotheses. Findings – The results reveal that there is no significant difference in Modified Value Added Intellectual Coefficient (MVAIC) across five ASEAN countries; however, firms in each country tend to place a different degree of emphasis on components of MVAIC to generate corporate value. The results further indicate a positive relationship between IC and market value, confirming that firms with greater IC tend to have greater market value. Likewise, a positive relationship between IC and financial performance measures is confirmed. Specifically, IC is found to be positively associated with margin ratio and return on assets. Capital employed efficiency and human capital efficiency are found to be the most influential value drivers for both market value and financial performance while structural capital efficiency and relational capital efficiency possess less importance. Originality/value – This study contributes to the IC literature by expanding our knowledge of IC in the emerging economies, and providing a national comparative IC research when such research is limited.

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Section: Research Settingmentioning

confidence: 99%

The relationship between intellectual capital, firms’ market value and financial performance

Nimtrakoon

2015

Journal of Intellectual Capital

340

455

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“…Other studies, such as Hwang et al . (), find that financial openness is also associated with increased output volatility.…”

mentioning

confidence: 91%

“…The share increased from 21% in 2001 to 32% in 2009.3 Other studies, such asHwang et al (2013), find that financial openness is also associated with increased output volatility.…”

mentioning

confidence: 97%

Is Asia Decoupling from the United States (Again)?

Leduc

Spiegel

2013

Pacific Economic Review

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The recovery from the recent global financial crisis exhibited a decline in the synchronization of Asian output with the rest of the world. However, a simple model based on output gaps demonstrates that the decline in business cycle synchronization during the recovery from the global financial crisis was exceptionally steep by historical standards. We posit two potential reasons for this exceptionally steep decline. First, financial markets during this recovery improved from particularly distressed conditions relative to previous downturns. Second, monetary policy during the recovery from the crisis was constrained in developed economies by the zero bound, but less so in Asia. To test these potential explanations, we examine the implications of an increase in corporate bond spreads similar to that which took place during the recent European financial crisis in a three‐region open‐economy dynamic stochastic general equilibrium model. Our results confirm that global business cycle synchronization is reduced when zero‐bound constraints across the world differ. However, we find that the impact of reduced financial contagion actually goes modestly against our predictions.

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“…The share increased from21% in 2001 to 32% in 2009. 4 Other studies, such asHwang, et al (2013) also find that financial openness is also associated with increased output volatility.…”

mentioning

confidence: 95%

Is Asia Decoupling from the United States (Again)?

Leduc¹,

Spiegel²

2013

ERWP

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The recovery from the recent global financial crisis exhibited a decline in the synchronization of Asian output with the rest of the world. However, a simple model based on output gaps demonstrates that the decline in business cycle synchronization during the recovery from the global financial crisis was exceptionally steep by historical standards. We posit two potential reasons for this exceptionally steep decline: First, financial markets during this recovery improved from particularly distressed conditions relative to previous downturns. Second, monetary policy during the recovery from the crisis was constrained in western economies by the zero bound, but less so in Asia. To test these potential explanations, we examine the implications of an increase in corporate bond spreads similar to that which took place during the recent European financial crisis in a 3-region open-economy DSGE model. Our results confirm that global business cycle synchronization is reduced when zero-bound constraints across the world differ. However, we find that the impact of reduced financial contagion actually goes modestly against our predictions.J.E.L. Classification Numbers: E32, F41, F44, F62

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Capital Market Openness and Output Volatility

Cited by 7 publications

References 0 publications

The relationship between intellectual capital, firms’ market value and financial performance

The relationship between intellectual capital, firms’ market value and financial performance

Is Asia Decoupling from the United States (Again)?

Is Asia Decoupling from the United States (Again)?

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