The East Asian crisis and financing corporate investment:is there a cause for concern?

In view of limited empirical evidence concerning the microeconomic aspects of corporate financial problems in the East Asian countries in the 1990s, this paper analyses the financing pattern of corporate investment in Indonesia, Korea, Malaysia, and Thailand. The analysis is based on an unbalanced panel of listed firms during the period 1989–1997. By using firm size, retention practices, and leverage as three different indicators of financial constraint on firm investment, we have examined the role of various internal and external financing variables on corporate investment in the sample countries. Results indicate that a large number of sample firms depend on free cash flow, especially in Indonesia; there was also a steady increase in debt-equity ratio in all countries. There were signs of agency costs in the use of cash flow in Korea and Malaysia and also in the use of debt financing in Malaysia and Thailand. There was also sign of over-investment among the Thai firms during 1994–1997 though it appears very little if at all was done to redress it in time.

How does ownership structure affect capital structure and firm value?:Recent evidence from East Asia

The present paper examines the effects of ownership structures on capital structure and firm valuation. It argues that the effects of separation of control from cash flow rights on capital structure and firm value also depend on the separation of control from management as well as on legal rules and enforcement defining investors' protection. We obtain firm-level panel data (three stage least squares, 3SLS) estimates from four of the East Asian countries worst affected by the last crisis. There is evidence that the general wisdom that higher control than cash flow rights may lower firm value may be reversed among owner-managed family firms in the sample countries. © 2007 The Authors Journal compilation © 2007 The European Bank for Reconstruction and Development.

Corporate restructuring: empirical evidence from the UK

Corporate restructuring is perceived as a challenge to research. Prior studies do not provide conclusive evidence regarding the effects of restructuring. Since there are discernible findings, this research attempts to examine the effects of restructuring events amongst the UK listed firms. The sample firms are listed in the LSE and London AIM stock exchange. Only completed restructuring transactions are included in the study. The time horizon extends from year 1999 to 2003. A three-year floating window is assigned to examine the sample firms. The key enquiry is to scrutinise the ex post effects of restructuring on performance and value measures of firms with contrast to a matched criteria non-restructured sample. A cross sectional study employing logit estimate is undertaken to examine firm characteristics of restructuring samples. Further, additional parameters, i.e. Conditional Volatility and Asymmetry are generated under the GJR-GARCH estimate and reiterated in logit models to capture time-varying heteroscedasticity of the samples. This research incorporates most forms of restructurings, while prior studies have examined certain forms of restructuring. Particularly, these studies have made limited attempts to examine different restructuring events simultaneously. In addition to logit analysis, an event study is adopted to evaluate the announcement effect of restructuring under both the OLS and GJR-GARCH estimate supplementing our prior results. By engaging a composite empirical framework, our estimation method validates a full appreciation of restructuring effect. The study provides evidence that restructurings indicate non-trivial significant positive effect. There are some evidences that the response differs because of the types of restructuring, particularly while event study is applied. The results establish that performance measures, i.e. Operating Profit Margin, Return on Equity, Return on Assets, Growth, Size, Profit Margin and Shareholders' Ownership indicate consistent and significant increase. However, Leverage and Asset Turn Over suggest reasonable influence on restructuring across the sample period. Similarly, value measures, i.e. Abnormal Returns, Return on Equity and Cash Flow Margin suggest sizeable improvement. A notable characteristic seen coherently throughout the analysis is the decreasing proportion of Systematic Risk. Consistent with these findings, Conditional Volatility and Asymmetry exhibit similar trend. The event study analysis suggests that on an average market perceives restructuring favourably and shareholders experience significant and systematic positive gain.

Drag coefficients with applications to satellite orbits

In the last twenty or so years the results of theory and experiment have produced much information on the characteristics of gas-surface interactions relevant to a satellite in hyperthermal free-molecular flow. This thesis contains reviews of the rarefied gas dynamics applicable to satellites and has attempted to compare existing models of gas-surface interaction with contemporary knowledge of such systems. It is shown that a more natural approach would be to characterise the gas-surface interaction using the normal and tangential momentum accommodation coefficients, igma' and igma respectively, specifically in the form igma = constant , igma' = igma'0 -igma'1sec i where i is the angle subtended between the incident flow and the surface normal and igma,igma'0 and igma'1 are constants. Adopting these relationships, the effects of atmospheric lift on inclination, i, and atmospheric drag on the semi-major axis, a, and eccentricity, e, have been investigated. Applications to ANS-1 (1974-70A) show that the observed perturbation in i can be ascribed primarily to non-zero igma'1 whilst perturbations in a and e produce constraint equations between the three parameters. The numerical results seem to imply that a good theoretical orbit is achieved despite a much lower drag coefficient than anticipated by earlier theories.

An investigation of the emerging system of host government participation in the international oil industry with particular reference to Libyan participation arrangements

This study has been conceived with the primary objective of identifying and evaluating the financial aspects of the transformation in country/company relations of the international oil industry from the traditional concessionary system to the system of governmental participation in the ownership and operation of oil concessions. The emphasis of the inquiry was placed on assembling a case study of the oil exploitation arrangements of Libya. Through a comprehensive review of the literature, the sociopolitical factors surrounding the international oil business were identified and examined in an attempt to see their influence on contractual arrangements and particularly to gauge the impact of any induced contractual changes on the revenue benefit accruing to the host country from its oil operations. Some comparative analyses were made in the study to examine the viability of the Libyan participation deals both as an investment proposal and as a system of conducting oil activities in the country. The analysis was carried out in the light of specific hypotheses to assess the relative impact of the participation scheme in comparison with the alternative concessionary model on the net revenue resulting to the government from oil operations and the relative effect on the level of research and development within the industry. A discounted cash flow analysis was conducted to measure inputs and outputs of the comparative models and judge their revenue benefits. Then an empirical analysis was carried out to detect any significant behavioural changes in the exploration and development effort associated with the different oil exploitation systems. Results of the investigation of revenues support the argument that the mere introduction of the participation system has not resulted in a significant revenue benefit to the host government. Though there has been a significant increase in government revenue, associated with the period following the emergence of the participation agreements, this increase was mainly due to socio-economic factors other than the participation scheme. At the same time the empirical results have shown an association of the participation scheme with a decline of the oil industry's research and development efforts.

Industrial new product planning:a study of the sources of new product ideas and the development of new product proposals in the UK computer industry

This thesis presents a study of the sources of new product ideas and the development of new product proposals in an organisation in the UK Computer Industry. The thesis extends the work of von Hippel by showing how the phenomenon which he describes as "the Customer Active Paradigm for new product idea generation" can be observed to operate in this Industry. Furthermore, this thesis contrasts his Customer Active Paradigm with the more usually encountered Manufacturer Active Paradigm. In a second area, the thesis draws a number of conclusions relating to methods of market research, confirming existing observations and demonstrating the suitability of flexible interview strategies in certain circumstances. The thesis goes on to demonstrate the importance of free information flow within the organisation, making it more likely that sought and unsought opportunities can be exploited. It is shown that formal information flows and documents are a necessary but not sufficient means of influencing the formation of the organisation's dominant ideas on new product areas. The findings also link the work of Tushman and Katz on the role of "Gatekeepers" with the work of von Hippel by showing that the role of gatekeeper is particularly appropriate and useful to an organisation changing from Customer Active to Manufacturer Active methods of idea generation. Finally, the thesis provides conclusions relating to the exploitation of specific new product opportunities facing the sponsoring organisation.

Investment efficiency among a cross-section of UK firms:implications for the debate on financing constraints

In this paper, we address this policy issue using a stylised methodology that relies on estimates of the cash flow sensitivity of firms’ investment, as well as a relatively new methodology that enables us to generate a (0, 1) bounded measure of investment efficiency of firms, i.e., the efficiency with which firms can convert their sales into investment, after controlling for unobserved year- and industry-specific effects. Higher investment efficiency is associated with lower financing constraint. Our results indicate that there is considerable heterogeneity in investment efficiency across firms, during a given year; the range being 0.57-0.82. However, the average investment efficiency measure is similar across years, regions and NACE 2-digit industries. We also do not find discernible patterns in the relationship between investment efficiency and firm size, both before and during the financial crisis. The results suggest that while some firms are clearly less efficient at translating their performance into investment, broad policies targeting firms of a certain size, or those within a particular industry or region, may not successfully address the problem of financing constraint in the United Kingdom. The targeting of firms with financing constraints may have to be considerably more refined, and look at not easily observable factors such as credit history/events and organisational capacity of the firms.

Expropriation of minority shareholders and payout policy

This paper studies the payout policy of Italian firms controlled by large majority shareholders (controlled firms). The paper reports that a firm’s share of dividends in total payout (dividends plus repurchases) is negatively related to the size of the cash flow stake of the firm’s controlling shareholder and positively associated with the wedge between the controlling shareholder’s control rights and cash flow rights. These findings are consistent with the substitute model of payout. One of the implications of this model is that controlled firms with weak corporate governance set-ups, in which controlling shareholders have strong incentives to expropriate minority shareholders, tend to prefer dividends over repurchases when disgorging cash.

A note on a semiparametric approach to estimating financing constraints in firms

In this paper, we present a novel approach to modeling financing constraints of firms. Specifically, we adopt an approach in which firm-level investment is a nonparametric function of some relevant firm characteristics, cash flow in particular. This enables us to generate firm-year specific measures of cash flow sensitivity of investment. We are therefore able to draw conclusions about financing constraints of individual firms as well as cohorts of firms without having to split our sample on an ad hoc basis. This is a significant improvement over the stylized approach that is based on comparison of point estimates of cash flow sensitivity of investment of the average firm of ad hoc sub-samples of firms. We use firm-level data from India to highlight the advantages of our approach. Our results suggest that the estimates generated by this approach are meaningful from an economic point of view and are consistent with the literature. © 2014 © 2014 Taylor & Francis.

Inward investment and the drivers of post recession recovery in Germany

This paper examines changes in the drivers of productivity in Germany over the period 1997-2012. We start by comparing the performance of German firms and inward investors before and during the recovery from the recent global financial crisis of 2008 across a range of sectors, and subsequently examine the channels through which different firms are able to generate productivity. Our results show that foreign investors are more productive than German MNEs and purely domestic firms, with the gap narrowing in the manufacturing sector, but growing in the service sector during the recovery period. We also contrast those firms for whom productivity growth is related to greater use of intangible assets, compared with those for whom productivity is linked to cash flow. Productivity of inward investors is driven by cash flow rather than intangible assets, these being limited to high-technology investors from the EU and the USA.

Variations of local heat transfer coefficient in piped flow of viscous liquids

Measurements were carried out to determine local coefficients of heat transfer in short lengths of horizontal pipe, and in the region of an discontinuity in pipe diameter. Laminar, transitional and turbulent flow regimes were investigated, and mixtures of propylene glycol and water were used in the experiments to give a range of viscous fluids. Theoretical and empirical analyses were implemented to find how the fundamental mechanism of forced convection was modified by the secondary effects of free convection, temperature dependent viscosity, and viscous dissipation. From experiments with the short tube it was possible to determine simple empirical relationships describing the axial distribution of the local 1usselt number and its dependence on the Reynolds and Prandtl numbers. Small corrections were made to account for the secondary effects mentioned above. Two different entrance configurations were investigated to demonstrate how conditions upstream could influence the heat transfer coefficients measured downstream In experiments with a sudden contraction in pipe diameter the distribution of local 1u3se1t number depended on the Prandtl number of the fluid in a complicated way. Graphical data is presented describing this dependence for a range of fluids indicating how the local Nusselt number varied with the diameter-ratio. Ratios up to 3.34:1 were considered. With a sudden divergence in pipe diameter, it was possible to derive the axial distribution of the local Nusse1t number for a range of Reynolds and Prandtl numbers in a similar way to the convergence experiments. Difficulty was encountered in explaining some of the measurements obtained at low Reynolds numbers, and flow visualization techniques wore used to determine the complex flow patterns which could lead to the anomalous results mentioned. Tests were carried out with divergences up to 1:3.34 to find the way in which the local Nusselt number varied with the diameter ratio, and a few experiments were carried out with very large ratios up .to 14.4. A limited amount of theoretical analysis of the 'divergence' system was carried out to substantiate certain explanations of the heat transfer mechanisms postulated.

The effect of flow regimes in the distillation of systems containing two liquid phases

Single phase solutions containing three components have been observed to exhibit foaminess near a single to two liquid phase boundary. It was seen, in a sintered plate column under mass transfer conditions, that distillation systems where the liquid appeared as one phase in one part of a column and two phases in another part, exhibited foaminess when the liquid concentration was near the one phase to two phase boundary. Various ternary systems have been studied in a 50 plate. 30mm i.d. Oldershaw column and it was observed that severe foaming occurred in the middle section of the column near the one liquid phase to two liquid phase boundary and no foaming occurred at the end of the column where liquid was either one phase or two phase. This is known as Ross type foam. Mass transfer experiments with Ross type ternary systems have been carried out in a perspex simulator with small and large hole diameter trays. It was observed that by removal of the more volatile component, Ross type foam did not build up on the tray. Severe entrainment of liquid was observed in all cases leading to a 'dry' tray, even with a low free area small diameter hole tray which was expected to produce a bubbly mixture. Entrainment was more severe for high gas superficial velocities and large hole diameters. This behaviour is quite different from the build up of foam observed when one liquid phase/two liquid phase Ross systems were contacted with air above a small sintered disc or with vapour in an Oldershaw distillation column. This observation explains why distillation columns processing mixtures which change from one liquid phase to two liquid phases (or vice versa) must be severely derated to avoid flooding. Single liquid phase holdups at the spray to bubbly transition were measured using a perspex simulator similar to that of Porter & Wong (17). i.e. with no liquid cross flow. A light transmission technique was used to measure the transition from spray regime to bubbly regime. The effect of tray thickness and the ratio of hole diameter to tray thickness on the transition was evaluated using trays of the same hole diameter and free area but having thickness of 2.38 mm, 4 mm, and 6.35 mm. The liquid holdup at the transition was less with the thin metal trays. This result may be interpreted by the theory of Lockett (101), which predicts the transition liquid holdup in terms of the angle of the gas iet leaving the holes in the sieve plate. All the existing correlations have been compared and none were found to be satisfactory and these correlations have been modified in view of the experimental results obtained. A new correlation has been proposed which takes into account the effect of the hole diameter to tray thickness ratio on the transition and good agreement was obtained between the experimental results and the correlated values of the liquid holdup at the transition. Results have been obtained for two immiscible liquids [kerosene and water] on trays to determine whether foaming can be eliminated by operating in the spray regime. Kerosene was added to a fixed volume of water or water was added to a fixed volume of kerosene. In both cases, there was a transition from spray to bubbly. In the water fixed system. the liquid holdup at the transition was slightly less than the pure kerosene system. Whilst for the kerosene fixed system, the transition occurred at much lower liquid holdups. Trends In the results were similar to those for single liquid phase. New correlations have been proposed for the two cases. It has been found that Ross type foams, observed in a sintered plate column and in the Oldershaw column can be eliminated by either carrying out the separation in a packed column or by the addition of defoaming additives.

Effect of liquid flow patterns on distillation trays

The thesis describes experimental work on sieve trays in an air-water simulator, 2.44 m in diameter. The liquid flow pattern, for flowrates similar to those used in commercial scale distillation, was observed experimentally by water cooling experiments, in which the temperature of the water is measured at over 100 positions over the tray area. The water is cooled by the rising air which is forced through the tray. A heat and mass transfer analogy is drawn whereby the water temperature is mapped to liquid concentration in mass transfer, and the water temperature profiles reveal how liquid channelling may reduce the tray efficiency. The first experiment was to observe the flow of water only over an unperforated tray. With the exception of very low weir loads, the flow separated at the ends of the inlet downcomer. This caused liquid to flow straight across the tray between the downcomers and large circulating regions to be formed in the side regions of the tray. The effect of the air crossflow on the flow pattern was then observed on a sieve tray of 10% free area with 1 mm diameter holes (such as is used in cryogenic distillation). The flow patterns developed on the tray were similar to those produced with water only on the unperforated tray, but at low weir loads the air crossflow prevented separation of the water flow and the associated circulating regions. At higher weir loads, liquid channelling down the centre of the tray and circulation in the side regions occurred. The percentage of the tray occupied by circulating liquid depended upon the velocity of the liquid entering the tray, which was set by the weir load and size of the gap under the inlet downcomer. The water cooling experiments showed that the temperature of the water in a circulating region is much lower than in other parts of the tray, indicating that the driving force for heat transfer is reduced. In a column section where trays (and circulating areas) are mounted on top of each other, the circulating regions will cause air (or vapour) passing through them to have a reduced change in temperature or concentration leading a loss in tray efficiency.

Octane requirement increase arising from the use of lead free fuel

Lead in petrol has been identified as a health hazard and attempts are being made to create a lead-free atmosphere. Through an intensive study a review is made of the various options available to the automobile and petroleum industry. The economic and atmospheric penalties coupled with automobile fuel consumption trends are calculated and presented in both graphical and tabulated form. Experimental measurements of carbon monoxide and hydrocarbon emissions are also presented for certain selected fuels. Reduction in CO and HC's with the employment of a three-way catalyst is also discussed. All tests were carried out on a Fiat 127A engine at wide open throttle and standard timing setting. A Froude dynamometer was used to vary engine speed. With the introduction of lead-free petrol, interest in combustion chamber deposits in spark ignition engines has ben renewed. These deposits cause octane requirement increase or rise in engine knock and decreased volumetric efficiency. The detrimental effect of the deposits has been attributed to the physical volume of the deposit and to changes in heat transfer. This study attempts to assess why leaded deposits, though often greater in mass and volume, yield relatively lower ORI when compared to lead-free deposits under identical operating conditions. This has been carried out by identifying the differences in the physical nature of the deposit and then through measurement of the thermal conductivity and permeability of the deposits. The measured thermal conductivity results are later used in a mathematical model to determine heat transfer rates and temperature variation across the engine wall and deposit. For the model, the walls of the combustion cylinder and top are assumed to be free of engine deposit, the major deposit being on the piston head. Seven different heat transfer equations are formulated describing heat flow at each part of the four stroke cycle, and the variation of cylinder wall area exposed to gas mixture is accounted for. The heat transfer equations are solved using numerical methods and temperature variations across the wall identified. Though the calculations have been carried out for one particular moment in the cycle, similar calculations are possible for every degree of the crank angle, and thus further information regarding location of maximum temperatures at every degree of the crank angle may also be determined. In conclusion, thermal conductivity values of leaded and lead-free deposits have been found. The fundamental concepts of a mathematical model with great potential have been formulated and it is hoped that with future work it may be used in a simulation for different engine construction materials and motor fuels, leading to better design of future prototype engines.