Finance and Financial Management Commons^™

The Rescue Of The Us Auto Industry, Module B: Restructuring General Motors Through Bankruptcy, Kaleb B. Nygaard

Journal of Financial Crises

As the Global Financial Crisis worsened in 2008, credit markets tightened and a broader economic downturn developed, hitting the auto industry particularly hard. The crisis intensified a decade-long decline of the largest US auto manufacturers. Because of its size and importance to the economy, the US government decided to provide assistance to General Motors (GM) to sustain it while it developed plans for its long-term viability. Congress declined to authorize funding for the auto manufacturers, but in December 2008, Treasury provided a bridge loan to GM under the Troubled Assets Relief Program (TARP) to sustain the company until the Obama …

The Rescue Of The Us Auto Industry, Module A: Automotive Bridge Loans, Alexander Nye

Journal of Financial Crises

In 2008, in the midst of the Global Financial Crisis, America’s Big Three automakers neared their breaking point. Two of them, General Motors (GM) and Chrysler, asked Congress for funding to prevent uncontrolled bankruptcies. Policymakers realized these uncontrolled bankruptcies would damage the manufacturing sector. Congress considered but failed to pass a framework conditioning short-term financing on the companies’ producing acceptable restructuring plans. With the companies warning that they could not survive the coming presidential transition, on December 19, 2008, President George W. Bush announced the Automotive Industry Financing Program (AIFP) under the authority of the Emergency Economic Stability Act (EESA) …

Broad-Based Capital Injection Programs, June Rhee, Junko Oguri, Greg Feldberg, Andrew Metrick

Journal of Financial Crises

This paper surveys 36 broad-based capital injection (BBCI) programs and attempts to identify some best (and worst) practices. We argue that it is crucial to distinguish between programs implemented during acute (“panic”) and chronic (“debt overhang”) phases of a crisis, where the goals of program design should be different. In an acute phase, programs should be designed to influence the behavior of bank counterparties, while in chronic phases, the focus should be on bank behavior itself. With this framing, we identify seven themes to guide program design, and provide many illustrative examples for the policymaker’s tool kit.

Farm Succession Planning: Why And How?, Allan Vyhnalek

Cornhusker Economics

If you visit with an ag professional and ask them “What percentage of farmers and ranchers have an estate plan, or an up-to-date estate/succession plan?” the answer will be half, or just less than half. This article will examine why that happens and give some simple steps for anyone to follow to create an up-to-date estate or succession plan. Farmers and ranchers don’t have a plan for a variety of reasons. These might include not ever planning to retire, not wanting to give up control, or not wanting to admit that they will ever pass away. Too often, we don’t …

When Experts Become Liabilities, Singapore Management University

Perspectives@SMU

Criticism can easily hit the confidence of experts and undermine the accuracy of their predictions, new research shows

The Ursinus College Investment Management Company Newsletter, Spring 2022, Scott Deacle, Olivia Defusco, Peyton Vostenak, Stephen Schoenborn, Stevie Benson, Jake Rowland, Jeremy Calabro

Investment Management Company Newsletter

Inside this issue:

Letter from Olivia DeFusco '24

Letter from Peyton Vostenak '22

At a Glance

Investment Team Strategies and Updates

UCIMCO Research

UCIMCO Investment Performance and Analysis

Endowment Outlook

Stock Selection Picks

Women's Fund Picks

Our Teams

Thank You!

How to Contribute

The Stock Market And Politics: An Analysis Of Stock Market Reactions To Political Decisions And World Events, Noah Endicott

Selected Honors Theses

The stock market is influenced by many outside factors around the world. Stock prices change every single day and there are many factors that cause this. This paper is structured as an extended literature review analyzing previous literature on the topic of politics and the stock market. There are six specific types of political decisions and world events analyzed to determine the effect on the stock market. The following topics are political elections, the presidential impact, tariffs, war, the pandemic, and tax cuts. Stock market data is gathered before and after the event takes place to understand the effects on …

The Impact Of Financial Crisis On Mfis Performance In Zimbabwe, Patience Hlupo Ms, Tafadzwa Mukute Mr, Tough Chinoda Ph.D., Edson Chagwedera Mr

The Journal of Entrepreneurial Finance

Our study explores the impact financial crisis has on performance of microfinance institutions in Zimbabwe employing the Vector Autoregression using annual time series data from 1990 to 2018. The findings from our study revealed a positive impact of financial crisis on performance of Microfinance Institutions. We also found a positive effect of gross domestic product, money supply, the first lag of inflation and exchange rates on microfinance institutions performance while the second lag of inflation has a negative effect. Variance decomposition results reveal an increasing long run positive effect of financial crisis on performance is increasing. From impulse response analysis, …

Financial Literacy And Consumer Protection: A Road Map To Digital Financial Access By Smes In Kenya, Salome M. Musau Dr., Stephen M. Muathe Dr., Lucy W. Mwangi Dr.

The Journal of Entrepreneurial Finance

This paper seeks to ascertain the influence of financial literacy and financial consumer protection on digital financial access. The objectives of the study were to find out the effect of financial literacy on digital monetary access, and to find out the effect of f consumer financial protection on digital access of finances of SMEs in Sub County of Ruiru in County government of Kiambu, Kenya. Financial Literacy Theory, Information Asymmetry Theory and Social Learning Theory are the theories that guided formulation of study’s objectives. Descriptive research design was used with the population of interest comprising of all SMEs owners in …

Employee-Friendly Practices And Innovation, Saeyoung Chang, Hoje Jo, Jo-Ellen Pozner

The Journal of Entrepreneurial Finance

We examine the inter-relationships among employee-friendly policies (EFP), innovation through R&D investment, and firm value. We hypothesize that firms with higher levels of innovation and entrepreneurial spirit are more likely to utilize EFP. Furthermore, we speculate that the value-EFP association is more pronounced in firms with high R&D intensity. Consistent with these assertions, we find that EFP is significantly and positively related to R&D investment and the number of patents. EFP is also associated with increased firm value at high levels of R&D investment and high numbers of patents. Furthermore, we find that firms investing more in R&D are more …

The Future Of Family-Operated Resort-Destinations, Colton L. Casselman

Political Science Theses and Capstones

The tourism industry, one of the largest in the world, is arguably one of the most volatile industries we look at. Through the varying sub-sectors of tourism, we narrow in on the family resort industry, predominately in the upper Midwest. You may hear me refer to them as Family-Operated-Resort-Destinations, but they serve unique clientele in a unique way. This industry faces immense pressure from mild tax code changes, politicians, DNR regulations, fishing quality, climate change, gas prices, foreign affairs and more. During this paper, I will examine the future of Family-Operated-Resort-Destinations.

Is Tesla, Inc.’S Market Value Justified Relative To Its Competitors?, Cody Silas

Honors Capstones

No abstract provided.

A Sleeping Giant: Finding An Endogenous Solution For The U.S. Public Pension Underfunding Crisis, Caroline Crawford

Honors Capstones

No abstract provided.

Value-Oriented Business Process Management: Using A Process Reengineering Approach To Identify Productivity Improvement Requirements And Justify Strategic Capital Investment, Laura Vu

Operations Research and Engineering Management Theses and Dissertations

The goal of this praxis is to create a modeling approach that can be used to evaluate and quantify the current efficiency and throughput at a transloading facility. The model will also be used to show the expected metric improvements and financial return of potential operational changes and capital investment scenarios that could be implemented, giving the facility’s management justification to approve these upgrades.

The case study presented will show how to capture and document the current processes within the loading facility, model the relationships between resources and constraints, find appropriate probability distributions to represent the service data, define the …

The Politics Of Bank Opacity, Heng Yue, Liandong Zhang, Qinlin Zhong

Research Collection School Of Accountancy

The distribution of power in the political system shapes the financial reporting opacity of banks. Specifically, banks located in states with senators on the Senate Banking Committee (BC senators) have greater abnormal loan loss provisions than banks in other states. The result is stronger for larger banks and banks with higher risk. In addition, BC senators have a negative effect on the likelihood of banks in their home states receiving enforcement actions, and, more importantly, this effect is stronger for more opaque banks. These findings suggest that politicians, regulators, and banks use opaque financial reporting to facilitate regulatory forbearance. Moreover, …

Why Commonality Persists?, Chyng Wen Tee, Raja Velu, Zhaoque Zhou

Research Collection Lee Kong Chian School Of Business

We show that order flows do not exhibit predictive power on asset returns, and their relationships have been static over time. We use a reduced-rank regression formulation to model both returns and the order flows as endogenous variables, and use investors' sentiment and attention as exogenous factors. We provide empiricalevidence to demonstrate that cross-sectional commonality in attention (sentiment) is linearly (nonlinearly) associated with both returns and order flows at the intraday level, while the sentiment and attentionmeasures themselves exhibit a nonlinear mutual relationship, thus revealing the multi-dimensional aspect of the commonality relationship.

Essays On Information Diffusion And Stock Market Efficiency & Analyst Style, Zuben Jin

Dissertations and Theses Collection (Open Access)

The dissertation consists of three chapters on information diffusion and stock market efficiency and analyst style. The first chapter examines the asset pricing implications of investors’ inattention to non-obvious firm relatedness hidden in earnings calls. This chapter documents that the overlap in attention allocation over various business aspects serves as a time-sensitive proxy for firm relatedness. By employing the unsupervised topic modelling methodology, I characterize the attention allocation of earnings conference call participants (executives, investors and analysts) over topics discussed. I construct a novel cross-firm topic similarity measure that captures difficultto-observe and time-varying firm relatedness compared with existing peer-firm classification …

Information Acquisition And Market Friction, Bo Sang

Dissertations and Theses Collection (Open Access)

My dissertation consists of three papers related to information diversity, acquisition, and asymmetry. One part of the dissertation explores the implications of interactions among different market participants and subsequent price efficiency in the stock market. The empirical findings indicate the information diversity between individuals and institutional investors, as well as an important channel for retail investors to obtain useful information – through insider filings. The remaining part investigates the information asymmetry between issuers and naive investors in the cryptocurrency market. In Chapter 2, I aggregate trading signals from hedge funds and retail investors, in order to examine their information diversity …

Yield Generation Using Decentralized Financial (Defi) Applications, Nathan Walton

Senior Theses

Decentralized financial (DeFi) applications are a new generation of financial service applications, composed of coded smart contracts, and deployed on a blockchain network. These applications offer several methods of generating yield on deposited funds, much like a traditional bank. In this paper I provide a definition of several key terms and a breakdown of the primary mechanisms through which yield is generated. Additionally, I examine three of the main types of DeFi applications, the services they provide, and how they execute these services. I then provide an overview of four strategies involving cash and leverage and estimate the potential benefits …

Transcendent Financial Planning, Joseph Daughtry

Senior Honors Theses

Financial planning is a broad discipline that involves many different categories of work. Professionally, the goal of financial planning is to help a client invest according to his/her personal needs in such a way that minimizes risk. From a Christian perspective, financial planning is about stewarding what God has given. Combining these perspectives means helping a client invest their finances in such a way that minimizes risk and accomplishes the goals of God. While simply stated, this is a complex and profound topic. To bring greater clarity, financial planning can be broken down into categories, four of which are retirement …

The Impact Of Different Worldviews On The Financial Planning Process, Luke Osterhus

Senior Honors Theses

An individual's worldview has an effect on all aspects of their life. Worldview affects the decisions people make, the clothes they wear, the people they interact with, and so much more. What is often overlooked is the impact of worldview on one's view and use of money. Money is universal and everyone has some form of currency or assets. However, the way money is used, whether it is saved, spent, or invested, is often determined by an individual's own concept of money. Additionally, relationships between people are often chosen or influenced by an individual's worldview. Human beings are seen differently …

Effects Of Esg Investing On Returns, Hank De Roover

Senior Honors Theses

Countless researchers have sought to find out if there is a positive correlation between Environmental, Societal, and Governance (ESG) investing and returns that beat the market over the past few decades. To analyze what ESG investing is, the history of the practice, and if there can be any conclusion drawn between ESG investing and returns. A deeper understanding of what goes into returns, including modern portfolio theory, will uncover that ESG securities cannot be efficiently placed on the efficient frontier. Risk associated with ESG stocks cannot only be tied directly to beta, but also to external qualitative forces that make …

Impact Of Risk Perception And Risk Tolerance On Investment Portfolio Decisions, Claire Covey

Senior Honors Theses

Average individual investor returns drastically underperform standard investment benchmarks, with common attributing factors including relying on instincts and overconfidence in trading ability. Neural processing, financial risk, risk perception, and risk tolerance literature show how instinctual reactions form and how those reactions affect risk decision-making under the Prospect theory. Examining the effect of neural processing and risk framing on subjective risk perception allows a measurement of the indirect impact on risk tolerance. The stable factors of risk tolerance directly impact investment risk decisions. There are implications of accurately assessing risk tolerance in a client/advisor relationship. Advisor application of a proper risk …

Seeking Independence A Second Time: Fdi In Uganda’S Development, Halle Jones

Independent Study Project (ISP) Collection

This paper aims to examine the characteristics of foreign direct investment in Uganda and its impacts on development. The paper will look at the current neoliberal paradigm in the international political economy and its role in the developing world.

A practicum-based internship with the Southern and Eastern Africa Trade Information and Negotiations Institute Uganda (SEATINI) guided independent research and provided information through interviews with various organizations and government ministries.

This paper found that neoliberal policies limit development opportunities of FDI. Examples of successful economic growth in various countries provide significant evidence of the importance of government intervention and strategic development …

Esg Investing: From Fad To Force, Erin Cullen

Senior Theses

ESG Investing is the application of environmental, social, and governance factors to identify material investment risks and growth opportunities. Though traditionally viewed as non-financial factors, this paper asserts that ESG factors are indeed financially material. This work first surveys the current state of ESG Investing, its shortcomings, and its success despite these inherent issues. Section II adds a new perspective to ESG research by examining the applications of ESG scores in portfolio management. The study conducts t-tests to answer whether the typical holdings of an ESG mutual fund are more sustainable than those of traditional funds. The paper then focuses …

Building A Future Microfinance Community In Kenya, Jack Spiehs

Senior Theses

The lack of access to financial tools has been a significant problem in many areas around the world for a long time. It prevents certain groups of people from being able to progress financially and improve their economic standing. This issue stems from an overall lack of resources and infrastructure in the area. Without the acquisition of new funds, there is no path to poverty alleviation in underdeveloped areas. Currently, the global response has been to try to provide these resources through various methods, including microfinance activities.

Microfinance institutions have been operating in Kenya for decades. They provide a variety …

Investor Sentiment And Paradigm Shifts In Equity Premium Forecasting, Liya Chu, Kai Li, Tony Xue-Zhong He, Jun Tu

Research Collection Lee Kong Chian School Of Business

This study investigates the impact of investor sentiment on excess equity return forecasting. A high (low) investor sentiment may weaken the connection between fundamental economic (behavioral-based non-fundamental) predictors and market returns. We find that although fundamental variables can be strong predictors when sentiment is low, they tend to lose their predictive power when investor sentiment is high. Non-fundamental predictors perform well during high-sentiment periods while their predictive ability deteriorates when investor sentiment is low. These paradigm shifts in equity return forecasting provide a key to understanding and resolving the lack of predictive power for both fundamental and non-fundamental variables debated …

Do Underwriters Short-Change Corporations Issuing Bonds?, Choo Yong, Jeremy Goh, Lisa Yang

Research Collection Lee Kong Chian School Of Business

We confirm prior evidence that bonds on average are offered at prices below their immediate post-offer secondary market prices. However, in cases where banks lead-manage their own bond offerings the underpricing is significantly less as compared to other non-self-marketed offerings. These findings are robust across various matched samples and selection models. Our results suggest that the bond offering process is characterized by substantive agency conflicts between shareholders of corporations (issuers) and underwriters.

Unconventional Monetary Policy And Disaster Risk: Evidence From The Subprime And Covid–19 Crises, Gustavo S. Cortes, George P. Gao, Felipe B. G. Silva, Zhaogang Song

Research Collection Lee Kong Chian School Of Business

We compare the interventions conducted by the Federal Reserve in response to the subprime and COVID–19 crises with respect to their effectiveness in reducing disaster risk. Using model-free measures of disaster risk derived from daily options data, we document that interventions in response to both crises reduced tail risks in domestic equity markets. The spillover effects of the two crises have been markedly dissimilar. While subprime interventions are generally characterized by negative spillovers to international equity markets, policy responses to the COVID–19 crisis are generally associated with positive spillovers. We interpret these results as consistent with the different degrees of …

Non-Gaap Earnings And Stock Price Crash Risk, Charles Hsu, Rencheng Wang, Benjamin C. Whipple

Research Collection School Of Accountancy

We investigate whether non-GAAP earnings disclosures increase stock price crash risk. Consistent with non-GAAP disclosures allowing managers to inflate investors' perceptions about firm performance, our results indicate that income increasing non-GAAP reporting increases crash risk. We also find that managers can use non-GAAP reporting as a substitute for earnings management to withhold bad news from investors (the traditional explanation for crashes). Finally, we find a positive association between non-GAAP reporting and the likelihood of subsequent events that can trigger a crash. Overall, our evidence is consistent with some non-GAAP disclosures exposing investors to risks of large and sudden price declines.(c) …