Measuring Debt Risk during Financial Crisis | Chapter 1 | Business, Management and Economics: Research Progress Vol. 8

The global financial crisis affected many developing countries in different ways. This affected risky portfolios adversely, forcing many investors to incur losses. Financial institutions, specifically banks and small businesses, have encountered difficulty in sustaining their ability to remain stable during the financial crisis. During this period most scholars addressed the cause and risk of financial turbulence but very few studies identified the cost of debt and risk of financial turbulence. The objective of this study is to enhance the Mahalanobis model to include the measurements of cost of debt when measuring financial turbulence which essentially has an impact on the stock market. The data collected in respect of the South African Reserve Bank (SARB) and Statistics South Africa (SAS) identifies the correlation of financial turbulence in banks as well as small businesses and analyses and interprets the relationship between total liquidation of companies and total assets of banks.  The crisis affected markets differently, but they all had the same results of low cash movement that resulted in a decrease in money supply that resulted in financial turmoil.

 

Author (s) Details

 

Keabetswe Ramantshane
School of Business Leadership (SBL), University of South Africa (UNISA), Pretoria, South Africa.

 

Please see the book here:- https://doi.org/10.9734/bpi/bmerp/v8/88

Impact of International Rating Agencies in Iberian Private Companies | Chapter 8 | Modern Perspectives in Economics, Business and Management Vol. 5

 Although not adequately addressed in recent research, the impact of international rating agencies handling political risk in Iberian private enterprises is a critical element for corporate capital structure and leverage decisions. The financial crisis of the new century, combined with international rating agencies' downgrading of Portugal, increased concerns about the influence of political risk on company financing and how changes in political risk can affect managers' perceptions of the capital structure of their companies. From 2003 to 2015, the time span was chosen to include recent and large financial crises that had an impact on the country's political risk change. The results were determined through an empirical research using a novel econometric model, starting with correlations between Leverage and variables Return on Assets, Return on Equity, Dimension, Tangibility, Sales Variation, Political Risk, and Critical Political Risk. Critical Political Risk is a dummy variable according to the Credit Rating Agencies' notations. We look at how this notation affects domestic political risk as well as the capital structure of businesses, taking into account the impact of this international notation. Evidence supported our hypothesis: as political risk increased, leverage decreased. Determining how CPR affects each firm, evaluating risk per company, and analysing the impact of Rating Notation on financing decisions in private enterprises from the Iberian Market are among the other research topics.

Author (S) Details

Vasco Soares
Instituto Superior do Vouga, Santa Maria da Feira, Porto, Portugal.

Sónia Carvalho
Instituto Politécnico de Viana do Castelo, Valença, Portugal.

Mafalda Mendes-Ribeiro
Departamento de Economia e Gestão, Universidade Portucalense, Porto, Portugal.

View Book :- https://stm.bookpi.org/MPEBM-V5/article/view/3332

The Impact of a One Factor Model on Risk Level of Viet Nam Medicine Industry | Chapter 4 | Current Strategies in Economics and Management Vol. 3

This research paper evaluates the impacts of external financing (one factor model) on market risk for the listed firms in the Viet nam medical industry as it becomes necessary, esp. after the financial crisis 2007-2009.  First, by using quantitative and analytical methods to estimate asset and equity beta of total 10 listed companies in Viet Nam medical industry with a proper traditional model, we found out that the beta values, in general, for many institutions are acceptable. Second, under 3 different scenarios of changing leverage (in 2011 financial reports, 30% up and 20% down), we recognized that the risk level, measured by equity and asset beta mean, decreases when leverage increases to 30% and it increases in case leverage down to 20%. Third, by changing leverage in 3 scenarios, we recognized the dispersion of risk level, measured by equity beta var, increases if the leverage increases to 30%. Compared to the results of other industries, we see that asset beta var in here increases when leverage up to 30% as well as  that in consumer good industry. Finally, this paper provides some outcomes that could provide companies and government more evidence in establishing their policies in governance.

Author(s) Details

Dinh Tran Ngoc Huy
Banking University Ho Chi Minh City, Vietnam and Graduate School of International Management, International University of Japan, Niigata, Japan.

Nguyen Thi Phuong Thanh 
Thai Nguyen University of Information Technology and Communications, Vietnam.

Luong MInh Lan
Van Lang University, Ho Chi Minh City, Vietnam

View Book :- http://bp.bookpi.org/index.php/bpi/catalog/book/191

Evaluation of Systematic Risk of Viet Nam Construction Material Industry during the Pre-Low Inflation Period 2012-2014 | Chapter 3 | Current Strategies in Economics and Management Vol. 3

Construction material industry is one of the most rapidly growing sectors, with many achievements both in Vietnam and in Asia. In recent years, its rapid growth has produced revenues from business activities. One of the key objectives of this paper is to assess market risk volatility in construction material businesses in the 2012-2014 pre-low inflation period. Our first findings are to be found that beta values in general (< 1) for most of our construction material companies are appropriate when we apply quantitative, statistical and analytical methods to evaluate the asset beta and beta CAPM of 20 listed Viet Nam construction material companies. However, we analyze the market risk volatility, determined by asset and equity beta var,  during the post-low inflation period in this sector and compare results in two circumstances: risk fluctuation in pre-low inflation time 2012-14 is lower than that in post-low inflation period 2015-2017. Finally, if we observe in 2 periods, Beta CAPM or equity beta mean goes up in case post-low inflation period.  At last, policies in risk management and governance are suggested in the conclusion based on the research results and findings. In the post-low inflation environment, we alert that Beta fluctuations could be little higher.

Author(s) Details

Dinh Tran Ngoc Huy
Banking University Ho Chi Minh City, Vietnam and Graduate School of International Management, International University of Japan, Niigata, Japan.

Pham Tun Anh
Thuongmai University, Ha Noi, Vietnam.

View Book :- http://bp.bookpi.org/index.php/bpi/catalog/book/191

Asset and Equity Beta of Viet Nam Public Utilities- Electric Power and Water Industries after the Low Inflation Period | Chapter 13 | Current Strategies in Economics and Management Vol. 2

The Vietnam economy has obtained lots of achievements after the financial crisis 2007-2011, until it reached a low inflation rate of 0.6% in 2015. Vietnam Water & Electric power Company group are growing and contributing much to the economic development and has been affected by inflation. High and increasing inflation might reduce values of Water& Electric power Company group contracts. This paper measures the volatility of market risk in Viet Nam Water& Electric power Company group after this period (2015-2017) and recommends policies for sutainable water treatment and development. The main reason is the necessary role of the of Water& Electric power Company group system in Vietnam in the economic development and growth in recent years always go with risk potential and risk control policies.  Hence, this research paper aims to figure out how much increase or decrease in the market risk of Vietnam Water& Electric power Company group firms during the post-low inflation environment 20152017. First, by using quantitative combined with comparative data analysis method, we find out the risk level measured by equity beta mean in the water and electric power industry is acceptable, as it is lower than (<) 1. Then, one of its major findings is the comparison between risk level of stock investment industry compared to those of Water Company group in the post-low inflation time 2015-2017. In fact, the research findings show us market risk level of water and electric power group during the post-low inflation time is lower (equity beta mean = 0.412). Then, another major finding is the comparison between risk level of electric power industry in the post-low inflation time 2015-2017 compared to those in the crisis 2007-09. In fact, the research findings show us market risk level of electric power group during the post-low inflation time is higher. Finally, this paper provides some ideas that could provide companies and government more evidence in establishing their policies in governance. This is the complex task but the research results shows us warning that the market risk need to be controlled better during the post-low inflation period 20152017. And our conclusion part will recommends some policies and plans to deal with it. Basically, we need to have a better integration management of water cross the country, identify challenges in water treatment and resolve them.

Author(s) Details

Dinh Tran Ngoc Huy
Banking University, Ho Chi Minh City, Viet Nam and Graduate School of International Management, International University of Japan, Niigata, Japan.

Nguyen Thi Phuong Thanh
Thai Nguyen University of Information Technology and Communications, Thai Nguyen, Viet Nam.

Pham Tuan
Anh Thuongmai University, Hanoi, Viet Nam.

View Book :- http://bp.bookpi.org/index.php/bpi/catalog/book/185

A Three Variable Model on the Risk Level of Viet Nam Hardware Industry during and after the Global Crisis | Chapter 12 | Current Strategies in Economics and Management Vol. 2

Over recent years, hardware industry in Viet Nam has reached a lot of achievements. Under the volatility of stock price, and changes in macro factors such as inflation and interest rates, the wellestablished hardware market in Viet Nam has many efforts to recover and grow from the crisis 2008. This study analyzes the impacts of 3 factors: Competitor size, tax rate policy and leverage on market risk for the listed firms in the hardware industry as it becomes necessary.  First, by using quantitative and analytical methods to estimate asset and equity beta of total 22 listed companies in Viet Nam hardware industry with a proper traditional model, we found out that the beta values, in general, for many companies are acceptable. Second, under 3 different scenarios of changing tax rates (20%, 25% and 28%), we recognized that there is the largest dispersion in equity beta value (0,2), if leverage up to 30% and doubling size competitors. Third, by changing tax rates in 3 scenarios (25%, 20% and 28%), this study identified that the risk dispersion level in this sample study could be minimized in case the competitor size doubling, tax rate up to 28% and financial leverage down to 20% (measured by asset beta var of 0,081). Finally, this paper provides some outcomes that could provide companies and government more evidence in establishing their policies in governance.

Author(s) Details

Dinh Tran Ngoc Huy
Banking University, Ho Chi Minh City, Vietnam and Graduate School of International Management, International University of Japan, Niigata, Japan.

Nguyen Thi  Phuong Thanh
Thai Nguyen University of Information Technology and Communications, Vietnam.

View Book :- http://bp.bookpi.org/index.php/bpi/catalog/book/185

An Expansion Analysis of the Volatility of Market Risk in Groups of Viet Nam Listed Computer and Electrical Company Groups during the Financial Crisis 2007-2009 | Chapter 8 | Current Strategies in Economics and Management Vol. 1

The Viet Nam economy and especially, the stock exchange has been influenced by the global crisis during the period 2007-2011. For specific industries, such as consumer good and wholesale/retail industries, the risk re-analysis and estimation for the listed firms in these industries become necessary.  First, by using quantitative and analytical methods to estimate asset and equity beta of three (3) groups of sub-trading listed companies in Viet Nam material, consumer good, wholesale and retail industries with a proper traditional model, we found out that the beta values, in general, for most companies are acceptable, excluding a few cases. There are 72% of listed firms with lower risk, among total 229 firms, whose beta values lower than (<) 1.  Second, through comparison of beta values among three (3) above industries, we recognized there are still 26% of total listed firms in the above group companies with beta values higher than (>) 1 and have stock returns fluctuating more than the market index. Finally, this paper generates some outcomes that could provides both internal and external investors, financial institutions, companies and government more evidence in establishing their policies in investments and in governance.

Author(s) Details

Le Thi Viet Nga
Thuongmai University, Hanoi, Vietnam

Dinh Tran Ngoc Huy
Banking University, HCMC – GSIM, International University of Japan, Japan and The National Economics University, Hanoi, Vietnam.

Ly Thu Trang
Thai Nguyen University of Information Technology and Communications, Thai Nguyen, Vietnam.

View Book :- http://bp.bookpi.org/index.php/bpi/catalog/book/174

An Expansion Analysis of Risk Level of Viet Nam Construction Material Industry under Financial Leverage during and after the Global Crisis 2007-2009 | Chapter 7 | Current Strategies in Economics and Management Vol. 1

After the financial crisis 2007-2009, this paper evaluates the impacts of external financing on market risk for the listed firms in the Viet nam construction material industry.  First, by using quantitative and analytical methods to estimate asset and equity beta of total 57 listed companies in Viet Nam construction material industry with a proper traditional model, we found out that the beta values, in general, for many institutions are acceptable. Second, under 3 different scenarios of changing leverage (in 2011 financial reports, 30% up and 20% down), we recognized that the risk level, measured by equity and asset beta mean, decreases (0,259) when leverage increases to 30% and it increases (0,544) if leverage decreases down to 20%. Third, by changing leverage in 3 scenarios, we recognized the dispersion of risk level, measured by equity beta var, increases if the leverage increases to 30%. And the asset beta var value is quite small, showing leverage efficiency. Finally, this paper provides some outcomes that could provide companies and government more evidence in establishing their policies in governance.

Author(s) Details

Nguyen Thi Thanh Phuong
Thuongmai University, Hanoi, Vietnam

Dinh Tran Ngoc Huy
Banking University, HCMC – GSIM, International University of Japan, Japan

Le Ngoc Nuong
Faculty of Management - Economic Law, University of Economics and Business Administration (TUEBA), Vietnam.

View Book: - http://bp.bookpi.org/index.php/bpi/catalog/book/174

A Set of International OECD and ICGN Corporate Governance Standards after Financial Crisis, Corporate Scandals and Manipulation - Implications for Developing Countries | Chapter 6 | Current Strategies in Economics and Management Vol. 1

A statement by ACCA in May 2009 that any corporate governance system should consider factors such as transparency, accountability, fairness and responsibility, raises issues in this field over past few years. There are also a few researches which have been done in the field of international corporate governance standards. This paper chooses a different analytical approach and among its aims is to give some certain systematic conclusions. First, it separates international standards into groups: ICGN and OECD latest principles covered in group 1 while it uses ACCA principles as reference. Second, it identified differences between these above set of standards which are and have been used as reference principles for many countries and organizations. Third, it aims to build a selected comparative set of standards for corporate governance system in accordance to international standards. Last but not least, this paper illustrates some ideas and policy suggestions.

Author(s) Details

Pham Minh Dat
Thuongmai University, Hanoi, Vietnam

Dinh Tran Ngoc Huy
Banking University, HCM City, Vietnam and Graduate School of International Management, International University of Japan, Niigata, Japan

View Book :- http://bp.bookpi.org/index.php/bpi/catalog/book/174

To What Extent Corporate Tax Policy Changes Impact on the Risk Level of Viet Nam Software and Hardware Companies | Chapter 5 | Current Strategies in Economics and Management Vol. 1

The global crisis 2007-2011 has wide effect on many economies including Viet Nam; hence, this study analyzes the impacts of tax policy on market risk for the listed firms in the Viet Nam hardware and software industry as it becomes necessary.  First, by using quantitative and analytical methods to estimate asset and equity beta of total 22 listed companies in Viet Nam hardware and software industry with a proper traditional model, we found out that the beta values, in general, for many companies are acceptable. Second, under 3 different scenarios of changing tax rates (20%, 25% and 28%), we recognized that there is not large disperse in equity beta values, estimated at 0,740, 0,725 and 0,746 (minimum at the rate 25%).These values are lower than those of the listed VN construction firms. Third, by changing tax rates in 3 scenarios (25%, 20% and 28%), we recognized equity beta mean decreases if tax rate increases from 20% to 25%, then goes up if tax rate goes up to 28% while asset beta mean value increases if tax rate increases from 20% to 25%, then goes down if tax rate goes up to 28%. Finally, this paper provides some outcomes that could provide companies and government more evidence in establishing their policies in governance.

Author(s) Details

Pham Tuan Anh 
Thuongmai University, Hanoi, Vietnam.

Dinh Tran Ngoc Huy
Banking University, HCMC – GSIM, International University of Japan, Japan.

View Book :- http://bp.bookpi.org/index.php/bpi/catalog/book/174