Finance and Financial Management Commons^™

Essays On Corporate Finance, Su Hee Yun

Dissertations and Theses Collection (Open Access)

Chapter 1. The impact of ESG disasters on Green and Brown firms

I investigate the effect of a firm’s prior ESG reputation on the market impact of ESG incidents. I find that firms with a better ESG reputation, i.e., higher ESG ratings, experience less negative stock-market reactions and analysts' forecast revisions compared to firms with a poorer ESG reputation. But managers of Greener firms, when producing earnings guidance, do not forecast a lower impact of these incidents on future earnings. Similarly, actual decreases in future earnings following these incidents are not significantly different between Green and Brown firms. Altogether, the …

Climate Challenges: Central Banks In The Hot Seat – Rethinking Monetary Policy And Educational Activity, Łukasz Kurowski

Journal of Banking and Financial Economics

Global warming poses many challenges for all economic entities. The two main challenges facing all countries are climate change mitigation and adaptation. Central banks also face difficult tasks in this context. The difficulty stems from the impact of climate change on all sectors of the economy. Central banking has to deal with the new challenges created by climate change for monetary policy, macroprudential policy, but also climate education. The aim of the article is to verify to what extent climate change is considered in the central bank’s main objective – monetary policy. Therefore, the article examines the frequency with which …

Assessing And Mitigating The Impact Of Geopolitical Risk Uncertainty On The Indian Financial Sector: A Policy Perspective, Satish Kumar, Amar Rao

Bulletin of Monetary Economics and Banking

The study explores the impact of geopolitical risk uncertainty on the Indian financial sector, focusing on bonds, banking, currency, and the equity markets. It uses a quantile vector autoregression (QVAR) approach to examine shock transmission under different market conditions. Results show that geopolitical risks significantly influence the Indian financial sector, with varying levels of shock transmission across different market conditions. The currency and banking sectors show heightened sensitivity during periods of increased uncertainty. The findings suggest the need for effective monitoring systems and comprehensive risk management strategies to mitigate the adverse effects of geopolitical risks.

Consumers’ Financial Literacy In Poland - The Research And The Resulting Conclusions, Andrzej Bień, Łukasz Gębski

Journal of Banking and Financial Economics

Background & Purpose of the article: The research paper raises important issues in the field of consumer financial literacy in Poland. The authors note that efforts made in financial education are not fully effective and the number of wrong decisions made by consumers is high. The study led to two interesting observations: high self-assessment of knowledge is not confirmed in practice. The mistakes made do not result solely from the lack of knowledge of consumers. They are very often a result of their personality and a way of perceiving reality.

Methods: The authors compared Polish and foreign research results in …

Can Financialisation Counteract Banking Exclusion? A Study On The Example Of The European Union Member States, Tomasz Florczak, Marika Ziemba

Journal of Banking and Financial Economics

The purpose of the article is to assess the relationship between financialization and banking exclusion. The research hypothesis that financialization contributes to the reduction of financial exclusion was also verified. The research was based on an analysis of the variables describing financialization and banking exclusion of 27 European Union countries in the 2014–2021 period. The zero-unitarization method and Pearson’s correlation coefficient were used. The results of the study indicate that a high degree of financialization is found in Croatia, Greece, Cyprus and Portugal. In contrast, the level of banking exclusion is the highest in Finland, Sweden, the Netherlands and Latvia. …

Board Gender Diversity And Its Impact On Financial Performance And Risk-Taking: A Study Of Listed North American Companies, Ambrose Houphouet

Doctoral Dissertations (DBA)

In today's globalized world, gender diversity is increasingly recognized as vital for companies, yet women remain underrepresented in leadership positions. The lack of representation of women in leadership roles and their possible impact on business performance have led to a greater awareness of gender diversity on corporate boards in recent years. However, men dominate in some fields and the representation of women in decision-making levels is very low and it is unclear whether gender diversity brings any benefits to the company in terms of financial performance and risktaking. Therefore, the study examines the impact of gender diversity on financial performance …

Empirical Tests Of The Existence Of Industry Momentum On The Indonesian Stock Exchange, Irene Natalia Verda

The Indonesian Capital Market Review

Momentum is one of strategy to generate return for profit seeker. This research was conducted to see the existence of momentum strategy at the industry level with the object of all stocks on the Indonesia Stock Exchange consists of 880 stocks grouped into 11 industries based on ICB (Industry Classifi- cation Benchmark). Research period start in July 2014 until December 2023. There are 6 industry momentum strategies, 3 strategies to form portfolio quarterly and 3 strategies to form portfolio in each semester. Tests are conducted on mean returns and risk-adjusted returns using the Fama-French Three Factor model. The method of …

Cds Channels Of Influence On Discretionary Accruals, Hao Cheng, Kian Guan Lim

Research Collection Lee Kong Chian School Of Business

Existing studies indicated that firm debt holders can use the credit default swap (CDS) market to hedge their credit risk, and thus they would reduce their monitoring of the firms, leading to largely distressed firms shirking and increasing positive abnormal earnings accruals. Besides providing insurance, however, the CDS spreads also perform price discovery of credit risk information sought by trade creditors and potential lenders who are not protected. High absolute abnormal discretionary accruals or bad earnings quality, especially negative abnormal accruals, would lead adverse CDS price signals that are very costly to the firm. This compels the firm under nondistressed …

Can Corporate Sustainability Performance (Csp) Overcome Indonesia's Corporate Debt Problems?, Johnson Ferry Febrian, Nora Sri Hendriyeni

Jurnal Akuntansi dan Keuangan Indonesia

Based on IMF publications (2022), Indonesian companies have a risky debt level that may cause bankruptcy, so companies are required to make leverage adjustments to return the debt to its optimal level. In recent years, corporate sustainability performance (CSP) practices have been proven to improve performance and overcome financial problems such as debt by integrating sustainability aspects into business processes. Based on stakeholder theory and trade-off theory, this study aims to examine the effect of CSP on leverage adjustment and the role of competitive advantage, equity mispricing, profitability, and firm size in moderating this relationship. This study used a sample …

Do Fundamental Financial Ratios Affect The Company's Stock Price? Indonesia Evidence, Arumega Zarefar, Armadani Armadani

Jurnal Akuntansi dan Keuangan Indonesia

The objectives of this research aims to examine the effect of corporate fundamental financial ratios on stock prices and to examine whether firm age determine stock prices in the perspective of signaling theory. Here Generalized Least Squares (GLS) approach was used as the main analysis technique, and Ordinary Least Squares (OLS) was incorporated for the robustness test. The research was conducted on companies listed on the Indonesia Stock Exchange during the 2014-2020 period. This study finds that return on assets, solvency ratio, and Tobin's Q positively affect stock prices, that cash ratio has a negative effect on stock prices, and …

An Investigation On The Effects Of Fund Manager’S Narcissism On Fund Performance, Ning Zhou

Dissertations and Theses Collection (Open Access)

As the capital market continues to expand, the benefits of securities investment funds have become increasingly prominent. However, for investors, selecting the right investment fund from numerous options can be more challenging than directly choosing stocks. The process of seeking investment opportunities also involves selecting the right fund manager, a step often underestimated by investors. Research in behavioral finance indicates that fund managers tend to exhibit irrational decision behavior under immense pressure and uncertain investment outcomes. Narcissism as a psychological trait may influence fund managers’ decision-making behavior. This study, through questionnaires and empirical analysis, examines the narcissistic traits of Chinese …

The Impact Of Renewable Energy Adoption On State-Level Housing Market Prices, Hernan Checchi

Doctoral Dissertations (DBA)

Renewable energy continues to gain popularity amongst businesses and residents due to the growing concerns on climate change, government regulations and the overall need for a more sustainable energy system. Renewable energy has surged in popularity due to declining costs, and the growing awareness of the need for renewable energy to combat ongoing climate issues. The transition to renewable energy sources such as solar and geothermal power is expected to have a significant impact on various aspects of the economy including the housing market. This research aims to explore the relationship between renewable energy adoption and housing prices in the …

Economic Policy Uncertainty And The Uncovered Interest Rate Parity Of Exchange Rate Determination, Yanyan Freitag

Doctoral Dissertations (DBA)

I argue that the Uncovered Interest Rate Parity (UIRP) relationship depends on the Economic Policy Uncertainty zones (EPU). The UIRP-EPU relationship is state-dependent, non-linear, and asymmetric. Using the monthly data for the sample period January 1999 to December 2023, I test the relationship between changes in the U.S. Dollar in the Euro exchange rate and the spread between the yields on the 10-year U.S. Treasury Note vs. the euro area 10-year convergence bond. The relationship is tested at three different zones or ‘levels’ of the EPU for the U.S. The low, intermediate, and high EPU zones are determined by employing …

Correlation Between Interest Rates And Bank Mergers, Maren Egging

Honors Theses

This paper examines the relation between macroeconomic factors and bank mergers and acquisitions from 1995 to 2022. I build upon the work of Etsy et al. (1994) to determine an updated analysis of how interest rates and stock market returns may influence merger activity in the banking segment. Using a dataset of 1,153 large bank mergers, I perform correlation analyses to draw three main conclusions. Firstly, bank mergers demonstrate weaker correlations with key macroeconomic variables than industrial mergers. Secondly, I observe material differences from the work of Etsy et al. with what appears to be significant changes in underlying relations. …

2024 Private Capital Markets Report, Craig R. Everett

Pepperdine Private Capital Markets Report

The Pepperdine private cost of capital survey was originally launched in 2007 and is the first comprehensive and simultaneous investigation of the major private capital market segments. This year’s survey specifically examined the behavior of senior lenders, asset-based lenders, mezzanine funds, private equity groups, venture capital firms, angel investors, privately-held businesses, investment bankers, business brokers, limited partners, and business appraisers. The Pepperdine survey investigated, for each private capital market segment, the important benchmarks that must be met in order to qualify for capital, how much capital is typically accessible, what the required returns are for extending capital in today’s economic …

Impact Of Esg Ratings On Company Stock Price Returns, Benjamin Mccormick

Honors College Theses

ESG, Environmental, Social, Governance, is a new business philosophy that asserts that businesses have a duty to the environment, their communities, and to act legally and ethically. ESG rating agencies are built around grading public companies on their fulfillment of these objectives. Critics of ESG cite that ESG dilutes the primary purpose of business, to create value for shareholders. This paper uses regression analysis to test whether these perspectives are mutually exclusive. With stock returns as the dependent variable and ESG ratings as the dependent variable of interest, this paper finds a slight correlation between lower returns and companies in …

Financial Assessment Of Executive Decision-Making And Risk Management: A Case Study Of Autozone, Carolina Hollis

Honors Theses

This area of investigation pertains to the business organizational structure, executive summary, and risk management decisions of AutoZone within the 2022-2023 fiscal year. This analysis was performed by examining previous financial records, the yearly 10-K report, and various research databases regarding the financial performance of retail auto part companies. Many different sources were used to gather information about AutoZone. AutoZone has an intricate financial system that maintains the going concern by addressing current issues within the financial world to combat problems they could face in the future. These risk factors include inflation, interest rates, energy prices, political climates, and supply …

A Financial Valuation Of Comcast (Cmcsa), Lucas Marcinkowski

Honors Thesis

The current valuation of the global entertainment and media industry revenue is $2.32 trillion. When investing in the entertainment and media industry, individuals think of the fame and glamorous side of the entertainment industry. However, the industry is fiercely competitive and continuously evolving. Through examining the historical financial statement of the publicly traded media and technology conglomerate Comcast, as well as its competitors, I forecasted the future financial valuation of Comcast utilizing the Discounted Free Cash Flow and Public Comparable Firm Multiples models. This analysis examines the effects of the pandemic and other economic conditions on the entertainment and media …

Moving Forward: Automating A Walmart Executive View From Existing Manual Financial Systems, Alexandra Rosen

Finance Undergraduate Honors Theses

Walmart, the largest retail giant globally, is a company that needs no introduction. Headquartered in Bentonville, Arkansas, it has become synonymous with retail innovation and efficiency. Last summer, I had the unique opportunity to immerse myself in Walmart’s culture and the world of finance and accounting through Walmart's Accounting and Finance Development Program (AFDP) internship. This analysis examines my summer in the program and applies my experience to the importance of in-person office work.

Bidding Strategy For A Wind Power Producer In Us Energy And Reserve Markets, Anne Stratman

Department of Electrical and Computer Engineering: Dissertations, Theses, and Student Research

Wind power is one of the world's fastest-growing renewable energy resources and has expanded quickly within the US electric grid. Currently, wind power producers (WPPs) may sell energy products in US markets but are not allowed to sell reserve products, due to the uncertain and intermittent nature of wind power. However, as wind’s share of the power supply grows, it may eventually be necessary for WPPs to contribute to system-wide reserves. This paper proposes a stochastic optimization model to determine the optimal offer strategy for a WPP that participates in the day-ahead and real-time energy and spinning reserve markets. The …

Finance And Artificial Intelligence, Luke Schawang

Theses/Capstones/Creative Projects

The integration of artificial intelligence (AI) into finance represents a significant evolution in the industry, one that has been ongoing for years but is now accelerating rapidly. This paper explores the various forms and functions of AI, from reactive machines to the potential for superintelligence, and examines its impact on banking, business finance, and investing.

In banking, AI has bolstered cybersecurity and fraud detection, leveraging machine learning algorithms to continuously improve accuracy and efficiency. Similarly, in business finance, AI tools like chatbots and algorithms streamline processes, enhance productivity, and reduce costs. In investing, AI-driven solutions such as robo advisors offer …

Lululemon Strategic Audit, Tessa Mozingo, Olivia Eno, Molly Mitchell, Connor Morrissey, James Eshleman

Honors Program: Senior Projects (Public)

This case study focuses on lululemon, a prominent athleisure apparel company. Our team conducted an audit of the company revolving around strategic business management principles. Our research used publicly available information that included the company’s website, SEC filings, news articles, lululemon’s annual reports, financial statements, IBIS industry reports, and online sources. The goal of this strategic audit is to develop an understanding of lululemon’s business activities and strategies, collect and analyze both internal and external data, and evaluate lululemon based on strategic management concepts.

In this strategic audit, we conduct internal, external, performance, and competitive analyses and an examination of …

Corporate Technological Patent And Financing Accessibility - An Empirical Analysis Based On Startups, Tao Xu

Dissertations and Theses Collection (Open Access)

Technological innovation is not only central to competition among firms but also a crucial driver of economic growth. The process of corporate technological innovation often demands substantial financial support. However, due to information asymmetry and capital constraints, tech startups encounter numerous obstacles in sustaining innovation. Venture capital is instrumental in fostering continuous corporate innovation, providing essential financial support for innovative activities, and playing a key role in achieving core technological breakthroughs. As a significant manifestation of corporate innovative technology, patents can mitigate the information asymmetry between startups and investors by creating a positive patent signal from diverse perspectives. Therefore, investigating …

The Effect Of Massage Therapy On Test Anxiety Experienced By Traditional-Aged Undergraduate Business Students, Jorge A. Pazmiño

Graduate Theses, Dissertations, and Capstones

Test anxiety impacts traditional-aged undergraduate business students and influences their academic performance and overall well-being. This study explored the efficacy of massage therapy (MT) as a means of mitigating test anxiety within this demographic. Building on existing literature that addresses the consequences of anxiety and alternative coping mechanisms, this research study focused on MT as a potential strategy for test anxiety management. The study employed the Adult Manifest Anxiety Scale–College Version (AMAS-C) to gather data from participants at a private liberal arts institution in the East South-Central region of the United States. An experimental group received an MT intervention, while …

The Effects Of Perceived Cultural Conflicts On Employee Retention After Mergers And Acquisitions, Chengpeng Luan

Dissertations and Theses Collection (Open Access)

With China’s deepening medical reform, the state has introduced a series of regulatory policies, which has set off a frenzy of mergers and acquisitions in the medical device industry. Small and medium-sized device distribution companies with small scale and weak strength have closed. Large and powerful large medical device distribution enterprises seize the opportunity to expand mergers and acquisitions rapidly.

Based on the researcher's work experience and data availability, this paper takes an MNC company, M, acquisition of a high-quality local company, K, as the research object. Based on the actual operation of the medical device industry, combined with the …

Efficiency And Sustainability Of Bond Market: Evidence From Aftermarket Trading Of Us Corporate Bond Offerings, Lisa (Zongfei) Yang, Choo Yong, Jeremy Goh

Research Collection Lee Kong Chian School Of Business

We find that for bond offerings that are non-self-marketed, there is a significantly larger proportion of institutional-sized sell trades than buy. In stark contrast, for self-marketed offerings by underwriters, immediate post-offer trading is characterized by a larger proportion of institutional-sized buy trades than sell. We also find evidence suggesting that retail investors, who are initially shut out of the offering deals, buy bonds in the secondary market at a higher price. Our evidence suggests that certain institutional investors receiving allocations of non-self-marketed offerings flip them for a quick profit. The systematic disparity in aftermarket trading immediately following self-marketed versus non-self-marketed …

Jump Diffusion Outperforms Geometric Brownian Motion When Forecasting Bric’S Daily Foreign Exchange Carry Trading Strategy Returns, Marc Kwait

Doctoral Dissertations (DBA)

This research will examine how the Jump Diffusion Model 1 (JDM) accurately outperforms Geometric Brownian Motion2 (GBM) when forecasting the Japanese Yen carry trade daily returns for the BRICs' and three bellwether currency pairs GBP/JPY, EUR/JPY, and PLN/JPY from January 2, 2012, to September 30, 2023. An added innovation within this research is the inclusion of the interest rate return in arriving at the daily cumulative carry trade returns. This is a distinctive and unique feature that offers a different perspective, since many journal articles do not discuss or address the interest earned (long position) component of the FX Carry …

Meme Stocks, Robinhood, And Wall Street: Retail Investors And Changing Market Dynamics, Nick Murray, Spencer Brosnan

Senior Theses

This thesis explores the rise of retail investors in the wake of the COVID-19 pandemic, and how they have changed the landscape of financial markets. We outline the full timeline of the GME and AMC social media craze that exemplified the power of retail investors in the market and investigate the impact the COVID-19 pandemic had on this group. Through the use of VandaTrack, a software that tracks retail investors’ trading activity, we were able to quantify the impact that retail investors have on US equities and ETFs and compare them to the market as a whole. We utilized this …

[Discussions] Vol. 19 Iss. 1

Discussions

This issue of Discussions was published for the Spring 2023 cycle.

U.S. Public Equity Esg Fund Composite And Parnassus Core Equity Fund: Performance And Factor Attribution, Karthik Nemani, Barrett Buhler

Discussions

This is the first paper to examine all U.S. public equity Environmental, Social, and Governance (ESG) funds offered by the Forum for Sustainable and Responsible Investment’s (SIF) institutional member firms from 2005 to 2020. For ease of communication, this will be called the ESG Composite. With a Net Asset Value (NAV) over $150 billion, these funds comprise nearly half of the U.S. public equity ESG investment landscape. The article finds that the ESG Composite maintains performance with the Standard and Poor’s (S&P) 500 total return index on an overall returns basis with lower volatility, indicating greater risk-adjusted returns. Factor analysis …