Download or read book Three Essays on Ownership Issues in Corporate Finance Dissertation written by Yuan Wang and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The study consists of three research topics about corporate ownership and financial issues. Existing literature focuses on overall corporate ownership structure. This study extends the existing literature by studying the impacts of different ownership types. Different types of shareholders are different in several key aspects such as investment policies, targets, and risk preference, all of which influence how they execute their screening role over the companies, and are important determinants of firms' decisions. To the extant literature, scholars have employed various perspectives to examine corporate ownership. In this study, I will be focusing on the behavior agency theory, agency theory, and socioemotional wealth theory, in the hope of bringing a more nuanced insight of the impacts of different corporate ownership on financial issues, such as, cost of bank loan, the formation of international joint venture, and CEO turnover. In the first essay, I employ a sample of U.S. public companies between 2007 and 2016 to explore the joint effects of executive inside debt (EID) and family involvement on the cost of bank loans. The empirical results indicate that the mitigating effect of EID on the cost of bank loans is attenuated for family firms. In addition, I provide evidence for the following: 1) the mitigating effect of EID on cost of debt is strengthened when a firm's performance is lower than its aspiration level and 2) the moderating effect of family involvement is significant when firm performance is above its aspiration level. Collectively, our findings support the behavioral agency prediction that family involvement shapes firms' risk-taking preference, which acts as a substitute for EID in decreasing the cost of debt. In the second essay, I examine whether family involvement in business affects firms' engagement in international joint ventures (IJVs). Building on the narrow framing perspective, I argue that family businesses are more prone to utilize risk diversifying strategies over multiple IJV choices than non-family firms, because the family firms' decisions tend to be broadly-framed. Examining the interaction between three IJV decisions (type of IJV, choice of host country, and number of partners) in a sample of 1,439 IJVs formed by publicly traded companies in the US, we found support for our predictions. In the third essay, I explore how institutional holding together with other finance factors affect the likelihood of CEO turnover and whether analyst forecast accuracy serves as a mechanism through which institutional holding influences the likelihood of CEO turnover. I find that increased institutional shareholding results in a lower likelihood of CEO turnover directly as well as indirectly (through the mechanism of analyst forecast accuracy). We also investigate the impact of CEO turnover on subsequent firm performance using market-based measures, including firm value and the cost of equity. Moreover, we examine whether different types of CEO turnover would make a difference on firm value and cost of equity. Our results reveal that after CEO turnover-especially when the previous CEO is forced to leave, and the successor is from outside the company-the firm value is higher, and the cost of equity is lower.

Download or read book Three Essays in Corporate Finance written by Jérôme Philippe Alain Taillard and published by . This book was released on 2010 with total page 210 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: In my dissertation, I first contribute to the capital structure literature by estimating the potential impact of financial distress on a firm's real business operations. Secondly, I contribute to the ownership structure literature, and more broadly to the field of corporate governance, by revisiting the relationship between managerial ownership and firm performance. In my first essay, I analyze a comprehensive sample of defendant firms that found themselves exposed to an unexpected wave of asbestos litigation in the wake of two U.S. Supreme Court decisions. Since these legal liabilities are unrelated to current operations, firms that are in financial distress due to their legal woes provide a natural experiment to study the impact of financial distress on a firm's operational performance. When analyzing firms suffering from this exogenous shock to their finances, I find little evidence of negative spillover effects ("indirect" costs) of financial distress. That is, the competitive position of the distressed firms is not adversely impacted by their weakened financial situation. Furthermore, I find empirical support for a significant disciplinary effect of financial distress as these firms actively restructure and refocus on core operations. In my second and third essays, I focus on the relationship between managerial ownership and firm performance using a large panel dataset of U.S. firms over the period 1988-2004. In the second essay, I reconcile some of the extant literature by showing that the relationship is sensitive to the firm size characteristics of the sample being used. In particular, I recover the classic hump-shaped relationship when focusing only on the largest firms (e.g. Fortune 500 firms), while the relationship turns negative when the sample is comprised of smaller firms. The negative relationship among smaller firms is consistent with entrenchment arguments given that managerial ownership is on average much higher for small firms. Second, I find that for lower levels of managerial ownership, the negative relationship is driven by older firms that have on average less liquid stocks. This finding is consistent with firms that do not perform well enough to create a liquid market for their stock, and hence have to keep high levels of insider ownership in order to avoid a negative price impact that would result from a reduction of their stake. Lastly, these results could also be suggestive of endogeneity concerns. I investigate this issue further in my third essay. Principal-agent models predict that managerial ownership and firm performance are endogenously determined by exogenous changes in a firm's contracting environment. Changes in the contracting environment are, however, only partially observed, and the standard statistical techniques used to address endogeneity may be ineffective in this corporate setting. In my third essay, together with my coauthor Phil Davies, we develop a novel econometric approach to control for the influence of time-varying unobserved variables related to a firm's contracting environment. Using the same large panel dataset of U.S. firms over the period 1988-2004, we find no evidence of a systematic relation between managerial ownership and performance.

Download or read book Three Essays in Political Economy and Corporate Finance written by Anqi Jiao and published by . This book was released on 2020 with total page 145 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays exploring the issues related to the political economy of finance and corporate finance. The first essay studies whether and how institutional investors exert influence in firms' external governance environments related to law and politics. I explore the role of institutional investors in corporate lobbying of their portfolio firms. I find that greater lobbying institutional ownership leads to more lobbying activities of firms. This effect is more pronounce in the subsample where firms face constraints to lobbying. I identify two plausible channels through which institutional investors can facilitate corporate lobbying. First, institutional investors tend to provide direct support by lobbying in the same congressional bills with firms possessing greater weights in their portfolios. Second, institutional investors protect firms' political information by voting against shareholder proposals requesting additional lobbying disclosure. Overall, I show that lobbying institutional investors actively engage in firms' external governance related to law and politics. The second essay takes a unique insight into the ethics of corporate lobbying. We study the Honest Leadership and Open Government Act of 2007, a regulatory reform on lobbying and government ethics, aiming to mitigate unethical lobbying activities. We find that the average market reaction to the reform, which aimed to mitigate unethical lobbying practices, by lobbying firms is positive, implying the reform benefited these shareholders on average. We also uncover heterogeneity of lobbying firms' response to the reform. Following the Act, firms with a history of active lobbying reduced their lobbying activity, whereas firms with little prior lobbying activity increased their lobbying efforts. Finally, we find that after the enactment of these reforms, firms that engage in active lobbying, and especially those with a good ethical reputation, are more likely to appoint politically connected directors relative to non-lobbying firms. The third essay focuses on the dark side of corporate lobbying on firms. Specifically, we investigate the impacts of lobbying engagement on corporate innovation. One percent increase in lobbying expenditures reduces the number of patents by 30 bps, the number of citations by 50 bps, and the average patent value by 50 bps. We find that more corporate lobbying activities causally impedes innovation, in contrast to the conventional stewardship perspective that lobbying brings government privileges. We find that the effects of corporate lobbying on innovation are stronger in the subsample where firms have more resources constraints and lower institutional ownership, which are constituent with both "resources constraints" and "lazy managers" hypotheses.

Download or read book Essays in Corporate Finance and Corporate Governance written by David De Angelis and published by . This book was released on 2012 with total page 192 pages. Available in PDF, EPUB and Kindle. Book excerpt: My dissertation contains three essays in corporate finance and corporate governance. The first essay studies the effect of information frictions across corporate hierarchies on internal capital allocation decisions, using the Sarbanes Oxley Act (SOX) as a quasi-natural experiment. SOX requires firms to enhance their internal controls to improve the reliability of financial reporting across corporate hierarchies. I find that after SOX, the capital allocation decision in conglomerates is more sensitive to performance as reported by the business segments. The effects are most pronounced when conglomerates are prone to information problems within the organization and least pronounced when they still suffer from internal control weaknesses after SOX. Moreover, conglomerates' productivity and market value relative to stand-alone firms increase after SOX. These results support the argument that inefficiencies in the capital allocation process are partly due to information frictions. My findings also shed light on some unintended effects of SOX on large and complex firms. The second essay is co-authored with Yaniv Grinstein and investigates how firms tie CEO compensation to performance. We take advantage of new compensation disclosure requirements issued by the Securities and Exchange Commission in 2006. Firms vary in their choice of performance measures and horizons, and in their reliance on pre-specified goals. Consistent with optimal contracting theories, we find that firms choose performance measures that are more informative of CEO actions, and rely less on pre-specified goals when it is more costly to contract on CEO actions. The third essay investigates the design of division managers (DMs) incentive contracts again taking advantage of the disclosure requirements. I find that firms do not use relative performance evaluation across divisions and that in general most of DM compensation incentives are associated with firm performance instead of division performance. Furthermore, division performance-based incentives tend to be smaller in complex firms, when within-organization conflicts are potentially more severe. I also find that when the probability of promotion to CEO is lower, DM ownership requirements are more stringent and DM compensation incentives are greater. These results support notions that influence costs as well as promotion-based incentives are important considerations in designing DMs contracts.

Download or read book Three Essays in Corporate Finance written by Bernardino Manuel Pereira Adão and published by . This book was released on 1995 with total page 292 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Dissertation Abstracts International written by and published by . This book was released on 2008 with total page 618 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Corporate Finance and Governance written by Johan Molin and published by Stockholm School of Economics Efi Economic Research Institut. This book was released on 1996 with total page 182 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays in REIT Corporate Finance written by Zhonghua Wu and published by . This book was released on 2006 with total page 184 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Capital Market with Incomplete and Asymmetric Information written by Chaoli Guo and published by Open Dissertation Press. This book was released on 2017-01-26 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation, "Three Essays on Capital Market With Incomplete and Asymmetric Information" by Chaoli, Guo, 郭朝莉, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: This thesis includes one essay on incomplete information and two essays on the capital market implications of asymmetric information. The acquisition of information and its dissemination to all economic units are central activities in capital markets. Limits to information diffusion may exist when market participants have limited processing ability or when market structure causes information asymmetry to persist. Merton (1987) proposes a simple capital market equilibrium model with incomplete information, in which difference in a stock's investor recognition affects its cost of capital. Myers and Majluf (1984) lay out the theoretical foundation for the role of asymmetric information in corporate finance and its capital market implications. The first essay tests and offers support to Merton's (1987) theory. In the U.S. market, using the breadth of ownership among retail investors as a proxy for investor recognition, I show that a long-short portfolio based on the annual change of shareholder base earns a compounded annual abnormal return of 6.42% after controlling for the Fama-French three factors. These results are more pronounced among young, low visibility and high idiosyncratic volatility stocks. Moreover, I present evidence that the investor recognition effect can explain approximately 20% of the puzzling net equity issuance effect documented by Pontiff and Woodgate (2008). The second essay suggests a novel signaling mechanism in the framework of asymmetric information. When a firm's convertible debt is issued, it is not only determined by the fundamentals of the firm such as past stock performance, but also related to whether this performance is realized during the tenure of current CEO who decides the issues. I define the performance that the current CEO achieves in the firm ever since the CEO comes to the helm as CEO-specific performance. Higher CEOspecific performance leads to (1) a higher probability of convertible issues, and (2) a less negative abnormal stock return in response to the convertible issue announcement, controlling for other firm characteristics. These evidences indicate that CEO-specific performance serves as a credible information signal to influence the adverse selection costs between the firm and outside investors in convertible bond financing. The third essay explores the possibility of asymmetric information in explaining the pronounced share issue anomaly in the cross-sectional variations of stock returns, as documented by Pontiff and Woodgate (2008). A lot of equity share issue and repurchase actions are actively determined by the decision of corporate stakeholders, such as employees at the stock options exercises. As these stakeholders hold a large amount of private information about the firm, it is in their optimal decisions to try to time the exercise of their share purchase activity, but outside investors are likely to fail to interpret the information revealed from these actions. I present strong evidence that a negative relation between share issues and stock returns is affected to a greater extent when the information asymmetry problem is more severe. DOI: 10.5353/

Download or read book Essays on Ownership Structure Corporate Governance and Corporate Finance written by Kurt A. Desender and published by . This book was released on 2010 with total page 137 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Foreign Corporate Ownership written by Dominic Heesang Chai and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Corporate Governance Shareholder Activism and Economic Policy Risk written by Marcel Maier and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays in Finance written by Xiaohu Deng and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation presents three papers that examine the real effects of market frictions such as short selling constraints, and also informed trading in put option and short selling markets. Specifically, first two essays examine the positive externalities of short selling, and paper 3 examines the informational patterns of short selling and put option trading and interactions between both trading activities. Essay 1 studies the real effects of short selling constraints on stock prices, and corporate investment. To do so, I exploit world-wide regulatory interventions to permit short selling. I find that reducing short selling constraints causes stock prices and crash risk to drop, and price efficiency to improve. Corporate investment also drops and is accompanied by a drop in debt and equity issues. Investment becomes more responsive to growth opportunities. My results suggest that short selling constraints can alleviate distortions in stock prices and corporate investment. My results are consistent with the notion that stakeholders infer information from stock prices and adjust investment accordingly. Essay 2 examines whether short selling reduces politically motivated bad news hoarding. I examine the stock price behavior of Chinese public firms around two highly visible political events - meetings of the National Congress of the Chinese Communist Party and Two Sessions (The National People’s Congress Conference and The Chinese People’s Political Consultative Conference) from 2002-2014, and find that political bad news hoarding has been reduced after short selling becomes available. I establish causality by relying on a difference-in-differences approach based on a controlled experiment of short selling regulation changes in China. I also find this reduction in bad news hoarding to be more pronounced in firms with stronger politicalconnection (higher state ownership and larger size) and higher accounting opacity, which further confirms our finding. This study sheds new light on the real effects of short sellers on political impact on capital market. Essay 3 identifies the informational patterns of short sales and option trades. Using VAR and calculating Impulse Response Functions, I find that short selling in general contains more information than put option trading, and put option trading has limited substitution effect.

Download or read book A Compilation of Essays in Corporate Finance written by Melinda L. Newman and published by . This book was released on 2000 with total page 378 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Corporate Finance written by Worawat Margsiri and published by . This book was released on 2006 with total page 150 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Evolution of Financial Structure and Performance of Young Firms written by Jie Zhang and published by . This book was released on 2008 with total page 126 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Corporate Governance Strengthening Latin American Corporate Governance The Role of Institutional Investors written by OECD and published by OECD Publishing. This book was released on 2011-07-01 with total page 78 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report reflects long-term, in-depth discussion and debate by participants in the Latin American Roundtable on Corporate Governance.