Corporate Finance Commons^™

Essays On Capital Structure And Ownership Structure, Yiqin Chen

Dissertations, Theses, and Capstone Projects

This dissertation consists of two chapters about how ownership structure affects REITs’ capital structure and property transactions.

Chapter 1: The Influence of Ownership Structure on REITs’ Financing Decisions
This essay explores how ownership structure affects REITs’ financing decisions following natural disasters. The results show that REITs with high insider ownership tend to increase leverage in the aftermath of such events, while those with high institutional ownership, especially long-term institutional ownership, are more likely to reduce leverage. These findings provide further evidence of the monitoring role of institutional investors in shaping REITs’ financial strategies during times of crisis.

Chapter 2: …

Essays On Tax Impacts On Corporate Finance, Corporate Governance And Regional Disparity, Mei Li

Dissertations, Theses, and Capstone Projects

This dissertation consists of three chapters that cover topics on tax impacts on corporate finance, regional disparity and corporate governance.

Chapter 1 - How Do Net Operating Loss Carryforwards Affect Tax Impact on Corporate Capital Structure? This paper examines the impact of net operating loss (NOL) carryforwards on the tax implications of corporate capital structure. Leveraging the Tax Cuts and Jobs Act of 2017 (TCJA), the largest tax reform in four decades, this paper investigates the effect of NOL carryforwards on firms' sensitivity to tax reforms. As NOL carryforwards have become increasingly significant since 2000, but not widely researched due …

Bearer Negotiable Instruments: Addressing A Financial Intelligence Gap And Identifying Criminogenic Weaknesses, Hollis B. Kegg

Dissertations, Theses, and Capstone Projects

Bearer Negotiable Instruments (BNI) are a long-standing category of financial instruments used to transfer large amounts of money in ways that may not be subject to regulation, reporting, tracking, review, or oversight. There is limited information available on BNIs, and no evidence that any studies have been undertaken on BNIs alone, much less reported. Increasingly, BNIs are being used for illegal purposes including money laundering. This study gathers information about their characteristics, nature, purpose, legal status, and numbers. It also focuses on the crime risks associated with BNIs, the crime opportunities they facilitate, and the criminal weaknesses in the financial …

Climate Change And Corporate Behaviors, Lei Lei

Dissertations, Theses, and Capstone Projects

This dissertation consists of several chapters that span corporate disclosures on climate change-related impacts, environmental performance, common institutional ownership, and financial analyst coverage.

Chapter 1 This chapter briefly introduces this dissertation, including the motivation and structure.

Chapter 2 In this chapter, I exploit the oral and communicative nature of earnings conference calls to explore whether the discussions on climate change influence corporate environmental performance. I find strong and robust evidence that communications make firms engage more actively in environmentally beneficial investments, and thus, have better environmental profiles. Further evidence shows that mandatory disclosure may unexpectedly crowd out communications, and this …

Contracting In Direct Asset Sales, Xin Yuan

Dissertations, Theses, and Capstone Projects

Using a unique, hand-collected dataset of direct asset sales agreements in the SEC filings, I provide the first large-sample evidence on how contracting mechanisms are used to mitigate information frictions in these important transactions. The conflict of interests is unique because the scarcity of asset-specific financial information makes target assets difficult to value and monitor, especially when such transactions are usually consummated in a short period. I first show an extensive use of representations and warranties, covenants, and special payment arrangements in these contracts when severe information asymmetry exists between buyers and sellers. Importantly, further results suggest that these contracting …

Essays On Corporate Debt Features, Capital Structure, And Cash Policies, Xiaoyu Zhu

Dissertations, Theses, and Capstone Projects

Chapter 1: This chapter examines variations in corporate debt features with respect to changes in macroeconomic and microeconomic conditions. The features seen in corporate debt issues have evolved substantially over the past four decades in response to changes in the corporate financing landscape. In particular, this chapter studies the evolution of active debt provisions such as fixed-price calls, make-whole calls, and callable conversion features in corporate bond contracts. By integrating corporate bond data from the Mergent Fixed Income Securities Database (FISD) and Securities Data Company (SDC), This chapter reveals new temporal and cross-sectional patterns in active debt provisions.

Chapter 2: …

Essays On Corporate Sustainability, Aditya Malateesh Kashikar

Dissertations, Theses, and Capstone Projects

The dissertation provides an extensive literature review of topics in Corporate Sustainability. It further examines two key topics: ESG Pay and ESG Investing. For ESG Pay, I examine Bloomberg’s ESG linked pay measure using the largest panel (to date). I confirm several important results from the nascent literature on ESG Pay. Firstly, I find that Country and Industry play a major role in determining ESG Pay adoption. Secondly, among firm characteristics, Big and Value firms tend to have a greater probability of adopting ESG Pay. Thirdly, higher ESG scores increase the chance of ESG Pay adoption in the subsequent year. …

Cost Stickiness And Supply Chain Bargaining Power, Binghao (Jimmy) Zhao

Dissertations, Theses, and Capstone Projects

Given the essential role of supply chains in the economy, furthering our understanding of the interactions between trade partners is important. In this paper, I study the relation between cost stickiness and bargaining power over supply chain partners. I document evidence consistent with the argument that firms wield supply chain bargaining power to avoid cost stickiness by shifting high adjustment costs onto their trade partners. In particular, I show that the level of SG&A and COGS stickiness is negatively associated with firms’ bargaining power over their suppliers and customers. My results are robust to using industry competition as an alternative …

New Perspectives About Financial Intermediation: Disruption By Senior Managers And Financial Technologies, Yu Shan

Dissertations, Theses, and Capstone Projects

This dissertation consists of three chapters that span managerial styles, financial technologies, and social interactions.

Chapter 1 Banks increase credit risk-taking in syndicated bank loans when their systemic risk increases; however, the interrelationship across risks depends on bank managerial styles. Using a connectedness sampling method to differentiate patterns of business policy styles and systemic risk-taking among managers, I find that credit risk-taking is more sensitive to the bank's systemic risk if the manager exhibits a preference for systemic risk. Asset-innovating managers (exhibiting a preference for non-traditional forms of income and assets) take higher credit risk in their loan portfolios, but …

Essays On Bank Acquisitions And Systemic Risk, Farindokht Vaghefi

Dissertations, Theses, and Capstone Projects

This dissertation consists of two chapters on bank acquisitions and systemic risk.

Chapter 1: This chapter explores whether bank acquisitions are associated with systemic risk-shifting. Acquisitions can form larger and more diversified firms and, as such, increase the correlation of the acquirer's investment with other banks and subsequently the probability of their joint failure. This can be beneficial for the acquirer due to (implicit) government ``too-many-to-fail'' guarantees. I find that bank acquisitions on average lead to an increase in acquires' systemic risk, which is in turn associated with an increase in firm value for non-distressed acquisitions. Interestingly, congruent with the …

Leverage Adjustment And Credit Risk, Wei He

Dissertations, Theses, and Capstone Projects

This dissertation consists of three coherent chapters that discuss the capital structure target, speed of adjustment and effect of speed of adjustment on credit risk.

Ⅰ: We standardize leverage ratio by underlying business risk. The methodology of standardization follows the assumption that asset value follows a geometric Brownian motion. We find that by standardizing book leverage ratio, standardized leverage ratio can be explained by firm characteristics with a much larger coefficient of determination compared with book leverage ratio. The coefficient of determination difference of regression with standardized leverage ratio and book leverage ratio becomes even larger if we exclude zero …

Essays On Innovation, Analyst Coverage, And Corporate Finance, Yang Liu

Dissertations, Theses, and Capstone Projects

This dissertation consists of three chapters that encompass corporate innovation, analyst coverage, public firm disclosure, and institutional investors.

Innovation Under Stress, Zhaojun Huang

Dissertations, Theses, and Capstone Projects

The aim of the dissertation is to explore firms’ innovation strategies during certain stressful periods. This dissertation consists of 3 chapters. . .

Chapter 1: Innovation Diversification Under Policy Uncertainty

Using detailed data on patent grants and applications, I explore the effect of policy uncertainty on firms’ innovation strategies. I show that firms that invest in R&D tend to pursue more diversified strategies and are more likely to explore unfamiliar fields during periods of policy uncertainty. These findings hold after adjusting for possible sample-selection bias using variation from patent examiners’ historical approval rates, and after adjusting for potential endogeneity using …

Essays On Banking And Corporate Finance, Alev Isil Yildirim

Dissertations, Theses, and Capstone Projects

This dissertation consists of two chapters.

Chapter 1: The Effect of Relationship Banking on Firm Efficiency

This paper analyzes the impact of relationship bank oversight on firm operational efficiency and default risk. I find that a new loan from a relationship bank improves the technical efficiency of inefficient firms that have an elevated probability of default. Moreover, borrowing firms with elevated default risk exposure experience reductions in their probabilities of default in the years following new relationship bank loans, benefiting both banks and borrowers. Thus, the benefits of relationship bank monitoring are most apparent the higher the ex ante default …

Essays On Capital Structure And Institutional Ownership, Yuan Feng

Dissertations, Theses, and Capstone Projects

This dissertation consists of three chapters about how institutional ownership and trading affect capital structure.

Chapter 1

The literature documents that firms issue equity following periods of high stock return and such behavior only occurs in concert with high returns that coincide with large amounts of buying by new institutions. My findings suggest this is also associated with strong institutional selling, the opposite of what one would expect. This positive relationship is not driven by outflow-motivated selling, but rather by informed selling by short-term institutions.

Chapter 2

I document a strong negative relationship between institutional ownership and leverage. I find …

Essays On Capital Structure And Public Debt Markets, Viktoriya Staneva

Dissertations, Theses, and Capstone Projects

This dissertation consists of three chapters that examine capital structure determinants as well as the evolution of credit rating standards in the market for public debt.

Chapter 1 This chapter shows that firm fixed effects in panel leverage regressions act as a noisy proxy for managerial effects that drive persistence in leverage. Firms that do not change their CEO for prolonged periods of time are more likely to keep debt ratios within a narrow bandwidth and to display persistent differences in their time-series averages for up to 20 years. A CEO turnover is associated with considerable modifications to the financing …

Essays In Corporate Responsibility And Finance, Mert Demir

Dissertations, Theses, and Capstone Projects

This dissertation consists of three chapters:

Chapter 1: The Effects of Corporate Social Performance and Social Norms on Market Valuation of Nonfinancial Disclosures Using a novel measure of the quality of corporate social responsibility (CSR) disclosures by global companies, this paper analyzes how CSR report quality affects firm value when mediating roles of social pressure and CSR performance are considered. I find that firms operating in socially controversial industries enjoy higher valuations when they issue high-quality CSR reports. I also find that for firms with poor CSR performance, higher-quality CSR disclosure is associated with a decline in firm value, while …