Study of the Financial Structure and Role of Financial Institutions in Ensuring Faster Economic Growth - Research Paper Example

Study of the Financial Structure and Role of Financial institutions in ensuring faster Economic growth Name of Student Word Count: 5,139 Executive Summary The analysis of success of state owned companies and private companies is very crucial in this paper. In majority of cases, the private corporations met with success. Even in communist China, which liberalized its policies according to the changing needs, there are successful private companies that are formed by merging some state owned companies. In ASEAN and developing economies, the privatization of the corporations paved the way for emergence of successful economy. Nevertheless this is not the case all the way. In Singapore the state owned Temasek Company was run successfully. The reasons for success and failure of private and state owned companies were discussed along with financial structure and reforms that are causing the success were presented. The investments in fixed income securities as a indicator for weak economy and volatile stock markets was discussed and analyzed using GARCH model Contents Executive Summary 2 Abstract 4 Introduction 4 Literature Review 5 Methodology 12 Analysis 21 Chapter headings and side headings 23 Research Questions 25 Tabulation of state owned companies and their profits 26 Quarterly time table for research 27 Study of the Financial Structure and Role of Financial institutions in ensuring faster Economic growth Abstract Proposed study is aimed at providing a framework for developing economies, to determine the financial structure that would answer the question about the effects of bank based financial system for a better stability. The study was done with the analysis of Asian Financial Crisis, viewing critically the contentious aspects that are applicable to the economies like China. The study would examine various aspects of Corporate Governance and the legal framework in developing countries and determine the cost of capital that these countries incur, due to the changed financial structure. The efficiency of state owned enterprises and the privatization effort will also be studied. 1.0 Introduction The countries in the world are moving closer due to increased economic and business activities of companies belonging to them in different parts of the world. Due to the above mentioned activities trade between countries was being made easier and natural. When different companies of different countries are operating overseas, the financial structures of the majority of the countries need to be restructured. This involves the intermediaries providing financial service being more important in the global economy. While in the course of financial restructuring the option for selecting the best structure is a challenge rather than an option. Moreover there are issues peculiar to certain historic reasons. In this course of restructuring, number of state owned financial institutions and banks were being privatized or changing their mode of governance. The changes involve the corporate responsibility and the regulations to avoid the crises like Asian financial crisis in future. The aim of the present study is to study these changes and the consequences of these changes in the success or failure of different companies in private, public sectors and the companies that are taken over. 2.0 Literature review 2.1 The Financial structure: Allen (2000) has compared the financial structures to determine whether market based funding is more appropriate for economic growth, compared to banks and intermediaries contributing the funds. La Porta (1997) opines that good legal system is required for success of a financial structure. Levine (1997) Demirguk-Kunt (1999) also agreed with the above opinion. They discussed about unresolved confusion, of which system is better. It is pointed out that Common Law countries have well developed markets, and French Law countries do not have well developed markets. Germany and Japan which is bank based and are doing equally well. At a time it was felt that Japanese financial system was considered as very successful. So the debate continues about which financial structure is most appropriate. Present study will make sample study of firms, countries and industries to determine, if a particular financial structure is more appropriate. The aspects such as debt, Equity, monetary policies, fiscal policies, intermediation and government finance; macroeconomics, economic development and regulation; politics; and legal framework and corporate governance will be examined in the study. 2.2. International financial regulation in each country. Countries with very high restriction fail to attract overseas investment. Those without restriction may find the fluctuation in inflows and outflows triggering panic. It is proposed to study the regulations in those countries, where the impact of Asian crisis was minimum. The countries like Taiwan and Singapore can be considered for the study. Financial crisis in Indonesia has taken a terrible toll due to price rise protests and racial turmoil, where as Malaysia, Singapore Taiwan and Hong Kong had a different story. The experiences of Russia, Brazil and Mexico also need to be examined together, to understand if, the differences in international financial regulations had role in resulting the crisis. 2.3. Structuring financial contracts and corporate governance of financial institutions such as roles and functions According to Classens (2006), country’s corporate governance requirement and adherence to the norms by the firms, followed by consistent enforcement, have great impact on flow of overseas capital. Successful implementation reduces cost of capital and also makes low cost funds available to the industry. The authors generally conclude that good governance systems help the individual enterprises, help the development of financial markets, and help the countries raise low cost overseas funds. This theory also says that overseas funds reduce overall cost of capital. This improves improved transparency and ensures higher earnings on equity, efficiency, and more favorable treatment of all stakeholders. Even in this favorable situation the direction of causality is not always clear. The law and finance literature has documented the important role of institutions aimed at contractual and legal enforcement, including corporate governance, across countries. Using data at company level, researchers have documented relationships between countries’ corporate governance frameworks on the one hand and performance, valuation, the cost of capital, and access to external financing on the other. Given the benefits of good corporate governance, firms and countries should voluntarily reform more. Resistance by entrenched owners and managers at the firm level and political economy factors at the level of markets and countries partly explain why they do not. 2.4. Budget constraint and state-owned firm State owned enterprises are normally starved of growth funds, as the Governments have other pressing needs. Hence privatization of state owned enterprises is advocated. Though majority analysts favor this opinion, it is not the case in all the contexts. For example, in case of Singapore the state owned company Temasek was being run successfully. The reason is good corporate governance that was implemented in taking decisions and investing the funds. Even in Taiwan the public construction company and companies like Retired Soldier Reengineering Association (RSEA), under the Veterans Affairs Commission, and the Bureau of Engineering Services (BES) under the Ministry of Economic Affairs (hereafter, MOEA)1 have constructed infrastructure projects for the development of economy. Here it should be noted that the taiwan and singapore are working in tandem with the US laws and governance. This resulted in ensuring the companies good market for their products and the availability of low cost overseas funds. This is not the case in all the countries, which have to concentrate on other sectors like agriculture and welfare schemes for the downtrodden. In thailand the government restricted its complete ownership to infrastructure providers like water and elecricity departments. It rised the investment cap for private operators to 50 percent in some critical sectors like construction. In case of tobacco industry the IMF has to supply an aid of $4billion dollars to privatise and corporatise thailand’s state controlled $17 billion tobacco industry.1 This reveals that in majority cases regarding developing economies the privatisation and corporatisaiton of the economies and the structures showed good financial results. Gray (1996) has stated that the privatization of state owned enterprises, in emerging economies has been attempted with different degrees of success. In any case, the creation of strong financial intermediaries, and improving contribution to GDP through the previous state owned enterprises resulted in good performance. The study would compare the GDP contributions of private enterprises with state owned enterprises to drive home the point that privatization is in fact in the interest of the economy. Even in China State owned companies control $1.3 trillion of assets and are in a process of loosing control over them. China’s Blue Star group a private chemical company was a result of combining of 70 state owned companies. This type of privatization and financial restructuring in china made companies like Motorola, Kentucky chicken and others to invest in china. 2 In South Korea the financial restructuring started with the help of US firms. The companies like Korea gas corporation, which has control over the oil reserves and business was being run in the public sector due to lack of competition. The companies which face stiff competition were privatized and South Korea started doing business with both USA and China. The Korean companies benefited from markets of both US and China. These success stories of the companies either in public or private sector is due to timely changes in corporate governance and financial structure enabling the companies to have access to vast markets and making them available the low cost international funds. 2.5. The theory of financial crises such as 1997 Asian Financial Crisis Gray (1999) mentions the need to look at the corporate balance sheets to get clues about an impending financial crisis. Even this examination or perusal of the corporate balance sheets will reveal only the macro economic factors but not he micro economic factors that caused the crisis. Policy makers could use the study of balance sheets to reduce the impact of an impending danger to the economy. The study of balance sheets must in such a manner to know about the flaws in corporate governance. The regular process in Finance ministries or in the Central Bank, not to dig into balance sheets of corporations results is giving facts only about macro economic indicators. Heavily indebted corporations, fluctuating currencies, foreign currency borrowings, can create cyclical cash flows, resulting in weakness in currency. These factors cannot be revealed in examining the balance sheets of the corporations. The corporations act according to the policies of the government. The study that analyses the performance of the companies according to the financial policy of the government is capable of revealing the micro economic indicators that caused the crisis. Changes in world interest rates can cause short term investments to evaporate, causing severe foreign exchange crisis. Tight monetary policy can also cause balance sheet distress, if interest payout is high. The balance sheets of state owned enterprises had large impact on cash flow for Govt. Till the Month of June, 1997 South East Asian economies were considered by IMF as miracle economies and Brazil and Russia were the real hot destinations for investors. Crisis occurred only in those countries, where the private investment flow was third largest (Indonesia) fourth, fifth, sixth largest in the world. After the crisis the theories for explaining it were explored. There is a need to study both the positions about Asian Financial crisis, to generalize the vulnerabilities of overseas capital flows and impact on currencies and foreign exchange balances. 2.6 Financial econometrics The linear probability model built for analyzing the financial crisis of Malaysia, Indonesia, Thailand Singapore and Philippines indicated that FDI, money stock, growth of exports, current account balance and real interest rates played a major role in the crisis. The weak domestic credit, increased inflation, short term debt relative to reserves resulted in occurrence of crisis.1 2.7. Organizational change after Joint Venture, Merger, Acquisitions, and Take Over Osage (2006) has recounted the organization changes due to bank mergers and effects of restructuring. Hostile takeovers have been hotly countered and the country’s policy should be clear about admissibility of take over. Research is needed on policies related to mergers and de mergers, and the Government regulations in the area and about external investments. 2.8. Internal and external auditing in corporate governance “Audit Quality Forum” (2005) has underlined the importance of strengthening statutory audits as well as internal audits. This makes the financial reports transparent and that results in existence of companies, which sustain growth. 3.0 Methodology Method used for research will be study of the random sample data, samples taken on the basis of certain hypothesis and assumptions in each case. Testing of validity of hypothesis based on the data. For determining the best financial structure, the data from USA, UK, Germany and Japan will be compared to arrive at the aggregate cost of capital. Similarly cost of capital data will be compared for emerging market economies Data will be used for best practices on corporate governance from UK, France, China and Singapore. GDP growth and correlation with the additional capital formation and investment and savings rate will be done for evaluating the free trade benefits, market development Other tools to be used 3.1. Empirical Finance By investigating the daily returns for a particular number of years the degree of integration between markets of the different countries can be found. It was done in the case o Australia, china, Honk Kong, Malaysia, New Zealand and Singapore from 1988 to 1998. It was found that they were highly integrated with Japan. This implies that the fluctuations, growth or downfall of Japanese economy will effect these economies of these countries. After 1994 this integration was still more. The higher import share, greater differential in inflation rates, real interest rates and GDP growth rates have shown negative effects on stock market. The export of share of the above mentioned economies increased with respect to Japan and FDI from Japan to other Asian economies resulted in the crisis. 1 3.2. Investment Appraisal According to Justin Wood in his ‘Case of Asia’, the western firms wasted a lot of money in first investment. The reason is that they collaboration between the wrong partners for the right business. The poor structuring of joint ventures and misreading of the market also lead to the Asian financial crisis. Previously in China it is not possible to operate the wholly owned foreign enterprises. This resulted in wrong joint ventures and losses. After the crisis it is now possible in China to run wholly foreign owned enterprises in many sectors. This made management more effective and avoided the theft of technology by local partners.2The CEO of American Express Christopher Le Caillec asserts that the assessing the investment opportunities is the most challenging thing and the companies failed to do so before the financial crisis in East Asia. The markets are unpredictable, uncertainty about the currency, lack of clarity about the legislations and financial structures made western companies to lack visibility about the future. 3 3.3. Information economics and game theory with the applications to finance In game theory central bank, workers and firms are concerned. The level of employment (L­) Price level (P), Money supply (M), nominal wage rate (W), Real wage rate (R), expected price level (Pt) are concerned. 1 The rate of inflation is given by P – P( previous) The expected rate of inflation in case of Asian financial crisis is less than the real one at the time of the crisis. The countries in which the crisis occurred failed to expect the future inflation and the actions to avoid it were not taken. At the time of crisis in those countries the nominal wages of the workers were more than the services that are offered at the market. The policy of the central banks in those countries did not try to control the inflation rates. The increased salaries and the decreased supply triggered the crisis. 3.4. ARCH Model The examination of information flows for commodity futures traded in US and china markets found that US futures play a dominant role in transmitting the information to Chinese market. This confirms the leadership of US in global market. Though there is volatility in the market the US china futures are highly segmented in pricing. The study reveals that the connection with the US market is good for china. 1 3.5. Financial Derivatives In 2002 China lagged far behind in the development of derivatives markets. China notice that the development of derivatives market would help expand the financial market. Along with stock index futures SFE considered other derivatives like interest futures and foreign exchange. This made china to compete with the derivatives markets in Asian and western countries. 2 3.6. Forecasting Forecasting of the economic condition of a country will be on the basis of its commitments and agreements in international sector. If consider Singapore the forecasting of that country depends on the FTA between it and US. The flow of investment from US to Singapore gives rise to the forecasting about the booming economy.3 This is not the case with India in 2002. Though India is bigger than Singapore the absence of FTA with US will make the differences between the forecasting between it and Singapore. 3.7. Fixed Income Securities The fixed income securities denote the healthy economy up to some extent. When the economy is fluctuating the people try to invest in fixed income securities. If the forecasting is in such a manner that indicates sustaining growth the investment in shares will increase. So it can be termed as the presence of fixed income securities can be termed as healthy up to some extent. If they increase after certain extent it denotes the lack of confidence of the investor regarding the growth of the economy. The next model used is GARCH model. The following study will analyze the stock market developments between ASEAN countries and their dependence on US and JAPAN using GARCH models. The volatility resulted in investing in fixed income or secure securities like US treasury. The study resulted that the countries Korea, Singapore, Malaysia, Hong Kong and Taiwan have supported the interrelations between themselves and their dependence on Japan and US. There is no dispute that the relationship regarding Japan depends on geographical conditions. The link with US is an element that favors the thesis, which states the existence global process that integrates the developed countries with the global market. The lead role of Japan was weakened by stock market crisis of 1990-91. Until then Japan has macro economic conditions that dominate the asia Pacific region. Currency of Japan also found much acceptance in the markets of asia pacific till the crisis occur. The behaviour of the Niddei 225 was shown in the graph, which shows that the index has fallen to the values 4 years back. The above graph is obtained from http://www.feem.it/NR/rdonlyres/2DB88EEF-0F5E-4F1A-9FB4-BADBC6484C86/723/4303.pdf The study based on garch models is as below. GARCH model is used to model the phenomena that are typical of many financial time series. They can model the variances and volatility clustering. The simples formulation of a ARCH(r) model is: where a0>0, ai 0 (i=1,…r); ht indicates a white noise error and ht is the conditional variance of the process. In other terms, if Ft is the s-algebra generated by ,... , 1 t t h h , then E(e2 t|Ft) = ht. The second generalization can be mentioned is the use of a STAR model in the conditional mean of the process and a GARCH specification for the conditional variance (STAR-GARCH models). If we view this from an estimation view point, the parameters for the conditional mean and conditional variance can be estimated separately. In this case, given the Hessian for the STAR-GARCH model The above matrix equation is adapted from http://www.feem.it/NR/rdonlyres/2DB88EEF-0F5E-4F1A-9FB4-BADBC6484C86/723/4303.pdf Where indicating the vector of parameters in the conditional mean, and yr the vector of parameters of the conditional variance, elements Hxy and Hyx are both zero. Conclusion: The above analysis on the volatility of stock markets of Japan, US, ASEAN and their stock exchanges nekkie 225, S&P 500, FTSE 100 exhibits the vulnerabilities of ASEAN and Japan economies. These vulnerabilities resulted in investing in secure and fixed income securities by investors. Moreover the study established the dependence of the economies of ASEAN on US. The dependence of these economies on Japan is geographical, but the dependence on US is due to the integrated efforts of the developed economies to have global process regarding trade. 3.8. Financial Portfolio The above diagrams are adapted from http://images.google.co.in/imgres?imgurl=http://www.fundsupermart.com/main/articleFiles/Research/jap2004(2).gif&imgrefurl=http://www.fundsupermart.com/main/research/viewHTML.tpl%3FarticleNo%3D1281&h=316&w=538&sz=47&hl=en&start=11&tbnid=Xc8j-XtgfEB6NM:&tbnh=78&tbnw=132&prev=/images%3Fq%3DFinancial%2Bportfolio%2BChina%2BUS%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN The percentage of growth in GDP of Japan was given in the above tables. The results the above table denote the country’s financial portfolio. 3.9. MM Theory Miller and Modigliani theory regarding dividend payments, capital structure and pay out policies decides the payment and capital structure of the companies. The dividend offered by companies will be more if its earnings are more. The percentage of dividend offered by a company may differ from company to company. MM Proposition I considers the irrelevancy of the value to capital structure. It is to observe that in what follows financial instruments can be expected to take mainly two forms: stocks and bonds. In this structure, the value of a firm can be defined as: V = B + S Where B is the market value of the firm's debt and S is the market value of the firm's equity1 The MNCs belonging to developed countries more percentage of earnings as dividend regarding the companies in the developing countries. This is due to increase the confidence of share holders and for more earnings per share ratio. This makes the company to have access for capital of low cost. The share value of the company increases. The US companies in China have more market capitalization due to increase of share value for offering more percentage as dividend. This process is encouraging the MNCs of developed countries to invest in developing countries and countries like China. 3.10. Multiple Regression After applying all the above methods to compare China and US economies performance the multiple regression method provides solid basis for forecasting the investment flows and value drivers. The fields in which the investment can be done and into the industries the investment will flow can be estimated. This helps in deciding the areas of investment for companies of different industries to invest in different areas. Particularly multiple regression provides date for US and other Western companies to invest in East Asian countries, China and India. 3.11. Using EVIEWs and SPSS By developing an electronic data base one can apply EVIEW and SPSS for development economics and others related: Trade policies and Industrialization; competitiveness and clustering; competition and policy. The different types of methods described above can be made using EVIEWs and SPSS. 4. Analysis 4.1. The financial performance of each selected company, each country, and its stock market such as number of shareholders, share price, dividend, debt, equity, capital, interest rate, gearing, and so on. How efficiency of each stock market is? The above details when collected for a number of companies belonging to a same country reveal the performance of that country. 4.2. Financial risk analysis, economic growth, the dynamics of capital structure, portfolio strategies and management, investment strategies and policies in both S-T (short-term) and L-T (long-term) The above details belonging to a country reveals its short and long term strategies regarding the investments. They can decide the investment flow and forecasting for the economic growth. 4.3. Volatility modeling and forecasting :The more volatile the profitability of the companies, there will be less chance of flow of low cost funds into the country. The forecasting about the flow of investment will be degraded if the country’s companies’ profits are volatile. Volatile modeling is used to decide the flow of investments regarding FDI and FII. 4.4. Investment appraisal in new manufacturing environments The investment appraisal in new manufacturing environments will be done according to the areas financial structure and the availability of low cost funds to the companies. The market available in the country or favorable laws from the administration to make companies export oriented. 4.5. The factors that determine takeovers, flow of FDIs, FIIs. The effect of foreign investment on financial sectors, micro economics and macro economics can be studied for future appraisals. 4.6. Competition and convergence in financial markets according to the investments in different sectors. When investments flow in to a single sector the convergence of the competitors may occur. The competition will increase when there is reasonable increase in the demand for the product. When the demand reaches a saturation point the companies try to converge. 4.7. Impact of taxation and capital mobility with the impact on consumption, investment and growth in each country The impact of taxation is an important thing that decides the profitability of the company. If the tax structure is liberal, then the capital will be mobile while flowing into the country and solid after entering into it. The increase of consumption in the country increases the availability of the low cost funds as the companies increase their profitability. 5. Headings and Sub headings In this section we outline the project structure with the main chapter headings and sub-section headings below. The project will be structured as follows: Executive Summary Abstract 1. Introduction 2. Literature Review 2.1 The Financial structure: 2.2. International financial regulation in each country. 2.3. Structuring financial contracts and corporate governance of financial institutions such as roles and functions 2.4. Budget constraint and state-owned firm 2.5. The theory of financial crises such as 1997 Asian Financial Crisis 2.6 Financial econometrics 2.7. Organizational change after Joint Venture, Merger, Acquisitions, and Take Over 2.8. Internal and external auditing in corporate governance 3. Methodology 3.1. Empirical Finance 3.2. Investment Appraisal 3.3. Information economics and game theory with the applications to finance 3.4.ARCH Model 3.5. Financial Derivatives 3.6. Forecasting 3.7. Fixed Income Securities 3.8. Financial Portfolio 3.9. MM Theory 3.10. Multiple Regression 3.11. Using EVIEWs and SPSS 4. Analysis 5. Chapter headings and side headings 6. Research Questions 7. Tabulation of state owned companies and their profits 8. Quarterly time table for research 6. Research Questions (5.1) How and when do the financial systems with different constituents of institutions, perform their functions more efficiently than others? The financial systems with different constituents of institutions need stable financial structure and institutions. This increases the efficiency of the organizations. (5.2) what are possibilities and implications, if any, of having a bank-based financial system as opposed to a equity market-based system for developing economies? The bank based system is capable of increasing consumption by providing low interest loans to the customers. This increases the market for the manufacturing sector and banking system is capable of providing funds to the industry that is capable of decreasing the fluctuations in equity market based system (5.3) Can structural changes have any effect on company performance or country level long-term GNP growth? The financial and organizational structure of a company or a country is crucial for the company or economy’s performance. (5. 4).How can Governments in weaker economies identify impending financial crisis in time and take counter measures to address the crisis and also have solutions in hand to mitigate the impact. The governments in weaker economies can identify the financial crisis in time by analyzing both macro and micro economic factors. The reasons for the decreasing markets, consumption, profitability of the companies can be analyzed and timely action can be taken. The reason for the non availability of low cost funds and the obstacles in tax structure can be analyzed and the problems can be solved. 7. Tabulation of state owned companies and their profits Company Country Capital Million USD % return on capital Saving Bank Albania 33 -173 IBA united universal Ajarbaijan 19 55.6 BelPro Belarus 44 2.8 Invest bk Bosnia 29 1.5 BSK Bulgaria 79 12.4 Commerci Czech 1000 1.4 Post bank Hungari 148 6.5 Agri bank Lithuania 32 6.5 Sber bank Russian federation 1000 24.2 Eximp bank Ukrain 32 17.0 Aska bank Uzbekistan 138 13.5 Vijb Slovak Rep 160 17.5 Pkobp Poland 65 1.0 Icbc China 245 12.5 Temasek Singapore 70.9 11 8. Quarterly Time table for research Q1 Literature Survey for theory Jan-March Q2 Literature survey for theory April-Jun Q3 Data collection July-Sep Q4 Data Collection Oct-Dec Q5Data Analysis Jan-Mar Q6 Data analysis April-Jun Q7 Hypothesis generation Jul-Sep Q8 Hypothesis generation Oct-Dec Q9 Testing of hypothesis Jan-Mar Q10 Revisiting hypothesis April-Jun Q11 Discussion on hypothesis Jul- Sep Q12 Final research paper preparation and presentation Oct- Dec References The references were given in the following format Author, year, title, publisher or sponsor, edition information, type of media, date retrieved, website address 1. Allen, F. Gale, D.(2000), Comparing Financial Systems , Cambridge, Masschusetts, M.I.T. Press 2. Classens, S.,(2006), Corporate Governance and Development, World Bank Research Observer, Spring 2006, 21:91 3. Gray, C.W.(1996),In Search of Owners, Privatization and Corporate Governance in Transition Economies, WORLD BANK Research Observer(August96), Vol 11 No2. p.179 4. La Porta, R., Shrifer, A,, Vishney,R W,(1997), Legal Determinants of External Finance, Journal of Finance, Vol52, No 2 5. Levine, R, (1997), Financial Development and Economic Growth: Views and Agenda; Journal of Economic Literature, Vol 35, pp 688-726 6. Demirguk-Kunt, A. & Levine,R.,(1999) Bank based and market based financial systems: Cross country comparisons; World Bank Working paper; Retrieved on 3rd December,2006, from www.worldbank.org/html/dec/publication/workpapers/wps2000series/ wps2143/ 7. Gray, D F& Stone, M R (1999), Finance and Development, Corporate Balancesheet and Macroeconomic Policy; Finance & Development; Sept,1999, Vol 33, 3 8. Grabel, I (no date), Rejecting Exceptionalism: Reinterpreting Asian Financial Crisis; 3-12-06 , 9. Sheriff,,K.; Borish, M, Gross, A(NO DATE); State owned banks in transition, 3-12-06 from, www. inweb18.worldbank.org./ececa/eca.nsf/general 10. Author not mentioned, 2004, Taiwan’s major projects, US commercial service, , electronic, 13-12-06, http://www.buyusa.gov/taiwan/en/majorprojects.html 11. Suein L. Hwang and Michael M. Phillips, Wall Street Journal, 1998, IMF's Asian Bailout Could Open Markets for the Tobacco Giants, interactive.wsj.com, ,electronic, 13-12-06, http://www.hartford-hwp.com/archives/50/044.html 12. Author not mentioned, 2000, State-owned Enterprises: 'Sick Patients' Waiting for a Cure?, Knowledge@warton, ,electronic, 13-12-06, http://knowledge.wharton.upenn.edu/createpdf.cfm?articleid=805 13. Author not mentioned, 2004, taiwan’s major projects, US commercial service, ,electronic, 13-12-06, http://www.buyusa.gov/taiwan/en/majorprojects.html 14. Suein L. Hwang and Michael M. Phillips, Wall Street Journal, 1998, IMF's Asian Bailout Could Open Markets for the Tobacco Giants, interactive.wsj.com, ,electronic, 13-12-06, http://www.hartford-hwp.com/archives/50/044.html 15. Author not mentioned, 2000, State-owned Enterprises: 'Sick Patients' Waiting for a Cure?, Knowledge@warton, ,electronic, 13-12-06, http://knowledge.wharton.upenn.edu/createpdf.cfm?articleid=805, 16. Mete Feridun, 2002, East Asian Financial Crisis Revisited: An Econometric Analysis, 1981-2001, University of Connecticut, ,electronic, 13-12-06, http://ideas.repec.org/a/eaa/ijaeqs/v2y2005i1_3.html 17. Robert Johnson, Luc Soenen, 2002, Asian Economic Integration and Stock Market Co movement, Black well synergy, , electronic, 13-12-06, http://www.blackwell-synergy.com/links/doi/10.1111/1475-6803.00009/abs/ 18. Justin Wood, 2005, Making the case of Asia, CFO ASIA, , electronic, 13-12-06, http://www.cfoasia.com/archives/200507-01.htm 19. Andrew Buck, 2006, An introduction to game theory with introduction to economic applications, Temple university, ,electronic, 15-12-06, http://www.gametheory.net/lectures/level.pl 20. Fung H-G,  Leung W.K.; Xu, 2006, Information flows between china and US, Springer, ,electronic, 15-12-06, http://www.ingentaconnect.com/content/klu/requ/2003/00000021/00000003/05146981 21 News Report, 2002, China to develop Financial derivatives market, People’e daily, ,electronic, 15-12-06, http://english.peopledaily.com.cn/200208/28/eng20020828_102237.shtml 22. Speech of Franklin L. Lavin, , 2002, .S.-Singapore FTA: Taking Singapore Higher, US embassy in Singapore, ,electronic, 15-12-06, http://singapore.usembassy.gov/032202.html 23. Campbell R. Harvey, 1995, Capital structure and Pay out policies, WWW.Finance, ,electronic, 16-12-06, http://www.duke.edu/~charvey/Classes/ba350/capstruc/capstruc.htm Read More