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Essays On The Effect Of Financial Institution’S Dual Holdings Of Debt And Equity Securities, Jiun-Lin Chen
Essays On The Effect Of Financial Institution’S Dual Holdings Of Debt And Equity Securities, Jiun-Lin Chen
LSU Doctoral Dissertations
This dissertation analyzes the effects on the stock markets when institutional investors hold their client firms’ stocks. The first essay examines the trading impact around earnings announcements and the second essay studies the effect on stock liquidity. In the first essay, we find that relationship institutions (that have lent/underwritten and hold shares of clients) support their clients when these client firms have negative earnings shocks. Their support not only mitigates the negative abnormal return around earnings announcements but also reduces the post-earnings-announcement-drift, thus, earnings momentum profits. In the second essay, we find that client firms held by relationship institutions suffer …