Ken Hung - Academia.edu (original) (raw)

Papers by Ken Hung

Springer eBooks, 2010

Due to limited numbers of reliable international equity funds, the Markowitz investment model is ... more Due to limited numbers of reliable international equity funds, the Markowitz investment model is ideal in constructing an international portfolio. Overinvestment in one or several fast-growing markets can be disastrous as political instability and exchange rate fluctuations reign supreme. We apply the Le Châtelier principle to the international equity fund market with a set of upper limits. Tracing out a

Theoretical Economics Letters, 2018

International Journal of Environmental Research and Public Health, Mar 15, 2023

This article is an open access article distributed under the terms and conditions of the Creative... more This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY

Springer eBooks, Nov 14, 2012

Research in finance, May 19, 2004

ABSTRACT This paper explores dividend announcements based on information hypothesis. We explore i... more ABSTRACT This paper explores dividend announcements based on information hypothesis. We explore in particular whether or not information signaling theory existed in Taiwan. We also explore the free cash flow hypothesis. In order to eliminate affecting factors, we target companies with irregular dividends as research samples, just like those with specially designated dividends (SDD). We examine whether or not those proceeds may be deemed as future earnings prospection. In this paper we study mainly dividend announcements made during stockholder’s meetings of the companies listed in the Taiwan Stock Exchange (TSE) or R.O.C. Over-the-Counter Securities Exchange (ROSE). We apply event study as means of analyzing abnormal returns of the companies. In addition we use the GARCH model with traditional ordinary least square to estimate the market model. The results indicate that SDDs are considered positive signals by the national exchange, TSE. In addition, we also show that the first-time SDD does transmit a positive signal to the market regarding the firm’s future cash flow, and that the SDD of no payment in the previous three years is negative. Furthermore, we prove that low Q firms have greater market reaction than high Q firms in announcement period. The free cash flow hypothesis and firm size effects could not be verified in Taiwan.

Social Science Research Network, Dec 18, 2011

Theories predict that initiation of index derivatives could affect the informativeness of the und... more Theories predict that initiation of index derivatives could affect the informativeness of the underlying stocksf prices. We test this hypothesis by exploring stock price behavior around the introduction of the SandP 100 options on the CBOE in March 1983. Applying two alternative statistical methods to both daily and weekly data, we find that, following the listing of the index options, the underlying stocksf returns become significantly more random and, thus, less predictable, net of contemporary marketwide efficiency shifts. That is, the underlying stocksf prices tend to be more informative following the commencement of the index options, consistent with the hypothesis. Key words: SandP 100 index options, underlying stocks, return predictability, price informativeness

Social Science Research Network, 2010

The role of steam coal was constrained by the Kyoto Protocol and the Copenhagen Climate Summit wh... more The role of steam coal was constrained by the Kyoto Protocol and the Copenhagen Climate Summit which call for reduced emissions of green house gases and related measures. These agreements increase the importance in properly managing emissions. Coupled with rapidly increasing demand from China and India, a study on the rents of the Appalachian coal mines is as important as it is timely. In this paper, we show that response surfaces of producers' surpluses are nonlinear with respect to changes in any parameters. They are closely related to a given flow pattern in which only m+n-l positive coal flows prevail. Only when the flow patterns change does the response surfaces of the producers' surplus undergo structural changes. Production taxes decrease supplier's welfare. Furthermore the result of the Friedman test indicates that the relative welfare position, measured in terms of producers' rents, differs significantly in our simulation.

Communications in Statistics - Simulation and Computation, 1989

... Ken Hung Frank B. Alt Department of Accounting Department of Management Science and Finance a... more ... Ken Hung Frank B. Alt Department of Accounting Department of Management Science and Finance and Statistics Morgan State University University of Maryland Baltimore, MD 21239 College Park, MD 20742 ... That is, where ele = el + e4 , eZe = e2e3 - Ole4 ...

Applied Economics Letters, 2013

ABSTRACT This study applies the Sequential Panel Selection Method (SPSM) procedure proposed by Ch... more ABSTRACT This study applies the Sequential Panel Selection Method (SPSM) procedure proposed by Chortareas and Kapetanios (2009) to test the validity of long-run Purchasing Power Parity (PPP) for a sample of East Asian countries over the period March 1985 to September 2011. SPSM classifies the whole panel into a group of stationary series and a group of nonstationary series. In doing so, we can clearly identify how many and which series in the panel are stationary processes. Empirical results from the SPSM using the Panel Kapetanios et al. (KSS) unit root test (Ucar and Omay, 2009) with a Fourier function indicate that PPP holds true for most of these East Asian countries studied, with the exception of Hong Kong. Our results have important policy implications for these East Asian countries under study.

The International Trade Journal, Oct 31, 2017

This research analyzes country of origin and online promotional strategy in cross-border e-busine... more This research analyzes country of origin and online promotional strategy in cross-border e-business of consumer products. This research reveals the network of products involved in online promotions in cross-border e-business markets, based on country of origin, promotional strategies, cultural differences, and product attributes. The relationship between sales performance of online promotions and similarities of products is analyzed based on the Moran and Geary indices. The quality management of cross-border e-business is further studied based on research of consumer behavior. This research offers support to further discussions about quality management based on an analysis of consumer behavior in cross-border e-business markets.

Romanian Journal of Economic Forecasting, 2015

With the development of the Chinese IT industry, a number of Chinese IT companies have enhanced t... more With the development of the Chinese IT industry, a number of Chinese IT companies have enhanced their involvement in the global market. The research of internationalization strategy, firm attributes, product attributes and firm performance in a complex network can be helpful to further reveal the effect of an internationalization strategy on firm performance. Dynamic cluster analysis is performed to analyze the relationship between internationalization strategy and firm performance based on big data concerning interactions with firm attributes and product attributes. The complex network of internationalization strategy, firm attributes, product attributes and firm performance is analyzed in a 2-mode network. The relationship of internationalization strategy and firm performance, concerning the effects of firm attributes, are further tested by a path model, and the effect of an internationalization strategy on firm performance is further estimated. This research finds that an internationalization strategy has a positive relationship with firm performance, and an indirect positive effect through financial leverage. Also, the integral function of internationalization strategy on firm performance in the complex network is generally on an ascending trend. This research can be helpful to policy makers and global managers of the Chinese IT companies in their future corporate decisions.

International Journal of Environmental Research and Public Health

Developing countries are primary destinations for FDI from emerging economies following the World... more Developing countries are primary destinations for FDI from emerging economies following the World Investment Report 2022, including destinations in OECD countries. Based on three theoretical lenses and case analyses, we argue that Chinese outward FDI has impacts on wellbeing in destination countries, and that this is an important issue for psychological health in response to COVID-19. Based on the super-efficiency DEA approach, our study investigated the impact of Chinese outward FDI on wellbeing in OECD countries. We also applied a Tabu search to identify country groups based on the relationship between Chinese outward FDI and wellbeing and we developed a key node analysis of the country groups using an immune algorithm. This research has implications for public administrators in global governance and could help shape FDI policies to improve psychological health of the destination countries in response to COVID-19.

Journal of Accounting and Finance, 2021

Theoretical Economics Letters, 2018

In this paper, we calculate four different kinds of means-AM, GM, HM, and GDM-to investigate the ... more In this paper, we calculate four different kinds of means-AM, GM, HM, and GDM-to investigate the risk-return contour using Markowitz risk minimization and Sharpe's angle maximization models. For a given k value (target portfolio return), the rank order of risk or variance-covariance (υ) can change. In the vertical segment of an efficient frontier curve, we observed v(GDM)> v(HM)> v(GM)> v(AM). At higher k values, the rank changes to v(GDM)> v(HM)> v(AM)> v(GM). That is to say, ranking a portfolio using different kinds of means may well give different rankings depending on what k value one is evaluating. It is also shown the harmonic mean should not be used in the case of a small negative growth rate in stock prices.

International Journal of Financial Research, 2015

The Averch-Johnson model provides a classic depiction of the behavior of a regulated monopoly fir... more The Averch-Johnson model provides a classic depiction of the behavior of a regulated monopoly firm. It has become one of important models and has found wide applications especially in energy and utility industry. The traditional A-J model assumes that regulated or fair rate of return is exogenous to but not affected by the market cost of capital, therefore, demand for capital (hence output) is not responsive to the change in the cost of capital, a result that contradicts well-established phenomenon in business world. In this paper, we show that the capital investment could indeed respond to a change in the cost of capital if such a change affects the fair rate of return. Consequently, the traditional Averch-Johnson model is only a special case of a more general outcome.

Chinese Business Review, 2013

This paper investigates the market timing hypothesis of capital structure using a sample of 1,077... more This paper investigates the market timing hypothesis of capital structure using a sample of 1,077 Chinese firms for the period 1992 to 2007. We find that market timing plays a significant role in capital structure decisions. However, market timing effects are not persistent and disappear within three years. The results suggest the prominent role played by the government in timing of security issues.

SpringerReference

Coupon-prefunded bonds have been developed and sold by investment bankers in place of zero-coupon... more Coupon-prefunded bonds have been developed and sold by investment bankers in place of zero-coupon bonds to raise funds for companies facing cash flow problems. Additional bonds are issued and proceeds are deposited in an escrow account to finance the coupon payment. Our analysis indicates that a coupon-prefunded bond is equivalent to a zero-coupon bond only if the return from the escrow account is the same as the yield to maturity of the prefunded issue. In reality, the escrow return is lower than the bond yield. As a result, the firm provides interest subsidy through issuing additional bonds which leads to higher leverage, greater risk, and loss of value compared to a zero-coupon issue.

Springer eBooks, 2010

Due to limited numbers of reliable international equity funds, the Markowitz investment model is ... more Due to limited numbers of reliable international equity funds, the Markowitz investment model is ideal in constructing an international portfolio. Overinvestment in one or several fast-growing markets can be disastrous as political instability and exchange rate fluctuations reign supreme. We apply the Le Châtelier principle to the international equity fund market with a set of upper limits. Tracing out a

Theoretical Economics Letters, 2018

International Journal of Environmental Research and Public Health, Mar 15, 2023

This article is an open access article distributed under the terms and conditions of the Creative... more This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY

Springer eBooks, Nov 14, 2012

Research in finance, May 19, 2004

ABSTRACT This paper explores dividend announcements based on information hypothesis. We explore i... more ABSTRACT This paper explores dividend announcements based on information hypothesis. We explore in particular whether or not information signaling theory existed in Taiwan. We also explore the free cash flow hypothesis. In order to eliminate affecting factors, we target companies with irregular dividends as research samples, just like those with specially designated dividends (SDD). We examine whether or not those proceeds may be deemed as future earnings prospection. In this paper we study mainly dividend announcements made during stockholder’s meetings of the companies listed in the Taiwan Stock Exchange (TSE) or R.O.C. Over-the-Counter Securities Exchange (ROSE). We apply event study as means of analyzing abnormal returns of the companies. In addition we use the GARCH model with traditional ordinary least square to estimate the market model. The results indicate that SDDs are considered positive signals by the national exchange, TSE. In addition, we also show that the first-time SDD does transmit a positive signal to the market regarding the firm’s future cash flow, and that the SDD of no payment in the previous three years is negative. Furthermore, we prove that low Q firms have greater market reaction than high Q firms in announcement period. The free cash flow hypothesis and firm size effects could not be verified in Taiwan.

Social Science Research Network, Dec 18, 2011

Theories predict that initiation of index derivatives could affect the informativeness of the und... more Theories predict that initiation of index derivatives could affect the informativeness of the underlying stocksf prices. We test this hypothesis by exploring stock price behavior around the introduction of the SandP 100 options on the CBOE in March 1983. Applying two alternative statistical methods to both daily and weekly data, we find that, following the listing of the index options, the underlying stocksf returns become significantly more random and, thus, less predictable, net of contemporary marketwide efficiency shifts. That is, the underlying stocksf prices tend to be more informative following the commencement of the index options, consistent with the hypothesis. Key words: SandP 100 index options, underlying stocks, return predictability, price informativeness

Social Science Research Network, 2010

The role of steam coal was constrained by the Kyoto Protocol and the Copenhagen Climate Summit wh... more The role of steam coal was constrained by the Kyoto Protocol and the Copenhagen Climate Summit which call for reduced emissions of green house gases and related measures. These agreements increase the importance in properly managing emissions. Coupled with rapidly increasing demand from China and India, a study on the rents of the Appalachian coal mines is as important as it is timely. In this paper, we show that response surfaces of producers' surpluses are nonlinear with respect to changes in any parameters. They are closely related to a given flow pattern in which only m+n-l positive coal flows prevail. Only when the flow patterns change does the response surfaces of the producers' surplus undergo structural changes. Production taxes decrease supplier's welfare. Furthermore the result of the Friedman test indicates that the relative welfare position, measured in terms of producers' rents, differs significantly in our simulation.

Communications in Statistics - Simulation and Computation, 1989

... Ken Hung Frank B. Alt Department of Accounting Department of Management Science and Finance a... more ... Ken Hung Frank B. Alt Department of Accounting Department of Management Science and Finance and Statistics Morgan State University University of Maryland Baltimore, MD 21239 College Park, MD 20742 ... That is, where ele = el + e4 , eZe = e2e3 - Ole4 ...

Applied Economics Letters, 2013

ABSTRACT This study applies the Sequential Panel Selection Method (SPSM) procedure proposed by Ch... more ABSTRACT This study applies the Sequential Panel Selection Method (SPSM) procedure proposed by Chortareas and Kapetanios (2009) to test the validity of long-run Purchasing Power Parity (PPP) for a sample of East Asian countries over the period March 1985 to September 2011. SPSM classifies the whole panel into a group of stationary series and a group of nonstationary series. In doing so, we can clearly identify how many and which series in the panel are stationary processes. Empirical results from the SPSM using the Panel Kapetanios et al. (KSS) unit root test (Ucar and Omay, 2009) with a Fourier function indicate that PPP holds true for most of these East Asian countries studied, with the exception of Hong Kong. Our results have important policy implications for these East Asian countries under study.

The International Trade Journal, Oct 31, 2017

This research analyzes country of origin and online promotional strategy in cross-border e-busine... more This research analyzes country of origin and online promotional strategy in cross-border e-business of consumer products. This research reveals the network of products involved in online promotions in cross-border e-business markets, based on country of origin, promotional strategies, cultural differences, and product attributes. The relationship between sales performance of online promotions and similarities of products is analyzed based on the Moran and Geary indices. The quality management of cross-border e-business is further studied based on research of consumer behavior. This research offers support to further discussions about quality management based on an analysis of consumer behavior in cross-border e-business markets.

Romanian Journal of Economic Forecasting, 2015

With the development of the Chinese IT industry, a number of Chinese IT companies have enhanced t... more With the development of the Chinese IT industry, a number of Chinese IT companies have enhanced their involvement in the global market. The research of internationalization strategy, firm attributes, product attributes and firm performance in a complex network can be helpful to further reveal the effect of an internationalization strategy on firm performance. Dynamic cluster analysis is performed to analyze the relationship between internationalization strategy and firm performance based on big data concerning interactions with firm attributes and product attributes. The complex network of internationalization strategy, firm attributes, product attributes and firm performance is analyzed in a 2-mode network. The relationship of internationalization strategy and firm performance, concerning the effects of firm attributes, are further tested by a path model, and the effect of an internationalization strategy on firm performance is further estimated. This research finds that an internationalization strategy has a positive relationship with firm performance, and an indirect positive effect through financial leverage. Also, the integral function of internationalization strategy on firm performance in the complex network is generally on an ascending trend. This research can be helpful to policy makers and global managers of the Chinese IT companies in their future corporate decisions.

International Journal of Environmental Research and Public Health

Developing countries are primary destinations for FDI from emerging economies following the World... more Developing countries are primary destinations for FDI from emerging economies following the World Investment Report 2022, including destinations in OECD countries. Based on three theoretical lenses and case analyses, we argue that Chinese outward FDI has impacts on wellbeing in destination countries, and that this is an important issue for psychological health in response to COVID-19. Based on the super-efficiency DEA approach, our study investigated the impact of Chinese outward FDI on wellbeing in OECD countries. We also applied a Tabu search to identify country groups based on the relationship between Chinese outward FDI and wellbeing and we developed a key node analysis of the country groups using an immune algorithm. This research has implications for public administrators in global governance and could help shape FDI policies to improve psychological health of the destination countries in response to COVID-19.

Journal of Accounting and Finance, 2021

Theoretical Economics Letters, 2018

In this paper, we calculate four different kinds of means-AM, GM, HM, and GDM-to investigate the ... more In this paper, we calculate four different kinds of means-AM, GM, HM, and GDM-to investigate the risk-return contour using Markowitz risk minimization and Sharpe's angle maximization models. For a given k value (target portfolio return), the rank order of risk or variance-covariance (υ) can change. In the vertical segment of an efficient frontier curve, we observed v(GDM)> v(HM)> v(GM)> v(AM). At higher k values, the rank changes to v(GDM)> v(HM)> v(AM)> v(GM). That is to say, ranking a portfolio using different kinds of means may well give different rankings depending on what k value one is evaluating. It is also shown the harmonic mean should not be used in the case of a small negative growth rate in stock prices.

International Journal of Financial Research, 2015

The Averch-Johnson model provides a classic depiction of the behavior of a regulated monopoly fir... more The Averch-Johnson model provides a classic depiction of the behavior of a regulated monopoly firm. It has become one of important models and has found wide applications especially in energy and utility industry. The traditional A-J model assumes that regulated or fair rate of return is exogenous to but not affected by the market cost of capital, therefore, demand for capital (hence output) is not responsive to the change in the cost of capital, a result that contradicts well-established phenomenon in business world. In this paper, we show that the capital investment could indeed respond to a change in the cost of capital if such a change affects the fair rate of return. Consequently, the traditional Averch-Johnson model is only a special case of a more general outcome.

Chinese Business Review, 2013

This paper investigates the market timing hypothesis of capital structure using a sample of 1,077... more This paper investigates the market timing hypothesis of capital structure using a sample of 1,077 Chinese firms for the period 1992 to 2007. We find that market timing plays a significant role in capital structure decisions. However, market timing effects are not persistent and disappear within three years. The results suggest the prominent role played by the government in timing of security issues.

SpringerReference

Coupon-prefunded bonds have been developed and sold by investment bankers in place of zero-coupon... more Coupon-prefunded bonds have been developed and sold by investment bankers in place of zero-coupon bonds to raise funds for companies facing cash flow problems. Additional bonds are issued and proceeds are deposited in an escrow account to finance the coupon payment. Our analysis indicates that a coupon-prefunded bond is equivalent to a zero-coupon bond only if the return from the escrow account is the same as the yield to maturity of the prefunded issue. In reality, the escrow return is lower than the bond yield. As a result, the firm provides interest subsidy through issuing additional bonds which leads to higher leverage, greater risk, and loss of value compared to a zero-coupon issue.