Business Commons^™

Entire Volume Journal Of Banking And Financial Economics 2025, 2(24)

Journal of Banking and Financial Economics

Entire Volume Journal of Banking and Financial Economics 2025, 2(24)

Bed Allocation Model For Infection Control During A Pandemic, Rosemary R. Seva, Dennis E. Cruz, Lourdes Marie Tejero

DLSU Business & Economics Review

This study proposes a model of allocating beds in a hospital considering infection control during a pandemic. The problem was formulated using the quadratic assignment problem (QAP) in a multi-period planning horizon. The main objective is to

minimize the spread of infection by maximizing the total distance (TD) between areas assigned to the pandemic and non- pandemic patients. Model validation using GAMS showed that the assignment of patient groups to areas is determined by

the arrival rates of patients and the area’s capacity. The model was able to identify periods when the sharing of space was more advantageous. The model’s …

The Follower Fallacy: Revisiting Engagement Hypothesis By Evidencing Nonlinear Dynamics In Influencer Marketing, Pranjal Jain, Pooja Jain, Anju Jain

DLSU Business & Economics Review

The traditional premise posits a positive correlation between influencer following (indegree) and engagement metrics, covering likes, shares, comments, and so forth. This study aims to either affirm or dent this engagement hypothesis. Through a methodical analysis of engagement data, this research recognizes potential deviations from the anticipated linear trajectory. Contrary to antecedental social influence, campaign customization, indegree composition, and post components define diverse nonlinear trajectories, empirically challenging the existing research assumptions underlying hypothesis. By evidencing the multifaceted dynamics of influencer engagement, this study offers critical insights for marketers navigating the complexities of contemporary digital marketing landscapes, facilitating the optimization of …

National And Regional Bank Deposits And Their Relationship To The Stock Market, Joseph Zhong

CMC Senior Theses

Institutional investors started using bank deposits as a Leading Economic Indicator to predict stock market returns. I find that bank deposits lead stock market returns by 2 weeks at the national level. Examining the mechanism through which bank deposits affect stock market returns, existing literature postulates the Bank Deposit Lending Channel: increased bank deposits increase financial liquidity, powering and leading stock market returns. I do not find evidence for the Bank Deposit Lending Channel. In my regional analysis, I find that bank deposit behavior differs drastically between US regions. In general, regional bank deposits still lead stock market returns. In …

Startup Equity To Stock Exchange: Key Drivers In Venture-Backed Ipo Journeys, Aryaman Shiv Khosla

CMC Senior Theses

This study investigates the components that shape the probability of a venture capital (VC) backed company’s ability to transition from private to public markets through an Initial Public Offering (IPO). The study employs logistic regression models to analyze firm-specific and funding-related determinants of IPO likelihood. Key predictors in this study include total VC funding, number of VC rounds, average deal size growth, size of first round, average days between rounds, company age, number of employees, and primary industry sector. The findings reveal that higher total funding increases IPO likelihood, highlighting the critical role of robust capital access in fueling growth …

A Multiple Perspective Analysis On Urban Poverty In Developing Nations: A Case Study On Nigeria, Colonial Implications, And Modern-Day Outcomes, Julian Rivera-Williams

CMC Senior Theses

This paper will dissect urbanization and poverty in Nigeria as a case study of the challenges of underdevelopment and the lingering effects of colonialism in Africa. To draw a complete understanding of challenges faced by developing nations facing systemic underdevelopment, high poverty, and low productivity– nations like Nigeria, my research will uncover colonial impacts and post-colonial policies that initiated urban poverty and underdevelopment outcomes we see today. The purpose of my thesis is to encompass existing fragmented academia on the causes and consequences of underdevelopment and connect historical implications to current impacts of global development today including the influence of …

Better Than Blume: An Approach To Forecasting Future Stock Betas With Linear Bayesian Models And Sample-Wide Priors, Kian Shah

CMC Senior Theses

This paper investigates the predictive accuracy of stock beta forecasts by comparing the widely used Blume adjusted beta to four Bayesian regression models I developed. Stock beta, an essential measure of systematic risk, plays a crucial role in portfolio management and valuation; however, raw betas lack forecasting capabilities. While various attempts have been made to develop alternative beta forecasting models, the Blume adjustment remains the most commonly used. To evaluate this, I created four Bayesian models utilizing a single, sample-wide set of priors, simplifying the computational requirements compared to stock-specific priors. The analysis is based on daily return data for …

Uncovering Earnings Management In The U.S. Tech Industry: Strategies To Meet Or Just Beat Analyst Eps Expectations, Morgan Schilling

CMC Senior Theses

This paper investigates earnings management practices within the U.S. tech industry, focusing on firms that meet or just beat analyst EPS expectations. I specifically built off the Stubben (2010) model that used discretionary revenue to identify potential mismanagement across multiple industries. The modified model incorporates deferred revenue as well as accounts receivable to identify revenue recognition practices in an industry where subscription based revenue is highly relevant. I hypothesize that tech firms with aggressive revenue recognition strategies, particularly those with higher levels of accounts receivable, are more likely to engage in earnings management in order to meet EPS targets. A …

Unlocking Value Or Signaling Trouble? Exploring The Determinants Of Immediate Market Reactions To Underwater Employee Option Exchanges, Riley Lai

CMC Senior Theses

Whether employee option exchanges are an effective process to ensure a firm’s future outlook is vital for companies to consider. Evaluating the impact of these exchanges on firm value and shareholder wealth can provide insights for companies to align employee incentives with shareholder interests. This paper seeks to determine a definitive correlation between employee option exchange announcements and positive or negative abnormal returns over the announcement window. The focus is on the regulatory environment post-Section 409A, a provision in the Internal Revenue Code that prohibits the issuance of in-the-money employee stock options. This paper fills a significant gap in the …

The Public Face Of Private Credit: Performance Dynamics In Business Development Companies, Russell Kuan

CMC Senior Theses

This study examines the performance dynamics of public Business Development Companies (BDCs) – a unique and growing component of the private credit market that bridges public and private financing. Publicly traded BDCs provide critical capital to underserved middle-market firms, while giving investors access to private credit opportunities. Using a hand-pulled dataset derived from 10-K filings and supplemental sources, this research identifies the key financial and operational factors driving BDC performance, with a focus on senior secured loan allocations, portfolio yield, and leverage strategies. The findings reveal that portfolio yield and senior secured loan allocations are significant predictors of total returns …

Altman Z-Score Relationship With Stock Price Performance After Layoff Announcements, Natalie Phillips

CMC Senior Theses

This paper examines the broader implications of such workforce reductions, historically prevalent in corporate environments since the advent of "new capitalism" in the late 20th century. Characterized by intense global competition, deregulation, and technological advancements, this era saw a surge in corporate downsizing as a means to enhance efficiency and competitiveness. Despite the strategic intentions, layoffs often signal underlying organizational challenges, prompting critical inquiry into their short- and long-term impacts on firm performance and investor sentiment. Central to this study is the exploration of whether a firm's Altman Z-Score, a metric predicting bankruptcy risk, influences stock price reactions following layoff …

Forecasting Equity Betas Using Option-Implied Moments, Ivan Kolesnikov

CMC Senior Theses

Traditional beta estimates are constructed from historical stock‑and‑market returns and therefore adjust only as fast as realized data accrue. This thesis investigates whether the forward‑looking information embedded in equity‑option prices can enhance beta forecasts. Using near‑end‑of‑day quotes for 236 S&P 500 firms between 2007 and 2024, I extract risk‑neutral variance and skewness, construct five alternative beta estimators (historical, option‑implied, and three hybrids), and evaluate them against realized betas over six‑, twelve‑, and twenty‑four‑month windows. Rolling‑OLS beta remains the most accurate benchmark at short horizons, yet option‑implied moments add economically and statistically significant value when systematic exposure is expected to change …

The Pricing Of Forecast-Based Earnings Uncertainty In Equity Markets, Brenda G. Galvan

CMC Senior Theses

This paper constructs a firm-level measure of earnings forecast uncertainty by adapting the macroeconomic methodology of Jurado et al. (2015) to micro-level financial statement data from Compustat and CRSP. Using a two-stage estimation procedure, I first forecast the scaled year-over-year changes in earnings, defined as the change in income before extraordinary items normalized by firm sales,based on lagged firm fundamentals. I then model the squared forecast errors to extract the unpredictable component of earnings variation, generating a forward-looking, firm-specific measure of ex-ante uncertainty. Empirically, I examine whether this forecast uncertainty measure is priced in equity markets by regressing future stock …

The Effect Of The Tcja And Cares Act On Charitable Contributions And The Financial Health Of The Nonprofit Sector, Nathanio A. Bright

CMC Senior Theses

This thesis examines the impact of the Tax Cuts and Jobs Act of 2017 and the Coronavirus Aid, Relief, and Economic Security Act of 2020 on charitable contributions and nonprofit financial health. The standard deduction increase introduced by the TCJA disincentivized middle to low-income earners from making contributions. In March 2020, Congress temporarily increased the AGI limit on charitable deductions while simultaneously offering an above-the-line deduction for all U.S. taxpayers. While earlier studies have analyzed the effect of the TCJA in disincentivizing charitable contributions, no study has examined the moderating effect of the TCJA and CARES Act in affecting contributions …

Optimizing Bitcoin Allocation: Predictability Of Bitcoin Portfolio Weights Through Macroeconomic Variables, Kirby Baynes

CMC Senior Theses

This thesis examines whether Bitcoin is a beneficial asset in a diversified, mean-variance optimized portfolio and whether its portfolio weights can be reliably predicted using macroeconomic variables. Using data from December 2013 to February 2025, the analysis applies rolling-window portfolio optimization and OLS regressions with Newey-West standard errors to test the relationship between Bitcoin allocations and a set of macroeconomic indicators. Results show that Bitcoin receives non-zero weights across portfolios and that its optimal allocation is sensitive to variables such as changes in the Credit Spread and Yield Curve. These variables were statistically significant in several models and produced meaningful …

Scaling Social Impact Bonds In The United States: Barriers, Incentives, And Policy Solutions, Angelique M. Rivanis

CMC Senior Theses

Social Impact Bonds (SIBs) are a form of outcomes-based financing that fund social programs by shifting financial risk from the government to private investors. While SIBs have gained international traction, their long-term viability in the United States depends on structural reforms. This thesis examines two completed U.S. SIB projects, Rikers Island in New York and the Just-in-Reach project in Los Angeles, through an analysis of their design, implementation, and outcomes. While both projects focus on criminal justice, they provide context about the scalability of SIBs across multiple social policy areas.The three primary constraints are high transaction costs, limited investor interest, …

The Marginal Value Of Public Pension Wealth: Evidence From Border House Prices, Darren Aiello, Asaf Bernstein, Mahyar Kargar, Ryan Lewis, Michael Schwert

Faculty Publications

We study how state pension windfalls affect property prices near state borders, where theory suggests real estate reflects the value of additional public resources. Windfalls, representing a source of state revenue about half the size of total taxes, provide economically significant and plausibly exogenous variation in fiscal conditions. We find that each dollar of pension asset returns increases border house prices by approximately two dollars, suggesting that governments allocate additional funds towards high-value projects or tax abatement rather than wasting incremental resources. Evidence of larger effects in financially constrained municipalities highlights how fiscal resources amplify welfare effects of economic shocks.

The Contributors, Marites Tiongco

DLSU Business & Economics Review

No abstract provided.

Determinants Of Corporate Capital Structure And The Emerging Role Of Intangibles And Innovation: The Case Of Japanese Corporations, Michael Angelo A. Cortez

DLSU Business & Economics Review

This study aims to modernize capital structure determinants in line with changing economic environments by incorporating the function of intangible assets, particularly innovations, into capital structure decisions. Traditional independent variables such as tangibility, firm size, profitability, growth opportunities, and profitability have been thoroughly researched, but the growing importance of intangible assets and innovations in the contemporary economy with advanced technology calls for a reassessment of their impact on capital structures. I examine 95 enterprises listed in the Nikkei over 11 years (2014–2024) using cross-section generalized least squares regression and dynamic panel data estimation. Results show that corporate leverage decisions (debt-to-equity …

Impact Of International Trade Competitiveness On Unemployment And Poverty Reduction In Ecowas Region, Ikubor Ofili Jude, Yahaya U. Isah, Ojih U. Abraham, Mazeli O. Mark, Abdul Y. Mary

DLSU Business & Economics Review

This study investigates the impact of trade competitiveness on unemployment and poverty in the ECOWAS region. The study relied on POLS, FE, and RE techniques to analyze the impact of export value and trade openness on unemployment and poverty in the ECOWAS region from 2001 to 2020. Annual time series data were sourced from World Bank and World Integrated Trade Solution databases. Major findings from this study show that unemployment responds strongly and favorably to export value and trade openness, whereas poverty responds favorably to trade openness. Further investigation revealed that trade regulatory environment is a determinant of unemployment and …

Assessing The Impact Of Shifting To Non- Combusted Alternatives To Reduce The Economic Cost Of Tobacco-Related Illnesses: A Cost Of Illness Approach In The Philippine Case, Christopher James Cabuay

DLSU Business & Economics Review

Smoking continues to be one of the leading causes of death and disability around the world. Recent health studies, however, have reported that these diseases are more likely to be due to the smoke from burning rather than the actual nicotine content. This study uses a cost-of-illness approach in estimating the cost of smoking-related illness in the Philippines and calculating the potential reduction in costs if a significant portion of the adult smoking population switches to the exclusive use of non-combusted alternatives (NCAs), which drastically reduces the risk of contracting smoking-related diseases. This study finds that cost reductions in the …

Vocational Education And Training (Tvet) And Its Impact On The Employment Prospects Of The Als Graduates, Martha Joy J. Abing, Mitzie Irene P. Conchada

DLSU Business & Economics Review

The pressure for technical-vocational education and training to deliver skilled and competent laborers has become a major concern in the labor market. As such, the strong desire to explore the effectiveness of TVET’s skills training programs remains. There is limited literature on the employability of the alternative learning system graduates in comparison to those graduates of the ALS program who did not pursue TVET. Using the dataset of the World Bank STEP Skills Measurement Household Survey for the Philippines, 2015-2016, this study seeks to determine whether completing TVET has significantly increased the employability of ALS graduates. Utilizing the method of …

A Review Of Climate Change And Its Financial Impact On The Transportation Sector, Ray Anthony L. Almonares

DLSU Business & Economics Review

In this paper, I review the existing literature on climate risks—both transition and physical—and their relationship with firm performance, with a specific focus on transportation finance. I find that the broad literature on carbon emissions and firm performance overlooks two critical characteristics of the global transportation sector: its heavy reliance on fossil fuels and the international scope of its operations. As a result, the conclusions drawn from this body of work may not be directly applicable to global transportation companies. Furthermore, I examine existing studies on extreme sea levels and the global maritime transportation sector, noting that these studies have …

Natural Capital Credit Risk Assessment In Agricultural Lending: An Approach Based On The Natural Capital Protocol, Francisco Ascui, Theodor Florian Cojoianu

Research Collection College of Integrative Studies

It is increasingly recognised that financial institutions have significant impacts and dependencies on natural capital – defined as the stock of the world’s renewable and non-renewable natural resources and ecosystems that yield flows of environmental goods and services, which directly and indirectly underpin the global economy and human wellbeing. Historically, many of these impacts and dependencies have been overlooked. The value of goods and services that nature provides ‘for free’ has often been ignored, and resources have typically been priced at their cost of extraction, rather than the cost of their replacement or substitution, which would promote more sustainable long-term …

Three Essays On Investment Strategies, Machine Learning And Risk Management, Nafise Aalipour

Open Access Dissertations

This dissertation explores the role of frictions, regime dynamics, and predictive modeling in understanding persistent anomalies and managing financial risk in equity markets. Across three essays, I examine how transaction costs limit arbitrage opportunities, how market regimes shape the evolution of return anomalies, and how a hybrid econometric-machine learning framework can enhance risk forecasting.

The first essay investigates whether transaction costs and idiosyncratic risk constrain the profitability of long-term reversal and medium-term momentum strategies. Using a comprehensive dataset from 1927 to 2022, I estimate stock-level trading frictions through three distinct methods - Limited Dependent Variable models, Gibbs cost estimators, and …

Ai And Personal Finance: Evaluating Rules Of Thumb Generated By Chatgpt, Jing Jian Xiao, Kexin Meng

Human Development and Family Science Faculty Publications

Purpose – The purpose of this article is to evaluate the information quality generated by ChatGPT on rules of thumb in personal finance.

Design/methodology/approach – Prompts were developed to ask ChatGPT questions regarding rules of thumb in personal finance. After several iterations, we selected seven rules of thumb and asked ChatGPT to provide more in-depth information. The information was evaluated by checking its accuracy and validity based on relevant peer reviewed journal articles.

Findings – We found both advantages and limitations of using ChatGPT for information search. The advantages include its speed of information generation, width of topic generation, adaptivity …

Effect Of Trade Openness On Food Security In Economic Community Of West African States Region, Yahaya Umar Isah, Ikubor, Ofili Jude, Bernard, O. A., Zakari Saheed S., Ayodeji, S.

DLSU Business & Economics Review

This study investigates the impact of trade openness on food security in the ECOWAS trade zone. The study relied on the system GMM approach to analyze the impact of trade openness on overall and disaggregated components of food security in the ECOWAS trade zone during the period 2014 and 2021. Annual time series data were sourced from the Food and Agriculture Organization, World Bank Metadata base, and World Integrated Trade Solution. Major findings from the study reveal that trade openness has a significant positive impact on overall food security indicators. However, trade openness has not significantly impacted food availability and …

The Global Value Chain Effects Of Rcep: Estimating The Impact On The Philippines, Caesar B. Cororaton

DLSU Business & Economics Review

This paper extends the global CGE model results of Cororaton (2022) by disaggregating further the RCEP trade creation effects on the Philippines into global value chain (GVC) impacts. The GVC analysis indicates that the trade agreement in RCEP results in higher Philippine exports of US$ 2.8 billion in 2031, of which the increase in Philippine domestic value added is US$ 2.4 billion, significantly higher than the foreign value added of US$ 403 million. Electronic products contribute 67% of the value added generated within the Philippines. The increase in the import contents of Philippine exports is only US$ 413 million. Furthermore, …

The Impact Of Short-Term Rental Activity On House Prices: Evidence From Coastal Virginia, Navid Safari, Lei Zhang, Timothy M. Komarek

Finance Faculty Publications

Short-term rentals such as Airbnb have grown substantially in recent years. In this study, we investigated the effect of Airbnb rentals on neighboring house prices in Hampton Roads, Virginia. We focus on three different measures of Airbnb activity to obtain more robust results. Our measures include active Airbnb listings, active listings with at least one reservation, and the sum of reservations over three different periods. Consistent with previous literature, our main results show that prior Airbnb rental activity has a positive impact on the surrounding housing sales prices. Furthermore, the localized impact diminishes over geographic space (i.e., distances greater than …

Labor Heterogeneity, Labor Adjustment Costs, And Externally Financed Firm Growth, Enxi An, Kenneth Yung

Finance Faculty Publications

Highlights

• Because skilled workers entail higher hiring and firing expenses, firms tend to retain skilled workers in the face of the high labor adjustment costs (LACs).

• The retention of skilled workers imposes inflexibility on business operations and exposes firms to cash flow shocks.

• Firms with high LACs hoard precautionary cash in the face of higher cash flow risk.

• We find a positive relationship between LACs and externally financed firm growth.

• Equity is the major source of external funds for firm growth in the face of high LACs.

• The retention of skilled workers elevates conflicts …