Forthcoming articles


International Journal of Governance and Financial Intermediation


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International Journal of Governance and Financial Intermediation (5 papers in press)


Regular Issues


  • Identifying Credit Constraints Using Direct Elicitation Methodology: The Case of Indonesia   Order a copy of this article
    by Sigit S. Wibowo 
    Abstract: This study considers how credit constraints come to exist and how to identify them. Credit constraints may arise from market mechanisms: the demand for loans and the supply of loans. In order to assess credit constraints, I use direct elicitation methodology and then examine the gathered information and other household characteristics by applying a multinomial logit model. Using an access-to-finance survey conducted by the World Bank, I find that Indonesian households are likely to experience supply-side constraints rather than demand-side constraints. I also find that financial literacy plays a vital role in accessing services from formal financial institutions. I estimate welfare loss by elaborating several types of constraints: households constrained because of riskrelated reasons experience a loss in annual income of between Rp 16 million and Rp 19 million.
    Keywords: Access to finance; credit constraints; direct elicitation methodology; Indonesia.

  • Ownership Concentration, Institutional Ownership, and IPO Underpricing: Evidence from Indonesia Stock Exchange   Order a copy of this article
    by Mamduh M. Hanafi 
    Abstract: Using 182 IPOs in Indonesia Stock Exchange from 2006-2015, we attempt to investigate IPO underpricing using agency theory framework. We use two dimensions of agency theory: ownership concentration and institutional ownership. We find that ownership concentration does not have effect on IPO underpricing, while institutional ownership negatively affect IPO underpricing. Institutional ownership seems to be able to monitor IPO underpricing, leading to smaller loss from IPO underpricing. We further analyze the nature of relationship of these two variables on IPO underpricing. First, we investigate whether the effect of ownership concentration on IPO underpricing is different under different level of institutional ownership. Second, we analyze whether the effect of institutional ownership on IPO is non-linear. For the first issue, we do not find different effect of ownership concentration on IPO underpricing under different level of institutional ownership. In other word, we do not find a moderating effect of institutional ownership on the effect of ownership concentration on IPO underpricing. For the second issue, we find that the negative effect of institutional ownership on IPO underpricing is stronger when the level of institutional ownership is low. Higher level of institutional ownership seems to increase principal-principal agency conflict and to reduce monitoring effect of institutional ownership. Our results highlight the importance of ownership in company affairs.
    Keywords: Underpricing; ownership concentration; institutional ownership; agency conflict; Indonesia.

  • Is there a relation between capital and ownership on the bank performance? The German and Italian cases   Order a copy of this article
    by Belinda Laura Del Gaudio 
    Abstract: This paper examines the effects of capital on bank performance, considering the ownership structure using a large sample of German and Italian cooperative and commercial banks from 2006 to 2012. The determinants of performance are studied using a set of variables reflecting the banks core business and bank-type characteristics, namely, total assets, dependency on funding and liquidity combined with capital and risk measures. The findings show that the ownership structure drives the impact of capital measures and liquidity on performance. The differences in the impact of capital strength among cooperatives and commercials could be derived from differences in capital formation and management. This paper includes implications for regulatory authorities, who should consider the latter in the definition of new regulatory sets.
    Keywords: bank performance; cooperative banks; ownership; capital; business model.

  • Does ownership structure affect Dividend policy? A panel data analysis for the French market   Order a copy of this article
    by Wissem Daadaa, Fathi Jouini 
    Abstract: This study try to examine the effect of ownership structure on the dividend policy of 102 French companies listed on the SBF120 index for the period from 2010 to 2014. Based on agency and signal theories, we have empirically demonstrated the role of substitution between corporate governance mechanisms and dividend payout. Our study also demonstrates the role of dividend policy in disciplining of manager behavior. Our results indicate for firms with institutional, largest, managerial and family shareholders pay lower dividends.
    Keywords: ownership; payout; dividend yield.

  • A Study of relevance of Black Scholes model on option prices of Indian stock market   Order a copy of this article
    by Anubha Srivastava, Manjula Shastri 
    Abstract: In the modern world, with the continuous evolution of the financial market, there has been a continuous development of different financial instruments. Derivative trading is becoming an integral part of stock market .In the recent years trading volume in stock market has increased tremendously which has led to the high volatility in the option prices. A derivative is a type of such evolved financial instrument which has attracted the financial marketers all over the world. It is a financial contract between two or more parties whose value depends on a given underlying asset, and any change in the value of the underlying has a subsequent change in the value of the derivative contract. An option is a type of financial derivative that represents a contract between the seller (option writer) and the buyer (option holder), which offers the buyer the right, not the obligation, to execute the contract. The options contract allows the buyer to buy (or sell) a security or other financial asset at an agreed-upon price (strike price) during a certain period or on a specific date. Black Scholes option model is used for fair value pricing for option contracts .In this research work, an attempt has been made to find out the relevance of Black Scholes Model values with the market values for stock options. The study found out that the option values have insignificant relevance to the market values.
    Keywords: Options; Black-Scholes model ; Fair price ; volatility; market value.