日本経済学会2009年春期大会
6, June, 2009
Foreign Ownership, Listed Status
and Financial System in East Asia
Evidence from
Thailand and Malaysia
Fumiharu Mieno, Kobe University
[email protected]
in cooperation with JBIC Institute
Paper is available from
http://www2.kobe-u.ac.jp/~fmieno/main/22Report.htm
1
1.Motivation
Questions on the Conventional Arguments
a. Overreliance on Debt Finance
Claessens et.al. (1998) and many
- Debt financing really excessive?
NO, debt financing have been never
active in East Asia
- Average debt ratio is generally lower than in
Industrialized countries
2
1. Motivation
b. Weak Corporate Governance
and Immature Capital Market
Claessens et.al (2000), Johnson et.al.(2000), and many
– Expropriation of Minority Shareholders, Immature
Capital Market
– Focal point: Minority Shareholder’s Rights
– Possible Critics
• CG really mattered in the process of recovery?
• Investors Right vs. Firm Participation in Capital
Market.
• Does the discussions really capture the
characteristics of production sectors in real economy?
such as,
2. the role of foreign capitals
3. firms’ non-listed tendency
3
2. Research Focus
• FDI and Corporate Finance (F. System)
– Presence and Distribution of Foreign Capital
in Southeast Asia
– FDI and
• Capital Market - attitude for going pubic (Listed)
• Financial Intermediation – bank borrowing
• Internal Market – non bank debt
• Examination on the Distribution of Firms
• Foreign Share as a Determinant of the
Capital Structure
4
3. Literatures & Evidences
Thailand
1980s
Claessens et.al.(1998)
Booth et.al.(2001)
Singh(1995)
Wiwattanakantang (1999)
1990s
65.6%
67.5%
50.9%
49.4%
55.8%
51.4%
57.8%
75.0%
Mieno (2006)
Year
Observation
1988-91
Major Firms'　564
1992-96
1985-87
Major Firms' 64
1983-90
1983-90 Major' Listed Firms 69
1996 Major Non-Listed　270
1991-95 Listed Manuf. 105
1991-95 Non Listed Manuf 182
Data Source
Worldscope, Extel
IFC
IFC
SET
Manager Information
Service Ltd.,
Malaysia
1980s
Claessens et.al.(1998)
Booth et.al.(2001)
Singh(1995)
Suto(2003)
1990s
43.7%
47.2%
40.9%
41.8%
10.3%
23.0%
Source: Okuda, Mieno, Ojima (2006) ch.6
Year
1988-91
1992-96
1985-87
1983-90
1983-90
1995-96
Observation
Data Source
Major Firms' 772
Worldscope, Extel
Major Firms' 96
IFC
Major Listed Firms' 100 IFC
Listed Non Financial Primark Company
Firms 375
Analysis, Annual
5
3. Literatures & Evidences
FDI-led Industrialization and Firms’ Fundraisings
(in Japanese academics)
– Teranishi (1991)
• Asymmetric Information & Failure on Long-term fund market
– Okuda (2001)
• Asymmetric Information matters in FDI-led Industrialization?
– Mieno (2006b)
• Characteristics of Credit Channel of Foreign Firms
FDI and Financial System in Recent Literatures (in
Mainstream Journals)
– Daude and Fratzscher (JIE 2008): “Pecking order of crossborder investment”
– Antras, Desai and Foley (NBER WP 2007) “Multinational
Firms, FDI Flows and Imperfect Capital Markets”
6
4. Approach
1. Collecting Financial Statements from Company
Registration Offices of the Governments
- instead of Stock Exchanges
2. Picturing Firm Distribution Map Classified by
Foreign Ownership and Listed Status
- to Find the Presence of FDI Firms
3. Searching Determinants of Capital Structure
– Focusing on Foreign Share, Listed Status
– Based on Agency Cost & Pecking Order
Hypotheses
7
5. Data Collection
(1) Thailand
Rank by Asset Listed Firms Non-listed Firms
1st
149
（33.3%）
A) Company Profile and Top 5-10
Shareholder for TOP
1300(T),1500(M) firms
298
2,586 ↑'Financial Statement Sample'
447th
119
(16.0%)
623
↑'Company Profile &
1,040 Shareholders Inf. Sample'
1189th
Sub total 1189
Asset Size
501,721
268
(22.5%)
921
Omitted from
Observation
112
Total 1,301
380
921
Note: Total Asset in 2004, Million Baths
Parentheses represent the % of no. of listed firms in each class.
(2) Malaysia
Rank by Asset Listed Firms Non-listed Firms
1st
633
（74.8%）
117,011 ↑'Financial Statement Sample'
724
↑'Company Profile &
30,531 Shareholders Inf. Sample'
1824th
Sub total 1,824
Asset Size
12,521,700
213
846th
254
(22..7%)
887
(48.6%)
B) Financial Statements for top
500(T) 800(M) firms for 2000-04
978
36
Total 1,860
923
937
Note: Total Asset in 2004, Thousand Ringgt
Parentheses represent the % of no. of listed firms in each class.
Omitted from
Observation
C) Data Source
Non Listed Firms
•
Thailand: Company Registration
Office, Ministry of Commerce
•
Malaysia: Company
Registration Office, Kuala
Lumpur Capital & Negri
Sembilan State
•
Collected through Local
Consultant Companies.
Listed Firms
•
OSIRIS DB by Bureau van Dijk
Ltd.,
8
6. Firm Distribution (Thailand)
上場企業
図表２－１　タイ企業の総資産、上場／非上場、外資出資別分布
外資出資なし
(地場企業）
100
社
外資95%- 上場
外資66.6-95% 上場
90
外資50-66.6% 上場
外資33.3-49.9% 上場
外資10-33.2% 上場
80
70
外資0-10% 上場
外資0%（地場） 上場
外資0%（地場） 非上場
60
50
外資0-10% 非上場
外資10-33.2% 非上場
非上場企業
40
30
外資33.3-49.9% 非上場
外資50-66.6% 非上場
外資66.6-95% 非上場
20
10
外資95%- 非上場
• Big Presence of Non-listed
Firms in the Large Firms’
Layer: 66% of Top 400
• Large Presence of Foreign
Capital：52.3% of Top 400
• Most of the firms with foreign
share at more than 10% are
rarely listed to the market
0
1100
1000
900
800
700
600
500
400
300
200
100
総資産順位
上場企業
非上場企業
総資産順位
1-400
401-800 801-1100
1-400
401-800
企業数
135
76
46
265
324
外資比率10%以上小計
14.8%
18.4%
10.9%
40.4%
40.7%
95%以上
0.0%
0.0%
0.0%
18.1%
18.5%
50-95%
1.5%
2.6%
0.0%
12.1%
9.0%
10-50%
13.3%
15.8%
10.9%
10.2%
13.3%
外資比率0-10%
48.9%
26.3%
28.3%
5.7%
6.8%
外資出資なし 0%
36.3%
55.3%
97.8%
54.0%
52.5%
注：各階層の上場企業、非上場企業それぞれにおけるパーセンテージ。
801-1100
254
42.1%
13.4%
13.4%
15.4%
3.5%
54.3%
Foreign Share & Definition:
<10%: Fin. Investment
<50%: Joint venture type 1
<95%: Joint venture type2
>95%: Subsidiary
9
6. Firm Distribution (Malaysia)
図表２－２　マレーシア企業の総資産、上場／非上場、外資出資別分布
社
100
上場企業
90
外資95%- 上場
外資66.6-95% 上場
外資50-66.6% 上場
外資33.3-49.9% 上場
外資10-33.2% 上場
外資0-10% 上場
外資0%（地場） 上場
外資0%（地場） 非上場
外資0-10% 非上場
外資10-33.2% 非上場
外資33.3-49.9% 非上場
外資50-66.6% 非上場
外資66.6-95% 非上場
外資95%- 非上場
80
70
60
50
外資出資なし
(地場企業）
40
30
20
10
1800
1700
1600
1500
1400
1300
1200
1100
900
1000
800
700
600
500
400
300
200
100
非上場企業
0
総資産順位
上場企業
非上場企業
総資産順位
1-600 601-1200 1201-1800
1-600 601-1200 1201-1800
企業数
445
279
124
155
321
476
外資比率10%以上小計
8.3%
7.9%
3.2%
53.5%
39.6%
41.0%
95%以上
0.0%
0.0%
0.0%
34.2%
26.5%
25.2%
50-95%
3.1%
2.5%
0.8%
12.9%
6.9%
8.2%
10-50%
5.2%
5.4%
2.4%
6.5%
6.2%
7.6%
外資比率0-10%
4.0%
2.9%
4.8%
0.0%
1.5%
0.8%
外資出資なし 0%
87.6%
67.0%
91.9%
46.5%
58.3%
43.7%
注：各階層の上場企業、非上場企業それぞれにおけるパーセンテージ。
• Moderate Presence of Nonlisted Firms in the Large
Firms’ Layer: 26% of Top
600
• Large Presence of Foreign
Capital：21.6% of Top 600
• Most of the firms with
Foreign share are in forms
of subsidiaries. Joint
Venture case is Rare
Summery of Thailand & Malaysia
•
•
Revisiting Corporate Governance Argument:
- Investors’ Right v.s. Firms Participation
Estranged Relation between the Securities Market and Foreign Capitals
10
図表３　企業の国籍別分類
タイ（筆頭および第2位株主）
(1)
(2)
筆頭株主
タイ
日本
米国
シンガポール
香港
マレーシア
韓国
台湾
その他
計
696
206
78
63
20
12
10
5
3
1093
マレーシア(筆頭株主）
マレーシア
1430
日本
119
シンガポール
92
ＥＵ
85
米国
51
台湾
13
バージン諸島
11
香港
9
オーストラリア
6
ケイマーン諸島
5
韓国
5
その他
22
計
1848
Thailand:
(3)
筆頭又は第 筆頭、第２位
2位株主
株主が一致
821
277
102
133
43
17
11
7
3
559
131
42
30
2
1
5
2
0
(4)
(5)
(6)
(3)/(2)
タイとの合弁
企業数*1
(5)/(2)
47.3%
41.2%
22.6%
4.7%
5.9%
45.5%
28.6%
0.0%
118
42
63
20
11
2
4
2
42.6%
41.2%
47.4%
46.5%
64.7%
18.2%
57.1%
66.7%
注
タイについては第2位株主までの、マレーシアについ
ては筆頭株主の情報について集計した。タイでは225
社、マレーシアでは9社について株主情報が不明であ
る。
*1　筆頭、第2位の2株主が、当該国資本とタイ資本と
なっているもの。
•Japanese is the largest
in number and occupies
the half of the all foreign
firms, following the U.S.
and Singapore
•Joint venture case are
around half in number in
most nationalities (except
for Malaysia, Korea)
Malaysia:
Japanese and
Singaporean are the
largest in number,
following EU.
11
7. Determinants of Capital Structure
Methodology
-
Estimation Based on Agency Cost Approach
Dep   0  1 Asset   2Cash   3 Risk
  4 NDT   5 Ind   6 List   7 D  u
Dependent Variables
(1) Debt Ratio = Debt / Total Assets
(2) Bank Borrowing Ratio = Bank Bor./ T.A.
(3) Non-Bank Debt = (Debt – Bank Bor.) / T.A.
12
7.
Determinants of Capital Structure
Independent Variables
Asset = T.A.(+) ;
Cash= ROA as proxy (+,-);
Risk = Standard Deviation of ROAs (-);
NDT= Non-Debt Tax Shield (-);
Ind = Manufacturing Sector Dummy
- with ‘Foreign Share’ related variables
as liner and square correlations (U shape) (D)
- and ‘Listed Dummy’ (LIST)
Estimation Method: OLS (Random Effect)
13
7. Determinants of Capital Structure (cont.)
Capital Structure in Sample Average
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Liability
Current Liability
Account payable
Short term borrowing
Borrowing from Related Parties
Other Current Liability
Non Current Liability
Long term Borrowing
Debentures
Other Non Current Liability
Capital Account
Paid in Capital
Retained Earnings
Capital Surplus
Total bank borrowing (4)+(7)
Non-bank debt (1)-(15)
No. of Sample
Thailand
Malaysia
Non-listed Listed Non-listed Listed
54.7%
56.5%
39.1%
45.0%
37.7%
30.7%
32.2%
29.4%
11.5%
7.4%
20.3%
7.5%
11.1%
4.4%
3.0%
2.3%
2.7%
12.6%
18.9%
6.2%
19.6%
17.0%
25.8%
6.9%
15.7%
6.8%
18.2%
2.3%
9.0%
2.7%
0.9%
3.5%
4.9%
4.6%
5.7%
45.3%
43.5%
60.9%
55.0%
29.6%
33.5%
30.1%
33.2%
9.4%
1.6%
17.8%
6.2%
6.3%
8.4%
13.0%
15.6%
17.9%
22.7%
5.3%
11.3%
36.8%
33.8%
33.8%
33.8%
1017
568
1012
2766
Foreign Shares and Debt (in Non-listed Firms)
Debt
Ratio
Bank Bor. Non-bank
Ratio
Debt Ratio
Retained
Earnings /
T.A.
０％＜Foreign Share≦３３．３％
３３．３％＜Foreign Share≦９５％
９５％＜Foreign Share
56.2%
56.9%
51.6%
53.9%
19.3%
14.3%
15.2%
19.4%
36.9%
42.6%
36.4%
34.5%
2.2%
-2.9%
19.4%
19.9%
93-100
16-18
50
37-40
40.3%
39.1%
36.8%
37.7%
6.3%
4.8%
4.8%
4.0%
34.0%
34.3%
32.0%
33.7%
19.6%
16.4%
6.5%
18.3%
89-108
14-16
13-18
62-74
Malaysia
Foreign Share＝０％
０％＜Foreign Share≦３３．３％
３３．３％＜Foreign Share≦９５％
９５％＜Foreign Share
• Debt Ratio is low, particularly in
Mal.
• The role of financial
intermediation (i.e. bank bor.) is
very limited.
• Negative correlation between
foreign ownership and debt?
No. of
Sample
Thailand
Foreign Share＝０％
Descriptive Observation
• Positive correlation between
foreign ownership and self
financing?
14
Debt Ratio
1
Listed
Non Listed
All
Non Listed
Listed
0.9
0.8
0.7
0.6
Thailand
Listed Status
• Positive for Debt, Bank Borrowing
• Negative for Non Bank Borrowing
0.5
Foreign Share
• U shaped Bank Borrowing
• Adv. U shaped Non Bank Borrowing
• Neutral for Debt Ratio
0.4
0.3
0.2
0.1
0
0
10
20
30
40
50
60
70
80
Bank Borrowing Ratio
90
100
Forigen Share
Non-Bank Debt Ratio
1
1
Listed
Non Listed
All
Non Listed
Listed
0.9
0.8
0.8
0.7
0.7
0.6
0.6
0.5
0.5
0.4
0.4
0.3
0.3
0.2
0.2
0.1
0
Listed
Non Listed
All
Non Listed
Listed
0.9
0.1
0
10
20
30
40
50
60
70
80
90
100
Forigen Share
15
0
0
10
20
30
40
50
60
70
80
90
100
Forigen Share
7.
Determinants of Capital Structure (cont.)
Thai Case
Table 5 Estimation Results, Thailand
Dependent Variables
Debt Ratio
Constant
-0.1050
-0.1024
-0.1383
-0.6914
-0.6740
-0.9041
Total Asset
(Firm size)
ROA
(Cash Flow)
Standard Deviation of ROA
(Risk)
Non Debt Tax Shield
0.0295 ***
4.3656
12.4497 ***
4.3405
12.4828 ***
0.0306 ***
4.4922
13.0688 ***
-6.9005
0.0478 ***
-7.1077
0.0496 ***
-6.9668
0.0487 ***
8.1999
8.4907
8.2985
3.9159
3.6589
3.3199
2.0679
2.0732
2.1651
0.7535
0.7029
0.6376
-0.0053
-0.0047
0.0004
0.0001
0.0000
-0.7318
-12.5375 ***
0.2149 ***
-0.7354
-12.5707 ***
-2.0866
0.2147 ***
-0.6515
-13.1552 ***
-2.1781
0.2289 ***
0.0706
0.0173
0.0077
-3.9396
-3.6789
-3.3411
-0.7576
0.3843 ***
-0.7063
0.3740 ***
4.6424
4.6632
4.5418
9.6182
9.3931
Manu. Dummy
-0.0113
-0.0115
-0.0119
0.0204
0.0208
-0.7986
-0.8153
-0.8308
Foreign Share
-0.0002
0.0001
-0.9307
0.0919
[List Dummy] * [Foreign Share]
-0.9196 ***
-0.0053
-2.0813
List Dummy
0.0293 ***
Bank Borrowing Ratio
-0.9044 ***
-0.9334 ***
0.2718
0.0001
1.6997
8.9687
0.0248 **
2.0080
-0.0021 ***
-3.2282
-0.0029 ***
0.1601
[Foreign Share] ^2
1.6742
0.0000
-0.6413
0.3900 ***
-3.8797
-2.7405E-06
2.1811E-05 ***
-0.3492
0 < [Foreign Share] <= 10%
3.2140
0.0560
-0.0233
1.7381
-0.8394
10 < [Foreign Share] <= 33.3%
0.0586
-0.0717
0.7415
-1.0517
33.3% < [Foreign Share] <= 50%
0.0215
-0.0191
0.7824
95% < [Foreign Share]
（0 < [Foreign Share] <=10%）
* [List Dummy]
（10< [Foreign Share] <= 33.3%)
* [List Dummy]
（33.3% < [Foreign Share] <=50%）
* [List Dummy]
（50% < [Foreign Share] <=95%)
* [List Dummy]
（95% < [Foreign Share]）
* [List Dummy]
Adjusted R-square
-0.8070
-0.0395
50% < [Foreign Share] <=95%
-0.0427 **
-1.6180
-2.0292
0.0073
0.0246
0.3243
1.2742
-0.0519
0.0030
-1.2609
0.0843
-0.0725
0.0236
-0.8282
0.3122
0.0316
-0.1390 ***
0.5416
-2.7566
-0.0567
-0.1502 *
-0.5768
-1.7708
16
0.0249
0.0249
0.0264
0.0665
0.0635
0.0693
7.
Determinants of Capital Structure (cont.)
Table 5 Estimation Results, Thailand (continued)
Dependent Variables
Non-Bank Debt
Constant
0.7994 ***
5.4675
Total Asset
(Firm size)
ROA
(Cash Flow)
Standard Deviation of ROA
(Risk)
Non Debt Tax Shield
-0.0183 ***
5.6764
-0.0203 ***
0.7812 ***
5.3170
-0.0181 ***
-2.8168
-3.1131
-2.7767
8.5338
8.8238
9.7490
1.4720
1.5204
1.6820
-0.0057
-0.0054
-0.0048
-0.8233
List Dummy
-8.5979
-1.4822
-0.1694 ***
Manu. Dummy
-0.0317 **
Foreign Share
-0.0002
-3.8007
-2.3301
-1.2102
[List Dummy] * [Foreign Share]
0.8310 ***
-0.7785
-8.8918
-1.5312
-0.1592 ***
-3.5878
-0.0323 **
-2.3704
-0.6854
-9.8140
-1.6923
-0.1610 ***
-3.3271
-0.0367 ***
-2.6691
0.0022 ***
2.9911
0.0031 ***
3.6440
[Foreign Share] ^2
-2.4551E-05 ***
-3.2452
0 < [Foreign Share] <= 10%
0.0793 **
10 < [Foreign Share] <= 33.3%
0.1304
33.3% < [Foreign Share] <= 50%
0.0407
50% < [Foreign Share] <=95%
0.0032
2.5642
1.7170
1.5397
0.1379
95% < [Foreign Share]
-0.0173
（0 < [Foreign Share] <=10%）
* [List Dummy]
（10< [Foreign Share] <= 33.3%)
* [List Dummy]
（33.3% < [Foreign Share] <=50%）
* [List Dummy]
（50% < [Foreign Share] <=95%)
* [List Dummy]
（95% < [Foreign Share]）
* [List Dummy]
-0.0549
-0.8070
-1.3889
-0.0961
-1.1430
0.1706 ***
3.0404
0.0935
0.9900
Adjusted R-square
0.0219
0.0201
0.0290
Note: *, **, and *** represent the coefficients are significant in 1%, 5%, 10% level, respectively
17
7. Determinants of Capital Structure (cont.)
Suggestion from the observation - Thailand
- Substitution of ‘informal’ debt to ‘formal’ one in listed
firms
- Different Credit Channels between Joint Ventures and
Subsidiaries?
- CG problem in Joint Ventures?
18
Debt Ratio
1
Listed
Non Listed
All
Non Listed
Listed
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
0
10
20
30
40
50
60
70
80
Malaysia
Listed Status
- Positive for Debt, Bank Borrowing
& Non Bank Debt.
Foreign Share
- Monotonous falling trend in Debt,
Bank Borrowings & Non Bank
Debt
90
100
Forigen Share
Non-Bank Debt Ratio
Bank Borrowing Ratio
1
1
Listed
Non Listed
All
Non Listed
Listed
0.9
0.8
0.8
0.7
0.7
0.6
0.6
0.5
0.5
0.4
0.4
0.3
0.3
0.2
0.2
0.1
0.1
0
Listed
Non Listed
All
Non Listed
Listed
0.9
0
10
20
30
40
50
60
70
80
90
100
Forigen Share
0
0
10
20
30
40
50
60
70
80
19
90
100
Forigen Share
7.
Determinants of Capital Structure (cont.)
Malaysian Case
Table 7 Estimation Results, Malaysia
Dependent Variables
Debt Ratio
Constant
-0.3556 ***
Total Asset
(Firm size)
ROA
(Cash Flow)
Standard Deviation of ROA
(Risk)
Non Debt Tax Shield
-0.3485 ***
-0.3563 ***
-5.4397
-5.3309
-5.4618
0.0372 ***
0.0372 ***
0.0374 ***
11.1550
11.2468
11.1553
-12.3786 ***
-12.4297 *** -11.7107 ***
Bank Borrowing Ratio
0.1236 ***
0.1278 ***
0.1235 ***
3.0379
3.1415
3.0404
-0.0041
-0.0041
-0.0041
-1.9744
-8.0491 ***
-1.9667
-8.0820 ***
-1.9929
-8.1860 ***
-4.4865
-4.5032
-4.2394
-4.6863
-4.7035
-4.7578
0.0051
0.0051
0.0052
-0.0008
-0.0008
-0.0009
1.0666
12.3612 ***
4.4820
1.0611
12.4123 ***
4.4987
4.2349
List Dummy
0.3235 ***
13.7890
13.5982
13.6464
Manu. Dummy
0.0229 ***
0.0222 ***
0.0238 ***
Foreign Share
-0.0008 ***
[List Dummy] * [Foreign Share]
-0.0009 ***
2.8737
-4.6375
0.3150 ***
1.0985
11.6937 ***
2.7923
0.3224 ***
2.9908
-0.0015 ***
-0.2813
-0.2838
-0.2927
8.0336 ***
8.0665 ***
8.1709 ***
4.6792
0.0649 ***
4.4418
0.0369 ***
7.4356
-0.0004 ***
-3.7660
-3.9942
4.1408
0.0365 ***
7.3573
4.7510
0.0660 ***
4.4840
0.0382 ***
7.7227
-0.0009 ***
-3.3723
-0.0005 ***
-2.3373
-2.2714
6.1965E-06
[Foreign Share] ^2
4.6964
0.0597 ***
3.5465E-06
1.5680
1.4416
0.0251
0 < [Foreign Share] <= 10%
10 < [Foreign Share] <= 33.3%
-0.0569
0.3628
-1.3197
0.0468
0.0326
1.0355
1.1588
33.3% < [Foreign Share] <= 50%
-0.1600 **
-0.0138
50% < [Foreign Share] <=95%
-0.1185 ***
95% < [Foreign Share]
-0.0726 ***
-4.1270
-4.0656
（0 < [Foreign Share] <=10%）
* [List Dummy]
（10< [Foreign Share] <= 33.3%)
* [List Dummy]
（33.3% < [Foreign Share] <=50%）
* [List Dummy]
（50% < [Foreign Share] <=95%)
* [List Dummy]
（95% < [Foreign Share]）
* [List Dummy]
-0.0690
0.0213
-2.5387
-0.3508
-0.0359
-3.9943
Adjusted R-square
-1.9407
-0.0445 ***
-0.9530
0.4713
-0.0302
-0.0204
-0.5979
-0.6475
0.0934
-0.0611
1.3108
-1.3779
-0.0164
-0.0330
-0.4387
-1.4182
20
0.1485
0.1051
0.1059
0.1031
0.1023
0.1084
7.
Determinants of Capital Structure (cont.)
Table 7 Estimation Results, Malaysia　(Continued)
Dependent Variables
Non-Bank Debt
Constant
-0.4792 ***
-0.4763 ***
Total Asset
(Firm size)
ROA
(Cash Flow)
Standard Deviation of ROA
(Risk)
Non Debt Tax Shield
List Dummy
-0.4798 ***
-9.0922
-9.0406
-9.1118
0.0413 ***
0.0413 ***
0.0415 ***
15.3600
15.3591
15.4699
-4.3295
-4.3477
-3.5248
-1.9462
-1.9543
-1.5807
0.0059
0.0059
0.0061
1.5401
4.3276
1.9461
0.2586 ***
13.6727
Manu. Dummy
-0.0140 ***
Foreign Share
-0.0004 ***
[List Dummy] * [Foreign Share]
-0.0004
-2.1768
-2.6678
1.5357
4.3458
1.9542
0.2553 ***
13.6732
-0.0142 ***
-2.2182
1.5867
3.5228
1.5804
0.2564 ***
13.4450
-0.0145 ***
-2.2537
-0.0007 *
-2.0678
-1.1452
[Foreign Share] ^2
2.65E-06
0.8320
0 < [Foreign Share] <= 10%
0.0820
10 < [Foreign Share] <= 33.3%
0.0142
1.4676
0.3887
33.3% < [Foreign Share] <= 50%
-0.1462 ***
50% < [Foreign Share] <=95%
-0.0826 ***
95% < [Foreign Share]
-0.0280 *
（0 < [Foreign Share] <=10%）
* [List Dummy]
（10< [Foreign Share] <= 33.3%)
* [List Dummy]
（33.3% < [Foreign Share] <=50%）
* [List Dummy]
（50% < [Foreign Share] <=95%)
* [List Dummy]
（95% < [Foreign Share]）
* [List Dummy]
-0.0903
-2.8742
-3.4506
-1.9755
-1.5442
-0.0098
-0.2411
0.1545 ***
2.6869
0.0166
0.5508
Adjusted R-square
0.0778
0.7765
0.8202
Note: *, **, and *** represent the coefficients are significant in 1%, 5%, 10% level, respectively
21
7. Determinants of Capital Structure (cont.)
Suggestion from Observation – Malaysia
- Relatively Active Debt-financing in Listed Firms
- High Reliance on Self-financing in Foreign Firms
22
8. Discussion and Conclusion
• There are tick layers of non-listed firms consisting both
of domestic and FDI firms.
• Debt financing is generally inactive, and many firms
depend mostly on self-financing and internal market.
• Listed status seems to be negatively associated with
foreign ownership.
• In general, debt financing is negatively correlated to
foreign ownership.
• Above two facts suggest that the foreign capital-led
growth process of East Asia is related to the delayed
development of the financial system both in capital
market and debt financing.
23
8. Discussion and Conclusion
Policy Implication
•
For the capital market development, the consideration
to the incentive for firms’ participation in organized
securities market is essential, in addition to that to
minority shareholders right, particularly in relation to
the foreign ownership.
•
The view of balanced development of the financial
system, instead of the shift from financial
intermediation to capital market, is necessary.
•
For designing the balanced development, the nature of
complementarity, instead of substitutivity between
financial intermediation and capital market should be
made used of.
24

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