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Papers by Charlie Charoenwong

Social Science Research Network, 2008

Earnings play a vital role in portraying a company's economic health. Hence, executives have ... more Earnings play a vital role in portraying a company's economic health. Hence, executives have incentives to manage earnings. Motivated by Degeorge et al. (1999) and Burgstahler and Dichev (1997), this study applies the behavioral framework developed by Degeorge et al. (1999) to investigate earnings management to exceed thresholds in Singapore and Thailand. The empirical evidence reveals that earnings management exists in Singapore and Thailand to avoid reporting losses and negative earnings growth. This earnings management practice, however, varies between financial and non-financial firms, between Singaporean and Thai firms, and between before and after the Asian financial crisis in 1997. Moreover, corporate governance structure is found to impact the extent of earnings management to exceed thresholds in Singapore.

Social Science Research Network, 1998

In this study, we argue that share price reaction to a ®rm's capital expenditure decisions depend... more In this study, we argue that share price reaction to a ®rm's capital expenditure decisions depends critically on the market's assessment of the quality of its investment opportunities. We postulate that announcements of increases (decreases) in capital expenditures positively (negatively) aect the stock prices of ®rms with valuable investment opportunities. Contrarily, we predict that announcements of increases (decreases) in capital spending negatively (positively) aect the share prices of ®rms without such opportunities. Our empirical results are generally consistent with these predictions. Overall, empirical evidence supports our conjecture that it is the quality of the ®rm's investment opportunities rather than its industry aliation which determines the share price reaction to its capital expenditure decisions.

This paper examines the effectiveness of trading halts using trade-by-trade data provided by the ... more This paper examines the effectiveness of trading halts using trade-by-trade data provided by the Stock Exchange of Thailand between January 1999 and December 2006. The transaction data enables us to closely analyze return, volatility and trading activities around the halts. This study also investigates trading performance of different types of investors around trading halts. Our results suggest that trading halts are efficient in maintaining stability and an orderly trading in the market. Trading halts serve as devices to facilitate price discovery process by allowing investors opportunity to adjust their trading interests and react to the material information. Our findings show that return and volatility tend to reverse to their normal period in a short period of time. However, high trading volume appears before and after halts but gradually decays within 3 days after resumption of trades. Moreover, the evidence reveals that domestic investors trade at better prices than foreign investors around trading halts periods. Retail domestic investors trade at the most favorable price than institutional domestic and foreign investors. Retails follow contrarian trading strategy by buying low and selling high.

Capital Markets Review, 2009

Journal of international finance and economics, Jun 1, 2023

Social Science Research Network, 1993

... Kee H. Chung is an Associate Professor of Finance and Charlie Charoenwong is a Ph.D. candidat... more ... Kee H. Chung is an Associate Professor of Finance and Charlie Charoenwong is a Ph.D. candidate at Memphis State University, Memphis ... More recently, Gahlon and Gentry [30] and Miles [49] define the systematic risk as a weighted average of the systematic risk associated ...

International Journal of Financial Studies

Since the adoption of the SEC’s Rule 10b-21 in 1988, many researchers have been concerned over th... more Since the adoption of the SEC’s Rule 10b-21 in 1988, many researchers have been concerned over the effectiveness of short sales constraints in preventing manipulative trading in the derivatives market. We analyze whether options can be used as synthetic short sale instruments to manipulate stock prices before a seasoned equity offer. Due to the existence of strict short sales constraints in the equity market and market makers’ anticipation of manipulative trading, it would be very costly for a manipulator to drive stock prices down artificially either by short selling in the equity market or by using synthetic short sales in the options market. Using a sample of 237 firms that issued SEOs on the NYSE and had options listed on any U.S. options exchange from April 2002 to December 2004, we show that potential manipulators in the options market tend to use put options as a trading vehicle during the SEO’s pre-offer period. The results of our empirical tests support the predictions of o...

We study the effect of changes involving component stocks of the Nikkei 225 stock index on the be... more We study the effect of changes involving component stocks of the Nikkei 225 stock index on the behavior of the Nikkei 225 index futures. Specifically, we examine the effects of component changes of the Nikkei 225 on the volume, returns, volatility, and bid-ask spreads (BAS) on its corresponding futures contract traded on the Singapore Exchange (SGX). We find that trading volume increases and the bid-ask spread decreases but there is no significant change in the returns of the SGX Nikkei 225 index futures after a component change takes place. This does not support the Price Pressure Hypothesis, which states that the increase in price of a stock after it is newly added into a stock index is only temporary and gradually

Journal of international business research, 2014

China-USA Business Review, 2013

In Markowitz's (1959) findings, portfolio analysis using semivariance tends to produce more effic... more In Markowitz's (1959) findings, portfolio analysis using semivariance tends to produce more efficient portfolios. A series of post-1960 researches support Markowitz's proposition. Specifically, Hogan and Warren (1974) prove that the fundamental structure of CAPM continues to hold when standard deviation is substituted with semivariance. This includes: (1) the linear relationship between the equilibrium expected return of efficient portfolio and portfolio risk; and (2) the linear relationship between the equilibrium expected return of an individual security and relative security risk. Market equilibrium model using downside semivariance, as This paper uses empirical data from Singapore, South Korea, Hong Kong, and Taiwan to test the appropriateness of using downside beta as a measure of systematic risk. Contrary to what is found in the previous study on the U.S. market, our findings suggest that the explanatory power of downside beta to the stock returns in these markets is weak. This may be due to the positive skewness of stock returns in emerging markets in Asia. In addition, sorting stocks by downside beta does not lead to the capturing of additional priced risk than sorting on regular market beta. This result remains consistent after controlling for abnormal stock returns in the calendar month of January.

This paper shows that multiple tick sizes implemented by purely order-driven markets may not be o... more This paper shows that multiple tick sizes implemented by purely order-driven markets may not be optimal. Evidence from the Stock Exchange of Thailand (SET) suggests that tick sizes are strong binding constraints on the quoted bid-ask spreads. More than 90% of the investors quote in one-tick spread, implying that tick sizes may be too large. The findings also indicate that tick sizes between Baht 0.01 and Baht 1.00 would, in general, enhance market liquidity by improving market depths and keeping trading costs low. It can be concluded that the SET could have implemented smaller ticks and fewer pricing grids. A reduction in tick size by half for the higher-priced range between Baht 200-400 causes minimal change in quoted depths and trading volume, while significantly decreasing quoted bid-ask spreads.

This paper examines the stock market reaction to the appointment of female directors in Singapore... more This paper examines the stock market reaction to the appointment of female directors in Singapore-listed companies and investigates what determines the reaction. We study a sample of 30 companies that has met several selection criteria and use the event study methodology applied to data collected before and after the announcement of the appointment of female directors to the boards of these companies. As a proxy for investor reactions, we examine changes in stock market prices of these companies at different points in time. We find a positive announcement effect and, over a two-day announcement period, an average value of 2.31% is generated for shareholders. This enhanced value is positively impacted by non-duality (separation of the offices of CEO and chairperson), and the appointment of women directors as CEO. However, the proportion of women directors, as a variable, did not have a significant effect on share prices. The study suggests that investors in Singapore value the diversity and potential contribution of women on the board of directors.(ProQuest: ... denotes formulae omitted.)IntroductionThe existing diversity literature reveals a slow but steady rise in female presence on the board of directors of companies around the world (e.g., Germaine and Siegel, 1999; Hughes 2000; Koss-Feder, 2002; and MacKendrick, 2002). While it is clear that in most countries female presence on boards of directors is limited, this paper examines whether the cries for equality are justified by what really matters to the firm's owners - shareholder value. Does gender diversity in the boardroom contribute to higher firm value? Several European countries (including France, Germany, Italy, the Netherlands, Spain, Switzerland, and the United Kingdom) have put regulations in place requiring a minimum proportion of female directors to be appointed. Singapore does not have such a requirement. This study therefore investigates the stock market reaction of investors to the voluntary appointment of female directors and evaluates the extent that investors recognize the potential contribution of women directors. Besides adding to the diversity of corporate boards, the appointment of female directors may be viewed as a means of improving corporate governance of firms whose boards may be dominated by old-boys networks.The current literature largely focuses on the board of directors, in general, as opposed to women in top management or executive positions. Carter, Simkins, and Simpson (2003) examine the relationship between board diversity and firm value for the Fortune 1000 firms. They present empirical evidence of a significant positive relation between the proportion of women on the board of directors and firm value. In contrast, Shrader, Blackburn, and lies (1997) report a negative relation between the percentage of female board members and firm value. One could argue for greater female representation that, since women represent a significant proportion of the customer base in many corporations, the presence of female directors would bring the female perspective to the boardroom and positively impact the bottom-line of companies. Burke (1994) provides evidence that male CEOs found the viewpoints of female directors beneficial in understanding female clients.With such intriguing and contrasting findings, given the emphasis on greater female representation in the boardroom, it is a challenge to show that investors recognize the intangible qualities women bring to the company in a tangible manner with quantifiable evidence. A study conducted by The Leader's Edge Research(TM) (2000) reveals that corporate culture is the most significant barrier to women moving up into top executive positions. Two-thirds of the women surveyed say they desire top-level executive positions, and more than half of them say they will move to another company if they are passed over for promotion. This is further substantiated in a survey by The Leader's Edge Research(TM) (2002), which finds that 39 percent of executive women ranked corporate culture as the number one reason why they left their most recent position. …