Corporate Governance And The 2008-09 Financial Crisis,
2011
Old Dominion University
Corporate Governance And The 2008-09 Financial Crisis, Martin Conyon, William Q. Judge, Michael Useem
Management Faculty Publications
The financial crisis of the late 2000s resulted in enormous costs to the economies of many countries and the fortunes of millions of families, and it challenged a host of our conceptions and theories of corporate governance. The governing boards of many financial-services firms seemed unable to prevent the risky and ill-fated decisions that jeopardized their firms, devastated their investors, and helped precipitate a financial meltdown that morphed into global recession. Company boards were also directly responsible through their compensation committees and consultant advisors for a sharp rise in executive compensation during the 2000s that may have contributed to undue …
Did Board Configuration Matter? The Case Of Us Subprime Lenders,
2011
Old Dominion University
Did Board Configuration Matter? The Case Of Us Subprime Lenders, Maureen I. Muller-Kahle, Krista B. Lewellyn
Management Faculty Publications
Research Question/Issue: The origins of the global financial crisis have been attributed to the combination of a housing price bubble and innovative financial instruments, as well as the lack of restraint by corporate executives and boards to engage in excessive risk-taking. The rise in subprime lending between 1997 and 2005 played a crucial role in inflating the housing price bubble. We take a unique dataset of US financial institutions heavily engaged in subprime lending and ask the following research question: Did board configuration play a role in determining whether a financial institution specialized in subprime lending?
Research Findings/Insights: We use …
Finance, Fear, And Family: Issues Of Trust And The Common Ground With Terrorist Funding,
2011
Edith Cowan University
Finance, Fear, And Family: Issues Of Trust And The Common Ground With Terrorist Funding, David M. Cook, Timothy Smith
Australian Counter Terrorism Conference
In the immediate aftermath of al-Qaeda’s September 11 attacks on the United States of America, examinations of terrorist funding focused on the Middle Eastern and South Asian use of Hawala and non-traceable financial transactions. However, whilst the cloaking of identity is certainly a part of criminal activity for funds transfer, there are other factors. South Asia’s community banking norms align far more closely with informal systems that follow centuries-old customs of familial trust rather than reportable record keeping. Tightened restrictions on money movement in the form of identity checks and statements of purpose have coerced more than two hundred million …
Effect Of Lockup Agreements On Buyout Backed Initial Public Offerings,
2011
Claremont McKenna College
Effect Of Lockup Agreements On Buyout Backed Initial Public Offerings, Grant B. Heffernan
CMC Senior Theses
Using a sample of 279 buyout backed firms, I examined the effect of lockup agreements on the firm’s stock returns. I found there to be a negative .8 percent cumulative abnormal return for the three-day period surrounding lockup expiration. Consistent with my hypothesis the CAR for the three-day period surrounding lockup expiration was less negative for buyout backed IPOs compared to venture capital backed IPOs. In addition, I found there to be an abnormal 24.24 percent increase in trading volume for the three days surrounding lockup expiration.
Imf Conditionality, Fiscal Policy, And Income Inequality In Latin America,
2011
Claremont McKenna College
Imf Conditionality, Fiscal Policy, And Income Inequality In Latin America, Nicholas Egger-Bovet
CMC Senior Theses
The International Monetary Fund (IMF) is the leading international economic crisis manager, but the effects of its loans and conditionality reach far beyond overarching macroeconomic indicators. This paper will examine the consequences of IMF fiscal policy conditions on income inequality and poverty by examining cases in Latin America, and specifically Mexico during the 1980s. The role that internal politics within borrowing countries plays is also closely examined. The paper concludes with policy recommendations for the IMF to ensure the most equitable and effective means of overcoming balance of payments crises.
Take Me Out Of The Ball Game: The Efficacy Of Public Subsidies In The Success Of Professional Sports Stadiums,
2011
Claremont McKenna College
Take Me Out Of The Ball Game: The Efficacy Of Public Subsidies In The Success Of Professional Sports Stadiums, Jonah Chodosh
CMC Senior Theses
This paper weights the relative advantages of multiple factors that lead to the success of professional sports stadiums in major markets, though a discussion of the arguments for and against public subsidies towards these projects. Using a logit statistical model, the paper determines that the two factors determining the highest likelihood of venue success include multiple tenants and access to mass transit. The analysis demonstrates that public subsidies towards stadiums don’t generate sufficient economic returns, and that successful stadiums can be created without using taxpayer funds.
The Persistence Of Pricing Differentials In Dual-Listed Companies In Hong Kong And China,
2011
Claremont McKenna College
The Persistence Of Pricing Differentials In Dual-Listed Companies In Hong Kong And China, Justin Spitzer
CMC Senior Theses
Over the past two decades a number of Chinese companies have issued shares on both the Hong Kong Stock Exchange and on one of the Chinese stock exchanges. The Hong Kong-listed H-shares of Chinese dual-listed companies have traded at a persistent discount rate relative to the China-listed A-shares. As these shares represent the same ownership rights and cash flows, the shares should theoretically trade at the same price. The price differential between H-shares and A-shares should decrease as international markets continue to converge. The paper analyzes the persistence of the discount rates and the effects of both market and investor …
The Success Of Long-Short Equity Strategies Versus Traditional Equity Strategies & Market Returns,
2011
Claremont McKenna College
The Success Of Long-Short Equity Strategies Versus Traditional Equity Strategies & Market Returns, Lauren J. Buchanan
CMC Senior Theses
This study examines the performance of long-short equity trading strategies from January 1990 to December 2010. This study combines two financial screens that will yield candidates for both long and short positions for each month during the aforementioned time period. Two long-short strategies are tested: (1) perfectly-hedged, or equal allocation to long and short positions, and (2) net-long. The results of this thesis reveal that if a long-short equity manager is able to successfully determine what companies are overvalued and undervalued and actively rebalance their portfolio, perfectly-hedged and net-long strategies can generate superior risk-adjusted alpha.
The Effect Of The Introduction Of A Clearinghouse On Trading Costs: The New York Stock Exchange In The 1890s,
2011
Claremont McKenna College
The Effect Of The Introduction Of A Clearinghouse On Trading Costs: The New York Stock Exchange In The 1890s, Sara Reed
CMC Senior Theses
As one of the oldest and most innovative financial institutions, a clearinghouse efficiently clears and settles payments for equity transactions as well as other securities. However, this paper will only be concerned with common and preferred equity securities. The purpose of a clearinghouse is to reduce counterparty risk. It acts as an intermediary between two parties, so that the risk of one party failing to honor its contractual obligation is diminished. It reduces settlement risk through netting, the process of eliminating offsetting transactions, thus decreasing the amount of cash flow. I examine the impact of the New York Stock Exchange …
Quantifying The Variance Risk Premium In Vix Options,
2011
Claremont McKenna College
Quantifying The Variance Risk Premium In Vix Options, Reed M. Hogan
CMC Senior Theses
This thesis uses synthetically created variance swaps on VIX futures to quantify the variance risk premium in VIX options. The results of this methodology suggest that the average premium is -3.26%, meaning that the realized variance on VIX futures is on average less than the variance implied by the swap rate. This premium does not vary with time or the level of the swap rate as much as premiums in other asset classes. A negative risk premium should mean that VIX option strategies that are net credit should be profitable. This thesis tests two simple net credit strategies with puts …
Analyzing The Effects Of Credit Rating Changes, The Recent Financial Crisis And Other Variables On Firms' Debt Levels,
2011
Claremont McKenna College
Analyzing The Effects Of Credit Rating Changes, The Recent Financial Crisis And Other Variables On Firms' Debt Levels, Sean M. Wasserman
CMC Senior Theses
This paper utilizes a sample of firms over the years 2000–2009 to test the effects of credit rating changes, the financial crisis, interest rates, and other variables on short-term, long-term, and total debt levels on the balance sheet. Each independent variable was created using a one year lag in order to run the regressions. The values of these variables from the previous year are being analyzed to see if they can predict debt levels for the following year. The results of this paper suggest that levels of long-term and total debt are somewhat reliant on and are positively correlated with …
Understanding Investor Sentiment: The Case Of Soccer,
2011
University of Miami
Understanding Investor Sentiment: The Case Of Soccer, Gennaro Bernile, Evgeny Lyandres
Research Collection Lee Kong Chian School Of Business
We examine the extent to which the stock market's inefficient responses to resolutions of uncertainty depend on investors’ biased ex ante beliefs regarding the probability distribution of future event outcomes or their ex post irrational reactions to these outcomes. We use a sample of publicly traded European soccer clubs and analyze their returns around important matches. Using a novel proxy for investors’ expectations based on contracts traded on betting exchanges (prediction markets), we find that within our sample, investor sentiment is attributable, in part, to a systematic bias in investors’ ex ante expectations. Investors are overly optimistic about their teams’ …
Institutional Investors And Corporate Financial Policies,
2011
University of South Florida
Institutional Investors And Corporate Financial Policies, Ricky William Scott
USF Tampa Graduate Theses and Dissertations
Institutional investors influence corporate payout and research and development (R&D) investment policies. Higher payouts are encouraged by institutional investors, especially in firms with high free cash flow and poor investment opportunities. They also positively influence stock repurchases, particularly in firms with high information asymmetry. The substitution of stock repurchases for dividends as a percentage of total payout is encouraged by institutional investors. Institutional owners persuade firm management to increase research and development (R&D) investment overall and specifically in firms with higher stock liquidity, higher information asymmetry, lower free cash flow, and better investment opportunities. Institutional investors decrease agency costs in …
Privatization In Theory And Practice: The Issues To Be Considered,
2011
Old Dominion University
Privatization In Theory And Practice: The Issues To Be Considered, Berhanu Mengistu, Yacob Hail-Mariam
School of Public Service Faculty Publications
The concept of privatization is fairly recent. This paper examines the different perspectives of the privatization literature, analyzes and assesses the proposed advantages and disadvantages of privatization as a strategy for providing public goods. The paper concludes by instilling a conceptual framework that should be considered before undertaking a privatization policy.
The Importance Of Being Known: Relationship Banking And Credit Limits,
2011
University of Massachusetts, Boston
The Importance Of Being Known: Relationship Banking And Credit Limits, Atreya Chakraborty
Accounting and Finance Faculty Publication Series
This paper measures the importance of bank-firm relationships in obtaining higher credit “limits.” We use data from a relatively unused section of the National Survey of Small Business Finance (NSSBF, 1993) on credit limits, credit sources, and contract terms for firms with lines of credit from multiple banks. This lets us isolate the credit limit that each bank provides the same firm, eliminating the need to control for often immeasurable, unreliable, or firm-specific “soft” information. For a median Line of Credit (LOC) of $250,000, we find that a bank with a five-year information advantage provides a LOC limit that is …
Essays On International Corporate Cash Holdings,
2011
Wayne State University
Essays On International Corporate Cash Holdings, Yonghong Jia
Wayne State University Dissertations
This dissertation is composed of two distinct chapters. The first chapter is concerned with the secular trends in corporate cash holdings and the determinants of the changing cash policies for seven industrialized countries--Australia, Canada, France, Germany, Japan, the US, and UK. In the first chapter, we document that a pronounced secular upward trend in cash holdings is almost systemic across sample countries over 1991-2008, with France exhibiting a modest rise and Japan a substantial decline. However, the driving forces underlying the cash pattern are not uniform across countries. While the evolution in firm characteristics necessitated elevated cash balances, the time-varying …
The Geographic Profiling Of Poverty And Accessibility: The Case Of Two Provinces In The Philippines,
2011
De La Salle University
The Geographic Profiling Of Poverty And Accessibility: The Case Of Two Provinces In The Philippines, Alexis M. Fillone, Nicanor Roxas Jr., Cristela G. Dakila
DLSU Business & Economics Review
This study attempts to relate the poverty problem in the Philippines using spatial accessibility measures. Spatial accessibility is the ease with which one could avail of the social services and economic opportunities laid in geographic space to the individual. Using the provinces of Eastern Samar and Siquijor Island as case studies, a Social Composite Index (SCI) value for the household was derived from the 13+1 CBMS core indicators of poverty, which represents the unmet needs of the household and which was then aggregated at the barangay level. The spatial accessibility values were estimated by measuring how each barangay, specifically households, …
Essays On Foreign Currency Risk Management,
2011
Louisiana State University and Agricultural and Mechanical College
Essays On Foreign Currency Risk Management, Sungjae Francis Kim
LSU Doctoral Dissertations
This dissertation studies on-balance-sheet and off-balance-sheet foreign currency risk management of corporate firms and commercial banks. It is comprised of two essays. The first essay investigates what determines firms’ foreign currency spot net asset positions, derivatives hedging and synthetic hedging positions. We build a model that anticipates a firm’s market timing in currency markets and credit markets according to the exchange-rate return and interest rate differential. Using a unique set of data containing complete foreign currency spot and derivatives positions of Korean exporting firms, we empirically find that currency position-squaring firms have significantly higher firm value. We also find evidence …
Three Essays On Real Estate Finance,
2011
Louisiana State University and Agricultural and Mechanical College
Three Essays On Real Estate Finance, Shuang Zhu
LSU Doctoral Dissertations
This dissertation focuses on the mortgage default behavior and the valuation of distressed properties. Three essays are included. The first essay uses New Orleans foreclosure data, where each property has three appraisals, to investigate the factors affecting appraisal bias and accuracy, and to estimate the magnitude of appraisal accuracy for distressed properties. Our main finding is that the relation between the client and the appraiser affects valuation bias. Customer employed appraisers tend to give client friendly valuation than their court appointed counterpart. Experienced and licensed appraisers render less biased valuations; while appraisers specializing in lenders tend to give lender friendly …
Monthly Seasonality In Emerging Market: Evidence From Bangladesh,
2011
East West University
Monthly Seasonality In Emerging Market: Evidence From Bangladesh, Lutfur Rahman, Abu S. Amin
WCBT Faculty Publications
The presence of the seasonal anomaly in stock returns has been reported extensively in finance literature. This paper examines the presence of monthly anomaly in Dhaka Stock Exchange (DSE), the premier stock exchange of Bangladesh. Data used in the study include daily closing prices of DSE indices such as DSE all share prices index (DSI), DSE general index (DGEN) and DSE 20 index for a period of 01.01.2001-30.06.2010. Several hypotheses have been formulated; those hypotheses have been tested and dummy variable regression was used in the study. The result indicates that May and June returns are positive and statistically significant. …
