Business Commons^™

Success In Gateway Courses: What Matters And What Can We Do?, Thomas Berry, Lori Cook, Nancy Hill, Kevin Stevens

College of Business Faculty and Staff Works

No abstract provided.

Essays On Institutional Trading Behavior With Conflicts Of Interest And Information Sharing, Hyoseok Hwang

LSU Doctoral Dissertations

This dissertation explores a controversial issue of institutional trading behavior with conflicts of interest and information sharing. Using firms sued for alleged financial misreporting, the first essay examines whether analyst-affiliated institutions reduce the portfolio weights of sued firms prior to their analysts releasing the information through downgrade revisions – trading huddles. Empirical evidence is consistent with this behavior, particularly among the institutions with investment banking operations but without underwriting relationships with sued firms. Institutions with underwriting relationships only reduce portfolio weights significantly when their analysts are the first to provide downgrades during the class period, which is a proxy for …

Analysis Of Reits And Reit Etfs Cointegration During The Flash Crash., Stoyu Ivanov

Faculty Publications

In this study I revisit the “disintegration hypothesis” of financial assets around a major crisis event. I examine whether the Vanguard Real Estate Investment Trust and iShares Dow Jones US Real Estate Index Fund exchange traded funds disintegrate from the ten largest Real Estate Investment Trusts during the 14:45 Flash Crash on May 6, 2010. I find that six of the ten largest REITs are not cointegrated with the Vanguard Real Estate Investment Trust prior to the Flash Crash and that five of the ten largest REITs are not cointegrated with iShares Dow Jones US Real Estate Index Fund prior …

Analysis Of The Effects Of Pre-Announcement Of S&P 500 Index Changes., Stoyu Ivanov

Faculty Publications

In this study we attempt to answer the question – does the start of pre-announcing of S&P 500 index changes in October 1989 have an effect on the trading pattern of added or deleted firms? We document that prior to October 1989 the excess returns of added or deleted firms follow a white noise process around the event, whereas after the start of pre-announcing the excess returns can be described as nonstationary. This indicates significant excess profits to be captured around the addition or deletion event after S&P started pre-announcing changes in October 1989 but not prior to that date.

Do Neglected Firms Suffer From An Information Deficit?, Kenneth Yung, Hamid Rahman, Qian Sun

Finance Faculty Publications

We study the presence and distribution of private information in neglected firm stocks using a measure of private information first suggested by Roll (1988). Our results suggest that there is no shortage of information on neglected firms for investors and that this private information forms part of the decision set for managerial decisions. Our results indicate a significant negative correlation between the amount of private information and certain important firm characteristics such as market size, cash flow, sales and return on assets. When the impact of private information is analyzed on the investment and payout policies of the neglected firms, …

Matching Contributions And Saving Outcomes: A Behavioral Economics Perspective, Brigitte C. Madrian

Faculty Publications

Including a matching contribution increases savings plan participation and contributions, although the impact is less significant than the impact of nonfinancial approaches. Conditional on participation, a higher match rate has only a small effect on savings plan contributions. In contrast, the match threshold has a substantial impact, probably because it serves as a natural reference point when individuals are deciding how much to save and may be viewed as advice from the savings program sponsor on how much to save. Other behavioral approaches to changing savings plan outcomes—including automatic enrollment, simplification, planning aids, reminders, and commitment features—potentially have a much …

Two Essays On Stock Repurchases-The Post Repurchase Announcement Drift: An Anomaly In Disguise? And Intra Industry Effects Of Ipos On Stock Repurchase Decisions, Thanh Thiet Nguyen

USF Tampa Graduate Theses and Dissertations

We reexamine the stock price drifts following open-market stock repurchase announcements by differentiating actual repurchases from repurchase announcements and by controlling for the repurchasing firms' earnings improvement in the announcement year relative to the prior year. Our results show that only firms that actually repurchase their shares exhibit a positive post-announcement drift. More importantly, we find that these repurchasing firms have the same post-announcement drift as their matching firms that have similar size and earnings performance but do not repurchase. Further analysis indicates that the post-repurchase announcement drift is not a distinct anomaly but the well-documented post-earnings announcement drift in …

Reference Point Adaptation And Disposition Effect, Chiraphol New Chiyachantana, Zongfei Yang

Research Collection Lee Kong Chian School Of Business

This paper investigates the importance of reference point adaptation in the analysis of the disposition effect. We consider two exogenous factors pertinent to reference point adaptation: prior outcome and recent expectation of future outcome. We show that the incidence of the disposition effect varies in a manner consistent with reference point adaptation. Both prior outcome and recent expectation of future outcome affect the location of the reference point and have a large and significant impact on the incidence of the disposition effect. First, the disposition effect can largely be explained by investors’ inability to sufficiently adapt the reference point in …

Two Essays On Politics And Finance, Incheol Kim

USF Tampa Graduate Theses and Dissertations

I examined how politics affects corporate policies and value in two dissertation essays. In my first essay, we investigate whether diversity in points of view within corporate boards, as captured by the diversity in political ideology of board members, can affect a firm's performance. We employ personal political contributions' data to measure political ideology distance among groups of inside, outside directors and the CEO. Our empirical evidence strongly supports the notion that outside directors' monitoring effectiveness is more likely to be enhanced when their viewpoints are distinct from those of management. We find that ideologically diverse boards are associated with …

Two Essays On Investor Distraction, Erdem Ucar

USF Tampa Graduate Theses and Dissertations

In theory, all relevant information is incorporated in stock prices timely and completely and therefore prices respond related news quickly in efficient financial markets. In today's information age, technological advances provide investors with fast access to a vast number of information resources. One can argue that these advances can help market efficiency due to easy and quick access to relevant information. On the other hand, these technological advances not only facilitate availability of relevant information but also facilitate availability of all types of information--both relevant and irrelevant information signals. In essence, one can argue that there is (over)exposure to information …

Two Essays On Politics In Corporate Finance, Xiaojing Yuan

USF Tampa Graduate Theses and Dissertations

I examine how political geography affects firms' cost of debt. Policy risk, measured by proximity to political power reflected in firms' position in the country's political map, is negatively related to corporate bond ratings and positively related to firms' cost of debt. I find firms' policy risk can be mitigated by engaging in corporate political strategies like making campaign contributions or lobbying. Consistent with the view that such political strategies effectively protect firms against uncertainty about future policies, I find policy risk has less of an impact on the cost of debt of firms that support more powerful and well-connected …

Two Essays On Mergers And Acquisitions, Dongnyoung Kim

USF Tampa Graduate Theses and Dissertations

In the first essay, we examine the link between CEOs political ideology - conservatism - and their firms' investment decisions. We focus on the effect of CEO conservatism on M&A decisions. Our evidence indicates that politically conservative CEOs are less likely to engage in M&A activities. When they do undertake acquisitions, their firms are more likely to use cash as the method of payment, and the target firms are more likely to be public firms and to be from the same industry. Conditional on the merger, CEO conservatism appears to have a significantly positive impact on long-run firm valuation. However, …

Who Says There Is A High Consensus Among Analysts When Market Uncertainty Is High? Some New Evidence From The Commercial Real Estate Market, James D. Shilling, C. F. Sirmans, Barrett A. Slade

Faculty Publications

This paper seeks to determine whether analyst consensus is a function of the level of price informativeness, and therefore attempts to gauge the extent to which analyst consensus is high when market uncertainty is high. There is the view that a small or declining volume of trading implies less information and lower quality information, and that a lower level of price informativeness will lead analysts to put more weight on their private information at the time of forecasting. We add to this view the notion that when uncertainty is high there might be a positive option value of waiting. In …

Planning Prompts As A Means Of Increasing Rates Of Immunization And Preventive Screening, Hengchen Dai, Katherine L. Milkman, John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian

Faculty Publications

Building on psychological insights about the way people make decisions, behavioral scientists have proposed various methods to increase behaviors that promote welfare without limiting freedom of choice (Thaler & Sunstein, 2008). Recently, researchers have begun exploring the power of such methods for encouraging people to engage in beneficial health-related behaviors, particularly those that are often put off or forgotten (Loewenstein, Brennan, & Volpp, 2007). For example, motivated by evidence of substantial inertia at the status quo, researchers have demonstrated that if people are automatically assigned an appointment to receive a flu shot (while retaining the right to change or cancel …

Modelling The Volatility-Timing Of Funds Under Cpf Investment Theme, X Shen, Albert K. Tsui, Zhaoyong Zhang

Research outputs 2013

The performance measure of funds has been an important topic in the past few decades. In recent years the conditional models on return and volatility have become popular in studying the funds’ performance measure, but most of these studies focus on the US funds and a few on the Asian-based funds. The purpose of this study is to examine the volatility-timing performance of Singapore-based funds under the CPF (Central Provident Fund) Investment Scheme and non-CPF linked funds by taking into account of the currency risk effect on internationally managed funds. The CPF investment scheme was introduced in 1986 by the …

Modelling The Term Structure Of Japanese Bond Yields With The Nelson-Siegel Model, A. Tsui, J.X. Wu, Zhaoyong Zhang

Research outputs 2013

The Nelson-Siegel (1987) (NS) model has been credited for its high efficacy in the in-sample fitting and out-of-sample forecasting of the term structures of interest rates. The term structure of interest rates, popularly known as the yield curve, is a static function that relates the time-to-maturity to the yield-to maturity for a sample of bonds at a given point in time. The conventional way of measuring the term structure is by means of the spot rate curve, or yield curve, on zero-coupon bonds. Yet in reality, the entire term structure is not directly observable, which gives rise to the need …

Interest Rate Sensitivities Of Externally And Internally Managed Australian Reits, Jaime L. Yong, Abhay Singh

Research outputs 2013

Real Estate Investment Trusts (REITs) in Australia experienced tremendous growth and investor interest following the crash of unlisted property funds in the 1990s. Since 2001, management structures have shifted from external property management to an internally advised model. The sector’s returns had been notably rewarding up till the Global Financial Crisis but rising costs of debt and years of aggressive borrowing to fund expansions have eroded the values of REITs. Externally managed trusts had relatively higher levels of debt than their internally managed counterparts thus increasing the sensitivities to interest rate risks. Yet internally managed REITs engage in a wider …

A Dynamic Credit Ratings Model, David E. Allen, Robert Powell, Abhay Singh

Research outputs 2013

The Global Financial Crisis (GFC) provided overwhelming evidence of the problems caused by inadequate credit ratings. Losses and problem loans experienced by banks over this period were staggering. Yet many of the securitized sub-prime parcels which were widely seen as an underlying cause of the GFC, as well as corporate obligors who experienced severe difficulties during the GFC, retained extremely strong external credit ratings. They may have had low perceived risk at the time of rating, but as circumstances changed, the ratings stayed static and became far removed from the underlying risk. A key problem is that the external credit …

The Relationship Between Personal Financial Wellness And Financial Wellbeing: A Structural Equation Modelling Approach, Paul Gerrans, Craig P. Speelman, Guillermo J. Campitelli

Research outputs 2013

We examined the construct of financial wellness and its relationship to personal wellbeing, with a focus on the role of financial literacy. Gender comparisons are made using a structural equation modeling analysis including personal wellbeing, financial satisfaction, financial status, financial behavior, financial attitude, and financial knowledge. Males ranked higher in financial satisfaction and financial knowledge whereas females ranked higher in personal wellbeing. Joo’s (2008) concept of financial wellness as multidimensional is supported though the result is improved when a causal model of sub-components is estimated. The relationship of all variables to personal wellbeing is mediated by financial satisfaction, with gender …

Financial Services Innovation: Opportunities For Transformation Through Facial Recognition And Digital Wallet Patents, Debora S. Bartoo

Antioch University Dissertations & Theses

Bringing innovation to the marketplace for new products and services involves creativity, a culture in which change flourishes, and leadership that thrives on transformation and complexity. This study explored the potential for market disruption or change based on innovations involving patents granted to nonfinancial services organizations that could affect financial services, specifically consumer or retail bank products. It involved analyzing documents related to recently granted patents and completing a mixed methods survey integrating the Delphi research technique. This method required multiple iterations of a survey presented to expert panelists or industry thought leaders to attempt to gain consensus ("Consensus", 2011) …

Social Entrepreneurship And Wealth-Building Plans: Creative Strategies For Working Class Americans, Wayne R. Curtis

Antioch University Dissertations & Theses

This study investigated how the elements of social entrepreneurship with wealth-building strategies can advance the creation of wealth and serve as a mechanism for social change. This research takes a modest first step toward demystifying social entrepreneurship, better understanding the phenomenon, and exploring the relevance of wealth-building in social entrepreneurial activity. Specifically, this exploratory study used a multiple case study design to understand how existing social entrepreneurial ventures include wealth-building strategies, such as employee stock ownership plans for working class Americans. The concept of social entrepreneurship is relatively new. There is general agreement that the concept combines a passion for …

Essays On Credit Default Swaps And Debtor-Creditor Relationships, Cihan Uzmanoglu

LSU Doctoral Dissertations

Over the last decade, markets for credit insurance have developed dramatically and credit default swaps (CDS) have become the instrument of choice when it comes to hedging credit risks. The expanded hedging opportunities CDS provide and the allied benefits of better risk-sharing notwithstanding, concerns over the economic role of CDS arise from their ability to engender “empty” creditors – joint holders of the bond and CDS, and the role such creditors play in distress situations. Financially distressed firms often restructure their debt through out-of-court renegotiations with creditors to avoid formal default. In addition to the going concern value of the …

Planning Prompts As A Means Of Increasing Preventive Screening Rates, Katherine L. Milkman, John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian

Faculty Publications

In the U.S., 18,800 lives could be saved annually if those advised to obtain colorectal screenings based on national guidelines complied (Zauber et al., 2012). Subtle suggestions embedded in a decision-making environment can change people's choices (Thaler and Sunstein, 2008). Past research has shown that prompting people to form plans about where and when they will complete an intended behavior increases engagement in activities ranging from voting to vaccination (Gollwitzer and Sheeran, 2006; Milkman et al., 2011; Nickerson and Rogers, 2010). When plans are formed, they link intended behaviors with a concrete future moment and course of action, creating cues …

Simplification And Saving, John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian

Faculty Publications

The daunting complexity of important financial decisions can lead to procrastination. Weevaluate a low-cost intervention that substantially simplifies the retirement savings planparticipation decision. Individuals received an opportunity to enroll in a retirement savingsplan at a pre-selected contribution rate and asset allocation, allowing them to collapsea multidimensional problem into a binary choice between the status quo and the pre-selected alternative. The intervention increases plan enrollment rates by 10–20 percentagepoints. We find that a similar intervention can be used to increase contribution rates amongemployees who are already participating in a savings plan.

The Aftermarket Performance Of Initial Public Offerings, Chiyachantana N. Chiraphol, Theerawat Pinta, Nareerat Taechapiroontong, Anantaporn Wongkham

Research Collection Lee Kong Chian School Of Business

This paper examines the aftermarket performance of initial public offerings (IPOs) and explores the underpricing of IPOs in an Asian emerging equity market using a comprehensive sample of IPOs. Our findings suggest that there exist a significant underpricing. Specifically, new issues have been offered at an average market-adjusted discount of about 20%. The magnitude of IPO underpricing is significantly larger for large firms, older firms and firms with small offering size.

The Effect Of Information Disclosure On Information Asymmetry, Chiraphol New Chiyachantana, Neeranuch Nuengwang, Nareerat Taechapiroontong, Pakpoom Thanarung

Research Collection Lee Kong Chian School Of Business

This study investigates the relation among information disclosure, firm characteristics and information asymmetry. The authors find evidence consistent with the notion that increasing corporate disclosure and transparency reduces the asymmetric information between informed and uninformed investors. The findings indicate a strong relation between firm characteristics and level of information disclosure. Larger firms, firms with high growth opportunity and superior performance are associated with higher level of information disclosure. With respect to type of information, large firms, firms with superior operating performance, high growth opportunity are likely to disclose the investment and structural change as well as legal and miscellaneous information. …

A Structural Model Of Human Capital And Leverage, Ryan Pratt

Faculty Publications

I study the effect of human capital on firms' leverage decisions in a structural dynamic model. Firms produce using physical capital and labor. They pay a cost per employee they hire, thus investing in human capital. In default a portion of this human capital investment is lost. The loss of human capital constitutes a significant cost of financial distress. Labor intensive firms are more heavily exposed to this cost and respond by using less leverage. Thus the model predicts a decreasing relationship between leverage and labor intensity. Consistent with this prediction, I show in the data that high labor intensity …

Testimonials Do Not Convert Patients From Brand To Generic Medication, John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian, Gwendolyn Reynolds

Faculty Publications

Objectives—To assess whether the addition of a peer testimonial to an informational mailing increases conversion rates from brand-name prescription medications to lower-cost therapeutic equivalents, and whether the testimonial’s efficacy increases when information is added about an affiliation the quoted individual shares with the recipient.

Research Design and Methods—5,498 union members were randomly assigned to receive one of three different informational letters: one without a testimonial (No Testimonial Group), one with a testimonial from a person whose shared union affiliation with the recipient was not disclosed (Unaffiliated Testimonial Group), and one with a testimonial from a person whose shared union affiliation …

Relationship Of Single Stock Futures With The Spot Price: Evidence From Karachi Stock Exchange, Nasir Jamal, Ahmad Fraz

Business Review

The study is conducted to investigate the relationship of single stock futures with the spot price in Karachi Stock Exchange. Monthly data of twelve companies which are trading single stock futures have been examined for the period 1 January, 2005 to 31 December, 2010 with total of 72 observations for each company. Descriptive statistics, Unit Root test, Co-integration test, Granger Causality test, Vector Error Correction Model based on ARDL approach, Impulse Response and Variance Decomposition tests are used. The existence of long run relationship was found between the futures and spot prices of all the companies. The Granger Causality test …

An Empirical Study On Weak Market Efficiency Of Karachi Stock Exchange, Jaihan Zulqarnain, Syed Muhammad Amir Shah

Business Review

A lot of research has been conducted to check whether the Frontier and emerging markets show weak form of efficiency or follow a random walk. Karachi Stock Exchange, being a frontier market, was tested on the basis of daily closing values from 2006 to 2011. The study showed KSE to be a weak form inefficient market following non randomness. Three tests were applied on the data. KSE proved to have a unit root, the values in the series showed a strong correlation. Moreover, a Z-statistic value was far greater than 1.96 which proved KSE to be an inefficient market. Inefficient …