Finance and Financial Management Commons^™

Analyst Non-Gaap Reporting: When Do Equity Analysts Adjust Gaap Earnings – An Application Of Text Based Firm Complexity, Patrick Chen

CMC Senior Theses

Equity analysts adjust GAAP earnings to report non-GAAP figures that they believe better represent a firm’s current and future performance. The importance of such non-GAAP(street) figures has been determined and accepted by the literature, but the process in which analysts arrive at such figures is less understood. I apply a newly defined measure of firm complexity using text based analysis of firm annual reports and investigate its effect. When complexity increases, it becomes harder to individuate different components of a system. When that system is a firm, complexity then increases the difficulty in determining an accurate measure of performance. The …

Stock Market Volatility And Business Cycle: Exploring Cross-Country Spillovers, Nufazil Altaf

DLSU Business & Economics Review

This study explores the impact of the financial crisis on the relationship between stock market volatility and the business cycle. In addition, the possible spillover effects within a cross-country framework are also examined. The study is based on secondary macroeconomic data of monthly frequency for the time period of 1991:01 to 2012:12. Bivariate and multivariate causality techniques are used to arrive at results. Results of the study provide fresh evidence for the existence of strong bidirectional causality between stock market volatility and the business cycle for all sample countries. In fact, this bidirectional causality was found to be strong when …

Tracking School-To-Work Transition Among The Youth In The Philippines, Futoshi Yamauchi, Marites Tiongco

DLSU Business & Economics Review

This paper examines wage variations and turnovers using a unique tracking survey data of Filipino youth who were initially sampled at Grade 6. The analysis also uses mathematics and English test scores at Grade 6 to proxy for cognitive abilities. The empirical results show that returns to education and ability increase with labor market experience and occupational upgrading. The study highlights the importance of academic achievements, measured by both years of schooling completed and academic test scores, in upgrading occupations of youth to realize higher returns in the labor market, even though many youths often start with irregular and undesirable …

How Good Are Equity Analysts? Investigating The Impact Of Analyst Recommendations On Portfolio Performance, Maxwell Dawson

CMC Senior Theses

This paper lies at the convergence of the portfolio optimization literature and the equity research industry. I attempt to quantify the benefit provided to an investor by equity analysts from an asset allocation perspective, and hypothesize that no significant benefit exists because of the incentive misalignments facing analysts as well as the inherent difficulty of valuing stocks. Using a Bayesian regression framework with prior beliefs for alpha generated based on equity analysts’ recommendations, I find no significant difference in out-of-sample performance between portfolios which take analyst recommendations into account and portfolios which do not.

Zoom In, Class Out: An Event Study On Publicly Traded Ed Tech Firm Valuations During Covid-19, Matiss Ozols

CMC Senior Theses

This paper examines how publicly traded Ed Tech firms reacted to negative announcements regarding COVID-19. Using an event study method, I document how an international portfolio of Ed Tech firms react across multiple event windows. The results show that Ed Tech firms reacted positively to the announcement of the first US death and negatively to the World Health Organization’s declaration that COVID-19 was a pandemic. Additionally, differences in geographical location did not impact cumulative abnormal returns across event windows. Finally, firm-specific characteristics such as volatility and financial leverage had little or no significance on stock returns.

Spac Success Factors: Determinants Of Post-Acquisition Share Price Growth, Cade Moffatt

CMC Senior Theses

This paper examines characteristics of Special Purpose Acquisition Companies (SPACs) as determinants of post-acquisition success. I collected data on all SPACs which merged with a target firm between 2016 and the start of 2021. The data set controls for a host of variables including the contractual design of the SPAC, management team characteristics, founder compensation structure, key underwriter data, and performance metrics measured throughout the SPAC’s lifecycle. Using a multivariable regression, I find new and robust insights into the SPAC market. Contrary to current literature, I conclude that the misaligned incentives caused by the initial at-risk capital supplied by founders …

Effects Of Advance Refunding Municipal Bonds After The U.S. Tax Cuts And Jobs Act, Sarah Curry

Doctor of Business Administration Dissertations

The process when U.S. municipalities retire callable bonds early and refinance them with bonds of a lower coupon rate is called advance refunding. The advance refunding of debt is a widespread practice in municipal finance; however, the Tax Cuts and Jobs Act of 2017 removed the option to keep this debt tax-exempt and now requires municipalities to convert from tax-exempt to taxable. The purpose of this research was to evaluate the impact eliminating advance refunding of municipal debt into tax-exempt status has on the municipality’s advance refunding decision making process, specifically at the state level. Municipal governments are still …

Relationship Between Working Capital Management, Strategies, And Performance Of Nigerian Manufacturing Firms, Ayebainasuoton Francis Alagoa

Walden Dissertations and Doctoral Studies

Many Nigerian manufacturing firms have faced working capital management anomalies due to concerns of balancing profitability and liquidity that led to most business failures. To remain competitive corporate managers and business leaders of manufacturing firms need to operate optimally in working capital by understanding the association between working capital management (WCM), working capital strategy (WCS), and performance. Using the cash conversion cycle theory as the linchpin, the purpose of this quantitative correlational study was to examine the relationship between WCM, WCS, and performance. The study utilized secondary financial data spanning 2014 to 2018 from a random sample of 54 publicly …

Retrospective And Forecasting Analysis Of Increased Long Term Care Demand In Niagara, Breanne Alissa Hines

Walden Dissertations and Doctoral Studies

A problem exists within the Canadian healthcare system as many patients experience longer lengths of stay (LOS) in acute care (AC) and complex care (CC) beds within hospitals because of a lack of long term care (LTC) facilities. The purpose of this study was to evaluate the extra days patients wait for placement and assess the benefits of increasing the number of LTC beds. The theoretical framework used was the four-level model of the health care system. Research questions involved 2017-2019 data for the number of LTC beds required to eliminate waits and evaluate beds needed in the future. This …

Small And Medium Scale Firms Financing Strategies In Nigeria, Anthony Ogochukwu Chukwu

Walden Dissertations and Doctoral Studies

Past studies highlighted that small and medium scale enterprises contributions to nations’ economy have been minimal due to their inability to access the sufficient funds for their operations. The challenge is that small business owners lack the right strategies to raise finances required for business operations. The purpose of this study was to explore the lived experiences of small and medium scale enterprise owners in raising of finances from lending institutions. The conceptual framework emphasized the concepts of business environment, financing institutions, knowledge, and experience of small business owners as related to small and medium scale enterprise funding. The research …

Asymmetry Risk And Asset Pricing, Jiahao Gu

Graduate Theses, Dissertations, and Problem Reports (ETD)

The dissertation primarily focuses on asymmetry risk and its role in asset pricing. Asymmetry risk is a crucial component of systematic risk. However, it does not attract much attention, probably because of the misconception that it is similar to other asymmetry measures (e.g., skewness). Chapter 1 defines the asymmetry risk. The risk indifference curve (RIC) predicts two asymmetry premiums in the return distribution rather than one in the downside. I also derive the risk-neutral measure of asymmetry risk.

Chapter 2 empirically investigates the asymmetry beta's return predictability and tail risk hedging ability. Consistent with the risk indifference curve, the asymmetry …

Short-Term Capital Flows, Exchange Are Expectation And Currency Internationalization: Evidence From China, Mingming Li, Fengming Qin, Zhaoyong Zhang

Research outputs 2014 to 2021

This paper intended to employ a portfolio approach to assess the effect of exchange rate expectation on Chinese RMB internationalization and empirically test the interactive effects among short-term capital flows, RMB appreciation expectation and the internationalization process using a VAR model with monthly data ranging from February 2004 to December 2020. The results suggest that RMB exchange rate appreciation could lead to an increase in the foreign demand for RMB and RMB denominated assets, while RMB internationalization would attract more short-term capital inflow due to the reduced transaction costs. The empirical evidence from the VAR model estimation confirms the finding …

Honors Research Project Goodyear Business Suggestion, Drew Hodgson, Seth Gwirtz, Isabel Hartzler, Heather Kriston, Savannah Novak

Williams Honors College, Honors Research Projects

Our project takes on the task of evaluating the current market of the tire industry in todays pandemic. We are taking our findings to the local company Goodyear, and supplying suggestions to their firm in order to help their bottom line going forward. At the end of this, we will propose to Goodyear a solution within their firm on whether to pivot, expand, or downsize their current operations.

Less Commute Miles. Decreased Tire Wear. What Would You Do?, Dylan Schwarz, Brendon M. Ford, Brandon D. Hadinger, Abbie N. Pearce, Jacinta M. Pikunas

Williams Honors College, Honors Research Projects

With the flagrant recognition of the coronavirus as one of those most impactful viruses in the history of the world, it is important to study how the effects of such a disease can create troublesome ripple effects in the world. Covid-19 has caused the death of hundreds of thousands of individuals and has negatively impacted the lives of American’s all across the country during the nationwide lockdown. Decreased work commuters, minimal road travel, and little need for car repairs hit the Goodyear Tire and Rubber Company hard. The University of Akron has teamed up with Goodyear to explore such effects …

Organizational And Financial Considerations Of Inter-District School Of Choice On One Small District In The Detroit Metropolitan Area, Lori Lucas

Wayne State University Dissertations

The research study investigated the organizational and financial structure of a school district that participated in inter-district school of choice. The goal was to see if choice, resident and non-resident, had any influence on these structures. The literature that I reviewed highlighted the various organizational and funding mechanisms that school districts need to account for when considering options such as school of choice. This research study was conducted on a smaller scale compared to studies that have been completed on a grander scale. The goal of this study was to review the organizational and financial changes that districts make to …

Mapping The Knowledge Of Islamic Accounting Studies On Shariah Audit: A Bibliometric Analysis, Luqman Hakim Handoko, Sepky Mardian

Library Philosophy and Practice (e-journal)

The issues of shariah audit appeared more than three decades ago along with the progress of the Islamic financial industries. But it is challenging to obtain a study explaining the current state of shariah audit research to date. Therefore, it is necessary to assess the research on the Shariah audit. Thus, this study aimed to analyze and visualize the current state of shariah audit using a bibliometric approach. The bibliometric analysis was conducted by using VOSviewer software. To fulfill this goal, the keywords such as shariah audit, shariah auditing, and its variations were searched from the Scopus database. The articles …

Are Monthly Market Returns Predictable?, Jussi Keppo, Tyler Shumway, Daniel Weagley

Faculty Publications

We document significant persistence in the market timing performance of active individual investors, suggesting that some investors are skilled at timing. Using data on all trades by active Finnish individual investors over almost 15 years, we also show that the net purchases of skilled versus unskilled investors predict monthly market returns. Our results lend credibility to the view that market returns are predictable, without having to specify which variables active investors use to successfully time the market.

Portfolio Construction Under Group Risk Parity Strategy In The Stock Exchange Of Thailand, Warintorn Sornpradit

Chulalongkorn University Theses and Dissertations (Chula ETD)

Risk parity strategy has been commonly applied to construct a portfolio with multiple asset classes. For single asset class, group risk parity is introduced such that risks from each group are equally contributed. This study investigates and compares performances of group risk parity strategy in Thai market under two different grouping methods which are sector and size with non-group risk parity, minimum-variance, and equal-weight strategies. The study mainly focus on two periods which are during 2016-2020 and in years with highly volatile down market. The analysis indicates that there is no clear evidence that group risk parity strategy outperforms others …

Deterring Algorithmic Manipulation, Gina-Gail S. Fletcher

Faculty Scholarship

Does the existing anti-manipulation framework effectively deter algorithmic manipulation? With the dual increase of algorithmic trading and the occurrence of “mini-flash crashes” in the market linked to manipulation, this question has become more pressing in recent years. In the past thirty years, the financial markets have undergone a sea change as technological advancements and innovations have fundamentally altered the structure and operation of the markets. Key to this change is the introduction and dominance of trading algorithms. Whereas initial algorithmic trading relied on preset electronic instructions to execute trading strategies, new technology is introducing artificially intelligent (“AI”) trading algorithms that …

Monday Effect: Trading Patterns Of Individual Investors, Muraleedharan Gopinathan

Walden Dissertations and Doctoral Studies

The efficient market hypothesis (EMH) has served as the central theory in modern finance for more than half a century. The Monday effect, in which returns and trading volumes on Mondays are generally lower than other days of the week, is one of the anomalies of the EMH. Researchers postulated the different investment patterns of individual investors as an explanation for the Monday effect. The purpose of this comparative study is to examine the role of individual investors on the Monday effect in the United States stock market. This study involved using actual individual investor data from the New York …

The Impact Of Financial Education On The Lives Of Cherokee Nation Citizens, Ron Pense

Walden Dissertations and Doctoral Studies

Financial literacy is something that is important for financial well-being for individuals, but it is lacking, leading to problems such as inadequate saving and poor financial decision making. This research was conducted to examine the impact of financial education for citizens of Cherokee Nation on saving and financial decision making and was grounded in prospect theory and quasi-rational economics. Accordingly, the research questions focused on the extent of differences between individuals with and without financial education for decision making and saving as well as the extent demographic factors play a role. The research design was non-experimental causal comparative with financial …

Diversifying Funding Streams For A Nonprofit Behavioral Health Organization, Danielle Hurt

Walden Dissertations and Doctoral Studies

Business sustainability is essential for any nonprofit organization. Revenue diversification can play a key role in business sustainability. In this case study, the revenue diversification practices and challenges of an international, behavioral health, nonprofit organization based out of the western United States were examined. The organization provides training, support, and resources in an experiential modality of behavioral health treatment for clients worldwide. Data collection processes consisted of a review of current revenue diversification literature, semistructured interviews with three senior-level leaders in the organization, and a review of select organizational documents. The Baldrige Excellence Framework for Healthcare provided a proven framework …

Volatility Spillover Between Stock Market And Currency Market Of Pakistan In The Presence Of Structural Breaks, Muhammad Jamil, Hifsa Mobeen

Business Review

This study examines the volatility transmission between the currency market and the stock market of Pakistan in the presence of structural breaks. For this purpose, daily data from the stock market and currency market is analyzed. An empirical investigation is conducted using the bivariate EGARCH model and the test for multiple structural breaks developed by Bai and Perron (2003). This study analyses these markets with the inclusion of sudden changes. Results of the EGARCH model suggest that volatility spillover is positive and bidirectional between these markets of Pakistan.

Active Choice, Implicit Defaults, And The Incentive To Choose, John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian

Faculty Publications

Home-delivered prescriptions have no delivery charge and lower copayments than prescriptions picked up at a pharmacy. Nevertheless, when home delivery is offered on an opt-in basis, the take-up rate is only 6%. We study a program that makes active choice of either home delivery or pharmacy pick-up a requirement for insurance eligibility. The program introduces an implicit default for those who don’t make an active choice: pharmacy pickup without insurance subsidies. Under this program, 42% of eligible employees actively choose home delivery, 39% actively choose pharmacy pick-up, and 19% make no active choice and are assigned the implicit default. Individuals …

Redefining Sustainable Tourism In Covid-19: A Political-Economy Approach, Eylla Laire M. Gutierrez

DLSU Business & Economics Review

Tourism has emerged as a critical sector generating economic growth and development across countries in the world. However, in the face of the outbreak of the COVID-19 pandemic, it is also considered as one of the most heavily hit sectors. Given the backdrop of all the measures implemented to prevent the spread of the outbreak and the changing mindset of actors towards travel, sustainable tourism is expected to play a more critical role in the face of the new normal. This article aims to provide a better understanding of sustainable tourism by utilizing a political economy approach. Specifically, this article …

The Prospect Of Indonesian Government Retail Sukuk: From The Perspective Of Sharia Financial Knowledge, Education, And Behavior, Fajri Adrianto

DLSU Business & Economics Review

As a source of government financing, the Indonesian government’s retail Sukuk is still not as popular as conventional government bonds. The Indonesian government has issued serial retail Sukuks with the code SR to get funds from retail investors, especially those concerned with Sharia values. Sharia financial literacy is expected to determine the success of this Sukuk. This study fills the gap of previous research on financial literacy by investigating the Sharia financial literacy in the investment decision. This study investigates the descriptive analysis of Sharia financial literacy in Indonesia and its relationship with the prospect of retail Sukuk issued by …

Does The Organizer’S Reputation Affect Exhibitors’ Satisfaction?, Luz Suplico, Reynaldo Bautista Jr., Carlo Saavedra

DLSU Business & Economics Review

This research surveyed 229 exhibitors of the Manila FAME Trade Fair held last October 19–21, 2018, in the Philippines to find out if the trade fair organizer’s reputation was significant to exhibitors’ satisfaction. The other variable that was studied to determine if they affected exhibitors’ satisfaction was the quality of service dimensions of booth design and layout, exhibition logistics, venue services, and show management. The quality of these service dimensions was tested using structural equation modeling to determine if there is a relationship between the quality of the service dimensions and the trade fair organizer’s reputation, exhibitors’ satisfaction, and behavioral …

Reinforcing The Role Of Intellectual Property In The Battle Against The Pandemic: The Vowel Framework, Daniel S. Hofilena

DLSU Business & Economics Review

The intellectual property (IP) system plays a vital role in public health crises as everyone should have access to medicines and equipment to protect themselves. Thus, the State can utilize the system for the greater good. An IP-centric approach can be summarized using the simple letters of the vowels: Awareness – for the populace to respect IP rights, they must first be educated as to its value; Enforcement – for infringers to be discouraged, IP holders should have an avenue for the easy enforcement of their rights; Incentivize – for businesses to be encouraged to invest in certain forms of …

Risk Perception In Respect Of Equity Shares: A Literature Review And Future Research Agenda, Ranjit Singh, K. Kajol, Jayashree Bhattacharjee

DLSU Business & Economics Review

The purpose of this paper is to systematically review the literature published on various aspects of risk perception about equity investment. It also aims to raise specific questions for future research. A comprehensive and systematic literature review is done to get the insights of the available literature with an objective to identify the determinants of equity-share-related risk perception and identify its impact that influences equity investment behavior. The study found that risk perception can be measured mainly by using the axiomatic approach, socio cultural group approach, emotional reactions, marketing mix approach, and psychometric approach. It is also found that the …

Executive Compensation And Firm Performance In New Zealand: The Role Of Employee Stock Option Plans, David K. Ding, Ya Eem Chea

Research Collection Lee Kong Chian School Of Business

We examine the role of employee stock option plans (ESOPs) in mitigating agency problems in New Zealand firms. We find that ESOPs have a significant and positive effect on firm performance relative to their non-ESOP counterparts. This relation appears within a year from the first ESOP announcement, and for two to four years after the announcement. Our results show that ESOPs improve corporate performance by 10 times the cost of the ESOPs’ adoption in the first year of issue. The improvement persists for four years after the first issuance. These findings confirm the effectiveness of employee stock option plans for …