Corporate Financing Structures of Non-listed Firms in Four East Asian CountriesJBIC Discussion Paper No.1
JBIC Discussion Papers are research outputs of the Research Division, Policy and Strategy Office for Financial Operations. These papers were written by domestic and overseas researchers on specific subjects in order to promote their exchange of research work.
The main purpose of this study is to establish to a certain extent certain stylized facts concerning the general patterns of non-listed corporate financing in Indonesia, Malaysia, the Philippines, and Thailand post crisis. Moreover, we seek to explore some preliminary relationships between the corporate characteristics of these countries, although we do not intend to systematically examine the corporate finance models.
We find that during the sample period (after the financial crisis), non-listed firms had to heavily rely on internal sources in order to finance their growth, and among the external debt financing used by the sample firms, trade credit and loan from related parties and shareholders were two key sources. With respect to the relationship between variables, the preliminary correlation analysis indicates that a larger firm in these sample countries tends to take more bank loans, and a firm with higher profitability is likely to finance its growth more from internal sources and uses more trade credit and retained earnings but less bank loan.
Overall, our findings suggest that an immature financial system and high agency cost may exist in the context of corporate financing in these four Asian countries; therefore, non-listed firms in these economies have to heavily rely on internal sources to finance their growth and to seek other alternative channels in order to acquire debt other than the formal banking system, which is also indicated by the International Monetary Fund (IMF).
Developing countries, non-listed corporation, corporate financing patterns.