Finance and Financial Management Commons^™

Political Connectedness, Firm Performance And Corporate Risk Taking: Are Emerging Markets Different?, Augustine Tarkom

Electronic Theses and Dissertations

Existing literature exploring the effect of politically connected firms on their performance and risk-taking seems to offer decisive results for the emerging and the developed market. However, from professionals and anecdotal evidence, both markets do not exhibit similar characteristics. Considering these characteristics, instability of the government, lack thereof of adequate governance structure, I revisit the topic. This study comprises 27 advanced and 20 emerging economies for the years 1992 through 2016. I find that sound political environment drives risk-taking in advanced markets, while political connections drive corporate risk-taking in emerging markets. I also find that political institutions and political connections …

Strategies To Reduce Risks Associated With Corporate Social Responsibility Lending, Victor Johnson

Walden Dissertations and Doctoral Studies

Bank managers have transacted six trillion dollars of new loans in low and moderate income (LMI) communities because of the Community Reinvestment Act (CRA) mandate. CRA originated mortgages accounted for over 42% of the defaulted loans because of limited risk strategies. Based on the Aguilera conceptual framework, the purpose of this exploratory single case study was to explore the strategies CSR bank managers used to reduce the risks associated with lending in LMI communities. Data were collected and analyzed from semistructured interviews of five bank managers working in one financial organization located within the U.S. Northeast. Data also included the …

Regulatory Changes, Board Monitoring And Earnings Management In Nigerian Financial Institutions, Ishaq Ahmed Ishaq Ahmed Mohammed, Ayoib Che-Ahmad, Mazrah Malek

DLSU Business & Economics Review

This paper explores the heterogeneity of board of directors and shareholders involvement in the audit committee in addressing the question of whether the board of directors and audit committee shareholders are effective in suppressing earnings management after the implementation of 2011 revised Code of Corporate Governance in Nigeria. The paper utilized data generated after the implementation of the new Code. It examines explicitly board effectiveness and audit committee shareholder chairman on earnings management in Nigerian financial institutions. The study utilizes a dynamic panel data model of the generalized method of moment (GMM) in analyzing the data. The empirical results suggest …

M&A Performance: Market’S Initial Reaction As An Unbiased Indicator Of Post-Acquisition Performance, Nikolaos Papageorgiou

CMC Senior Theses

This paper investigates the reliability of the stock market’s initial reaction to M&A announcements as a predictor of actual post-acquisition performance. The two prevailing methods for evaluating M&A performance are event studies (stock market-based measures) and accounting-based measures. The present study combines these two performance evaluation approaches in a single empirical examination. Both the post-merger buy-and-hold abnormal returns and changes in ROA are used as actual post-acquisition performance variables. The acquirer’s cumulative abnormal return (CAR) around the announcement is used as the market predictor variable. An econometric model is employed to test the predictive power of the announcement-period CAR on …

What Drives Merger Waves? A Study Of The Seven Historical Merger Waves In The U.S., Katherine Ching

Scripps Senior Theses

Historically, merger and acquisition (or M&A) activity has occurred in cyclical patterns, forming what are known as “merger waves.” To date, there have been a total of seven waves. Though it is widely acknowledged that merger waves exist, there is no consensus on what drives these waves. Through both qualitative and quantitative analysis, this paper aims to determine the causes of merger waves and looks at those causes through two different lenses: the neoclassical view, which states that economic shocks cause merger waves, and the behavioral view, which states that increases in merger activity are due to managerial behavior and …

Snapchat's Gift: Equity Culture In High-Tech Firms, Amy Deen Westbrook, David A. Westbrook

Journal Articles

Snap, Inc., the company that owns the platform Snapchat, controversially offered nonvoting common shares to the public in 2017. This Article asks what it means to invest in Snap or other (mostly technology-based) companies in which common shareholders collectibely have little or no power to influence corporate policy. In particular, why do such investors expect to be compensated? This Article explores the familiar rationales for equity investing, including stock appreciation and dividends, and the logical shortcomings of those rationales in these circumstances. Adopting Henry Manne's "two systems" approach to corporate affairs through both law and economics, we show that corporation …

An Examination Of The Stock Market's Effect On Economic Inequality, Nicholas Golina

Williams Honors College, Honors Research Projects

The economic literature on economic inequality has shown that it can negatively impact aggregate demand because it indicates a higher concentration of wealth in the hands of the top 10% as opposed to the poor and middle class, who are more likely to consume. The literature has identified many factors that can lead to increasing inequality. The stock market could be one of those factors since it can either create an upward redistributive effect towards the top 10% or redistributive effect towards the middle class. This paper tested the effect of the stock market on inequality. This study contributes to …

Modeling Genomes To Phenomes To Populations In A Changing Climate: The Need For Collaborative Networks, Nika Galic, Allyson G. Hindle, John P. Delong, Karen Watanabe, Valery Forbes, C. Loren Buck

School of Biological Sciences: Faculty Publications

Condensed Abstract

Climate is changing globally and its impacts can arise at different levels of biological organization; yet, cross-level consequences of climate change are still poorly understood. Designing effective environmental management and adaptation plans requires implementation of mechanistic models that span the biological hierarchy. Because biological systems are inherently complex and dynamic in nature, dealing with complexities efficiently necessitates simplification of systems or approximation of relevant processes, but there is little consensus on mathematical approaches to scale from genes to populations. Here we present an effort that aims to bring together groups that often do not interact, but that are …

How Does The Thai Stock Market Respond To Monetary And Fiscal Policy Shocks?, Suthawan Prukumpai, Yuthana Sethapramote

DLSU Business & Economics Review

This study examines the impacts of monetary and fiscal policy on the Thai stock market using the structural vector autoregressive (SVAR) model. In addition to the data on the market aggregate level, we also consider the response of stock prices at the sectoral level. The empirical results show that the Thai stock market significantly responds to both monetary policy and fiscal policy. However, monetary policy has stronger effects on both real output and stock prices than those of fiscal policy. Fiscal policy shocks affect the stock market only for the next two to three quarters. In addition, sector indices wereused …

Legal Setbacks, Disbursement Sudden Stops, And Fiscal Stimulus: An Empirical Characterization Of A Recent Philippine Fiscal Experience, Lawrence B. Dacuycuy, Mariel Monica R. Sauler

DLSU Business & Economics Review

Recognizing the importance of expanding fiscal spending programs and improving disbursement rates, the Aquino administration implemented the Disbursement Acceleration Program (DAP) in 2011. Acting as a fiscal stimulus but packing a fiscal surprise, the program has reportedly succeeded in improving fiscal expenditure performance until the Supreme Court stopped it based on constitutional grounds. While there were official claims that it was effective in spurring growth, no study has been offered to investigate plausible mechanisms leading to expansions in output. This study proposes the use ofa dynamic stochastic general equilibrium (DSGE)model to stochastically simulate and compute simple fiscal multipliers to understand …

Time-Varying Weather Effects On Thai Government Bond Returns, Anya Khanthavit

DLSU Business & Economics Review

This study proposed a state-space model that allows time-varying weather effects on asset returns. It resolves the model misspecification of the unrealistic, fixed effect assumption commonly made by previous weather studies. The model was applied to examine the weather effects on Thai government bond returns from July 2, 2001, to December 30, 2015. Kalman filtering was used in the estimation. The study found that the weather effects were time-varying. They were wandering in the early sample period but disappearing in the later period. The effects were not co-integrated with the market’s inefficiency levels.

Are Cds Auctions The Tail Wagging The Dog? An Empirical Study Of Corporate Bond Return Volatility At The Time Of Default, Jennifer Mace

CMC Senior Theses

Over the past decade, numerous engineered credit events and cases of market participants manipulating bond prices to influence Credit Default Swap (CDS) auction payouts have occurred. These cases have become increasingly common, and the CFTC has stated they may constitute market manipulation and undermine not only the CDS market but also the credit derivative and default markets. Although there is a plethora of news and media coverage on publicized cases, there is no previous empirical research on evidence of these practices. This paper is motivated by the desire to determine if there is indirect evidence of bond price manipulation around …

The Contributors, Marites Tiongco

DLSU Business & Economics Review

No abstract provided.

Are Filipino Smokers More Sensitive To Cigarette Prices Due To The Sin Tax Reform Law?: A Difference-In-Difference Analysis, Myrna S. Austria, Jesson A. Pagaduan

DLSU Business & Economics Review

Employing a two-part estimation model using the Family Income Expenditure Survey before (2009) and after (2015) the tax reform, our study assessed the impact of the Philippine Sin Tax Reform Act (2012) on cigarette consumption and the responsiveness of cigarette consumption to price changes. The results are consistent with existing studies that cigarette consumption is price inelastic. The demand, however, has become less inelastic in the Philippines over the period 2009 to 2015, indicating a more responsive cigarette demand to price increases. Of the total effect of cigarette price increase on demand, the decrease in consumption by smokers (smoking intensity) …

The Role Of Fiscal Policy In A Natural Disaster-Prone Economy, Dickson Lim

DLSU Business & Economics Review

Theoretical work done on the macroeconomic impact of natural disasters has neglected the role of fiscal policy in stabilizing other sectors of the economy. Although inclusion of a public sector with a fiscal authority in macroeconomic models is common in the literature, most of these models assume that government expenditures are unproductive in that they do not accrue to anyone but the government. In reality, for a model that incorporates natural disaster and foreign aid, having a productive fiscal authority that produces public goods and services, as well as infrastructure, is necessary to capture the real effects of foreign aid …

Deep Habits And Taxes: A Simulation Study, Lawrence B. Dacuycuy

DLSU Business & Economics Review

Using a calibrated dynamic model that embeds endogenous fiscal policy tools, this note provides simulation evidence on the effectiveness of tax and fiscal spending policies in determining key macroeconomic outcomes. The model was chosen because newly imposed taxes in the Philippines have affected the prices of consumption varieties and plausibly because of deep habits, the pricing policies of firms have become dynamic. Building upon the seminal model of Ravn, Schmitt-Grohe, and Uribe (2006), this note shows that preference structures do have a key role to play in determining the response of private consumption to endogenous fiscal policy. Results show that …

Can Government Bond Replace Rational Bubbles? The Empirical Investigation On Singapore And Thailand, Athakrit Thepmongkol, Pichet Kaytanyaluk

DLSU Business & Economics Review

This paper aims to test the theoretical policy implication on rational bubbles. Many works, including Caballero and Krishnamurthy (2006), Kocherlakota (2009), and Martin and Ventura (2011), suggested that government bonds can rule out rational bubbles. We constructed our own bubble index using the Fourier transformation technique and, as a result, found the empirical support of the theory in the case of Singapore, but not in the case of Thailand. For the case of Singapore, the credibility in an ability to collect tax and the appropriate yield of government bonds are keys to the effectiveness of such the anti-bubble policy. Moreover, …

How Does Value Relevance Of Accounting Information React To Financial Crisis?, Karl Louis Eugenio, Rhobe Mitch Ailarie Parel, Katrina Marie Reyes, Keith Brian Yu, Cynthia Cudia

DLSU Business & Economics Review

The relevance of financial reports rests on the value relevance of accounting information. Since accounting information is value relevant only when used by investors to reflect stock valuations, it takes trust from the users of financial information over the financial statements. The heightened volatility of markets during periods of financial distress or crisis raises the imperative to determine the value of financial information during these periods. The great recession of 2008 also victimized East Asia, and firm strategies were influenced by resulting economic shocks. In this study, we aim to determine how value relevance of accounting information differ before, during, …

Impact Of Cash Holding On Foreign Institutional Holding In Large Manufacturing Companies In India: An Empirical Study, Souvik Banerjee

DLSU Business & Economics Review

Foreign institutions are playing a major role in a number of emerging market economies these days. In India, their investment acts as one of the cornerstones of market movement. In this research paper, it is explored whether cash holding levels have a bearing on the foreign institutional holding in large manufacturing companies in India. Various factors like size, profitability, growth opportunity, lifecycle, prior dividend payout, leverage,and so forth are controlled. Data is analyzed for a period of 16 years starting from the financial year 2000–01. The analysis is done in the form of panel data. The findings of the empirical …

Anticipating Aging And Prospecting Pension For Retirement Well-Being, Roberto E. Javier Jr., Mitzie Irene Conchada, Melvin Jabar

DLSU Business & Economics Review

Filipino young and middle-aged adults anticipate old age positively as it is a mark of achievement in human life but negatively apprehend living through their old age, given the high incidence of poverty among the elderly in the Philippines. The issues surrounding the insurance system, income security, and social pension in old age were all related to unfavorable views about living through the aging years. In-depth group interviews (IGIs) conducted across cities and municipalities in the countryside generated conceptions about aging and concerns about becoming old in a society with no strong social protection for its graying population. A qualitative …

Assessing The Poverty And Distributional Impact Of Alternative Rice Policies In The Philippines, Caesar B. Cororaton, Krista Danielle S. Yu

DLSU Business & Economics Review

Philippine domestic prices of rice are significantly higher than world prices for similar rice quality. The WTO- approved Philippine rice waiver, which allows the government to continue its quantitative restrictions on rice imports, sustains

the price gap in rice and prolongs the heavy burden on poor consumers who spend a significant amount of their income on rice. The results of rice policy simulations using a CGE model with poverty microsimulation indicate that a tariffication of the quantitative restrictions on rice imports, which maintains the level of protection to the local paddy farmers and the utilization of the generated revenue as …

Financial Sector In Singapore, Hwee Kwan Chow, Sai Fan Pei

Research Collection School Of Economics

This chapter reviews the financial development strategies adopted by the Singapore government as it navigates internal and external changes to build a vibrant center of finance in the Asia Pacific region. Sections 2 and 3 provide an overview of the structure of the financial system and the financial governance framework respectively. This is followed by a discussion, in Section 4, on the outward looking development strategy that underpinned the successful development of Singapore’s financial sector. Section 5 highlights the reforms undertaken in the aftermath of the Asian financial crisis that led to the building of a well-diversified and thriving international …

Measuring Fiscal And Monetary Policies Spillovers In Asean, Thi Mai Lien Dau, Yuthana Sethapramote

DLSU Business & Economics Review

This paper aims to comprehensively examine fiscal and monetary policies spillovers to real GDP and inflation in ASEAN-5 countries. We examine the effects of shocks from each of the ASEAN members and advanced economies by employing the global vector autoregression (GVAR) model because it allows us to investigate this issue in a multinational system. The empirical results show several important findings. Generally, both internal and external fiscal and monetary spillovers have a significant effect on all ASEAN-5 countries, although internal monetary spillover seems to be stronger than internal fiscal spillovers. At country level, out of the five ASEAN countries, Indonesia’s …

On Implementation Delays, Marginal Costs And Price Dynamics: A Theoretical Note With Implications For The Philippines, Lawrence B. Dacuycuy, Mariel Monica Sauler, Dickson Lim

DLSU Business & Economics Review

It has been known that longer implementation delays in public investments result in sluggish accumulation of public capital. In models in which public capital determines firm productivity, the longer the duration of implementation delays, the

higher the marginal costs which, in a New Keynesian economy means higher price markups. Consequently, higher mark- ups may increase the inflation rate, leading to an appropriate monetary policy response. Using a dynamic stochastic general

equilibrium (DSGE) model, this theoretical note focuses on the relationships among government investments, firm pricing policy, and monetary policy. It addresses some aspects of public investment, and through simulations, characterizes …

Editor's Note, Marites Tiongco

DLSU Business & Economics Review

No abstract provided.

Trading Regularity And Fund Performance, Jeffrey Busse, Lin Tong, Qing Tong, Zhe Zhang

Research Collection Lee Kong Chian School Of Business

We construct a new measure of trading regularity, capturing the extent to which investors trade on a regular basis. Institutional investors that regularly trade outperform those that trade less regularly. The performance of funds that regularly trade persists for at least a year. Among those who trade most regularly, larger funds perform relatively worse, because they incur higher transaction costs associated with their larger trades. Institutions that regularly trade generate superior performance, in part, by behaving as contrarians and by trading more aggressively on information. By contrast, we find no relation between trading regularity and performance among index funds.

Volatility Spillovers Among Oil And Stock Markets In The Us And Saudi Arabia, Marinela Adriana Finta, Bart Frijns, Alireza Tourani-Rad

Research Collection Lee Kong Chian School Of Business

In this article, we use high frequency data and an identification via changes in volatility approach to assess the volatility spillovers among oil and the US and Saudi Arabian stock markets. We document the existence of asymmetry in contemporaneous spillover effects. Particularly, during the times when oil’s trading hours overlap with the US and Saudi Arabian stock markets, the volatility spillover from oil to the stock markets is higher than the other way around. We highlight the importance of taking into consideration the information present during continuous trading hours of oil, especially during simultaneous trading hours with the stock markets. …

Climate Risks And Market Efficiency, Harrison Hong, Frank Weikai Li, Jiangmin Xu

Research Collection Lee Kong Chian School Of Business

Climate science finds that the trend towards higher global temperatures exacerbates the risks of droughts. We investigate whether the prices of food stocks efficiently discount these risks. Using data from thirty-one countries with publicly-traded food companies, we rank these countries each year based on their long-term trends toward droughts using the Palmer Drought Severity Index. A poor trend ranking for a country forecasts relatively poor profit growth for food companies in that country. It also forecasts relatively poor food stock returns in that country. This return predictability is consistent with food stock prices underreacting to climate change risks.

Intraday Information From S&P 500 Index Futures Options, Kian Guan Lim, Chen Ying, Kian Leong Nelson Yap

Research Collection Lee Kong Chian School Of Business

In this paper we employ intraday transaction prices of liquid E-mini S&P 500 index futuresoptions to form 10-minutes ahead risk-neutral skewness forecasts and show profitable optionstrading strategy net of transaction costs. We do not find profitable trading based on 10-minutesahead risk-neutral volatility and only very marginal cases of profitable trading using kurtosisforecasts. The skewness profitability anomaly may be an indication of informational marketinefficiency in intraday S&P 500 futures options markets, which is contrary to findings usinglonger-span daily and weekly moments. Our results lend credence to the persistence of intradaytrading activities in the markets.

State's Fiscal Dependency And Implications On Monetary Management In Nigeria, Akinboyo O. Lawrence, Apinran O. Martins

Bullion

This study examines fiscal management by States in Nigeria and its potential to sustain growth and development. The study used secondary data from the Bank's Statistical Bulletin and the Nigeria Bureau of Statistics. Information on monthly allocations to States, internally Generated Revenue, Debt stock, total Revenue, and Total expenditure were used to examine fiscal imbalance in the States. Data were collected on statutory allocations to States by the Federation Account Allocation Committee (FAAC), Internally Generated Revenue (IGR), States' debt stock, capital and recurrent expenditure from the Central Bank of Nigeria (CBN) and the National Bureau of Statistics (NBS). Descriptive statistics …