Finance and Financial Management Commons^™

Digging Into Selection Criteria For Accelerator Acceptance: What Kind Of Owners Are More Attractive?, Veronika Ermilina, Matthew Farrell, Fatemeh Askarzadeh

Management Faculty Publications

Drawing on signaling theory, we aid in the identification of the rarely acknowledged impact of business owner’s features on acceptance to accelerator programs. Using a multi-national sample of 10,298 observations for startups in 166 countries over 2016-2018, we show that accelerators do not evaluate applicants uniformly. We find that entrepreneurs from developing countries are less likely to be accepted by accelerators than entrepreneurs from developed economies. Counterintuitively, we also find an advantage for female entrepreneurs in accelerator acceptance. Further, our results suggest a positive impact of education. Accelerators are a growing provider of entrepreneurial resources and a main driver of …

The Effects Of Ceo Dismissal Risk And Skills On Risky Corporate Decisions And Ceo Compensation, Son T. Dang

Theses and Dissertations in Business Administration

This dissertation consists of three distinct essays on the effects of CEO dismissal risk on M&A megadeal decisions, the association between CEO compensation and generalist managerial ability in the presence of CEO dismissal risk, and the alignment of the initial compensation of new CEOs following CEO dismissals with their managerial ability.

In Essay 1, I study the link between CEO dismissal risk and risky M&A decisions and find that higher-dismissal-risk CEOs engage in more M&A megadeals than their counterparts. Such megadeal transactions lead to lower acquirer post-M&A abnormal returns, suggesting that risky investment decisions are driven by CEOs’ career concerns. …

Two Essays On Ceo Overconfidence In Relation To Speed Of Adjustment Of Firm Financial Policy And Ceo Inside Debt, Xiang Long

Theses and Dissertations in Business Administration

This dissertation is a thorough examination of CEO overconfidence, and consists of two essays. The first essay focuses on the relationship between CEO overconfidence and the adjustment speed of firm financial policy. No research has examined the relationship between CEO overconfidence and firm financial policies adjustment speed. Previous studies focus solely on the adjustment speed of leverage, we are motivated to examine the adjustment of firm leverage and the adjustment of cash holdings together because there is evidence that firm leverage and firm liquidity are related. We find that CEO overconfidence places an important role in adjusting firm leverage and …

Three Essays On Ceo Characteristics And Corporate Bankruptcy, Rajib Chowdhury

Theses and Dissertations in Business Administration

Scholarly studies have focused on the impact of managerial characteristics on various corporate activities. Following this stream of literature, this dissertation empirically examines the potential effects of three major Chief Executive Officer (CEO) characteristics, i.e., CEO ability, CEO risk taking behavior induced by compensation structure, and CEO overconfidence on corporate bankruptcies. Essay 1 examines whether chief executive officers (CEOs) are to be blamed for corporate failure. Using alternative measures of CEO ability, we document that high-ability CEOs are less likely to be associated bankruptcy. Bankruptcy-related high-ability CEOs manage to salvage their post-bankruptcy careers either with the reorganized firms or with …

Two Essays On The Microstructure Of The Housing Market: Agents' Diffused Effort And Sellers' Behavior Bias, Zhaohui Li

Theses and Dissertations in Business Administration

For the first essay, we generalize the classic Williams [1998 RFS] brokerage model by introducing the diffused effort. That is, the agent can cross-utilize effort spending on one listing to another one. Besides, the agent can manage heterogeneous housing assets. One counterintuitive finding in Williams’ paper is the absence of the agency problem. As a special case in our model, we recover the agency problem. We examine the positive externality due to the diffused effort and show that it depends on the agent’s inventory size. Hence there exists a trade-off between agents’ effort spending on existing listings and on finding …

Two Essays On The Effects Of Organization Capital On Firm Behavior, Andrew Root

Theses and Dissertations in Business Administration

A growing stream of finance literature involves measuring the effects of organization capital (“OC”) on investment decisions, financial policy, and firm value. Li, Qui & Shen (2018) use the exogenous event of a merger or acquisition to determine whether high OC acquirers perform better. We extend the OC literature by considering economic policy uncertainty (“PU”)(Baker, Bloom & Davis, 2016), which is also exogenous to the firm, to determine the effect of OC on firms in the face of PU. Univariate tests show that high OC firms take more investment risk, have lower leverage, higher cash, lower total shareholder payouts, and …

Two Essays On Investor Attention, Investor Sentiment, And Earnings Pricing, Qiuye Cai

Theses and Dissertations in Business Administration

This dissertation proposes novel direct measures for both firm-level and market-level investor attention and investor sentiment and provides new empirical evidence on the effects of investor attention and investor sentiment on earnings pricing.

The first essay proposes novel direct measures for both market-level and firm-level attention using user activity data from StockTwits.com. To the best of my knowledge, this is the first direct measure of market-level attention. By measuring market-level and firm-level attention separately, I am be able to not only distinguish between attention allocated on market level and firm level but also detach attention from equilibrium outcomes. I document …

Two Essays On Bitcoin Price And Volume, Mohammad Bayani Khaknejad

Theses and Dissertations in Business Administration

Bitcoin is a decentralized peer to peer digital transactions system that was introduced in 2009 in the aftermath of the financial crisis. Since its introduction, it has had a volatile journey, being adopted by computer programmers, cyber punk enthusiasts, criminals, and financial investors. While the future of bitcoin is still not clear, it has been widely adopted by many, not necessarily as a new method of transactions, but rather as a new investment vehicle. Being a new asset class, there are many unknown financial characteristics to be investigated about bitcoin and in this dissertation, we try to explore two of …

Three Essays On Ceo Characteristics And Corporate Decisions, Trung Nguyen

Theses and Dissertations in Business Administration

Recent studies have stressed the importance of managerial fixed effects on firm investment decisions. Following this stream of research, this dissertation empirically investigates the potential effects of two major Chief Executive Officer (CEO) characteristics, i.e. risk preferences and potential mobility, on corporate decisions such as merger and acquisition (M&A) and corporate social responsibility (CSR) investments.

Essay 1 examines whether the variation of M&A stock returns around the 2008 financial crisis is associated with shareholders’ increased loss aversion as a result of undergoing financial losses. The results show that acquisitions carried out by CEOs with risk-averse inducing compensation (inside debt) before …

How Ceo Wealth Affects The Riskiness Of A Firm, Sonik Mandal, Charlie Swartz, Sanjib Guha, Carl B. Mcgowan Jr.

Finance Faculty Publications

The objective of this paper is to analyze the relationship between the ownership level of managers and the risk averse behavior of the firm. We measure the ownership level of the managers by the ratio of their ownership of the company relative to their total wealth for a sample of 69 individuals from the Forbes 400 list of the wealthiest individuals in the world for the period from 2001-11 using an unbalanced panel data analysis. The dependent variable is the Altman Z-score of each firm and we further test these relationships using financial leverage. The independent variables are delta and …

When Fund Management Skill Is More Valuable?, Feng Dong, John A. Doukas

Finance Faculty Publications

Does fund management skill allow managers to identify mispriced securities more accurately and thereby make better portfolio choices resulting in superior fund performance when noise trading- a natural setting to detect skill - is more prevalent? We find skilled-fund managers with superior past performance to generate persistent excess risk-adjusted returns and experience significant capital inflows, especially in high sentiment times, high stock dispersion and economic expansion states when price signals are noisier. This pattern persists after we control for lucky bias, using the "false discovery rate" approach, which permits to disentangle manager "skill" from "luck".

Innovation In Economic Education, Mariam T. Abdelhamid

Information Technology & Decision Sciences Faculty Publications

(First paragraph) Economic integration in the K-16 space is one facet of the American education system that depicts inadequacy yet potential. Mary Beth Henning alongside several educational specialists and economists illustrate how economics can be taught in a multidisciplinary manner through the mandated disciplines, such as math, reading, and history. The authors of this book demonstrate the need for students to develop an economic way of thinking through three themes focusing on: interdisciplinary integration of economics, blended learning, and economic educator preparation. I would highly recommend this book to K-16 educators looking to integrate economics into core academic subjects through …

A Systematic Public Capital Management And Budgeting Process, Arwiphawee Srithongrung, Juita-Elena (Wie) Yusuf, Kenneth A. Kritz

School of Public Service Faculty Publications

This chapter introduces the readers to a public capital management and budgeting process and its role in generating public infrastructure networks. The main purpose of the chapter is to describe the normative public capital management and budgeting practices that are recommended by the public finance literature. These normative practices are segregated into four main components: (1) long-term capital planning, (2) capital budgeting and financial management, (3) capital project execution and project management, and (4) infrastructure maintenance. Given that the literature recommends specific practices to maximize efficiency in public capital spending, the four main components, combined, are referred to as the …

Summary, Initial Observations, And Getting To A Tentative Theory Of Public Investment Behavior, Arwiphawee Srithongrung, Juita-Elena (Wie) Yusuf

School of Public Service Faculty Publications

This chapter evaluates the 12 countries' capital management practices according to the systematic public capital management and budgeting process described in Chapter 1. The chapter characterizes and classifies the management practices of the twelve countries based on the authors' evaluation using the case study descriptions. The authors offer some initial observations based on comparisons across the case study countries and analysis of relationships between capital management and budgeting practices and political, economic, and public sector variables. The chapter proposes a tentative theory of public investment behavior and offers five propositions regarding the factors driving different practices across the case study …

2017 Costliest Year Ever For Weather-Related Disasters, Betsy Hnath

News Items

No abstract provided.

Does The Market Believe White Knights And Hostile Bidders Are Acting In Their Shareholders' Interest?, John M. Griffith, Mohammad Najand, Jiancheng Shen

Finance Faculty Publications

This study examines why white knights suffer significant losses while their rival hostile bidders experience significant abnormal gains. We address two research questions: 1) Does the market believe that white knights and hostile bidders are acting in their shareholders' interest? 2) Does Tobin's q explain why white knights suffer significant losses and hostile bidders experience significant gains upon the announcement of their bids? The results show that hostile bidders are value-maximizing investors and white knights are not acting in their shareholders' interest. Instead, white knights suffered significant reductions in value and historically have not maximized the wealth of investors

Random Walks And Market Efficiency: Evidence From Real Estate Investment Trusts (Reit) Subsectors, Fahad Almudhaf, Andrew J. Hansz

Finance Faculty Publications

This paper investigates the random walk behavior of real estate investment trust (REIT) subsectors using monthly return data from January 1994 to July 2015. Using variance ratio tests, we examine subsectors of lodging/ resorts and self-storage and find that they do not follow a random walk, contradicting the weak-form efficient market hypothesis. Nonparametric runs tests help us find that office, industrial, mixed, free standing, shopping centers, apartments, manufactured homes, and timberland subsectors are weak-form efficient. The evidence in this study supports the idea that some subsectors are more informationally efficient than other subsectors. Copyright © 2018 The Author(s).

Three Essays On Ceo Risk Preferences, And Ability, Corporate Hedging Decisions, And Investor Sentiment, Sonik Mandal

Finance Theses & Dissertations

The derivative hedging research has looked at why firms and how firms hedge and if it increases value for their shareholders. In this dissertation we investigate the relation between CEO risk preferences and ability and whether if affects their hedging decisions and firm value.

In our first essay, we challenge the theory and previous empirical evidence that showed CEO risk preferences affects hedging. Using a sample of Fortune 500 firms and 5 years of panel data, and using inside debt (i.e., CEO pension and deferred compensation) and the CEO Vega and CEO Delta, as proxies of CEO risk preferences, we …

Essays On The El Niño Anomaly And Stock Return Predictability, Zhijun Yang

Finance Theses & Dissertations

This dissertation is to examine the impact of the El Niño phenomenon on the international stock market, both at the aggregate level and the portfolio level.

In first essay, I study the predictive relation between the El Niño phenomenon and international stock market aggregate returns. I find that the El Niño anomaly can predict all 14 countries’ stock returns. Specifically, the El Niño unconditional effect can predict stock return negatively in Japan, Malaysia, and South Africa, while the El Niño conditional on winter season can predict positively stock returns in 13 countries’ stock markets except for Japan. This conditional effect …

Two Essays On Forced Ceo Turnover During Envy Merger Waves, And Dividends, Bader Almuhtadi

Finance Theses & Dissertations

Scholars have provided different theories that aim to explain merger waves throughout the years. However, a recent stream of the finance literature addresses the behavioral aspect behind mergers waves and imply that envy motivated CEOs tend to create merger waves. On the other hand, the decision to oust a CEO is considered one of the most important corporate decisions made in the lifetime of corporations. In Essay 1, we participate into the study stream by focusing on whether the incident of forced CEO turnover is higher during the late stages of merger waves where envy turns out to be more …

Three Essays On Mutual Funds, Fund Management Skills, And Investor Sentiment, Feng Dong

Finance Theses & Dissertations

The mutual fund research focus has switched from whether average active fund managers have fund management skill to whether a subset of active fund managers have skills that produce investor benefits. In this dissertation we participate into the study stream by investigating the relation between managerial skills possessed by mutual fund managers and fund performance.

Essay 1 focuses on whether investor sentiment affects the performance of skilled mutual fund managers. Stocks during periods of high investor sentiment are more likely to have noise, while during low investor sentiment periods stocks are more likely to trade close to their fundamental values. …

News And Social Media Emotions In The Commodity Market, Jiancheng Shen, Mohammad Najand, Feng Dong, Wu He

Finance Faculty Publications

Purpose--Emotion plays a significant role in both institutional and individual investors' decision-making process. Emotions affect the perception of risk and the assessment of monetary value. However, there is a lack of empirical evidence available that addresses how investors' emotions affect commodity market returns. The purpose of this paper is to investigate whether media-based emotions can be used to predict future commodity returns.

Design/methodology/approach--The authors examine the short-term predictive power of media-based emotion indices on the following five days' commodity returns. The research adopts a proprietary data set of commodity-specific market emotions, which is computed based on a comprehensive …

How Costly Is A Misspecified Credit Channel Dsge Model In Monetary Policymaking?, Takeshi Yagihashi

Economics Faculty Publications

This paper examines whether misspecification in credit market friction could be costly in the context of monetary policymaking. Using two widely known dynamic stochastic general equilibrium (DSGE) models, we simulate a hypothetical financial crisis and examine how each model performs when the misspecification occurs in the credit channel. We demonstrate that monetary policy suggested by misspecified models tends to destabilize the economy during crisis, even though one of the two models does reasonably well in estimating policy-invariant model parameters. We also show that the opportunity cost of using a misspecified model is high relative to the outcome achieved under a …

Profit Based Simulation Model For The Rail Transportation Industry, Mark Patrick Doran

Engineering Management & Systems Engineering Theses & Dissertations

Schedules often conflict in the rail transportation industry. Operations managers assign resources and make scheduling decisions with no visibility of the revenue, cost, and profitability characteristics of the route they are manipulating. Transit speed decisions focus on ensuring trains safely reach their destination on time with little regard given to the actual service needs of the customer. Although all customers want on-time deliveries, few actually pay a premium to garner this level of preferential treatment. Operating in this type of environment results in decisions that severely erode profits.

In this dissertation, a simulation model referred to as the Rail Profit …

Two Essays On Shareholder Base, Firm Behavior, And Firm Value, Yi Jian

Finance Theses & Dissertations

Most companies spend significant time and attention to managing their shareholder base out of the belief that significant stock market benefits can be reaped if they can identify and attract the right shareholders. Consistent with the opinion of practitioners, many financial economists suggest that the shareholder base is an important determinant of firm value and corporate policies (Lins and Warnock 2004; Brav, Graham, Harvey, and Michaley 2005; Bodnaruk and Ostberg 2013). Despite the importance of the shareholder base, research on the topic has been scant. What’s more, previous studies have reported conflicting results regarding the effect of the shareholder base …

Two Essays On Ceo Inside Debt Holding In Relation To Firm Payout Policy And Financial Reporting, Asligul Erkan

Finance Theses & Dissertations

This dissertation is a thorough examination of CEO inside debt holding, and consists of two essays. The first essay focuses on the relationship between CEO inside debt and firm payout policy. Previous studies document that higher CEO inside debt is associated with lower firm payout which is explained by CEO’s motivation to preserve cash either in order not to default on debt obligations or in order to keep cash available for his future pension benefits. This study investigates how do excess cash, overinvestment risk, and firm-specific information asymmetry affect this negative relationship, and examines net payout to shareholders as well …

What Citizens Want To Know About Their Government’S Finances: Closing The Information Gap, Meagan Jordan, Juita-Elena (Wie) Yusuf, Martin Mayer, Kaitrin Mahar

School of Public Service Faculty Publications

There is an information gap between citizens and their governments when it comes to government finances. The inherent complexity of fiscal policy makes it exceedingly difficult for effective public participation. Effective public participation in fiscal decision making must address informing or educating the citizenry with accurate and meaningful government financial data. Better understanding citizen wants and perceptions is critical to closing the information gap between users and providers of financial information. This study uses information gathered from focus groups with residents of Norfolk, Virginia that asks what government financial information they want and how to make that information useful. Results …

Two Essays On Short Selling, Zhaobo Zhu

Finance Theses & Dissertations

This dissertation provides some new evidence that the information contained in short selling is informative about future returns, confirming the role of short sellers in the price discovery process.

The first essay examines the cross-sectional relation between the change in short interest and expected stock returns. NYSE/AMEX stocks with large decreases (increases) in short interest over past medium-term horizon experience significant and positive (negative) abnormal returns. Moreover, the positive abnormal returns are larger in absolute value and are more persistent than negative abnormal returns. The return spread between bottom and top deciles is economically and statistically significant and persistent. The …

Essays On The Equity Risk Premium, Mohamed Mehdi Rahoui

Finance Theses & Dissertations

The equity risk premium (ERP) is an essential component of any asset pricing model both for academics and practitioners alike. Nevertheless, the financial literature does not accord much attention to the ERP estimation issues (Damodaran, 2015). The first chapter of this dissertation gives a summary of the recent literature review on the subject of the ERP. The second chapter explores four of the most commonly cited models in literature for estimating the ERP: the Historical Mean of Realized Returns Model (HMRRM), the Dividend Discount Model (DDM), the Free Cash Flow Model (FCFM), and the Sharpe Ratio Model (SRM). The results …

Two Essays On Investor Emotions And Their Effects In Financial Markets, Jiancheng Shen

Finance Theses & Dissertations

This dissertation provides empirical evidences on media-based investor emotions in predicting stock return, conditional volatility, and stock and bond return comovements.

We first studied the interaction between US media content and the US stock market returns and volatility. We utilize propriety investor sentiment measures developed by Thompson Reuters MarketPsych. We select four measures of investor sentiment that reflect both pessimism and optimism of small investors. Our objective is two-fold. First, we examine the ability of these sentiment measures to predict market returns. For this purpose, we use dynamic Vector Auto-Regressive models. Second, we are interested in exploring the effects of …