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Three Essays On Corporate Governance And Institutional Investors
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Book Synopsis Three Essays on Corporate Governance and Institutional Investors by : Vyacheslav Fos
Download or read book Three Essays on Corporate Governance and Institutional Investors written by Vyacheslav Fos and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation analyzes the role of institutional investors in corporate governance. The first essay studies the effect of potential proxy contests on corporate policies. I find that when the likelihood of a proxy contest increases, companies exhibit increases in leverage, dividends, and CEO turnover. In addition, companies decrease R&D, capital expenditures, stock repurchases, and executive compensation. Following these changes, there is an improvement in profitability. The second essay investigates the optimal contract with an informed money manager. Motivated by simple structure of portfolio managers' compensation and complex risk structure of returns, I show that it may be optimal for the principal to stay unaware about the true risk structure of returns. The third essay analyzes the biases related to self-reporting in the hedge funds databases by matching the quarterly equity holdings of a complete list of 13F-filing hedge fund companies to the union of five major commercial databases of self-reporting hedge funds between 1980 and 2008.
Book Synopsis Three Essays on Corporate Governance by : Stefan Petry
Download or read book Three Essays on Corporate Governance written by Stefan Petry and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Three Essays on Information Production and Monitoring Role of Institutional Investors by : Xiaorong Ma
Download or read book Three Essays on Information Production and Monitoring Role of Institutional Investors written by Xiaorong Ma and published by . 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 Information Production and Monitoring Role of Institutional Investors" by Xiaorong, Ma, 马笑蓉, 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 about the information production of institutional investors and two essays about the monitoring role of institutional investors. The first essay empirically examines the association between investor base and information production in the context of stock splits. Using the proportion of 13F filers as the proxy for the size of investor base, we show that three proxies for stock price informativeness, adjusted probability of information-based trading (AdjPIN), price non-synchronicity and probability of information-based trading (PIN), decrease significantly due to enlarged investor base after stock splits. It suggests that institutional investors are less incentivized to gather firm specific information when firm''s investor base expands, which is consistent with the "risk sharing hypothesis," proposed by Peress (2010). Furthermore, we find that the change of the price informativeness around splits is negatively related to the magnitude of positive return drifts following splits. This result is consistent with the notion that less information incorporated in stock prices results in a sluggish response by the market to corporate event. The second essay empirically identifies an external corporate governance mechanism through which the institutional trading improves firm value and disciplines managers from conducting value-destroying behaviors. We propose a reward-punishment intensity (RPI) measure based on institutional investors'' absolute position changes, and find it is positively associated with firm''s subsequent Tobin''s Q. Importantly, we find that firms with higher RPI exhibit less subsequent empire building and earnings management. It suggests that the improved firm values can be attributed to the discipline effect of institutional trading on managers, which is in line with the argument of "Governance Through Trading." Furthermore, we find that the exogenous liquidity shock of decimalization augments the governance effect of institutional trading. We also find that the discipline effect is more pronounced for firms with lower institutional ownership concentration, higher stock liquidity, and higher managers'' wealth-performance sensitivity, which further supports the notion that institutional trading could exert discipline on a manager. The third essay focuses on a particular type of institutional investor, short sellers, and explores the discipline effect of short selling on managerial empire building. Employing short-selling data from 2002-2012, we find a significantly negative association between the lending supply in the short-selling market and the subsequent abnormal capital investment. Besides, we find a positively significant association between the lending supply and the mergers and acquisitions announcement returns of acquiring firms. These results suggest that the short-selling potential could deter managers from conducting over-investment and value-destroying acquisitions. In addition, the discipline effect is stronger for firms with higher managers'' wealth-performance-sensitivity, for firms with lower financial constraints, and for stock-financed acquisition deals. Finally, firms with higher lending supply also have higher Tobin''s Q in the subsequent year. These results indicate that short-selling is another important external governance force. DOI: 10.5353/th_b5066226 Subjects: Institutional i
Book Synopsis Three Essays on Institutional Investors and Corporate Governance by : Rasha Ashraf
Download or read book Three Essays on Institutional Investors and Corporate Governance written by Rasha Ashraf and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The first essay analyzes mutual funds' proxy voting records on shareholder proposals. The results indicate that mutual funds support shareholder proposals and vote against management for proposals that are likely to increase shareholders' wealth and rights, in firms with weaker external monitoring mechanisms, in firms with entrenched management, and when funds have longer investment horizon. Mutual funds mostly take management sides on executive compensation related proposals, when they have higher ownership concentration, and when they belong to bigger fund families. The results further indicate that there is a positive reputational effect for the funds undertaking a monitoring role. Moreover, mutual funds reduce holdings when they disapprove of managements' policy, but before doing so they take on an activist role by supporting shareholder proposals. The second essay investigates institutional investors' trading behavior of acquiring firm stocks surrounding merger activities. We label investment companies and independent investment advisors as active institutions and banks, nonbank trusts and insurance companies as passive institutions. We find active institutions increase holdings of acquiring firm stocks for mergers with higher wealth implications. However, active institutions overreact to stock mergers at the announcement, which they appear to correct at the resolution quarter of the merger. The trading behavior of passive institutions suggests that these institutions disregard the market response of merger announcement in trading acquiring firm stocks at the announcement quarter. The passive institutions gradually update their beliefs and trade on the basis of merger wealth effect at the resolution quarter. The third essay examines relation between executive compensation structure with the existing level and changes of takeover defense mechanisms of firms. According to "managerial entrenchment hypothesis," higher managerial power from adoption of takeover defense mechanisms would lead to generating higher rents for executives. "Efficient contracting hypothesis" argue that higher anti-takeover provisions would contribute in achieving efficient contracting by deferring compensation into the future due to the low possibility of hostile takeover. The results support managerial entrenchment hypothesis with regard to existing level of takeover defense mechanisms. With regard to changes in anti-takeover provisions, the existing level of managerial power influence the future pay structure.
Book Synopsis Three Essays on Corporate Governance by : Aazam Virani
Download or read book Three Essays on Corporate Governance written by Aazam Virani and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Three Essays on Institutional Investment by : Nida Abdioglu
Download or read book Three Essays on Institutional Investment written by Nida Abdioglu and published by . This book was released on 2012 with total page 171 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis investigates the investment preferences of institutional investors in the United States (US). In the second chapter, I analyse the impact of both firm and country-level determinants of foreign institutional investment. I find that the governance quality in a foreign institutional investor's (FII) home country is a determinant of their decision to invest in the US market. My findings indicate that investors who come from countries with governance setups similar to that of the US invest more in the United States. The investment levels though, are more pronounced for countries with governance setups just below that of the US. My results are consistent with both the 'flight to quality' and 'familiarity' arguments, and help reconcile prior contradictory empirical evidence. At the firm level, I present unequivocal evidence in favour of the familiarity argument. FII domiciled in countries with high governance quality prefer to invest in US firms with high corporate governance quality. In the third chapter, I investigate the impact of the Sarbanes-Oxley Act (SOX) on foreign institutional investment in the United States. I find that, post-SOX, FII increase their equity holdings in US listed firms. This result is mainly driven by passive, non-monitoring FII, who have the most to gain from the SOX-led reduction in firm information asymmetry, and the consequent reduction in the value of private information. The enactment of SOX appears to have changed the firm-level investment preferences of FII towards firms that would not be their traditional investment targets based on prudent man rules, e.g., smaller and riskier firms. In contrast to the extant literature, which mostly documents a negative SOX effect for the US markets, my chapter provides evidence of a positive SOX effect, namely the increase in foreign investment. In the fourth chapter, I examine the effect of SOX on the relation between firm innovation and institutional ownership. I find that US firms investing in innovation attract more institutional capital post-SOX. Prior literature highlights two SOX effects that could cause this result: a decreased level of information asymmetry (direct effect) and increased market liquidity (indirect effect). My findings support the direct effect, as I find that the positive relation between innovation and institutional ownership is driven by passive and dedicated institutional investors. A reduction in firms' information asymmetry is beneficial for these investors while they gain less from increased market liquidity. Overall, my results indicate that SOX is an important policy that has strengthened the institutional investor's support for firm innovation.
Book Synopsis Three Essays on External Sources of Corporate Governance by : Lee Kevin K.
Download or read book Three Essays on External Sources of Corporate Governance written by Lee Kevin K. and published by . This book was released on 2012 with total page 250 pages. Available in PDF, EPUB and Kindle. Book excerpt: Corporate governance is the system by which corporations are controlled. External sources of governance include regulatory and market mechanisms as well as the interplay of goals between managers, the board, and shareholders. Other external sources can include informal institutions which can shape goals as well as suggested by institutional theory, effectively constrain human behavior. In my first essay, I argue that foreign direct investors can act as agents of change in corporate governance. Investigating changes in ownership and control of Swedish firms, I find that active foreign investors' participation move firms away from a Swedish stakeholder orientation toward an Anglo-American shareholder wealth maximization focus. In my second essay, I explore the relationship of informal and formal institutions on microfinance institutions (MFI). Investigating the outreach and performance of MFIs in developing nations, I find that strong formal institutions foster better efficiency and outreach while strong informal institutions' impact is limited to better outreach. In my third essay, I investigate the apparent lack of market discipline in the bank subordinated debt market leading up to the 2008 finance crisis. I find that subordinated debt holders were caught off guard by the suddenness and magnitude of the crisis. I argue that bank opacity created a vulnerable environment in the banking industry that contributed to this collapse.
Book Synopsis Three Essays in Corporate Finance and Institutional Investors by : Jiekun Huang
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:
Book Synopsis Essays in External Corporate Governance by : Abhishek Ganguly
Download or read book Essays in External Corporate Governance written by Abhishek Ganguly and published by . This book was released on 2020 with total page 183 pages. Available in PDF, EPUB and Kindle. Book excerpt: My dissertation comprises three essays that address several unanswered and unsettled questions on the role of institutional investors as external monitors. In the first chapter titled, "Media and Shareholder Activism," using more than twenty-five million firm-level media articles, I examine the role of media in shareholder activism events from 2002 to 2014. I find that conditioning on numerous observable firm-specific characteristics and unobservables, broader and negative ex-ante media coverage, is positively associated with the probability of a firm being a shareholder activist's target. I further document that media coverage also plays a crucial role in determining the outcomes of activism events. Target firms with ex-ante positive media coverage not only have significantly lower announcement returns but also have a higher likelihood of management winning. The second chapter titled, "CEO Overconfidence and Shareholder Activism," relies on extensive behavioral corporate finance theory and empirically explores whether managerial overconfidence is associated with hedge-fund activists' target selection and activism outcomes. Predictions from theoretical models point in different directions: activists mitigate overconfidence or activists avoid overconfident managers. We find evidence that hedge-fund activists are less likely to target firms with overconfident CEOs, after controlling for various firm and CEO characteristics and fixed effects. In the third chapter, "Hedge Fund Activism and Capital Structure," using a comprehensive sample of hedge-fund activism from 1994 to 2018 in the U.S., and closest propensity score-matched firms, we study whether hedge-fund activists influence the capital structures of targeted firms. We find that for over-levered firms, there is a significant positive association between firms' distance away from the target leverage and their likelihood of being targeted by an activist hedge-fund. However, rebalancing of leverage toward their target debt ratios post-hedge fund activist intervention is observed only among under-levered firms. Our findings are broadly consistent with the dynamic trade-off models of capital structure, where adjustment costs and agency benefits of leverage play a crucial role.
Book Synopsis Three Essays in Corporate Governance by : Adam Yore
Download or read book Three Essays in Corporate Governance written by Adam Yore and published by . This book was released on 2009 with total page 270 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Three essays on corporate governance by : Cassandra D. Marshall
Download or read book Three essays on corporate governance written by Cassandra D. Marshall and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Three Essays on Corporate Governance by : Robert Scott Roark
Download or read book Three Essays on Corporate Governance written by Robert Scott Roark and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays on Corporate Governance and Social Responsibility by : Lukai Yang
Download or read book Essays on Corporate Governance and Social Responsibility written by Lukai Yang and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In the first essay, we study whether the increasingly large and concentrated ownership stakes by passive investors influence shareholders activism in the form of shareholder proposals. We find a positive association between passive ownership and the total number of proposals initiated, proposals with different types of sponsors, the rate of proposal withdrawal, vote-for percentage, and finally 1-year abnormal returns following the annual meeting date at which time the proposals were put forth. To mitigate endogeneity concerns, we use the Russell reconstitution as an exogenous shock. Our findings highlight the ability and power that passive investors have to affect corporate policy by supporting fellow shareholder sponsored proposals.In the second essay, we investigate the effectiveness of shareholder voice. In 2017, The Big Three institutional investors launched campaigns to increase gender diversity on corporate boards. We estimate that their campaigns led firms to add at least 2.5 times as many female directors in 2019 as they had in 2016 and to promote female directors to key board positions. Firms increased female representation by relying less on managers existing networks to identify candidates and by placing less emphasis on candidates executive experience. Our results highlight index investors ability to influence firms governance structures and shareholder advocacy's potential to expand women's participation in corporate leadership more extensively than government mandates. In the third essay, we examine whether and how local religiosity has an impact on corporate attitude towards corporate social responsibility (CSR) activities and how CSR activities directly impact firm value. Employing an extensive US sample from 1991 to 2015, we find that firms headquartered in more religious regions undertake a greater level of CSR activities. Furthermore, the CSR activities of firms located in highly religious regions are positively valued in the stock markets as we observe a positive association between CSR and Tobin's Q for the companies that are headquartered in high religious regions. The association is stronger when firms are less visible to non-local investors. This study enriches the emerging literature on the influence of local cultural factors on corporate behavior and encourages future research on the various aspects of how the local environment impacts firms ethical behaviors.
Book Synopsis Three Essays on Corporate Governance, Shareholder Activism, and Economic Policy Risk by : Marcel Maier
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:
Book Synopsis Three Essays on Corporate Governance by : Michael John Fleming
Download or read book Three Essays on Corporate Governance written by Michael John Fleming and published by . This book was released on 1994 with total page 236 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Three Essays in Corporate Governance by : James Martin Forjan
Download or read book Three Essays in Corporate Governance written by James Martin Forjan and published by . This book was released on 19?? with total page 127 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Three Essays on Corporate Governance by : Trang L. N. Nguyen
Download or read book Three Essays on Corporate Governance written by Trang L. N. Nguyen and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
