The Review of Finance and Banking

43-52

Authors: Pattaragit Netiniyom

This research aims to investigate alternative investment illiquidity stocks in an emerging market, the Stock Exchange of Thailand. The new sample, illiquidity stocks, is evaluated by the ranking of stock trading volume from 2011 to 2012. Data screening yielded 163 listed companies. The OLS model is applied with quarterly data for the study period from 2011 to 2014. Because of the reflection between ROE and TOBIN Q, the usage of the OLS model might lead to biased results due to the autocorrelation of the variables. Thus the TSLS model is applied for the final prediction. The results of the study may be important; in the case of stocks with low liquidity, shareholder wealth depends on investor choice as to whether they prefer a quick payment as a dividend yield, or whether to wait to receive the return from company reinvestment in the future. The regulators could apply the results in decisions about free float criteria. Alternative investment could be supported by encouraging the issue of stock analysis reports.

61-75

Authors: Ingrid-Mihaela Dragota, Aura-Cristina Stefan-Dobrin

This work adds to the debate on the determinants of debt-equity mix providing new insights for four Nordic countries - Denmark, Finland, Norway and Sweden, less studied in the existing literature. Using a sample of 79 companies from Nasdaq Omx Nordic Index for the period 1995-2014, and a panel data approach, we draw on a complex set of firm- and country- specific variables to find the determinants for the total debt and, respectively, for the long-term debt ratios. Our results support the hypothesis that the regulatory quality is the most important determinant for both types of leverage, next to the domestic credit to private sector as percentage of GDP. Regarding the firm-specific factors, the tax implications of debt are an important determinant. The substitution effect seems to be not applicable for the Nordic firms due to the positive relation between the leverage and the non-debt tax shield, whatever the measure for the leverage is analysed. We also find that companies with high volatility in earnings have a higher risk of bankruptcy and borrow less than others. We reinforce that profitable companies avoid debt, and that large companies are more indebted than the small ones.

7-20

Authors: Prayagsing Chakeel Coomar, Jankee Kheswar

This paper confirms that, in a pre-financial crisis environment, alternative forms of corporate arrangements and operation of internal financial markets impact differently on corporate investment decisions, tested in heterogeneous samples in Mauritius. Innovatively, a more rational measure of internal finance (net liquidity), in line with International Accounting Standards, is adopted. It is found that only certain categories of firms rely more on internal finance than others and also do not resort to debts. Based on the results available, several policies are proposed for the authorities and financial institutions in view of addressing the problem of financial constraints (FC) and enhancing corporate investments.