To read this content please select one of the options below:

Corporate Pension Funding and Investments: Evidence From Asia Pacific Countries*

Advances in Pacific Basin Business, Economics and Finance

ISBN: 978-1-83753-865-2, eISBN: 978-1-83753-864-5

Publication date: 4 April 2024

Abstract

We study the potential effects of pension underfunding on corporate investment, financial constraints and improved employee bonding using 10 Pacific-Basin countries (including the United States, Australia, and eight Asian countries) at heterogeneous economic development stages and different regulatory environments. We document that corporate pensions are significantly underfunded in most countries of our sample in the period of 2001–2017, when interest rates were ultralow in most countries. In addition, firms from countries with stronger employee protection and more generous retirement benefits tend to show higher levels of underfunding in their defined benefit (DB) pension plans. To the extent of pension underfunding imposing constraints on corporate investment, we find that firms in these countries can face more constraints on investment when their pension is underfunded.

Keywords

Citation

Kim, Y.H., Li, B., Paek, M. and Yu, T. (2024), "Corporate Pension Funding and Investments: Evidence From Asia Pacific Countries* ", Lee, C.-F. and Yu, M.-T. (Ed.) Advances in Pacific Basin Business, Economics and Finance (Advances in Pacific Basin Business, Economics and Finance, Vol. 12), Emerald Publishing Limited, Leeds, pp. 1-38. https://doi.org/10.1108/S2514-465020240000012001

Publisher

:

Emerald Publishing Limited

Copyright © 2024 Yong H. Kim, Bochen Li, Miyoun Paek and Tong Yu. Published under exclusive licence by Emerald Publishing Limited