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Author : Yue Shi
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Essays on Corporate Investment Dynamics and Complexity written by Yue Shi and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Ryan Heath Peters
Publisher :
ISBN 13 :
Total Pages : 228 pages
Book Rating : 4.:/5 (131 download)
Download or read book Essays on Corporate Investment Dynamics written by Ryan Heath Peters and published by . This book was released on 2017 with total page 228 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation contains two paper. The first, "Volatility and Venture Capital," demonstrates that the performance of venture capital (VC) investments load positively on shocks to aggregate return volatility. I document this novel source of risk at the asset-class, fund, and portfolio-company levels. The positive relation between VC performance and volatility is driven by the option-like structure of VC investments, especially by VCs' contractual option to reinvest. At the asset-class level, shocks to aggregate volatility explain a substantial fraction of VC returns. At the fund level, consistent with the reinvestment channel, this exposure is concentrated in years two through four of fund life and in early-stage VC funds, which have more embedded reinvestment options. For VC-backed portfolio companies, volatility shocks correlate with faster and more frequent reinvestment. The level of volatility at the time of investment has no relation with future performance, consistent with competitive markets. Overall, my results imply that the option-like features of VC investments are first-order determinants of risk in VC.The second paper, "Intangible Capital and the Investment-q Relation," shows that the neoclassical theory of investment, which has mainly been tested with physical investment, also helps explain intangible investment. At the firm level, Tobin's q explains physical and intangible investment roughly equally well, and it explains total investment even better. Compared with physical capital, intangible capital adjusts more slowly to changes in investment opportunities. The classic q theory performs better in firms and years with more intangible capital: Total and even physical investment are better explained by Tobin's q and are less sensitive to cash flow. At the macro level, Tobin's q explains intangible investment many times better than physical investment. We propose a simple, new Tobin's q proxy that accounts for intangible capital, and we show that it is a superior proxy for both physical and intangible investment opportunities.
Author : Antonio Manuel Saragga-Seabra
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (894 download)
Download or read book Essays on Corporate Investment, Financing Policies, and Exchange Rate Dynamics written by Antonio Manuel Saragga-Seabra and published by . This book was released on 2002 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Aashish Sunil Mehta
Publisher :
ISBN 13 :
Total Pages : 168 pages
Book Rating : 4.:/5 (89 download)
Download or read book Investment, Dynamics and Development written by Aashish Sunil Mehta and published by . This book was released on 2004 with total page 168 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Alexander-Nicholas Amundsen
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (125 download)
Download or read book Essays on Firm Dynamics written by Alexander-Nicholas Amundsen and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: "The unifying theme of this thesis is to understand the dynamics of firms in terms of their investments and productivity. In the first chapter, I explore how adjustment costs influence the investment dynamics of firms. This chapter is motivated by two unsettled issues in the literature: there is a discrepancy on the estimated sign of the interaction term between total capital and labour in the adjustment cost function, and that capital aggregation may severely bias the parameter estimates. I explicitly account for both issues by developing a firm structural model with labour and two types of heterogenous capital, and estimate the adjustment cost parameters. The main finding is that there are distinct complementarity/substitutability effects between the inputs in the adjustment cost function that are independent of the production function, and these effects lead to asymmetric outcomes when a fiscal policy subsidy is targeted towards each capital good.In the second chapter, we explore the productivity dynamics of firms. This chapter is motivated by the fact that simple Markov processes are widely used to model productivity in the literature, yet not much is known about how this process varies across firms, or over time, especially for the top 1% of productive firms. We leverage a comprehensive dataset that allows us to robustly estimate productivity across its distribution, even for the top 1%. Using new non-parametric methods, our main finding is that productivity deviates substantially from the ubiquitous AR(1), where it has fat tails, a heterogenous shock process and strong persistence. In the third chapter, we study the influence of financial constraints on investment dynamics. This chapter is motivated by two simultaneous trends that have been recorded in the literature: declining business dynamism and declining investment sensitivities. The chapter proposes that these two trends are linked, where declining business dynamism has led to an increase in the average age of firms, leading to a decrease in financial constraints, proxied by investment sensitivities. We measure the investment sensitivity for private domestic firms in both manufacturing and services and find that it is significant, suggesting that these firms are financially constrained as a group. Using a financial constraint index, our main finding is that these constraints have declined over time, of which we show that changes in age are the dominant driving factor"--
Author : Lin William Cong
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (881 download)
Download or read book Essays in Corporate Finance and Investment written by Lin William Cong and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis consists of two essays that examine several problems in corporate finance and mechanism design. The central theme is endogenous agency conflicts and their impact on dynamic investment decisions. The first essay features auctions of assets and projects with embedded real options, and subsequent exercises of these investment options. The essay shows timing and security choice of auctions endogenously misalign incentives among agents and derives the optimal auction design and exercise strategy. The second essay studies implications of endogenous learning on irreversible investment decisions, in particular, how learning gives rise to asymmetric information between managers and shareholders in decentralized firms. Depending on the quality of the project, the optimal contract between principal and agent distorts investments in ways that has not been examined in the literature. Specifically, in Chapter 1 of the dissertation, I study how governments and corporations auction real investment options using both cash and contingent bids. Examples include sales of natural resource leases, real estate, patents and licenses, and start-up firms with growth options. I incorporate both endogenous auction initiation and post-auction option exercise into the traditional auctions framework, and show that common security bids create moral hazard because the winning bidder's real option differs from the seller's. Consequently, investment could be either accelerated or delayed depending on the security design. Strategic auction timing affects auction initiation, security ranking, equilibrium bidding, and investment; it should be considered jointly with security design and the seller's commitment level. Optimal auction design aligns investment incentives using a combination of down payment and royalty payment, but inefficiently delays sale and investment. I also characterize informal negotiations as timing and signaling games in which bidders can initiate an auction and determine the forms of bids. I show that post-auction investments are efficient and bidding equilibria are equivalent to those of cash auctions. However, in this setting, bidders always initiate the informal auctions inefficiently early. In addition, I provide suggestive evidence for model predictions using data from the leasing and exploration of oil and gas tracts, which leads to several ongoing empirical studies. Altogether, these results reconcile theory with several empirical puzzles and imply novel predictions with policy relevance. In Chapter 2, I examine learning as an important source of managerial flexibility and how it naturally induces information asymmetry in decentralized firms. Timing of learning is crucial for investment decisions, and optimal strategies involve sequential thresholds for learning and investing. Incentive contracts are needed for learning and truthful reporting. The inherent agency conflicts alter investment behavior significantly, and are costly to investors and welfare. But contracting on learning restores efficiency with low future uncertainty or sufficient liquidity. Unlike prior studies, the moral hazard of learning accelerates good projects and delays bad projects. Even the best type's investment is distorted, and only when learning is contractible can adverse selection dominate learning.
Author : Wahib Ghazni
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (14 download)
Download or read book Essays on Corporate Investment and Managerial Attribution written by Wahib Ghazni and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The dissertation empirically investigates the role of managerial traits, skill, and biases on corporate investment decisions. The first essay causally explores the impact of Diversity Inclusion and Equity (DEI) in the ranks of executive leadership on corporate intangible capital. Using a machine learning algorithm that is trained on the U.S Census to build a novel database that identifies the ethnicity of all C-Suite Executives. It explores the differentiating dimensions of leadership traits that are brought to the managerial decision-making process by DEI. The findings reveal that minority executives pioneer in building a firm's intangible capital by increasing its innovation output and growing its organizational capital. The second essay shows that the sharp decline in option compensation following SFAS 123R in 2005 has diminished the effectiveness of previous option-based managerial overconfidence measures. Thus, it proposes a new measure of managerial overconfidence: dollars at risk from voluntarily holding vested shares and options. It tests 16 predictions from the literature regarding overconfidence and finds strong evidence validating the proposed measure. The third and last essay lends empirical support to the premise that boards consider dynamic CEO performance to make their estimates about true CEO skill. It expands the focus of the relative performance evaluation from studying the relationship of CEO pay and turnover with contemporaneous skill performance to including persistent skill. Its findings show that boards do consider dynamic skill performance in their assessment of managerial skill and that persistent skill is associated with higher pay and a lower probability of turnover.
Author : Pavel Zryumov
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (911 download)
Download or read book Essays in Corporate Finance written by Pavel Zryumov and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis studies the investment and financing decisions of firms in dynamic markets with asymmetric information. In the first chapter I analyze the effects of time-varying market conditions and endogenous entry on the equilibrium dynamics of markets plagued by adverse selection. I show that variation in gains from trade, stemming from market conditions, creates an option value and distorts liquidity when gains from trade are low. An improvement in market conditions triggers a wave of high-quality deals due to the preceding illiquidity and lack of incentives to signal quality. When gains from trade are high, the market is fully liquid; high prices and no delay in trade attract low-grade assets, and the average quality deteriorates. My analysis also reveals that illiquidity can act as a remedy as well as a cause of inefficiency: partial illiquidity allows for screening of assets and restores efficient entry incentives. I demonstrate model implications using several applications: early stage financing, initial public offerings, and private equity buyouts. Chapter 2, which is a joint work with Ilya Strebulaev and Haoxiang Zhu, reexamines the classic yet static information asymmetry model of Myers and Majluf (1984) in a fully dynamic market. A firm has access to an investment project and can finance it by debt or equity. The market learns the quality of the firm over time by observing cash flows generated by the firm's assets in place. In the dynamic equilibrium, the firm optimally delays investment, but investment eventually takes place. In a ``two-threshold'' equilibrium, a high-quality firm invests only if the market's belief goes above an optimal upper threshold, while a low-quality firm invests if the market's belief goes above the upper threshold or below a lower threshold. However, a different ``four-threshold'' equilibrium can emerge if cash flows are sufficiently volatile. Relatively risky growth options are optimally financed with equity, whereas relatively safe projects are financed with debt, in line with stylized facts. Finally, Chapter 3, which is based on an ongoing work with Ilya Strebulaev and Haoxiang Zhu, extends the analysis of Chapter 2 by allowing cash accumulation within the firm. We consider a firm whose managers possess superior information about the firm's value relative to the rest of the market and analyze the optimal timing of equity issuance. We show that equilibrium features socially inefficient, but privately optimal, delay of investment and equity financing of positive NPV projects. Waiting allows high quality firms to accumulate internal cash and increase investors' beliefs, therefore, reducing the cost of adverse selection. In the dynamic equilibrium low quality firms delay investment as well in hope of being mistaken for the high quality ones. However, when market beliefs are sufficiently low and/or internally accumulated level of cash is sufficiently high the low quality firm prefers to reveal itself.
Author : Akio Matsumoto
Publisher : Springer
ISBN 13 : 981101521X
Total Pages : 257 pages
Book Rating : 4.8/5 (11 download)
Download or read book Essays in Economic Dynamics written by Akio Matsumoto and published by Springer. This book was released on 2016-09-22 with total page 257 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book reflects the state of the art in nonlinear economic dynamics, providing a broad overview of dynamic economic models at different levels. The wide variety of approaches ranges from theoretical and simulation analysis to methodological study. In particular, it examines the local and global asymptotical behavior of both macro- and micro- level mathematical models, theoretically as well as using simulation. It also focuses on systems with one or more time delays for which new methodology has to be developed to investigate their asymptotic properties. The book offers a comprehensive summary of the existing methodology with extensions to the more complex model variants, since considerations on bounded rationality of complex economic behavior provide the foundation underlying choice-theoretic and policy-oriented studies of macro behavior, which impact the real macro economy. It includes 13 chapters addressing traditional models such as monopoly, duopoly and oligopoly in microeconomics and Keynesian, Goodwinian, and Kaldor–Kaleckian models in macroeconomics. Each chapter presents new aspects of these traditional models that have never been seen before. This work renews the past wisdom and reveals tomorrow's knowledge.
Author : Atsuko Izumi
Publisher :
ISBN 13 :
Total Pages : 97 pages
Book Rating : 4.:/5 (933 download)
Download or read book Three Essays on Corporate Finance and Firm Dynamics written by Atsuko Izumi and published by . This book was released on 2015 with total page 97 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Change in corporate performance after firing CEO: A comparison between US and Japan" The relation between board independence and management monitoring intensity is a long-standing question in the literature. Employing firm performance after CEO dismissals, this paper investigates whether independent boards solve the managerial entrenchment problem more effectively. Shleifer and Vishny (1989) demonstrate the incentive of CEOs to make irreversible skill-specific investments to increase the cost of replacing them under weak monitoring. I extend their model, generating an expected decline in firm performance when an entrenched CEO is fired. I track firm performance after CEO forced turnover events between 2000 and 2007 in the US and Japan, where the independence of boards differs distinctively. I find evidence that firm performance improves after a forced CEO turnover in the US, but not in Japan, where the insider-dominant boards monitor the CEO. The performance improvement in the US is accompanied by substantial consolidations; US firms reduce their assets and their labor force by a magnitude of 6 to 8 times more than Japanese firms. In addition, I demonstrate that forced CEO turnover is not followed by performance improvement in US firms with less independent boards. Overall, the evidence suggests that CEOs are more entrenched under the weak monitoring of less independent boards. "Market response to CEO turnover announcement for dismissal events" This paper investigates stock returns to CEO turnover announcements for CEO dismissal cases in US and Japan. A stock price response to CEO turnover announcement potentially captures the impacts of CEO turnover on overall firm performance. Using CEO forced turnover events that were announced between 2000 and 2007 in public companies of US and Japan, I find that the capital market responds to CEO succession news positively, but stock returns are statistically insignificant in both countries. Furthermore, the results indicate that CEO turnover announcement is followed by economically and statistically significant positive abnormal returns when independent board monitors top management. A greater market response to CEO turnover announcement for the external succession is observed in US, but not in Japan. "Do firms change investment behavior before and after financial crisis?" Aftermath of financial crisis, slow recovery in private business investment is one primary concern of policy makers. This paper investigates the change in firms' investment behavior before and after the financial crisis using 15-year quarterly financial data of 895 large firms in five advanced economies. I find a significantly positive relation between firm profitability and capital expenditure during the sample period from 1999 to 2014: firms increase 1% of capital expenditure to total asset ratio for 1% rise in ROA on average, which is consistent with findings in preceding studies (Fazzari et al., 1998; Kaplan & Zingales, 1997). However, the correlation between capital expenditure and cash flow disappears after the financial crisis. On the other hand, a linkage between R&D expenditure and cash flow emerges to be significantly positive. These results indicate the shift in corporate investment objective from tangible to intangible assets after the crisis.
Author : Giovanni Dosi
Publisher : Edward Elgar Publishing
ISBN 13 : 9781782541851
Total Pages : 728 pages
Book Rating : 4.5/5 (418 download)
Download or read book Innovation, Organization and Economic Dynamics written by Giovanni Dosi and published by Edward Elgar Publishing. This book was released on 2000-01-01 with total page 728 pages. Available in PDF, EPUB and Kindle. Book excerpt: Conventional economic analysis of property rights in natural resources is too narrow and restrictive to allow for effective comparisons between alternative institutional structures. In this book, a conceptual framework is developed for the analysis of the
Author : Sebastian Gryglewicz
Publisher :
ISBN 13 : 9789056682194
Total Pages : 138 pages
Book Rating : 4.6/5 (821 download)
Download or read book Essays on Competition, Corporate Financing and Investment written by Sebastian Gryglewicz and published by . This book was released on 2008 with total page 138 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Seoyeon Katie Moon
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (824 download)
Download or read book Essays on Corporate Investment written by Seoyeon Katie Moon and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Michal Kalecki
Publisher :
ISBN 13 : 9781583677254
Total Pages : 180 pages
Book Rating : 4.6/5 (772 download)
Download or read book Theory of Economic Dynamics written by Michal Kalecki and published by . This book was released on 2009 with total page 180 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Daniela S. Domuta
Publisher :
ISBN 13 :
Total Pages : 198 pages
Book Rating : 4.:/5 (643 download)
Download or read book Essays in Investment Behaviour and the Dynamics of Information Transmission Across Different Classes of Investors written by Daniela S. Domuta and published by . This book was released on 2001 with total page 198 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : R.M. Goodwin
Publisher : Springer
ISBN 13 : 1349055042
Total Pages : 232 pages
Book Rating : 4.3/5 (49 download)
Download or read book Essays in Economic Dynamics written by R.M. Goodwin and published by Springer. This book was released on 1982-07-15 with total page 232 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Rosanne Altshuler
Publisher :
ISBN 13 :
Total Pages : 144 pages
Book Rating : 4.:/5 (285 download)
Download or read book Essays on Dynamic Issues in Corporate Taxation written by Rosanne Altshuler and published by . This book was released on 1988 with total page 144 pages. Available in PDF, EPUB and Kindle. Book excerpt:
