Business Commons^™

Changing And/Or Funding Opeb Promises: A Typology Of Local Government Responses To Gasb 45 And The Realization Of Opeb Liabilities, Juita-Elena Yusuf, Thomas Musumeci

School of Public Service Faculty Publications

GASB Statement No. 45 addresses how governmental units account for employees' other post-employment benefits (OPEB), requiring government employers to replace OPEB reporting on a pay-as-you-go basis with an accounting of the cost of current and future benefits. This requirement and the resulting OPEB liability may prompt government employers to reconsider key questions regarding their OPEB provision. The size of the OPEB liability depends on both the benefit promises made to employees and the assets to fund these promises. We propose a typology that defines four approaches for governments to respond to GASB 45 and their OPEB liabilities. These approaches represent …

A Study Of Risk-Taking Behavior In Investment Banking, Elzotbek Rustambekov

Theses and Dissertations in Business Administration

This dissertation examines corporate risk-taking behavior by investment banks in the United States. This study was sparked by the collapse of Lehman Brothers, one of the largest bankruptcy filings in U.S. history. This dissertation examines the specific factors that drove investment banks such as Lehman Brothers to take excessive risks, and how the deregulation of the US financial services industry towards the end of the 1990s contributed to risk-taking behavior.

I use four theoretical perspectives to examine corporate risk-taking behavior among investment banks. These perspectives include: institutional theory, behavioral theory of the firm, knowledge based view (KBV) of the firm, …

Essays On Foreign Reverse Mergers And Bond Etf Mispricing, Charles William Duval

Theses and Dissertations in Business Administration

This dissertation examines two topics that have attracted significant attention in the financial media, but have received little academic study.

The first essay examines the characteristics and performance of foreign firms that acquire U.S. exchange listings through a reverse merger (RM). Specifically, this study focuses on Chinese companies which have accounted for over 40% of all RMs taking place on U.S. exchanges. Examination of these firms' characteristics and daily returns from 2004-2010 reveals Chinese firms that engage in RMs are private firms not listed in China, motivated by the ability to offer equity-based compensation (which has been illegal in China), …

Two Essays On Executive Pay And Firm Performance, Thuong Quang Nguyen

Theses and Dissertations in Business Administration

Two essays of this dissertation study the relationship between executive compensation and firm performance. These essays analyze both compensation level and compensation structure, and focus not only on CEO compensation but also on Top Management Team (TMT) compensation as well as Chief Financial Officer (CFO) compensation. Methodologically, these essays use different regression techniques to explore the nature of time series over cross sections of executive compensation data in order to find a reliable relationship between executive compensation and firm performance.

The first essay investigates the TMT compensation - firm performance relationship and finds that the compensation dispersion among TMT members …

Effective Popular Financial Reports: The Citizen Perspective, Juita-Elena (Wie) Yusuf, Meagan M. Jordan

School of Public Service Faculty Publications

The article presents a study that investigates the views of citizens on the efficiency of financial reports in the U.S. Researchers did a survey to discern the perspectives of respondents about the effectiveness of the said reports in informing other individuals about government finances. Moreover, results reveal that 80% of respondents believed that the reports are effective. [Associates Programs Source, EbscoHost database]

Risk Allocation Across The Enterprise: Evidence From The Insurance Industry, Michael K. Mcshane, Tao Zhang, Larry A. Cox

Finance Faculty Publications

Financial researchers initially regarded hedging activities as a means to reduce total firm risk, which often is defined in terms of cash flow volatility. More recently, researchers have focused on the strategic allocation of risk. Direct tests of risk allocation have been problematic, however, because hedging data are rarely available and, when available, are specific only to a single operation of the firm, such as bank lending. In this study, we exploit unique data from the insurance industry that allows us to observe hedging proxies for both investment and insurance underwriting risks and test the risk allocation hypothesis developed in …

How Effective Is The International Fuel Tax Agreement As A Multistate Tax Administration Model? A View From The States, Juita-Elena Yusuf, Lenahan O'Connell

School of Public Service Faculty Publications

The International Fuel Tax Agreement (IFTA) was established to reduce the complexities of reporting, allocating, and collecting diesel fuel taxes from interstate commercial carriers operating in multiple jurisdictions. This paper examines IFTA's effectiveness as a multistate tax administration model from the perspective of the states. We identify three criteria of effectiveness and use a survey of IFTA officials in the member states and provinces as well as additional data provided by IFTA, Inc to assess IFTA's effectiveness. We conclude that (1) IFTA promotes inter-jurisdictional cooperation and revenue transfers; (2) carriers do not locate disproportionately in low tax jurisdictions; and (3) …

Creditor Rights And R&D Expenditures, Bruce Seifert, Halit Gonenc

Finance Faculty Publications

Manuscript Type: Empirical

Research Question?Issue: This study examines the impact of creditor rights on R&D intensity (R&D/total assets). We argue that managers in countries with strong creditor rights have more incentives to reduce cash flow risk and therefore limit expenditures on R&D more than managers located in countries with weak creditor rights.

Research Findings/Insights: Using a sample of over 21,000 firms from 41 countries, our research is one of the first to document that strong creditor rights are indeed associated with reduced R&D intensity. This negative relationship is observed in market‐based countries, but not in bank‐based countries. Moreover, the results …

Trading Volume And Overconfidence With Differential Information And Heterogeneous Investors, Kenneth Yung, Qian Sun, Hamid Rahman

Finance Faculty Publications

This paper adds to the overconfidence literature by specifically considering the differential nature of information and its use by different classes of investors. The literature suggests that overconfidence is a major determinant of stock trading volume. We postulate that private investors are more prone to overconfidence bias as compared to institutional investors. This implies that turnover in firms with low institutional ownership will be driven more by private information while turnover in firms with high institutional ownership will be driven more by public information. This is the essence of the two hypotheses we explore. We find strong evidence in support …

Club Good Influence On Residential Transaction Prices, J. Andrew Hansz, Darren K. Hayunga

Finance Faculty Publications

We examine residential real estate transactions in a market where an additional property right to a club good may have an influence on prices. We find that for single-family property, the market capitalizes approximately 50% of the full value of the extra property right. For condominiums, the amount reduces to approximately 25%. While these amounts are positive, they clearly are significantly lower than full value.

Risk Allocation Across The Enterprise: Evidence From The Insurance Industry, Michael K. Mcshane, Tao Zhang, Larry A. Cox

Finance Faculty Publications

Financial researchers initially regarded hedging activities as a means to reduce total firm risk, which often is defined in terms of cash flow volatility. More recently, researchers have focused on the strategic allocation of risk. Direct tests of risk allocation have been problematic, however, because hedging data are rarely available and, when available, are specific only to a single operation of the firm, such as bank lending. In this study, we exploit unique data from the insurance industry that allows us to observe hedging proxies for both investment and insurance underwriting risks and test the risk allocation hypothesis developed in …

Two Essays On Behavioral Finance, Quang Viet Vu

Theses and Dissertations in Business Administration

The first essay is entitled: "CEO Overconfidence, Corporate Governance Practices and Firm Innovation". In this study, I examine if overconfident CEOs overinvest or underinvest in innovative projects. I also investigate if overconfident CEOs pursue innovative projects to benefit personal interests or the interest of shareholders. By focusing on the effect of corporate governance in monitoring the behavior of overconfident CEOs, my results show that there is a negative relation between CEO overconfidence and firm innovation among firms with poor governance. In these cases, the finding is consistent with the implication that overconfident CEO are entrenched and invest inadequately …