UNDERSTANDING AND ACCESSING FINANCIAL MARKET Nia Christina 16598

Foreign ownership and investment evidence from Korea Theory used by the article : Modigliani and Miller (1958) maintained that firms investment depend solely on the profit opportunity.

Hypothesis of research Firm tend to rely on internal funds to carry out investment Cash flow sensitivity of investment varies across differing levels of foreign ownership The impact of the opening of stock market differs across foreign ownership, interaction term between time dummies and foreign ownership dummies. Cash flow coefficient have a non-linear relationship with the level of foreign ownership.

Variable use in Research K t I t Q t TA t B t E t CF t High i Low i Before t After t

Method of analysis OLS estimation method for dynamic investment models is likely to result in biased estimates because of endogeneity and heterogeneity problem.

Result of analysis The availability of internal funds does affect investment levels. Cash flow has significant impact on the investment of firm with low foreign ownership. The opening of stock market is surely one of the factors in the mitigation of financial constraint although it may not be the only reason. Liquidity constraints are reduced mainly in firms with low foreign ownership. If the value of the firm is directly related to financial constraint that the firm faces, the effect of cash floe on investment may also have non-linear relationship with the level of foreign ownership. Foreign ownership seems to have a linear relationship to financial constraints.

Conclusion Foreign ownership improves a firms accessibility to external finance. The finding simply suggest that foreign ownership plays role in reducing financial constraints on firm, and thus improves accessibility of external financing investment. In addition asymmetry can also be a potential benefit of open financial market

Financial access and exclusion in Kenya and Uganda Theory used by the article Base on FSD (Financial Sector Development) which has positive causation on growth and emphasize the potential for bi-directionality and the variation due to specific conditions by country and time period.

Hypothesis of research Patterns of inclusion and exclusion dependent on the key factors of employment, gender, age, and education and geography.

Variable use in research Formal financial sector Semi-formal financial sector Informal financial sector Bank Co-operatives Microfinance institution ROSCAs ASCAs

Method of analysis Logistic regression model was developed to investigate the influence of socio-economic, demographic and geographic characteristics on their use.

Result of analysis Employment or main income source is the factor that most influence on access and exclusion in both countries. Government employees are nine times more likely to use formal services and seven times less likely to be completely excluded from financial services compared to the base category. Age also has strong effects in both countries. In Kenya inclusion via the formal sector reduces that exclusion. In Uganda the region was weakly significant in its impact on inclusion via formal sector. The impact of education is strong in both countries and presents a clear pattern In Kenya, being a woman significantly lowers the likelihood of exclusion from financial services overall. In Uganda, women were significantly less likely to be included via the formal sector than men

Conclusion It has found overall that employment, age, education, gender and geography are key factors but that in these countries access to formal services was not as strongly influenced by geography as other studies have concluded. Underlying social institutions - of which age, gender, educational attainment and so on are indicators - are clearly important to understanding patterns of access and exclusion. This suggests, at the policy level, that widening access requires that these causes of exclusion are adequately addressed and that emphasis on lowering transactions costs is not likely to be sufficient.

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