Finance and Financial Management Commons^™

International Evidence On The Relationship Between Financial Literacy And Corporate Cash Holdings, Kenneth Yung, Reza Kahibavil, Su Li, Arian Amidi

Finance Faculty Publications

This study is the first investigation of the relationship between corporate cash holdings and financial literacy (FL). We find that a one‐standard‐deviation increase in FL is associated with an 8%–27% reduction in corporate cash holdings, depending on the measure of FL used. Moreover, higher FL reduces the market value of excess cash, indicating that financially literate environments discourage value‐destroying cash accumulation. The results remain robust across alternative definitions of FL and cash holdings, estimation methods, and country subsamples. We further rule out the influence of endogeneity, refinancing risk, and variation in cash needs. Additional analyses identify agency costs as the …

Reassessing Argentina’S 2018 Crisis: Fiscal Imbalances, External Constraints, And Imf Policy, Michael Garcia

Honors Theses

This thesis will evaluate the causes of Argentina’s 2018 financial crisis, examining how it should be evaluated through the lens of fiscal imbalance or by external constraints. The dominant interpretation is shown in the International Monetary Fund’s (IMF) 2018 Standby Agreement. It attributed the crisis to excessive fiscal deficits, inflation, and weak monetary discipline. This perspective is supported by the Polak model. The model itself connects domestic credit expansion to balance of payment imbalances. It views external crises resulting from internal policy excess.

This paper offers an alternative interpretation of a post-Keynesian that emphasizes external vulnerability, foreign currency debt, and …

Essays On Stock Market Expectations And Financial Decisions, Shanxiang Yang

Graduate Theses, Dissertations, and Problem Reports (ETD)

This dissertation consists of three essays on stock market expectations and financial decisions. The first essay shows significant racial differences in expectations regarding future stock market performance. Using data from the Federal Reserve Bank of New York’s Survey of Consumer Expectations from 2013 to 2022, we find that, relative to White Americans, Black and Hispanic Americans have lower probabilistic expectations that the stock market will increase. This racial gap in expectations was even larger during the recession caused by the Covid-19 epidemic, suggesting that economic uncertainty exacerbates this heterogeneity in expectations. Furthermore, we show that relative to White Americans, the …

A New Functional Setting For Term Structure Modeling Using The Health-Jarrow-Morton Framework, Michael Pokojovy, Ebenezer Nkum, Thomas M. Fullerton Jr.

Mathematics & Statistics Faculty Publications

The well-known Heath–Jarrow–Morton (HJM) framework provides a universal and efficacious instrument for modeling the stochastic evolution of an entire yield curve by explaining the interest rate dynamics in continuous time under no-arbitrage conditions. Existing implementations involve exponentially weighted function spaces as theoretical settings for the former stochastic evolution. While the choice of weight can have a drastic effect on model calibration and subsequent forecasting, it cannot be estimated from market data and does not allow for any objective interpretation. The proposed approach does not have this shortcoming as it adopts a suitably designed unweighted function space. The HJM equation is …

Stock Market Reactions To Interest Rate Changes: Evidence From Emerging Markets, Binali Selman Eren

The Indonesian Capital Market Review

This study investigates the impact of interest rate decisions made by national central banks, including the Federal Reserve (Fed), and the European Central Bank (ECB), on the stock markets of emerging economies. It analyzed stock market reactions to interest rate hikes and cuts through the use of an event study approach. The findings provided evidence of heterogeneous effects of interest rate decisions by national central banks, the Fed, and the ECB on stock markets in emerging economies. Specifically, the results indicated that, in most emerging economies, stock markets reacted negatively to interest rate hikes and positively to cuts by national …

Identifying Risk-Free Asset Proxies In Companies Listed On The Indonesia Stock Exchange From 2017 To 2023 Using The Zero-Beta Capital Asset Pricing Model, Fajri Alan Ghazali Mr., Lenny Suardi Mrs.

The Indonesian Capital Market Review

This study evaluates Bank Indonesia Certificates (SBI), IndONIA, and gold as zero-beta proxies for Indonesian equities. Using daily returns for 213 firms listed on the Indonesia Stock Exchange (2017–2023) and the Jakarta Composite Index as the market return, we estimate firm-level zero-beta CAPMs and compute Wald statistics test to identify the appropriate risk- free asset proxy for each individual company; and firm-level outcomes are then aggregated under a Bernoulli/Binomial criterion with a 95% threshold. Empirical results show that gold satisfies the zero-beta condition for 207 of 213 firms (97.18%), whereas SBI and IndONIA satisfy it for five (2.35%) and six …

Escaping The Crash? The Protective Power Of Liquidity In The Pakistan Stock Market, Sana Saleem, Muhammad Usman, Amna Rafique

The Indonesian Capital Market Review

This study investigates the effect of stock liquidity on the risk of stock price crashes, taking sample of non-financial firms listed on the Pakistan Stock Exchange, from 2009 to 2024. A two-step system GMM estimation is applied to test the hypotheses. The results reveal that greater stock liquidity significantly reduces crash risk, whereas illiquidity amplifies it. Two underlying channels explain this relationship; first, liquidity strengthens block holders’ capacity to intervene, discouraging managerial tendencies to withhold adverse information, second, liquidity enhances price informativeness, limiting managerial discretion to manipulate prices through delayed disclosure of bad news. The findings imply that liquid stocks …

Linear And Asymmetric Interactions Of Bank And Stock Market Development In The Face Of Global Economic Uncertainty: A Focus On The Nigerian Economy, Augustine C. Arize, Ebere Ume Kalu, John Malindretos, Srinvias Nippani

Faculty Publications

This study explores the functional interaction between bank development and stock market development in the face of uncertainty variables. The geography of the study is one of the largest economies in Africa—Nigeria—regarding the following variables: credit to the private sector (CPS), broad money (M2) stock market capitalization (MCAP), and industrial production (IP), which are all scaled by the gross domestic product (GDP) and used in natural log form. Additionally, we included the natural logarithm of a measure of monetary policy uncertainty, which represents the uncertainty variable. In terms of methodology, the study uses monthly time series data from 1990:M1-2022M4 (384 …

Large Owner Expropriation Threat And Stock Option Pay's Effect On Firm Risk-­Taking Behaviors In Weak Institutions, Cuili Qian, Lipeng (Gary) Ge, Xuesong Geng, Jiatao Li, Maria Hasenhuttl

Research Collection Lee Kong Chian School Of Business

Research Question/Issue: This study investigates the impact of managerial stock option pay on firm risk-­ taking behaviors in aweak institutional context, a critical question that has been overlooked by the literature. Specifically, we build on the comparative corporate governance perspective that emphasizes the implications of large shareholders' expropriation threat in weak institutions to develop predictions about their impact on the stock option's incentive alignment effect. We further explore the boundary conditions of such a relationship.Research Findings/Insights: Based on a sample of Chinese listed firms between 2006 and 2016, we find that a high level of large shareholders' expropriation threat weakens …

Heartbeats: Sustainable Practices In Business, Natalie Pham, Shareef Awadallah, Lily Lisco, Logan Blissenbach, Nikolaos Verginis

Williams Honors College, Honors Research Projects

HeartBeats Co. LLC is a premier audio and software technology brand that brings renewed character and performance to a stagnant space, revolutionizing the listening experience by engineering a digital music platform and headphones that possess distinct style and exceptional performance. While our team identifies and tracks trends in the market, we strive to establish market trends rather than to follow them. We are a company founded on innovation, redefining the music streaming market by combining the importance of wellness with the latest audio and software technologies and innovative functionalities. This document outlines a ten-year plan for efficient and impactful scaling, …

How Does Economic Policy Uncertainty Affect Individual Contributions To Retirement Accounts?, David I. Becker

Honors Undergraduate Theses

This study tests whether Economic Policy Uncertainty (EPU) is associated with U.S. retirement contributions and whether responses differ across account types. Using annual contribution data for defined contribution plans and Traditional and Roth IRAs with the Baker, Bloom, and Davis EPU index, I estimate multivariate regressions with standard macroeconomic controls and compare contemporaneous and lagged specifications. EPU is positively associated with 401(k) contributions, negatively associated with Traditional IRA contributions in the contemporaneous model, and not statistically significant for Roth IRAs. These results suggest uncertainty may shift how households save for retirement rather than uniformly reducing retirement saving.

Essays In Housing And Consumer Finance, Spencer Stone

Theses and Dissertations--Finance and Quantitative Methods

In my first chapter, I show how consumer left-digit bias affects borrowing costs in the US residential mortgage market. I find that the distribution of mortgage rates bunch at .99-ending rates just below left-digit changing thresholds, and that this bunching is greater in the distribution of rates selected by borrowers than those simply offered by lenders. Comparing observably similar borrowers within the same 1-bp interest rate band, selecting similar mortgage products, in the same census tract and origination month, I show that borrowers receiving .99-ending rates pay significantly more fees than borrowers receiving the nearest whole-number rate just above them, …

A Strategic Analysis Of Project Learn Of Summit County, Alex Kennedy, Tyler Hutchinson, Haley Guest, Zach D. Thomas, Lizzie Sisler

Williams Honors College, Honors Research Projects

Our group is working with Project Learn of Summit County, a GED and ESL assistance program located in the Akron Public Library. Our group will be performing a strategic analysis and providing them with a strategic plan, to be presented to them at the end of the term. We aim to increase awareness for the program, point out areas of growth, and increase functionality.

Dynamic Modelling Of Shocks To Credit Spread Risk In Banking Book: Evidence From European Sovereign Markets, Yaman O. Erzurumlu, Alper Kirik, Tunc Oygur

Faculty Publications – Finance, Insurance, and Law

This research examines the relationship between credit spread risk in the banking book (CSRBB) and bond market behavior across various maturities in twelve European nations. We address the challenges banks encounter in modeling CSRBB in isolation, as directed by the European Banking Authority’s (EBA) revised guidelines, which mandate the distinct management of CSRBB and interest rate risk in the banking book (IRRBB). Utilizing IRF and VAR models, the analysis demonstrates that credit spread shocks have divergent effects on sovereign bond I-Spreads and 5-year Credit Default Swap spreads across different tenors and countries. The results also indicate that shock absorption and …

Entropic Foundation Of Finance And Physics: Securities Price Dynamics And Quantum Theory, Mohammad Abedi

Electronic Theses & Dissertations (2024 - present)

In many scientific and financial contexts, we must reason and make predictions under conditions of incomplete information. This dissertation develops Entropic Dynamics (ED) as a unified framework for deriving dynamical laws directly from principles of inference. Within this approach, probability distributions represent states of knowledge, and their evolution is determined through entropy maximization subject to relevant constraints. This leads to a novel concept of entropic time and a formulation of dynamics as an inferential process. In this talk, I will present how ED provides a common foundation across multiple domains. In physics, quantum dynamics for particles and scalar fields in …

Design Thinking For Corporate Social Responsibility Program Proposal Creation, Michelle "Mindy" D. Danovaro

University of the Pacific Theses and Dissertations

This qualitative study used action research to explore how the use of design thinking engaged employees in the creation of a corporate social responsibility (CSR) program proposal in a small- to medium-enterprises (SME) in the Sacramento region of California. The purpose of the study was to assess whether employee participation in a design thinking exercise could improve employee perception of engagement, inclusion, and reciprocity during the CSR program proposal creation. The study was grounded in social exchange theory, stakeholder theory, and design thinking methodologies. The iterative research process followed action research cycles (i.e., plan, act, observe, and reflect) integrated with …

Three Essays On Option Markets, Fangzheng Ou

Graduate Theses, Dissertations, and Problem Reports (ETD)

This dissertation includes three essays examining index option and stock option markets. The first essay investigates the pricing kernel puzzle by examining S&P 500 index option returns and empirical pricing kernels across expiration dates ranging from one month to one year. We document that at short maturities, out-of-the-money call option returns are negative and decrease with the strike price, while at long maturities, at least some are positive and increase with the strike price. Empirical pricing kernels predominantly exhibit a W-shape at short maturities, with this pattern becoming less pronounced and evolving toward a monotonically decreasing curve at longer maturities. …

When Money Moves In: The Consequences Of Housing Wealth, Darren Aiello, Jason Kotter, Gregor Schubert

Faculty Publications

We construct a novel dataset of millions of household moves over 25 years to examine how housing wealth affects purchase decisions. We find that a $1 exogenous increase in housing equity leads movers to pay a $0.06 premium on their next home, controlling for property characteristics and time-varying local prices. This behavior is driven by search frictions— wealthier households pay a premium rather than incur additional search costs. In aggregate, these decisions spill over to the broader housing market and cause upward regional price pressure. A 10% increase in equity gain among incoming movers increases local house price growth by …

The Prestige Paradox: Can Venture Capital Prestige Lead To Lower Startup Exit Rates?, Charlie Fenollosa

Honors Theses

This project investigates how the prestige of VC firms investing in early-stage startups affects the likelihood of successful exits, defined as IPOs or acquisitions. Using Crunchbase data on companies, funding rounds, and investments, I construct six measures of prior VC success to proxy for prestige. Contrary to conventional expectations, VC prestige is not associated with increased exit probability, a finding robust to composite, LASSO-selected, and PCA-based indices. Further analysis suggests this relationship is driven by mechanisms through which high VC prestige paired with large syndicates and high funding may create frictions, while prestigious VCs help smaller companies grow more effectively.

Detection Of Financial And Political Fake News As A Measure To Prevent Instability In Financial Markets, Konstantyn Malyshenko

DLSU Business & Economics Review

This article explores the role of social networks as a catalyst for instability in financial markets. Its purpose is to present strategies for mitigating the media’s influence on adverse outcomes, primarily by analyzing the information cascades and related transactions in stock markets. The innovative aspect of this research lies in the development of methods for analyzing specific types of information, particularly media reports, to identify indicators of fake that distort public perception. The focus of this study is on fake news and the analysis of its potential linguistic features for identification purposes. A significant outcome of this research is the …