18 research outputs found
DOWNWARD SLOPING DEMAND CURVES FOR STOCK AND LEVERAGE
No full textThis research attempts to investigate the effect of downward sloping demand curves for stock on firms' financing decisions. For the same size of equity issuance, firms with steeper slope of demand curves for their stocks experience a larger price drop in their share price compare to their counterparts. As a consequence, firms with a steeper slope of demand curves are less likely to issue equity and hence they have higher leverage ratios. This research finds that the steeper the slope of demand curve for firm's stock, the higher the actual leverage of the firm. Furthermore, firms with a steeper slope of demand curves have higher target leverage ratios, signifying that these firms prefer debt to equity financing in order to avoid the adverse price impact of equity issuance on their share price
Price Earnings Ratio and Stock Return Analysis (Evidence from Liquidity 45 Stocks Listed in Indonesia Stock Exchange)
No full textPrice to Earnings Ratio (PE Ratio) has been broadly used by analysts and investors for stock selection. Stocks with low PE ratio are perceived as having cheaper current price hence expected to generate higher return in subsequent period. This paper aims to examine predictability of stock return using PE Ratio based on historical relationship between PE Ratio and subsequent stock return. Particularly, it seeks to find whether stocks with high PE Ratio followed by low stocks return and on the contrary, stocks with low PE Ratio followed by high stocks return. Using stocks which are included as member of Liquidity 45 and observation period 2005-2010 as samples, results show that there is significance difference between low PE and high PE portfolio stock return in short term (holding period of 6 months) but there is no significance difference between both portfolio stock return if they are hold for one, two, three, and four years. This research also finds that there is no significant relationship between stock return and (trailing) PE Ratio which suggests that (trailing) PE Ratio is not useful in estimating both short term and long term stock return
Super Slack-Based Model Efficiency and Stock Performance of Manufacturing Industry Listed in Indonesian Stock Exchange
No full textThis research examines the efficiency of Indonesian manufacturing industry listed in Indonesian Stock Exchange during the period of 2010-2014 using
non-parametric output oriented Super Slack-Based Model (SBM). Furthermore, resulted changes of efficiency score are regressed on stock performance to investigate the relationship. 77 companies in
manufacturing industry classified as basic, miscellaneous and consumer goods industry listed in Indonesian Stock Exchange during 2010-2014 which resulted in 308 pooled data is being analyzed.
The input variables used in this paper are salary wages and benefit, raw materials cost, and net fixed asset while the output variable is earning before tax. Result shows that on average the highest output oriented Super SBM efficiency is miscellaneous industry while basic and consumer goods industry are not efficient on average
DOWNWARD SLOPING DEMAND CURVES FOR STOCK AND LEVERAGE
No full textThis research attempts to investigate the effect of downward sloping demand curves for stock on firms' financing decisions. For the same size of equity issuance, firms with steeper slope of demand curves for their stocks experience a larger price drop in their share price compare to their counterparts. As a consequence, firms with a steeper slope of demand curves are less likely to issue equity and hence they have higher leverage ratios. This research finds that the steeper the slope of demand curve for firm's stock, the higher the actual leverage of the firm. Furthermore, firms with a steeper slope of demand curves have higher target leverage ratios, signifying that these firms prefer debt to equity financing in order to avoid the adverse price impact of equity issuance on their share price
The Consumption-Health Nexus Revisited: Examining the Benefits of Social Insurance for the Poor in Indonesia
No full textHouseholds in developing countries are typically more vulnerable to illness episodes. This paper uses a panel micro data set from Indonesia to investigate whether households are able to smooth their consumption against idiosyncratic health shocks and to examine the mitigating effects of a social health insurance programme for the poor on such shocks. We find that Indonesian households manage to keep consumption smooth after deterioration in adult health. These findings are robust to various health measures and different specifications. The difference-in-differences (DiD) estimator shows a marginal effect of the insurance programme on insuring household consumption from major health problems. Further investigation reveals heterogeneous effects of the social insurance programme. While it plays a trivial role in protecting rural households, the effect of the health intervention is stronger in urban areas of the country. We argue that supply-side factors seem to be partly responsible for this finding
Three essays on sustainable finance
No full textMy thesis consists of three essays in the sustainable finance field, including
social bonds, environmental policy and emissions, corporate sustainability, firms’ ESG risk incidents, and government control of corruption.
In Chapter 1, we investigate whether social bond pricing has a premium or
discount. Using fixed-effect regression and exact matching methods, we find that US municipal social bonds have no significant price difference compared with non-social bonds issued between 2018 and 2023. We also find that issuers from Democratic Party- leaning states issue more social bonds than Republican Party-leaning states, but we do not find a social premium or discount in either leaning state. Our findings reveal that investors are unwilling to trade off financial returns to invest in social projects, suggesting that investors do not have social-use preferences while buying bonds.
In Chapter 2, we assess the effectiveness of environmental policy in reducing
greenhouse gas (GHG) emissions. Fixed-effects panel regression and panel vector autoregression results suggest that restrictive environmental policy effectively curbs GHG emissions. Furthermore, mediation analyses using structural equation modeling show that renewable energy production and consumption are important mechanisms in environmental policy effectiveness. Renewable energy production and consumption fully mediate the effect of market-based policy on GHG emissions, partially mediate the effect of technology policy on GHG emissions with complementary effect, and partially mediate the effect of non-market-based policy on GHG emissions with competitive effect. These findings reveal that market-based and technology-support policy instruments are more effective than non-market-based ones in reducing GHG emissions. In Chapter 3, I examine the significant forces of corporate social irresponsibility
in cross-country analysis. Employing various fixed-effect Poisson regression,
controlling for firm characteristics and other country factors variables, and various ways of adjusting standard errors, the results show that corporate social irresponsibility measured by firms’ environmental, social, and governance negative incidents in terms of number, severity, and novelty of incidents are significantly and strongly associated with the firm headquartered country's control of corruption. Identification tests using Instrumental Variable analysis and further robustness checks corroborate the main findings that firms headquartered in a country with higher control of corruption are less likely to engage in corporate social irresponsibility practices.Doctor of Philosoph
Performance Evaluation of Property and Real Estate Companies Listed in Indonesia Stock Exchange Using Data Envelopment Analysis
No full textThis paper aims to evaluate performance of property and real estate companies listed in Indonesia Stock Exchange using Data Envelopment Analysis (DEA) method. Samples were 23 companies listed from 2009 to 2012.. However, only one company that consistently having technical efficiency equal 1. The main cause of inefficiency from 2009-2011 was scale inefficiency while inefficiency happened in 2012 was pure technical efficiency. Overall the companies operate efficiently under constant returns to scale is showing an increase from 17.39-39.1
Price Earnings Ratio and Stock Return Analysis (Evidence from Liquidity 45 Stocks Listed in Indonesia Stock Exchange)
No full textPrice to Earnings Ratio (PE Ratio) has been broadly used by analysts and investors for stock selection. Stocks with low PE ratio are perceived as having cheaper current price hence expected to generate higher return in subsequent period. This paper aims to examine predictability of stock return using PE Ratio based on historical relationship between PE Ratio and subsequent stock return. Particularly, it seeks to find whether stocks with high PE Ratio followed by low stocks return and on the contrary, stocks with low PE Ratio followed by high stocks return. Using stocks which are included as member of Liquidity 45 and observation period 2005-2010 as samples, results show that there is significance difference between low PE and high PE portfolio stock return in short term (holding period of 6 months) but there is no significance difference between both portfolio stock return if they are hold for one, two, three, and four years. This research also finds that there is no significant relationship between stock return and (trailing) PE Ratio which suggests that (trailing) PE Ratio is not useful in estimating both short term and long term stock return
Price Earnings Ratio and Stock Return Analysis (Evidence from Liquidity 45 Stocks Listed in Indonesia Stock Exchange)
No full textABSTRAK ABSTRACT Price to Earnings Ratio (PE Ratio) has been broadly used by analysts and investors for stock selection. Stocks with low PE ratio are perceived as having cheaper current price hence expected to generate higher return in subsequent period. This paper aims to examine predictability of stock return using PE Ratio based on historical relationship between PE Ratio and subsequent stock return. Particularly, it seeks to find whether stocks with high PE Ratio followed by low stocks return and on the contrary, stocks with low PE Ratio followed by high stocks return. Using stocks which are included as member of Liquidity 45 and observation period 2005-2010 as samples, results show that there is significance difference between low PE and high PE portfolio stock return in short term (holding period of 6 months) but there is no significance difference between both portfolio stock return if they are hold for one, two, three, and four years. This research also finds that there is no significant relationship between stock return and (trailing) PE Ratio which suggests that (trailing) PE Ratio is not useful in estimating both short term and long term stock returns
PERFORMANCE EVALUATION OF PROPERTY AND REAL ESTATE COMPANIES LISTED ON INDONESIA STOCK EXCHANGE USING DATA ENVELOPMENT ANALYSIS
No full textThis paper aimed to evaluate perfomance of property and real estate companies listed in Indonesia Stock Exchange using the DEA method. Samples were 23 companies listed from 2009–2012. Results showed that some companies are relatively efficient each year. However, only one company consistently had technical efficiency equal to 1. The main cause of inefficiency from 2009–2011 was scale inefficiency while inefficiency happened in 2012 was pure technical inefficiency. Overall the companies operate efficiently un-der constant returns to scale is showing an increase from 17.39%–39.13%
