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Author : Jiekun Huang
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (139 download)
Download or read book Three Essays in Corporate Finance and Institutional Investors written by Jiekun Huang and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Ang Li
Publisher :
ISBN 13 :
Total Pages : 125 pages
Book Rating : 4.:/5 (115 download)
Download or read book Essays on Corporate Finance and Institutional Investors written by Ang Li and published by . This book was released on 2020 with total page 125 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Bruno d Laranjeira
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (774 download)
Download or read book Essays in Corporate Finance written by Bruno d Laranjeira and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis presents two essays in Corporate Finance. In the first essay, I use the August 2007 crisis episode to gauge the effect of financial contracting on real firm behavior. I identify heterogeneity in financial contracting at the onset of the crisis by exploiting ex-ante variation in long-term debt maturity structure. Using a difference-in-differences matching estimator approach, I find that firms whose long-term debt was largely maturing right after the third quarter of 2007 cut their investment-to-capital ratio by 2.5 percentage points more (on a quarterly basis) than otherwise similar firms whose debt was scheduled to mature after 2008. This drop in investment is statistically and economically significant, representing one-third of pre-crisis investment levels. A number of falsification and placebo tests suggest that my inferences are not confounded with other factors. For example, in the absence of a credit contraction, the maturity composition of long-term debt has no effect on investment. Moreover, long-term debt maturity composition had no impact on investment during the crisis for firms for which long-term debt was not a major source of funding. Our analysis highlights the importance of debt maturity for corporate financial policy. More than showing a general association between credit markets and real activity, my analysis shows how the credit channel operates through a specific feature of financial contracting. In the second essay, I analyze how institutional investors choose which Initial Public Offering to invest. Using a sample of IPOs from 1980 to 2004, I show that the reputation of the lead underwriter is the most significant variable in this decision process. Using Carter-Manaster rankings of underwriter reputation, I report that a one point increase in the reputation ranking leads to a 2% increase in institutional investors` holding. Moreover, I test hypotheses about what kind of certification the underwriter is providing. I provide evidence that underwriters certify un-measurable characteristics, in contrast to measurable characteristics, such as those provided in the financial statements of the issuer.
Author : Adolfo de Motta Gregori
Publisher :
ISBN 13 :
Total Pages : 214 pages
Book Rating : 4.:/5 (51 download)
Download or read book Essays in Corporate Finance written by Adolfo de Motta Gregori and published by . This book was released on 2001 with total page 214 pages. Available in PDF, EPUB and Kindle. Book excerpt: (Cont.) In addition, I analyze the relationships between the venture capital market and investors' diversity, investors' scope of expertise and entrepreneurial incentives. The third essay, which is co-authored with Andres Almazan, examines how the trading activities of institutional investors can help to mitigate agency conflicts in corporations. The access of institutional investors to privileged information produces an adverse selection effect that reduces the trading activity of institutional investors and generates a free-rider problem that affects the intensity with which institutional investors wish to "vote with their feet". We also study ownership implications, incentives to acquire information and the interaction of the Wall Street Rule with other mechanisms of governance (i.e. capital structure).
Author : Yan Wang
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (911 download)
Download or read book Three Essays on Corporate Finance and Financial Institutions written by Yan Wang and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: "This dissertation consists of three essays. The first essay provides a systematic way to distinguish informed institutional trades from uninformed ones based on the relation between institutional trades and sequential public information. By studying actively managed U.S. institutions from 1994 to 2010, I show that institutional trades initiated by managers responding proactively to upcoming informational signals strongly predict future stock returns. A hedging portfolio based on these trades generates an average risk-adjusted abnormal return of approximately 3% per quarter. The predictability is more pronounced for stocks with higher information asymmetry, such as those of firms with high volatility and young age. I also find that the most informed institutional traders are likely to have short-term investment horizon, large block holdings, high industry portfolio concentrations, as well as reside in financial centers. My results indicate that the informedness of certain institutional investor groups is substantially reduced after Regulation FD. The second essay examines the product market impact of minority stake acquisitions. We show that partial equity ownership between rival firms has a significant impact on industry competition. Industry-level tests indicate that acquisitions of a minority stake in competing firms' equity are followed by higher output prices and higher price-cost margins, particularly in industries with high barriers to entry. Stock-price reactions of non-participating competitors of the acquirer and target are positive while announcement returns of customer firms are negative. Moreover, the positive (negative) stock-price reaction of competitors (customers) is more pronounced when the acquirer and target are larger firms with greater market share. These results indicate that equity ownership of rival firms dampens competition in an industry.The third essay examines whether foreign firms by listing on or delisting from regular U.S. stock exchanges affect their U.S. counterparts. We find that they do - negatively for listings and positively for delistings, - and the impact is especially profound for the listing events. The U.S. counterparts of foreign firms belonging to the same industry experience severe underperformance in the short- and long-run across a variety of financial and accounting performance metrics, such as firm returns as well as growth in sales, profits, total assets, and capital expenditures. For example, the average 60-day cumulative abnormal return of U.S. firms around the foreign listing date is negative 2%, while the 36-month post-listing return is negative 4.3%. This result is present among listings with and without U.S. equity issuance. In addition, incumbent U.S. firms experience changes in their financing policies and a reduction in analyst coverage following listings of competing foreign firms in the U.S. Our findings therefore highlight an important role of international markets in influencing U.S. firms and markets. " --
Author : Abdulaziz Alomran
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (126 download)
Download or read book Three Essays in Corporate Finance written by Abdulaziz Alomran and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Li Zhang
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (697 download)
Download or read book Essays on Empirical Corporate Finance written by Li Zhang and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Yangyang Chen
Publisher :
ISBN 13 :
Total Pages : 143 pages
Book Rating : 4.:/5 (739 download)
Download or read book Three Essays in Corporate Finance written by Yangyang Chen and published by . This book was released on 2010 with total page 143 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Jie Zhu
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (136 download)
Download or read book Two Essays on Investments written by Jie Zhu and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In my dissertation, I study factors that influence investments from either corporate or institutional perspective. First, I examine the sensitivity of corporate investment to internally generated cash flow and its pattern of change over time across countries. Second, I investigate how a firm's customer profile can shape its ownership structure of institutional investors. Existing studies have documented a puzzling disappearance of investment-cash flow (ICF) sensitivity in the U.S.. In the first chapter, I explore whether economic and financial development can explain the extent of a country's ICF sensitivity and its evolution through time. I find that, in aggregate, ICF sensitivity has also faded around the world; yet it has remained high in countries with low economic and financial development. Further, I find that the access to external finance, especially equity finance, is a key channel through which country-level development affects the sensitivity of investment to internal cash flow. In more developed countries, external finance has become more accessible for firms when their internal cash flow is insufficient, thereby reducing their reliance on internal cash flow. The results indicate that once a country advances to a certain degree of financial and economic development, it becomes more efficient in allocating resources and therefore financial constraints at the individual firm level become less binding. A growing literature has documented different financial implications of a concentrated customer base. In the second chapter, I examine how customer concentration affects institutional investors' investment decisions. I find that a firm's customer concentration tends to attract different groups of institutional investors, depending upon their investment horizons. Specifically, those institutions who trade actively (short-term) would buy the stocks of firms with a more concentrated customer base. Conversely, those institutions who trade less actively (long-term) would buy the stocks of firms with a less concentrated customer base. While the preference of long-term investors is supported by the increased risk associated with the dependency on a few large customers, I find that the improved stock liquidity is the channel through which a concentrated customer base attracts short-term investors. Further, my findings cannot be explained by information transfer along the supply chain.
Author : Andrij Bodnaruk
Publisher :
ISBN 13 :
Total Pages : 166 pages
Book Rating : 4.3/5 (555 download)
Download or read book Essays in Empirical Corporate Finance and Portfolio Choice written by Andrij Bodnaruk and published by . This book was released on 2005 with total page 166 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Anqi Jiao
Publisher :
ISBN 13 :
Total Pages : 145 pages
Book Rating : 4.:/5 (125 download)
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.
Author : Adam Kolasinski
Publisher :
ISBN 13 :
Total Pages : 123 pages
Book Rating : 4.:/5 (854 download)
Download or read book Essays in Corporate Finance and Financial Institutions written by Adam Kolasinski and published by . This book was released on 2006 with total page 123 pages. Available in PDF, EPUB and Kindle. Book excerpt: Chi: Subsidiary Debt, Capital Structure, and Internal Capital Markets I investigate external subsidiary debt financing and its implications for internal capital markets. I find that firms tend to finance business segments with subsidiary debt when those segments have better investment opportunities than the rest of the firm, and such debt tends to be parent-guaranteed. I also find that having such debt outstanding significantly reduces the effect of a segment's cash flow on the capital expenditures of other segments. These findings suggest that firms use subsidiary debt to protect their stronger segments from the underfunding or "poaching" problems modeled in theories of internal capital markets. In addition, I find that firms use subsidiary debt for reasons related to traditional capital structure concerns. Ch2: Is the Chinese Wall too High? I test whether new regulatory restrictions on cooperation between analysts and investment bankers adversely affect equity research coverage. Contrary to the hypothesis, I find that firms engaging in SEO's enjoy just as large an increase in analyst coverage in the post-regulatory period as they do in the pre-regulatory period.
Author : Ligang Zhong
Publisher :
ISBN 13 :
Total Pages : 436 pages
Book Rating : 4.:/5 (82 download)
Download or read book Three Essays on Institutional Investors written by Ligang Zhong and published by . This book was released on 2012 with total page 436 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this dissertation, I investigate the impact of institutional investors on security prices and corporate policies, and offer a new perspective on the vital role that institutional investors play in the modern capital market. Specifically, on the impact on security price movements, I design a new measure of stock-level sentiment based on mutual fund publically disclosed portfolio information and provide a new dimension to better predict stock returns. A trading strategy based on the new sentiment metrics can generate an annualized alpha of 21.27%. The abnormal returns cannot be explained by the time-varying expected returns and transaction costs, and can be best explained by mutual fund overreactions. Hence, my findings can be interpreted as a new anomaly in a new era-when institutional investors are the marginal traders. On the impact on corporate policy side, I document two pieces of new empirical evidence on the importance of long-term institutional holdings: the entrenchment effect of long-term institutional holdings in the context of corporate financing decisions and the active monitoring role of long-term institutional investors in the context of international firms' accounting qualities. Combined with previous studies which favour a long-term institutional investor, the evidence on the cost side of long-term holding I document here can serve as the first call for an optimal investment horizon for firms operating in the U.S.
Author : Farooq Durrani
Publisher :
ISBN 13 :
Total Pages : 110 pages
Book Rating : 4.:/5 (128 download)
Download or read book ESSAYS IN EMPIRICAL CORPORATE FINANCE AND INSTITUTIONAL OWNERSHIP written by Farooq Durrani and published by . This book was released on 2020 with total page 110 pages. Available in PDF, EPUB and Kindle. Book excerpt: My dissertation consists of two chapters which explores various aspects of empirical corporate finance and institutional ownership. In the first chapter, I examine whether common owners - an institution with holdings in both the distressed and the lending firm - ameliorates this conflict given that common owners should seek to maximize the equity value of both firms. The results show that when a common owner holds a stake in both the borrowing and lending firm, distressed firms are over 3.3-times more likely to file for Chapter 11 freefall bankruptcy (rather than prepack) as compared to borrowing-lending firms without a common owner. Using ownership of passive funds as an instrument for the presence of a common owner, I provide evidence of a causal relation between common ownership and bankruptcy filing choice. Overall, the analysis indicates that common ownership in both financially distressed borrowing firms and their lending firms leads to a greater likelihood of Chapter 11 freefall bankruptcy filing; suggesting that common owners typically side with creditors to maximize their combined equity value in both the borrowing and lending firm. Next, I examine the effect of CEO social connections on stock returns. An equally weighted (value weighted) long-short portfolio strategy earns investors excess returns of 5.39% (4.44%) per year. Three potential reasons explain the relation between CEO social connections and excess returns; better firm performance, investor information asymmetry, and/or greater investor risk-bearing. Our analysis provides evidence consistent with CEO connections both increasing firm risk and improving firm performance.
Author : Ruidi Huang
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (114 download)
Download or read book Three Essays in Corporate Finance written by Ruidi Huang and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Julio César Riutort
Publisher :
ISBN 13 :
Total Pages : 284 pages
Book Rating : 4.:/5 (732 download)
Download or read book Essays in International Corporate Finance written by Julio César Riutort and published by . This book was released on 2011 with total page 284 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays in international corporate finance. It studies the impact of aggregate conditions and the institutional environment on the behavior of publicly traded firms from a broad sample of countries. In the first essay I argue that when credit constraints are widespread, as may be the case in countries with poor investor protection, we should not necessarily expect small firms' investment to be more sensitive to monetary contractions or negative aggregate shocks. A simple model of investment with credit constraints shows that for this pattern to occur we need a high enough level of investor protection. The empirical evidence is broadly consistent with the hypothesis. In periods of tight credit conditions, small firms from countries with high creditor protection contract their investment rate more than large firms, while there is no significant difference in the investment contraction of small and large firms in from low creditor protection countries. In the second essay I explore to what extent the effect of legal origin on payout policy, ownership concentration, and valuation has been stable through time. The results suggest that previously established results should be taken with caution, and cast doubts on their strength. In particular, it appears that corporate characteristics are converging across countries, and legal origin is not longer an important determinant of them. In the final essay I study to what extent capital raising in international markets is related to firms' ability to react to financial shocks. I provide a complete descriptive picture of the main patterns in the use of international financing between 1990 and 2009,study how issuers and non-issuers grow during financial crises, and how their growth is related to the aggregate conditions in the economy and their past financing behavior. Firms that raise capital internationally have a lower correlation with the local GDP growth, and grow more during local financial crises; however this relationship depends on the overall degree of development of the country and is highly dependent on the determinants of the issuance decision. The descriptive analysis show that international capital raising is pervasive in most countries, but the firms doing so differ depending on the development of their country of origin.
Author : Hui Wang
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (119 download)
Download or read book Essays on Household and Corporate Finance written by Hui Wang and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation has two essays which lie at the intersection of household finance and corporate finance. The topics include household leverage and human capital investment, and cross-holding and corporate borrowing. The essays hope to provide empirical analysis to better understand the economic decision made by both individuals and firms in practice. The first essay is “Household Financial Leverage and Human Capital Investment”. In this study, I find that household leverage has a hump-shaped effect on individual’s incentive to invest in human capital. Using the comprehensive information from the National Longitudinal Survey of Youth, I identify human capital investment decision based on whether an individual requests and participates in on-career skill acquisition training, and estimate household leverage based on the detailed debt and asset information. To strengthen causal inferences, I construct an instrumental variable based on changes in household’s mortgage burden relative to home value resulting from plausibly exogenous housing price fluctuations across regions and over time. Overall, this study highlights the effect of household leverage on human capital investment, which provides valuable implications for decisions of both individuals and macro policymakers. The second essay is “Networking Behind the Scenes: Institutional Cross-industry Holdings and Information Frictions in Corporate Loans”, joint with Jie He, Lantian Liang, and Han Xia. In this research, we study the role played by institutional investors in shaping firms’ cost of borrowing through affecting borrowers’ information friction in corporate loan market. We find that borrowers linked to banks other than the existing lenders through cross-holdings enjoy significantly lower loan spreads. This finding is mostly driven by institutions transmitting information between portfolio firms and banks, which mitigates information frictions and thereby reduces firms’ borrowing costs. For identification, we adopt a difference-in-differences method based on the quasi-natural experiment of financial institution mergers. Our evidence highlights an important effect of institutions’ cross-industry holdings on the corporate loan market.
