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- All Subjects: Business
- All Subjects: Finance
- Genre: Academic theses
- Creators: Chen, Hong
Description
The Chinese capital market is characterized by high segmentation due to governmental regulations. In this thesis I investigate both the causes and consequences of this market segmentations. Specifically, I address the following questions: (1) to which degree this capital market segmentation is caused by the fragmented regulations in China, (2) what are the key characteristics of this market segmentation, and (3) what are the impacts of this market segmentation on capital costs and resources allocations. Answers to these questions can have important implications for Chinese policy makers to improve capital market regulatory coordination and efficiency. I organize this thesis as follows. First, I define the concepts of capital market segmentation and fragmented regulation based on literature reviews and theoretical analysis. Next, on the basis of existing theories and methods in finance and economics, I select a number of indicators to systematically measure the degree of regulatory segmentation in China’s capital market. I then develop an econometric model of capital market frontier efficiency analysis to calculate and analyze China’s capital market segmentation and regulatory fragmentation. Lastly, I use the production function analysis technique and the even study method to examine the impacts of fragmented regulatory segmentation on the connections and price distortions in the equity, debt, and insurance markets. Findings of this thesis enhance the understanding of how institutional forces such as governmental regulations influence the function and efficiency of the capital markets.
ContributorsJia, Shaojun (Author) / Hwang, Yuhchang (Thesis advisor) / Chen, Hong (Committee member) / Wahal, Sunil (Committee member) / Arizona State University (Publisher)
Created2015
Description
Financing lease has bloomed as a new financing tool in China for the last several years. In this thesis I investigate the factors that influence China’s automobile financial leasing decisions by both lessors and lessees through market surveys. Based on Probit regression analysis of the data collected from 250 companies and 300 individuals, I find that a firm is more likely to use automobile financial leasing when its corporate tax rate is lower, growth potential is more stabilized, and profit is higher. It is also more likely to happen when a firm's long-term debt ratio and its degree of internationalization are higher. At the individual level, I find that the likelihood of individuals’ leasing decision is influenced by their risk preference, income level, and car price. Individuals’ gender, age and education level show no effect.
Using the analytic hierarchy process (AHP) analysis, I further find that financing costs, service value-added, and products diversity are the three most important competitive factors for the auto financial leasing service providers. This is the case for both the corporate and individual customers in the sample. By contrast, the factors of sales channel and government relationship are found to be much less important. Finally, through an in-depth case study of the leasing company Shanghai Auto Financial Leasing, I find that the key factors determining the customers’ credit default risk are interest rate and automobile type. I also investigate factors that influence business risk during the automobile procurement stage, at the selling stage, and toward the disposition stage. The managerial implications of the above results are discussed throughout the thesis.
Using the analytic hierarchy process (AHP) analysis, I further find that financing costs, service value-added, and products diversity are the three most important competitive factors for the auto financial leasing service providers. This is the case for both the corporate and individual customers in the sample. By contrast, the factors of sales channel and government relationship are found to be much less important. Finally, through an in-depth case study of the leasing company Shanghai Auto Financial Leasing, I find that the key factors determining the customers’ credit default risk are interest rate and automobile type. I also investigate factors that influence business risk during the automobile procurement stage, at the selling stage, and toward the disposition stage. The managerial implications of the above results are discussed throughout the thesis.
ContributorsLin, Zhen, Ph.D (Author) / Zhang, Anming (Thesis advisor) / Pei, Ker-Wei (Thesis advisor) / Chen, Hong (Committee member) / Arizona State University (Publisher)
Created2015
Description
By matching a CEO's place of residence in his or her formative years with U.S. Census survey data, I obtain an estimate of the CEO's family wealth and study the link between the CEO's endowed social status and firm performance. I find that, on average, CEOs born into poor families outperform those born into wealthy families, as measured by a variety of proxies for firm performance. There is no evidence of higher risk-taking by the CEOs from low social status backgrounds. Further, CEOs from less privileged families perform better in firms with high R&D spending but they underperform CEOs from wealthy families when firms operate in a more uncertain environment. Taken together, my results show that endowed family wealth of a CEO is useful in identifying his or her managerial ability.
ContributorsDu, Fangfang (Author) / Babenko, Ilona (Thesis advisor) / Bates, Thomas (Thesis advisor) / Tserlukevich, Yuri (Committee member) / Wang, Jessie (Committee member) / Arizona State University (Publisher)
Created2018
Description
The key chanllenge for Small and Micro Enterprises (SMEs) to get credit or loans is the fact that traditional financing business model in commercial banks cannot meet SMEs’ financial needs. Through extensive theoretical research, market analysis especially on SMEs’ behavioral characteristics and demands, serveral case studies on market-leading banks such as Wells Fargo and KASIKORN BANK, and the actual implementation experiences in China Minsheng Bank and Pingan Bank, this article proposes a new business model for servicing SMEs for commercial banks in China, which includes the principle and rationale of the business model, the technical foundation, business process and organizational structure, as well as the future transition of the model.
ContributorsZhao, Jichen (Author) / Chen, Hong (Thesis advisor) / Pei, Ker-Wei (Thesis advisor) / Chang, Chun (Committee member) / Arizona State University (Publisher)
Created2015
Description
This study investigates three issues that are relevant for the development of multinational investment banks in China. The first is about the domestic market conditions that are necessary for a country to develop multinational investment banks. The second issue is about the degree to which China has met these conditions. The last issue focuses on the potential strategies Chinese investment banks can undertake to become multinational corporations.
To address the first issue, I draw an important distinction between international investment banks and multinational investment banks. For an international investment bank to be regarded as a multinational, I propose that it must have a strong presence (i.e., holding at least one percent of the market share) in at least two of the seven major capital markets in the world. Using this criterion, I identify 25 multinational investment banks. I then analyze their home countries’ domestic market conditions and propose that the following six factors are important to the development of multinational investment banks: the size of the home country’s gross domestic product (GDP), the total capitalization of its domestic security market, the number of its Global 500 firms, the volume of its foreign direct investment (FDI), the internationalization of its currency, and the openness of its capital market to foreign investors.
By comparisons, I find that China’s domestic market conditions are comparable to the home countries of multinational investment banks with respect to the size of GDP, total market capitalization, the number of Global 500 firms, and the volume of FDI. What China lags behind are the internationalization of currency and the openness of capital market to foreign investors. Given the current trends of development, it is very likely that China will be able to catch up on the latter within ten years, thus meeting all the conditions necessary for the development of multinational investment banks.
Based on the above findings, I suggest that Chinese investment banks seize this historical opportunity, speed up the internationalization of their businesses, and learn from the experiences of global industry leaders to become truly multinational corporations.
To address the first issue, I draw an important distinction between international investment banks and multinational investment banks. For an international investment bank to be regarded as a multinational, I propose that it must have a strong presence (i.e., holding at least one percent of the market share) in at least two of the seven major capital markets in the world. Using this criterion, I identify 25 multinational investment banks. I then analyze their home countries’ domestic market conditions and propose that the following six factors are important to the development of multinational investment banks: the size of the home country’s gross domestic product (GDP), the total capitalization of its domestic security market, the number of its Global 500 firms, the volume of its foreign direct investment (FDI), the internationalization of its currency, and the openness of its capital market to foreign investors.
By comparisons, I find that China’s domestic market conditions are comparable to the home countries of multinational investment banks with respect to the size of GDP, total market capitalization, the number of Global 500 firms, and the volume of FDI. What China lags behind are the internationalization of currency and the openness of capital market to foreign investors. Given the current trends of development, it is very likely that China will be able to catch up on the latter within ten years, thus meeting all the conditions necessary for the development of multinational investment banks.
Based on the above findings, I suggest that Chinese investment banks seize this historical opportunity, speed up the internationalization of their businesses, and learn from the experiences of global industry leaders to become truly multinational corporations.
ContributorsLiu, Xin (Author) / Chang, Chun (Thesis advisor) / Shen, Wei (Thesis advisor) / Chen, Hong (Committee member) / Arizona State University (Publisher)
Created2015
Description
The current study combines field study, survey study, and public financial reports, and conducts an in-depths comprehensive study of the cost of the global tire industry. By comparing the price and the total cost structure of standardized tire products, we investigate Chinese tire industry’s global competitiveness, especially in light of China’s fast increasing labor cost. By constructing a comprehensive cost index (CCI), this dissertation estimates the evolution and forecasts the trend of global tire industry’s cost structure. Based on our empirical analysis, we provide various recommendations for Chinese tire manufacturers, other manufacturing industries, and foreign trade policy makers.
ContributorsZhang, Ning (Author) / Zhu, Ning (Thesis advisor) / Shen, Wei (Thesis advisor) / Chen, Hong (Committee member) / Arizona State University (Publisher)
Created2015
Description
There has been much debate in the world of academia over the valuation of conglomerates. This thesis proposes the use of the EVA theory in explaining fluctuations in conglomerates’ valuation, and we believe that ROIC, WACC, and ROIC-WACC are three indicators that to a certain extent explain these valuation fluctuations. Through analysis of a sample containing 23 conglomerates, this thesis finds that ROIC, WACC, and ROIC-WACC exhibit positive correlation with valuation fluctuations. In the case study on Fosun, this thesis finds that ROIC-WACC is highly correlated with Fosun’s valuation fluctuations and next with ROIC. Thus this thesis conjectures that for investment companies for which investment capital is derived largely from insurance float, such as Fosun, ROIC-WACC is a better valuation tool.
ContributorsLiang, Xinjun (Author) / Chen, Hong (Thesis advisor) / Pei, Ker-Wei (Thesis advisor) / Zhu, Ning (Committee member) / Arizona State University (Publisher)
Created2015
Description
The city of Shanghai is set to become an international financial center (IFC) by 2020. To achieve this goal, it is imperative to clearly define the key characteristics of an IFC. In this study I draw from recent research on the ranking of IFCs to develop an index of these key characteristics that can be used to assess a city’s standings as an IFC. Based on a review of prior research, I first put together a comprehensive list of the indicators that have been used to evaluate IFCs, which includes six first-level indicators and 34 second-level indicators. I then collect information on all these indicators from public sources for the following eight cities each year from 2011 to 2013: London, New York, Paris, Hong Kong, Tokyo, Singapore, Beijing and Shanghai. Next, I conduct a principal component analysis (PCA) on my data, and obtain four primary factors that contain most information of the original 34 indicators. The first factor covers 18 of the original indicators and reflects a city’s level of development in general business environment. The second factor covers 10 of the original indicators and reflects a city’s level of development in financial markets. The third factor covers three of the original indicators and reflects a city’s level of economic vitality. The fourth factor covers three of the original indicators and reflects a city’s level of the costs of living. I further calculate the composite scores for the above eight cities along these four factors, and find that these eight cities can be classified into three tiers on the basis of their scores. The first tier consists of New York and London; the second tier consists of Singapore, Hong Kong, Paris and Tokyo; and the third tier consists of Shanghai and Beijing. I also find that Shanghai has been making progress in its scores along these four factors over the last three years, especially regarding financial market development, economic vitality, and cost of living. What Shanghai needs to focus on next is to improve its business environment so that it can move up to the second tier in IFC status.
ContributorsWang, Weiren, Ph.D (Author) / Yao, David (Thesis advisor) / Gu, Bin (Thesis advisor) / Chen, Hong (Committee member) / Arizona State University (Publisher)
Created2015
Description
Using historical data from the third-party payment acquiring industry, I develop a statistical model to predict the probability of fraudulent transactions by the merchants. The model consists of two levels of analysis – the first focuses on fraud detection at the store level, and the second focuses on fraud detection at the merchant level by aggregating store level data to the merchant level for merchants with multiple stores. My purpose is to put the model into business operations, helping to identify fraudulent merchants at the time of transactions and thus mitigate the risk exposure of the payment acquiring businesses. The model developed in this study is distinct from existing fraud detection models in three important aspects. First, it predicts the probability of fraud at the merchant level, as opposed to at the transaction level or by the cardholders. Second, it is developed by applying machine learning algorithms and logistical regressions to all the transaction level and merchant level variables collected from real business operations, rather than relying on the experiences and analytical abilities of business experts as in the development of traditional expert systems. Third, instead of using a small sample, I develop and test the model using a huge sample that consists of over 600,000 merchants and 10 million transactions per month. I conclude this study with a discussion of the model’s possible applications in practice as well as its implications for future research.
ContributorsZhou, Ye (Author) / Chen, Hong (Thesis advisor) / Gu, Bin (Thesis advisor) / Chao, Xiuli (Committee member) / Arizona State University (Publisher)
Created2015
Description
This thesis starts with an analysis of the current situation of the pharmaceutical industry in China, and discusses the strategic mergers and acquisitions (M&A) by small and medium-sized enterprises (SMEs) in the pharmaceutical industry in China. It elaborates on the rationale for the development of the mergers and acquisitions of the pharmaceutical SMEs. Then a literature review is provided on the causes of corporate mergers and acquisitions such as the economies of scale, synergistic effect, transaction costs, market power, and strategic diversification.Next,the thesis analyzes the underlying rationale for the M&A transactions in the pharmaceutical industry in China, and explores the likely path of successful value creation for pharmaceutical SMEs in China. Specifically, with five in-depth case studies of M&A transactions of pharmaceutical firms, this thesis reveals the critical success factors leading to value creation and growth in the practice of mergers and acquisitions of the pharmaceutical SMEs in China.
ContributorsZhou, Yan (Author) / Pei, Ker-Wei (Thesis advisor) / Chen, Hong (Committee member) / Shen, Wei (Committee member) / Arizona State University (Publisher)
Created2015