Finance and Financial Management Commons^™

Competing For Deal Flow In Local Mortgage Markets, Darren Aiello, Mark Garmaise, Gabriel Natividad

Faculty Publications

The U.S. mortgage market exhibits competitive instability in which some lenders emerge rapidly from the fringe to substantial market shares. Using inferred discontinuities in application acceptance models to generate local lending shocks, we analyze the impact on a lender of a surge in originations by its competitors. We show that the quickest-growing (not the largest) competitors divert applications and originations from other lenders. Facing a quickly-growing competitor, lenders charge higher interest rates, partially due to the increased risk of their loans. Loan performance suffers for other lenders as the quickestgrowing competitor’s originations increase.

Young Firms, Old Capital, Song Ma, Justin Murfin, Ryan Pratt

Faculty Publications

Across a broad range of equipment types and industries, we document a pattern of local capital reallocation from older firms to younger firms. Start-ups purchase a disproportion- ate share of old physical capital previously owned by more mature firms. The evidence is consistent with financial constraints driving differential demand for vintage capital. The local supply of used capital influences start-up entry, job creation, investment choices, and growth, particularly when capital is immobile. Meanwhile, as suppliers of used capital, in- cumbents accelerate capital replacement in the presence of younger firms. The evidence suggests previously undocumented benefits to co-location between old and …

Three Essays On Information Asymmetry Across Heterogenous Agents, Shenru Li

Graduate Theses, Dissertations, and Problem Reports (ETD)

This thesis models and explores agents’ decisions in reaction to events that serves to increse the heterogeneity among agents. The analysis is conducted on three aspects of financial economics. In chapter 2, we empirically examine how trading by peers on a new platform influences others’ adoption decision. We model the adoption process and find the relationship to be U-shaped, with first movers greatly discouraging their peers from adoption, while late movers slightly discouraging or encouraging their peers.

In chapter 3, we investigate how managerial incentives influence corporate social responsibility (CSR). We examine the staggered adoption of corporate opportunity waiver laws …

The Impact Of The Covid-19 Pandemic On Corporate Financial Fragility In The Vietnamese Manufacturing Industry, Trang Nguyen

Honors Theses

In the past decades, under the government’s export-led growth strategy, the Vietnamese manufacturing sector – the backbone of the whole Vietnamese economy – has established a deep tie with the international market and the reliance on foreign buyers has fueled the growth of this sector before COVID-19. However, during the pandemic, when the global market contracted at -3.5 percent and demand slumped globally, this existing growth model and the manufacturing sector’s reliance on foreign buyers induced significant risks to this sector from both the demand and supply side. Using the firm-level data on 41 manufacturing exporting companies from the Vietstock …

Relationship Between Capital Structure And Financial Performance Of U.S. Retail Bank, Nelson Jonah Usoro

Walden Dissertations and Doctoral Studies

AbstractThe decision to fund the operations of a company through debt or equity has implications for the long-term sustainability of the organization. The purpose of this quantitative causal-comparative study was to evaluate the impact of capital structure on the financial performance of U.S. retail banks and to observe the behavior of the banks during a time of crisis to determine whether capital structuring decisions could support the bank in surviving financial distress. The research questions focused on the effects of capital structure, including common stock equity with preferred stock compared to common stock equity with secured debt, on earnings, profitability, …

Optimization Of Financial Performance In E-Commerce, Ishmael Fleming

Walden Dissertations and Doctoral Studies

Financial performance is a challenge for business managers in the e-commerce industry that lack the knowledge to meet their operational objectives consistently. Business managers are concerned with poor financial performance due to the adverse impact on business sustainability. Grounded in total quality management theory, the purpose of this quantitative correlational study was to examine the relationship between working capital management (WCM), operating expense ratio (OER), and e-commerce financial performance. Archival data were collected from 107 small- to medium-sized publicly traded e-commerce businesses headquartered in the United States from 2019 to 2021. The results of the multiple linear regression were significant …

Strategies To Decrease Unethical Financial Management Behavior In Nonprofit Organizations, Cristi Michelle Hargrave

Walden Dissertations and Doctoral Studies

Unethical financial management leadership conduct in nonprofit organizations threatens organizational mission accomplishment. Leaders of nonprofit organizations who fail to decrease unethical financial management conduct can observe a lack of mission accomplishment in their organizations. Grounded in the stakeholder and agency theories, the purpose of this qualitative multiple case study was to explore strategies nonprofit leaders use to decrease unethical financial management conduct. Participants were three nonprofit leaders from organizations on the East Coast of the United States who implemented strategies to reduce unethical financial management conduct. Data were collected using semistructured interviews and a review of nonprofit regulatory reporting documents. …

Strategies To Mitigate Voluntary Employee Turnover, Mutale Chilangwa Chisela

Walden Dissertations and Doctoral Studies

AbstractBanking leaders are negatively affected when employees voluntarily leave their employment. Banking leaders who implement strategies can enhance employee satisfaction to mitigate voluntary employee turnover. Grounded in the transformational leadership theory, the purpose of this qualitative multiple-case study was to explore strategies some banking leaders use to mitigate voluntary employee turnover. Participants were five banking leaders from local and international banks, four banks in Lusaka, Zambia, and one bank in Dar es Salaam, Tanzania, who successfully implemented strategies to mitigate voluntary employee turnover. Data were collected from semistructured interviews and company documents and analyzed using Yin’s five phases. Three themes …

Bank Manager Strategies To Retain Skilled Employees Beyond 5 Years, Lana Faye Martin

Walden Dissertations and Doctoral Studies

AbstractThe banking industry is fraught with low employee retention threatening the bank’s ability to perform optimally. Bank managers who fail to implement strategies to retain skilled employees experience reduced productivity and increased turnover costs. Grounded in the job embeddedness theory, the purpose of this qualitative single-case was to explore strategies bank managers use to minimize employees' intent to leave during downtimes in the banking industry. The participants were four employees of a Fortune 500 bank located in the U.S. in Virginia. Data were collected using semistructured interviews and a review of organizational employee handbooks. The six themes identified through a …

Learning To Manipulate A Financial Benchmark, Megan Shearer, Gabriel V. Rauterberg, Michael P. Wellman

Law & Economics Working Papers

Financial benchmarks estimate market values or reference rates used in a wide variety of contexts, but are often calculated from data generated by parties who have incentives to manipulate these benchmarks. Since the London Interbank Offered Rate (LIBOR) scandal in 2011, market participants, scholars, and regulators have scrutinized financial benchmarks and the ability of traders to manipulate them.

We study the impact on market welfare of manipulating transaction-based benchmarks in a simulated market environment. Our market consists of a single benchmark manipulator with external holdings dependent on the benchmark, and numerous background traders unaffected by the benchmark. We explore two …

Two Essays On The Evolution And Role Of Short Selling Activity In Financial Markets, Wanxi Zhao

Electronic Theses and Dissertations, 2020-2023

My dissertation studies the evolution and role of short selling activity in financial markets. My first essay examines the cross-sectional and time-series variations in the characteristics of equity lending market in the setting of IPO, where, as suggested by Duffie et al. (2002), search frictions are likely to be high. I find that the initial supply of lendable shares and short interest levels increase with offer size, while initial lending fees decrease with offer size. The initial lending fees are also positively related to the bargaining power of lenders and negatively related to the bargaining power of borrowers. The supply …

A Comparison Of Ncreif, Inrev, And Anrev Open-End Core Fund Indices, Barrett A. Slade, Jeffrey D. Fisher, Joe D’Alessandro

Faculty Publications

Cross-border investment in non-listed real estate is on the rise. This article aims to compare the U.S. NFI-ODCE index with the European INREV ODCE index and the recently released Asian ANREV ODCE index with the hope that this study will be helpful to cross-border investors in these major markets. From 2016 through 2020 (five years), we found that the NCREIF fund count remained relatively flat, but the INREV and ANREV fund count increase steadily. At the end of 2020, NCREIF’s GAV was 270 billion dollars compared with INREVs 39 billion dollars and ANREV’s 16 billion dollars, a considerable size difference …

The Effect Of Unsuccessful Past Repurchases On Future Repurchasing Decisions, Geoffrey C. Friesen, Noel Pavel Jeutang, Emre Unlu

Department of Finance: Faculty Publications

We find that managers are less likely to repurchase stocks when they lose money on past stock repurchases but find no robust evidence that past gains on repurchases influence future repurchasing activity. This asymmetric sensitivity is strongest for young CEOs and those with the shortest tenure. Also, future repurchases are more sensitive to past repurchase losses for CEOs whose previous lifetime experience with the stock market is unfavorable. The sensitivity of future repurchases to past losses costs firms, on average, about 3.7% per year. When this cost is decomposed into systematic and idiosyncratic components, we find that nearly half (1.8%) …

Long-Term Analysis Of A Savings Program In Elementary School, Jennifer Davidson, William Walstad

Department of Economics: Faculty Publications

The prevalence of in-school savings programs (ISSPs) for children and youth is widespread, but research on their effectiveness is limited. This study investigates the long-term effects of an ISSP conducted in one U.S. elementary school. Survey data were collected on the financial behaviors of high school students, who participated in or did not participate in an ISSP while attending the same elementary school at the same time. The results from a probit analysis of data controlling for demographic variables showed that ISSP participants compared with non-participants were more likely to have a bank account in high school. They also were …

Strategies To Mitigate Voluntary Employee Turnover, Mutale Chilangwa Chisela

Walden Dissertations and Doctoral Studies

AbstractBanking leaders are negatively affected when employees voluntarily leave their employment. Banking leaders who implement strategies can enhance employee satisfaction to mitigate voluntary employee turnover. Grounded in the transformational leadership theory, the purpose of this qualitative multiple-case study was to explore strategies some banking leaders use to mitigate voluntary employee turnover. Participants were five banking leaders from local and international banks, four banks in Lusaka, Zambia, and one bank in Dar es Salaam, Tanzania, who successfully implemented strategies to mitigate voluntary employee turnover. Data were collected from semistructured interviews and company documents and analyzed using Yin’s five phases. Three themes …

Strategies To Improve Minority Business Enterprises’ Access To Capital For Competitive Positioning And Profitability, Darlene Hill

Walden Dissertations and Doctoral Studies

Some minority business enterprises (MBEs) have limited capital for setting up their businesses, which often leads to business failure. Grounded in entrepreneurship theory, the purpose of this qualitative multiple-case study was to explore strategies MBEs used to access capital to improve their competitive positioning and profitability. The participants were six MBE owners from Alabama who demonstrated success at maintaining and securing working capital to maintain a profitable business for a minimum of 5 years. Data were collected from semistructured interviews and reviews of organization documents and websites. Using Yin’s five-step data analysis process, four themes emerged: owner financing, government loans …

Three Essays On Splits, Insiders, And Retail Traders, Paul Van Nes

Theses and Dissertations (Comprehensive)

The first essay tests the split signaling hypothesis by examining the reaction of sophisticated investors to stock split announcements. Return-based tests of signaling used in earlier studies produce conflicting results and have been criticized as unreliable. I bypass this criticism by focusing on long-term post-split behavior of short sellers who are generally recognized as sophisticated investors. Upon controlling for alternative hypotheses and conventional short selling determinants, I show that short interest permanently declines in reaction to split announcements. Furthermore, consistent with signaling, the degree of the decline is positively related to signal strength and to the splitter’s level of information …

Three Essays On Corporate Finance And Applied Econometrics, Pan Jiang

Theses and Dissertations (Comprehensive)

This dissertation comprises three essays that investigate topics in corporate finance and applied Econometrics.

The first essay examines how digital credit, a Fintech technology, improves micro-business owners' performance by comparing an economically important but often financially disadvantaged group, migrants, with their comparable natives. Using the data on micro-business owners registered with the largest Fintech firm in China, we find that with the access to microloans, migrants achieve greater business revenues compared to their native counterparts. The differential impact of Fintech on migrants versus natives is more pronounced in the businesses with more financial constraints, in more economically developed areas, for …

The New Accounting For Operating Leases: Unintended Consequences In The Airline Industry, Renata Bandeira, Bridget M. Lyons, Carolyn Trabuco

WCBT Faculty Publications

By 2020, new accounting rules for operating leases were applicable to publicly traded companies reporting under either the US Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). The accounting authorities under both standards noted that the new rules were developed to increase the transparency of lease transactions to provide more relevant and comparable information. We compare two Brazilian airlines reporting under IFRS, Azul and Gol, with an operationally similar US airline reporting under US GAAP, JetBlue, to determine whether the new standards improve the ability to understand, evaluate, and compare performance, managerial decision making and credit metrics. …

Co-Jumps, Co-Jump Tests, And Volatility Forecasting: Monte Carlo And Empirical Evidence, Weijia Peng, Chun Yao

WCBT Faculty Publications

This study classifies jumps into idiosyncratic jumps and co-jumps to quantitatively identify systematic risk and idiosyncratic risk by utilizing high-frequency data. We found that systematic risk occurs more frequently and has larger magnitudes than the idiosyncratic risk in an individual asset, which indicates that volatilities from one sector are largely derived from the contagious effect of other sectors. We further investigated the importance of idiosyncratic jumps and co-jumps to predict the sector-level S&P500 exchange-traded fund (ETF) volatility. It was found that the predictive content of co-jumps is higher than that of idiosyncratic jumps, suggesting that systematic risk is more informative …