Business Commons^™

The Implications Of Corporate Political Activism And Governance, Marcos Velazquez

FIU Electronic Theses and Dissertations

This dissertation is comprised of three essays that study corporate political activism through the lens of corporate governance. The first essay examines how CEO overconfidence, moderated by CEO power, drives lobbying expenditures. The findings suggest that neither variable by itself affects lobbying outlays. However, it is the interaction between such characteristics that increases lobbying activity. Executives exhibiting above-average overconfidence who also chair the board tend to spend 36% more in lobbying. Ensuing firm performance is examined to establish whether the surge is in line with stewardship or agency conflict paradigms. There is limited evidence of improved valuations due to lobbying …

Examination Of Order Routing Choices And Market Quality Under Zero Commission And Firm-Level Events, Le Zhao

FIU Electronic Theses and Dissertations

This dissertation is comprised of three essays that focus on the topics related to order routing choices in the U.S. equity market. This research provides insights into the effect of the routing order choice to dark and lit venues on the market quality under the multiple types of the event. The empirical results are significant and robust. There are three chapters included: the first chapter discusses the dynamic fragmentation of dark and lit venues and market quality pre-and post-zero brokerage commission events. Major retail brokers that eliminate commissions dramatically increase their market share of client assets. They increasingly routed orders …

Three Essays In Volatility, Yu Hu

FIU Electronic Theses and Dissertations

For a typical firm, idiosyncratic volatility is as sensitive to the relative value of assets in place as to growth options. However, for firms dominated by assets in place (growth options), idiosyncratic volatility is more sensitive to the relative value of assets in place (growth options). Binding irreversibility constraint (uncertainty) makes the effect of assets in place (growth options) more pronounced.

The institutional ownership in China’s (the U.S.) stock market is positively (negatively) related to idiosyncratic volatility. Our dynamic tests show two-way Granger-causality between institutional ownership and idiosyncratic volatility in the U.S. and one-way Granger-causality in China. It indicates that …

Me, Myself And My Future-Self: How Self-Motives Impact Personal Financial Decision Making, Patricia Torres

FIU Electronic Theses and Dissertations

The role of self-motives on consumer behavior has been a subject of interest for researchers in the fields of marketing and psychology. With regard to consumer well-being, most of studies have focused on health-related issues (diet, physical activity, tobacco use, substance abuse). However, there is a specific area that is of significant interest in the American context: financial decision making, specifically, personal savings and debt (mis) management. Both the 2008 financial crisis and the ongoing coronavirus pandemic exposed Americans’ lack of savings and its devastating consequences. A record-high consumer debt (Federal Reserve, 2018) combined with a lack of savings (Northwestern …

Three Essays In Corporate Governance, Dung Thanh Nguyen

FIU Electronic Theses and Dissertations

This dissertation examines exploring how a board structure protects and creates shareholder value. The main responsibilities of a board of directors are to enhance the shareholder value by setting a strategic direction for the firm, monitoring, and advising managers. A structure of a board of directors could range from board size, independent board ratio to gender diversity, inside-outside chairperson, committee designs. How exactly a board structure could create value and through what channels are one of the biggest challenges in corporate finance.

In the first essay, I use board structure changes brought by the Sarbanes-Oxley Act (SOX; 2002) and subsequent …

Internal Governance And Litigation Risk, Mohammad Hashemi Joo

FIU Electronic Theses and Dissertations

This dissertation is comprised of three chapters that focus on the topics related to internal governance and litigation risk.

The first essay investigates the effect of board independence on security litigation risk. Based on the premise of the agency theory, our findings indicate that board independence has a negative impact on securities litigation risk. The effectiveness of this impact is also analyzed in light of the firm’s complexity and monitoring cost. The results show that board independence effectiveness is negatively related to the firm’s monitoring cost but is positively influenced by the firm’s complexity. Our results challenge the notions of …

Three Essays On Risks Of Firms Led By Founder-Ceos, Yuka Nishikawa

FIU Electronic Theses and Dissertations

This dissertation is comprised of three essays that focus on the topics related to risks of firms led by founder-CEOs. This research provides insights into how founder-led firms are different from nonfounder-led firms in terms of their operational and financial risk taking, litigation risk, and restructuring probabilities and outcomes. The empirical results are significant and robust.

The first essay examines the relationship between founder-CEO firms and firm risk. Using a sample of S&P 1500 firms, our empirical results show that founder-led firms are associated with higher overall risk and operational risk, and lower financial risk than nonfounder-led firms. We further …

Community Bank Competition And Distress Events, Alejandro Pacheco

FIU Electronic Theses and Dissertations

The Small Business Job Protection Act of 1996 allows US banks to adopt the Subchapter S status and avoid double taxation. Many banks adopt the Subchapter S status and then transition back to C banks. In our first analysis, we investigate the reasons why these Subchapter S banks convert back to C banks and find that Subchapter S banks that experience financial distress most likely convert to the C status. Post-conversion we observe a marked increase in equity and a decline in risk measures alongside improving profitability ratios. The limit on number of shareholders inherent in Subchapter S banks inhibits …

The Era Of Global Risk Premia, Derek-Dion D. Lee

FIU Electronic Theses and Dissertations

I propose a global risk factor – Currency Traded Risk (CTR). This risk factor is the first to identify the directional link between currencies and equities. CTR captures the genesis of financial globalization, and contains the greatest predictive ability to date for monthly returns on a global stock portfolio.

Theoretically, return expectation is intimately linked to time-varying risk premia. Due to the intrinsic scope of currency values in integrating the world’s financial markets, information on time-varying risk premia prices into currencies at greater speed, scale, and global consensus, relative other asset classes. High interest rate currencies proxy as …

Short Selling: Implications For Corporate Governance And Capital Structure, Mohammad Anisur Rahman

FIU Electronic Theses and Dissertations

The literature on short selling documents substantial evidence that short sellers are generally informed investors (e.g., Diamond and Verrecchia, 1987; Asquith and Muelbrook, 1996). This dissertation investigates three specific implications of informed short selling for a firm and its investors.

The first essay investigates if short selling discourages managers from pursuing over-optimistic projects by reducing equity market timing. By conditioning short selling on firm overvaluation, this essay shows that short selling reduces managerial equity market timing and increases leverage. This moderating impact of short selling is more pronounced in smaller firms and those with low institutional ownership or higher intangible …

Three Essays In International Finance, Iván Marcelo Rodríguez Jr

FIU Electronic Theses and Dissertations

In this dissertation, I focus my research on some of the economically significant and current open problems in international finance, specifically the relationship between Credit Default Swaps (CDS) on sovereign debt, the importance of fundamental dyadic distances on the initiation and completion of cross-border mergers and acquisitions, and the impact of domestic and transnational terrorism on cross-border mergers and acquisitions.

In the first essay, we study the relationship between sovereign debt ratings and the information contained in CDS spreads regarding the credit risk of the reference entity. Using data for 54 countries over a twelve-year period, we find that the …

Three Essays In Financial Economics, Qianying Zhang

FIU Electronic Theses and Dissertations

The first paper revisits the link between interest rates and corporate bond credit spreads by applying Rigobon’s (2003) heteroskedasticity identification methodology. The second paper investigates the assumption that financial asset prices including stocks and bonds, reflect intrinsic value. The third paper decomposes the stock price into fundamental permanent, fundamental transitory, and non-fundamental shocks in order to explore the determinants of stock price fluctuations.

Essays On The Effect Of Board Gender Diversity On Firm Risk, Performance, And Institutions' Ownership Preferences, Jodonnis Rodriguez

FIU Electronic Theses and Dissertations

This dissertation examines the effect of gender diversity on firm risk and financial performance, and on the stock ownership preferences of institutional investors. For the firm risk and financial performance analysis, we use U.S. firms listed on the S&P 500 and NSE-listed Indian companies. The two samples provide our study with the ability to study gender diversity in a developed and emerging market with distinct economic frameworks, cultural traditions, and legal environments.

Our empirical tests show that firms with more gender diversity are less risky and have higher financial performance than firms with less gender influence. These results are consistent …

Cfo Turnover, Firm’S Debt-Equity Choice And Information Environment, Muhammad Bakhtear U. Talukdar

FIU Electronic Theses and Dissertations

The CEO and CFO are the two key executives of a firm. They work cohesively to ensure the growth of the firm. After the adoption of the Sarbanes Oxley Act (SOX) in 2002, the importance of CFOs has increased due to their personal legal obligation in certifying the accuracy of financial statements. Only a few papers such as Mian (2001), Fee and Hadlock (2004), and Geiger and North (2006) focus on CFOs in the pre-SOX era. However, a vacuum exists in research focusing exclusively on CFOs in the post-SOX era. The purpose of this dissertation is to delve into a …

Institutional Investors, Insiders And The Firm, Vinh Huy L. Nguyen

FIU Electronic Theses and Dissertations

This dissertation is comprised of three chapters that focus on three topics related to institutional investors’ and registered insiders’ trading activities around corporate announcements. The purpose of the research is to provide more insights into the trading behavior of institutions and insiders around corporate events when they are influenced by the anticipation and arrival of new information. Data samples are stratified, regression models are estimated, and control variables are added to ensure the results are significant and robust.

The first chapter discusses the information signaling hypothesis around share repurchase announcements. I examine if institutions can trade profitability around the announcement …

Essays On Volatility Drivers, Transmissions And Equity Market Correlations In A Global Setting, Antonio M. Figueiredo

FIU Electronic Theses and Dissertations

Volatility is a fascinating and important topic for financial markets in general, and probably the single most important issue in financial risk management. Although volatility itself is not synonymous with risk, it is closely associated with it in the realm of risk management. In this study, I focus on the volatility in the foreign exchange markets and investigate the spillover of volatility from this market to equity correlations and its impact on global equity markets’ bid-ask spreads as a proxy for market quality. I also explore the role that accounting earnings quality play in subsequent volatility in U.S. equity markets. …

Three Essays On The Microstructure Of Exchange Traded Funds, Samique March

FIU Electronic Theses and Dissertations

Exchange traded funds (ETFs) have increased significantly in popularity since they were first introduced in 1993. However, there is still much that is unknown about ETFs in the extant literature. This dissertation attempts to fill gaps in the ETF literature by using three related essays. In these three essays, we compare ETFs to closed ended mutual funds (CEFs) by decomposing the bid-ask spread into its three components; we look at the intraday shape of ETFs and compare it to the intraday shape of equities as well as examine the co-integration factor between ETFs on the London Stock Exchange and the …

Three Essays On Market Depth In Futures Markets, Alexandre Aidov

FIU Electronic Theses and Dissertations

Liquidity is an important market characteristic for participants in every financial market. One of the three components of liquidity is market depth. Prior literature lacks a comprehensive analysis of depth in U.S. futures markets due to past limitations on the availability of data. However, recent innovations in data collection and dissemination provide new opportunities to investigate the depth dimension of liquidity.

In this dissertation, the Chicago Mercantile Exchange (CME) Group proprietary database on depth is employed to study the dynamics of depth in the U.S. futures markets. This database allows for the analysis of depth along the entire limit order …

Liquidity, Governance And Adverse Selection In Asset Pricing, Sascha Strobl

FIU Electronic Theses and Dissertations

A plethora of recent literature on asset pricing provides plenty of empirical evidence on the importance of liquidity, governance and adverse selection of equity on pricing of assets together with more traditional factors such as market beta and the Fama-French factors. However, literature has usually stressed that these factors are priced individually. In this dissertation we argue that these factors may be related to each other, hence not only individual but also joint tests of their significance is called for.

In the three related essays, we examine the liquidity premium in the context of the finer three-digit SIC industry classification, …

Frameworks For Systemic And Structural Analysis Of Financial Innovations In Infrastructure, Ali Mostafavi, Dulcy M. Abraham

Infrastructure System-of-Systems (I-SoS ) Research Group

Financial innovations have emerged globally to close the gap between the rising global demand for infrastructures and the availability of financing sources offered by traditional financing mechanisms such as fuel taxation, tax-exempt bonds, and federal and state funds. The key to sustainable innovative financing mechanisms is effective policymaking. This paper discusses the theoretical framework of a research study whose objective is to structurally and systemically assess financial innovations in global infrastructures. The research aims to create analysis frameworks, taxonomies and constructs, and simulation models pertaining to the dynamics of the innovation process to be used in policy analysis. Structural assessment …

An Autoregressive Conditional Filtering Process To Remove Intraday Seasonal Volatility And Its Application To Testing The Noisy Rational Expectations Model, Jang Hyung Cho

FIU Electronic Theses and Dissertations

We develop a new autoregressive conditional process to capture both the changes and the persistency of the intraday seasonal (U-shape) pattern of volatility in essay 1. Unlike other procedures, this approach allows for the intraday volatility pattern to change over time without the filtering process injecting a spurious pattern of noise into the filtered series. We show that prior deterministic filtering procedures are special cases of the autoregressive conditional filtering process presented here. Lagrange multiplier tests prove that the stochastic seasonal variance component is statistically significant. Specification tests using the correlogram and cross-spectral analyses prove the reliability of the autoregressive …