Corporate Finance Commons^™

Winner’S Curse On Malaysian Ipos: Does The Phenomenon Still Exist?, Norliza Che Yahya, Rasidah Mohd Rashida, An Le Thuy Ngoc, Ayesha Anwar

The Indonesian Capital Market Review

This study examines the winner’s curse phenomenon through Amihud and Yong’s winner’s curse measurements. Amihud’s allocation rate (ALLOCTJ) is the natural log of the reciprocal of investor demand or oversubscription ratio while Yong’s institutional investor participation is gauged based on a type of IPOs which is issued via private placement (DPRIVATE). Using data set from 560 initial public offerings (IPOs) issued from January 2000 until December 2022 for listing on Bursa Malaysia, the results of the cross-sectional multiple regression analyses show that ALLOCTJ and DPRIVATE are consistently significantly negative in influencing initial returns of the IPOs. The former relationship indicates …

Investment Analysis Of Costco: A Comprehensive Strategic And Financial Evaluation, Shane Johnson

Honors Theses

We provide an investment analysis of Costco Wholesale Corporation by conducting an analysis of the fundamental business model, industry standing, financial performance, and long-term investment potential. As a leader in the warehouse retail industry, Costco has experienced significant growth through its cost-efficient operations, bulk sales approach, superior supply chain management, membership fee revenue streams, high quality product offerings, and strong customer loyalty. This research seeks to answer the question: Is Costco a good investment opportunity based on its valuation, competitive positioning, financial performance, and overall industry outlook? We begin with a business and industry overview, analyzing Costco’s business strategy in …

Corporate Environmental (Ir)Responsibility Of Chinese Construction Companies, Bin Zhang

Dissertations and Theses Collection (Open Access)

Grounded in a multi-stakeholder perspective, this study delves into the impact of Corporate Environmental Responsibility (CER) on the performance of firms in the Chinese construction industry. Utilizing a panel dataset of listed companies in the Chinese construction sector from 2008 to 2023, the research conducts empirical analysis by incorporating key stakeholder relationship indicators (customer concentration, government support, and bank loan costs) while controlling for firm characteristics, aiming to assess the effect of corporate environmental information disclosure on financial performance. The findings reveal that CER significantly positively affects financial performance. More crucially, this relationship is partly attributed to the strengthening of …

The Impact Of Eva Performance Evaluation System On Market Value Management Of State-Owned Listed Companies, Xiaohua Cai

Dissertations and Theses Collection (Open Access)

Against the backdrop of intensifying global economic competition and the deepening reform of state-owned enterprises (SOEs), improving the operational efficiency of central state-owned enterprises has become a core issue in China’s pursuit of high-quality economic development. Meanwhile, as market-oriented reforms advance and capital markets open further in both directions, central state-owned enterprises’ market value management has increasingly emerged as a pivotal mechanism connecting national strategies with market value, necessitating the establishment of an institutional framework that balances value creation and value realization. In 2009, the State-owned Assets Supervision and Administration Commission of the State Council introduced the Economic Value Added …

Simulation Research On Financial Competitive Intelligence Early Warning Mechanism Of New Ventures Based On Big Data Thinking, Keping Wang, Jingyi Zhou, Yao Che, Zhen Qiao

Journal of Scientific Information Research

[Purpose/significance]Financial competitive intelligence is a core element in promoting the stable development of new ventures. Based on big data thinking, exploring the construction process and simulation effects of financial competitive intelligence warning mechanisms for new ventures is of great significance for improving their competitiveness and promoting healthy development. [Method/process]The article takes startups as the research object, constructs a financial competitive intelligence early warning mechanism for startups based on big data thinking, and uses system dynamics methods to construct causal relationship diagrams and system flow diagrams, and simulates them using Vensim PLE software. [Result/conclusion]The system dynamics model constructed in the article …

Aggregate Earnings And Global Equity Returns, Yigit Atilgan, K. Ozgur Demirtas, A. Doruk Gunaydin, Aynur Dilan Tosun, Duygu Zirek

Department of Accounting and Finance Faculty Scholarship and Creative Works

This paper compares the predictive power of aggregate earnings for equity returns in international markets. We rank 51 non-US countries based on the time-series averages of their price synchronicity and market concentration measures, calculated at the firm level using daily data. We find that aggregate earnings negatively predict one-quarter-ahead stock returns in country groups that contain less synchronous and concentrated markets, as opposed to country groups that contain more synchronous and concentrated markets. We attribute the negative predictive power of aggregate earnings to a business cycle effect because high (low) corporate earnings correspond to economic expansions (contractions) that tend to …

From Poolside To Profit Margins: A Deep Dive Into Playa Hotels & Resorts, Elisabeth Zygmunt, Hai Tran

Honors Thesis

From a consumer perspective, all-inclusive leisure travel requires few worries coupled with plenty of enjoyment and relaxation. However, from a managerial perspective, there are countless operations to run to ensure a positive guest experience. Playa Hotels & Resorts (NASDAQ: PLYA) is a leader in all-inclusive resorts in vacation destinations worldwide. Compared to some of the biggest names and players in the industry, Playa has a relatively small market cap of $1.49B. To maintain its growth trajectory, Playa must capitalize on the increasing popularity of all-inclusive models and consumer health concerns, along with continuing to expand its portfolio through collaborations with …

Institutional Cross-Ownership Of Peer Firms And Revelatory Price Efficiency, Young Jun Cho, Holly I. Yang, Yue Zhao

Research Collection School Of Accountancy

We argue that cross-ownership increases the amount of private information in stock price, enhancing the ability of stock price to provide feedback to managers. Consistent with this argument, we find greater cross-ownership heightens a firm’s investment-q sensitivity. This effect is stronger for firms with a lower propensity for voluntary disclosure and for firms whose managers hold less private information. Furthermore, we find that cross-ownership is negatively associated with the sensitivity of a firm’s investment to its peers’ stock prices. Additionally, cross-ownership has a stronger impact on the investment-q sensitivity when measured among investors who trade more actively the …

Capital Formation, The Sec, And Accredited Investors, Neal F. Newman, Lawrence J. Trautman, Brian Elzweig

Faculty Scholarship

Protecting the investing public, while simultaneously facilitating the efficient flow of capital needed by all new and growing businesses continues as a primary responsibility of the U.S. Securities and Exchange Commission (SEC). Enhancing the capital formation process is a necessary step in the creation of jobs and growth of any economy. Central to the SEC’s regulatory schematic is the proposition that some particularly sophisticated and wealthy investors require less protection than those with less knowledge, experience, and resources. During December 2023, for just the third time, the SEC staff issued a report examining the status of the natural person accredited …

Sex & Startups, Jens Frankenreiter, Talia B. Gillis, Eric L. Talley

Faculty Scholarship

Private law offers a unique solution to the problem of long-term fiscal commitment. When Congress enacts a spending program that will take many years to reach fruition, there is a risk of a subsequent Congress or President cutting off funding in the interim. There is no escape from the problem within appropriations law itself. One solution, however, is to entrust private sector allies as vessels of long-term commitment. As a matter of political economy, that solution draws on policy-feedback theory. As a matter of law, the solution rests on a mechanism that Congress already uses but has not recognized its …

Aircraft Leasing And Its Effects On Ireland's Airline Sector, Aaron Christian, Jeanne Sumrall

SACAD: Scholarly Activities

The aircraft leasing industry sits at the heart of Ireland’s aviation sector, making Ireland the global leader in the business. The presence of major leasing companies’ headquarters, including Avolon, SMBC and AerCap, in Ireland, allows for country to benefit from these companies’ revenue. In return, Ireland provides the companies with supportive tax and regulatory frameworks that benefit the aviation sector. The research on this topic explores different ways aircraft leasing contributes to airline efficiency through cost reductions and fleet modernization while minimizing financial risks associated with aircraft acquisition by utilizing computer programs. Operational modeling has become an essential tool for …

In The Eye Of The Storm: Investor Sentiment And Audit Quality In Korean Financial Reporting, Antonios Persakis, Georgios Kolias

Economic and Business Review

Background and objective: We investigate whether financial reporting quality is associated with economic policy uncertainty and examine the moderating roles of investor sentiment and audit quality during periods of high uncertainty.

Methods: This study focuses on firms listed on the Korea Stock Exchange over the period 1998–2021. We employ a dynamic panel-data model and utilize the Arellano–Bover/Blundell–Bond system estimator, a two-step generalized method of moments estimator that leverages instrumental variables to mitigate the issue of endogeneity.

Results: The empirical result provides support for the hypothesis suggesting that Korean economic policy uncertainty is positively associated with financial reporting quality, indicating that …

How Do Firms Respond To Reduced Private Equity Buyout Activity?, Yi-Hsin Lo

Dissertations and Theses Collection (Open Access)

I investigate how firms respond to reduced private equity buyout activity in their home states by exploiting the state-by-state adoption of laws that increase the cost of buyouts. I find evidence suggestive of reduced firm efficiency. The firms also become less likely to go bankrupt or to relocate to other states. These findings suggest that the firms' managers may be starting to enjoy the quiet life. I also find a reduction in layoffs. Overall, the results indicate a trade-off: Whereas reduced private equity buyout activity increases managerial entrenchment, it also lowers firm exits and strengthens employees' job security.

Family Succession And Corporate Investment Policy, Weiting Lin

Dissertations and Theses Collection (Open Access)

Family firms play a significant role in economic and social development, making substantial contributions to wealth creation, employment generation, and the enhancement of social welfare. However, the development of family firms faces numerous challenges, among which intergenerational succession stands out as one of the most critical. The intergenerational succession of family firms is crucial for their long-term sustainable development. In China, since the reform and opening up, private enterprises have experienced rapid growth, with most family firms still under the control of their first-generation founders. These firms are now entering a critical period of succession. The unique political, business, and …

Unexpected Defaults: The Role Of Information Opacity, Aytekin Ertan, Yun Lee, Regina Wittenberg-Moerman

Research Collection School Of Accountancy

Bond defaults are undesirable yet natural outcomes of risky investments. What is also crucial but hitherto underexplored is the unexpectedness of defaults. We develop a parsimonious measure of default unexpectedness and highlight its economic importance by demonstrating that unexpected defaults are associated with unfavorable recovery outcomes and adverse price changes in peer firm bonds. We then examine how default unexpectedness relates to information opacity. We find that firms with opaque financial reporting and weak voluntary disclosure experience more unexpected defaults. Defaults also occur more unexpectedly when the external information environment is opaque—when rating agencies disagree on a firm’s credit risk …

Beyond The Disaster Zone: How Disruptive Climate Event Shape Epa Oversight And Firm Behavior, Grace Fan

Research Collection School Of Accountancy

We examine how experiences with disruptive climate events impact the Environmental Protection Agency’s (EPA) monitoring activities and subsequent firm behaviors. Using plausibly exogenous variation in the exposure of EPA regional offices to major hurricanes, we find that exposed EPA regulators increase their monitoring efforts, measured by both inspection frequency and length, at facilities located in their jurisdictions but outside the disaster zone. This effect diminishes over time and is stronger for regulators located closer to the disaster area or experiencing the disaster for the first time. Importantly, the heightened regulatory monitoring following disasters has real effects on regulated facilities–they face …

Venture Capital, Marketization, And Corporate Innovation Performance, Jia Dong

Dissertations and Theses Collection (Open Access)

The paper explores the impact of venture capital (VC) on the innovation performance of companies listed on the ChiNext and STAR markets of China’s A-share market. By examining the effect of VC involvement on the number of patent applications and patents granted to listed companies, the study reveals the role of VC in promoting corporate innovation and its potential mechanisms. The research finds that venture capital significantly enhances firms’ innovation performance through increased R&D investment and management incentives. Additionally, the degree of marketisation, as an important external factor, significantly amplifies the positive impact of VC on corporate innovation.

The paper …

Industry Peer Information And The Equity Valuation Accuracy Of Firms Emerging From Chapter 11, Bingxu Fang, Sasan Saiy, Dushyantkumar Vyas

Research Collection School Of Accountancy

Valuation plays a central role in determining Chapter 11 reorganization outcomes. However, obtaining accurate valuation estimates of reorganized firms is challenging because of limited firm-specific market-based information and the oft-conflicting incentives of claimholders. We examine the role of industry peer information in reducing misvaluations and its implications for unintended interclaimant wealth transfers and postreorganization performance. First, we find that the availability of relevant industry peer information is negatively associated with equity valuation errors for firms emerging from Chapter 11. Cross-sectional results suggest that the relation between industry peer information and valuation errors varies substantially with debtors’ information environment and case …

Information Spillover And Corporate Policies: The Case Of Listed Options, Gennaro Bernile, Jianfeng Hu, Guangzhong Li, Roni Michaely

Research Collection Lee Kong Chian School Of Business

Information production associated with derivatives markets is not a sideshow; rather, it has significantly positive spillover effects on an array of corporate decisions of underlying firms. Using a regression-discontinuity design based on exogenous variation in options availability as an instrument for changes in the information environment, we show that options introductions have causal effects on corporate policies on both sides of the balance sheet. Through improved information efficiency, options availability reduces the need for debt and payout, increases efficient investment, and yields superior innovation. We conduct two independent experiments demonstrating that our instrument s impact is not derived from alternative …

Green Innovation And Firms’ Financial And Environmental Performance: The Roles Of Pollution Prevention Versus Control, Qiang Cheng, An-Ping Lin, Mengjie Yang

Research Collection School Of Accountancy

This study examines the effects of firms' green innovation on their future financial and environmental performance. If pollution is primarily a manifestation of wasted resources, then investments in pollution prevention technologies can both reduce the environmental impact of production and improve financial performance. In contrast, investments in pollution control technologies likely reduce the environmental impact of production without improving financial performance. Using green patents to capture firms' investments in these two types of technologies, we find that the value of a firm's pollution prevention patents is positively associated with its future financial and environmental performance, and that the positive impact …