Finance and Financial Management Commons^™

Se(C)(3): A Catalyst For Social Enterprise Crowdfunding, Dana Brakman Reiser, Steven A. Dean

Indiana Law Journal

The emerging consensus among scholars rejects the notion of tax breaks for social enterprises, concluding that such prizes will attract strategic claimants, ultimately doing more harm than good. The SE(c)(3) regime proposed by this Article offers entrepreneurs and investors committed to combining financial returns and social good with a means of broadcasting that shared resolve. Combining a measured tax benefit for mission-driven activities with a heightened burden on shareholder financial gains, the revenue-neutral SE(c)(3) regime would provide investors and funding platforms with a low-cost means of screening out “greenwashed” ventures.

Three Essays On Dividend Policy, Mehmet Deren Caliskan

Finance Theses & Dissertations

This dissertation considers paying earnings out as dividends a conservative policy as opposed to investing earnings in to value-increasing projects. Based on this view, this dissertation explores the effect of chief executive officers’ (CEO) risk preferences on dividend policy, market’s reaction to dividend policy changes, and the effect of dividend policy on firm financial distress. The first chapter hypothesizes that risk seeking CEOs will be less likely to pay dividends compared to conservative CEOs. The second chapter hypothesizes that when the market sentiment is high (i.e., when investors are willing to take risk) firms that omit dividends should outperform the …

Travel Safety: Time Versus Distance, Charles J. Higgins

Finance Faculty Works

No abstract provided.

The Relationship Between The Option-Implied Volatility Smile, Stock Returns And Heterogeneous Beliefs, Shu Feng, Yi Zhang, Geoffrey C. Friesen

Department of Finance: Faculty Publications

We study the relationship between stock returns and the implied volatility smile slope of call and put options. Stocks with a steeper put slope earn lower future returns, while stocks with a steeper call slope earn higher future returns. Using dispersion of opinion as a proxy for belief differences, we find that the slope-stock return relation is strongest for stocks with high belief differences. The idiosyncratic component of the put slope fully explains the negative risk-adjusted stock returns. For the call slope, the idiosyncratic component dominates the systematic one, and explains the positive risk-adjusted returns.

Home Away From Home: Geography Of Information And Local Investors, Gennaro Bernile, Alok Kumar, Johan Sulaeman

Research Collection Lee Kong Chian School Of Business

We develop a 10K-based measure of spatial variation in the availability of value-relevant information that reflects the multi-dimensional nature of firm location. Spatially distributed information generates location-based information asymmetries that affect institutional portfolio decisions and performance. Institutions overweigh firms with greater local economic exposure and earn superior returns on corresponding trades, even for firms not headquartered locally. These patterns are stronger among harder-to-value stocks. Consistent with local informational advantage, local investor performance increases with the local exposure of individual stock holdings and her portfolio as a whole, and more so when her portfolio is more heavily tilted toward local stocks.

Key Findings: 2015 Atrs Global Airport Performance Benchmarking, Chunyan Yu

Publications

The ATRS Global Airport Benchmarking Project measures and compares the performance of several important aspects of airport operations: Productivity and efficiency, unit costs and cost competitiveness, financial results and airport charges. The report also examines the relationships between various performance measures and airport characteristics as well as management strategies in order to provide a better understanding of observed differences in airport performance. This report includes 211 airports and 25 airport groups of various sizes and ownership forms in Asia Pacific, Europe and North America. This presentation highlights key findings on efficiency and cost.

Why Do U.S. Firms Invest Less Over Time?, Fangjian Fu, Sheng Huang, Rong Wang

Research Collection Lee Kong Chian School Of Business

The ratio of capital expenditure to total assets of U.S. firms decreases by more than half from 1980 to 2012. The decline in capital investment is pervasive; it has occurred for firms in most industries and is robust to firms of different sizes, investment opportunities, profitability, accesses to external financing, and expenses on R&D or acquisitions. Existing theories of corporate investment fall short in explaining the decline trend. The decline is also not explained by time variation in firm characteristics, industry composition, and public listing cohorts, or by corporate lifecycle. Our further evidence suggests that it is related to the …

Density Forecast Evaluation For Dependent Financial Data: Theory And Applications, Aurobindo Ghosh, Anil K. Bera

Research Collection Lee Kong Chian School Of Business

In this paper, we propose a formal test for density forecast evaluation in presence of dependent data. Apart from accepting or rejecting the tested model, our smooth test identifies the possible sources (such as the location, scale and shape of the distribution) of rejection, thereby helping in revising the initial model. We also propose how to augment the smooth test to investigate explicit forms of dependence in the data within the same test framework. An extensive application to S&P 500 returns indicate capturing time-varying volatility and non-gaussianity significantly improve the performance of the model. Although we are dealing with index …

The Persistence Of Long-Run Abnormal Returns Following Stock Repurchases And Offerings, Fangjian Fu, Sheng Huang

Research Collection Lee Kong Chian School Of Business

The long-run abnormal returns following both stock repurchases and seasoned equity offerings disappear for the events in 2003–2012. The disappearance is associated with the changing market environment: increased institutional investment, decreased trading costs, improved liquidity, and enhanced regulations on corporate governance and information disclosure. In response to the more efficient pricing of stocks, firms become less opportunistic in stock repurchases and offerings. Recent events of stock repurchases and offerings are motivated more by business-operating reasons than to exploit mispricing. Both external market factors and internal firm factors contribute to the disappearance of the postevent abnormal returns. Our findings on the …

The Nexus Of Financial Deepening, Economic Growth, And Poverty: The Case Of Pakistan, Abdur Rehman Aleemi, Muhammad Azam

Business Review

This study investigates the nexus of financial development, economic growth, and poverty for Pakistan over a prolonged period of time, 1960- 2012. Autoregressive Distributed Lag (ARDL)-Bounds testing approach to co integration and Unrestricted Error Correction Model (UECM)along with VECM Granger causality have been applied to examine the long-run dynamic relationship among financial development, economic development and poverty. For that purpose, we have developed two models and adopted a new and relatively strong proxy for financial development. The results suggest that financial development negatively affects both long-run and short-run economic growth. However, financial development is found to be positively affecting per …

Determinants Of Hedge Fund Performance, Jun Duanmu

Graduate Theses and Dissertations

This dissertation consists of three essays which focus on the determinants of hedge fund performance. The first essay defines two distinct styles of active portfolio management: alpha active and beta active. I develop measures of beta activity and find ample evidence that top beta active managers deliver superior out-of-sample performance. In addition, I find that beta activity measure successfully captures the time varying nature of beta exposures that can be interpreted as the common factor driving the long term out-of-sample predictive power of both Systematic Risk and R2.

The second essay attempt to span the space of potential risk factors …

Food Waste At Retail, Erin G. Killeen Davis

Graduate Theses and Dissertations

Food waste at retail represents forgone sales and embodies store management and disposal costs. Fresh produce is the largest contributing sector to food waste at retail and bulky, seasonal products are an added challenge when stores experience a high waste event. In order to improve, retailers need to better understand the costs of food waste, as well as how management strategies can impact these costs.

Using pumpkins as an example of bulky, seasonal products, a twofold research project was conducted to better understand contributors to, and costs of food waste at the retail level. In part one, using data from …

Finding A Financial Planner, Emily G. Brown Jd

Pension Action Center Publications

This fact sheet provides information on how to find the right financial planner to help you meet your retirement planning goals. This fact sheet suggests things to consider prior to picking a financial planner and answers questions like:

• What do financial planners do?
• How do you know if you need a financial planner?
• How do you find the right financial planner?
• What type of professional title does a financial planner have?

Financial Advisor Fee Structure, Steven D. Dolvin

All Chapters

Historically, most advisors earned their income based on commissions; however, to reduce churning and to better align interests with clients, most advisors have moved to a fee based platform, with many charging an annual fee of 1% of assets. Given the compounded impact of this cost over time, as well as the lack of value added, we may see another change, as some advisors are moving to a fee for service model. See article here, WSJ.

Triple Crown -- Does It Matter For The Market?, Steven D. Dolvin

All Chapters

For the first time in 37 years, a horse (American Pharoah) has won the Triple Crown. The previous ten times this has happened, the stock market has lost an average of 9% over the remainder of the year. This adds to the expanding debate of Behavioral Finance vs. Market Efficiency.

Bad Corporate Marriages: Waking Up In Bed The Morning After, Ye Cai, Hersh Shefrin

Finance

This paper examines corporate risk taking behavior in the wake of unsuccessful merger activities. We find that relative to other firms, firms that made bad acquisitions take both more systematic risk and more idiosyncratic risk. Moreover, higher risk is associated with greater value destruction and stronger corporate governance. The increased risk can be traced to increased cash flow volatility, increased leverage, decreased asset liquidity, more investment in R&D, and more equity-based executive compensation. These findings are in line with the behavioral approach suggesting that in the domain of losses, decision makers generally become more tolerant of risk.

Are They Different? Ceos Made In Ceo Factories, Ye Cai, Merih Sevilir, Jun Yang

Finance

We examine the employment histories of CEOs at large US companies and find that a disproportionately large number of CEOs are originated from a small number of high-profile firms that are praised for their superior abilities in training and developing corporate leaders, referred to as CEO factories. Specifically, 20.5% of all CEOs appointed at the S&P 1500 firms from 1992 to 2010 came from 36 CEO factories. CEOs originated from those CEO factories are referred to as factory CEOs. Appointments of factory CEOs are associated with significantly larger announcement returns than the appointments of CEOs without work experiences at a …

Do Entrepreneurs Make Good Vcs?, Ye Cai, Merih Sevilir, Xuan Tian

Finance

Using hand-collected data on the backgrounds of venture capitalists (VCs), we show that in a typical venture capital firm in our sample, 13.9% of VCs have been entrepreneurs before becoming a VC, referred to as entrepreneur VCs. Both OLS and 2SLS analyses suggest that venture capital firms employing a greater fraction of entrepreneur VCs have better performance. In addition, the positive effect of entrepreneur VCs on venture capital firm performance is stronger for smaller and younger venture capital firms, and venture capital firms specializing in high-tech industries and in early-stage investments. We further explore performance implications of VCs with prior …

Target Date Funds: Benefits And Disadvantages, Steven D. Dolvin

All Chapters

Target date (i.e., lifecycle) funds are increasing in popularity, particularly among unsophisticated investors. These funds provide key benefits, as they automatically rebalance through time and also generally limit return chasing. Given the dollar cost averaging effect, the result may also be a higher (dollar-weighted) average return. On the downside, the target date funds may choose underlying funds in each category that benefit the fund family more than the investor. However, for most investors, the benefits would generally outweigh the potential disadvantages. See article here, WSJ.

Learning From The Past: A Comparative Analysis Of The Influences Of The Great Depression On The Recent Financial Crisis., Shirish Bade Shrestha

Honors Theses

The Great Depression and the recent financial crisis are events that have changed the lives of many American and global citizens. In hopes of preventing similar mistakes in the future, we should study, analyze, and learn from these past events. This investigation attempts to do just that through a rigorous study of the past Great Depression and recent financial crisis. We will explore the two events separately, analyze their similarities and differences and then discuss what we have learned from the Great Depression and see how that knowledge has been used to combat the recent financial crisis. The Great Depression …