Finance Commons^™

Two Essays On Finance: The Dark Side Of The Ceo Inside Debt: Evidence From Stock Price Crash Risk And Cybersecurity Risk And Corporate Bond Yield Spreads, Amir Gholami

Theses and Dissertations

This dissertation comprises of two papers. In the first paper, I found that despite being thought of as a governance mechanism, CEO inside debt seems to distort firms’ information environment. My results indicate that the CEO inside debt creates an incentive for managers to hoard bad news to prevent technical defaults, leading to increasing stock price crash risk. My results are robust after addressing endogeneity using the instrumental variable (IV) approach, a difference-in-differences test based on the implementation of Internal Revenue Code Section 409A Final Regulations, and Oster’s omitted variable diagnostic test, and selection bias using the propensity score matching …

Two Essays On Finance: Co-Opted Directors And Mergers And Acquisitions And The Impact Of Biodiversity Risk On The Cost Of Bank Loans, Fariba Gholami

Theses and Dissertations

This dissertation comprises of two papers. In the first paper, co-opted board members, those appointed after the CEO assumes office, are poor monitors and, contrary to prior assumptions, ineffective advisors. I show that board co-option is associated with suboptimal merger and acquisition (M&A) decisions, adverse deal characteristics, and lower acquirer’s short- and long term returns and operating performance. These results are robust to the use of propensity score matching, entropy balancing, Instrumental variable using 2SLS, and difference-in-differences to address selection bias and endogeneity. Cross-sectional evidence indicates that the negative effects of board co-option are more pronounced when boards are less …

Two Essays On Finance And Culture, Gia Han Ngoc Doan

Theses and Dissertations

This dissertation consists of two essays on finance and culture. The first essay examines the relationship between corporate quality culture and product recalls. The results show that firms with a stronger quality culture are less likely to have product recalls. This relationship is stronger for firms with more female directors and higher levels of managerial ability. We also find that for firms in high-tech industries, the impact of quality culture on product failure is more profound. The results are robust to various endogeneity tests and alternative models. Our findings support that a firm’s quality culture significantly influences product success and …

Essays In Real Estate And Household Finance, Paul Freed

Theses and Dissertations

The first chapter examines how the deterioration of a household’s balance sheet alters its propensity to sue another entity for damages in civil court. Using state-level administrative judicial data longitudinally linked to the value of individual plaintiffs’ real estate holdings, this study finds that a 5% decline in housing value is associated with an 8% increase in the probability of filing a civil suit. Similarly, a household entering a negative equity position on its mortgage is associated with a 14% increase. When facing distress, households are more likely to engage in civil action against both firms and other households, particularly …

The Impact Of Financial Inclusion On Inflation In The Mena Region: Oil Vs Non-Oil Countries, Jailan Elsaid

Theses and Dissertations

The study examines the impact of financial inclusion on inflation as a tool for monetary policy effectiveness in the MENA region, separating the analysis into oil and non-oil countries from 2004 to 2022. The Principal Component Analysis (PCA) technique is used to create a multidimensional index of financial inclusion through usage and access dimensions. Additionally, PVAR GMM estimation and Granger causality tests are implemented to analyze the dynamics and causality between financial inclusion and inflation, while controlling for other variables such as broad money, real effective exchange rate, and real GDP growth, which may influence the relationship according to the …

Four Essays On Banking, Bank Management, And Bank Lending, Jiarui Guo

Theses and Dissertations

This abstract synthesizes findings from four studies examining the liquidity creation, bank-borrower relationships, corporate capital structure, and managerial impact on firm performance, particularly within the context of banking and financial crises, including the COVID-19 pandemic.

The research first identifies the dual shocks of the pandemic—disease and policy-driven (government shutdowns)—on bank liquidity creation. I find that these shocks prompted banks to reallocate liquidity creation from assets (decreasing loans) to liabilities (increasing liquid deposits), which reduced profits and heightened risks.

In exploring bank-borrower relationships, the study highlights the role of banks in utilizing soft private information, such as the moral character of …

Three Essays On Financial Institutions And Financial Intermediation, Xinxin Zhang

Theses and Dissertations

In the first essay, I examine the trading relationship between the manager of a collateralized loan obligation (CLO) deal and the borrowers and/or lenders of the underlying portfolio of the CLO deal. I investigate how these relationships affect the structure and pricing of CLO deals. I find that a stronger relationship between a CLO manager and either borrowers or lenders of loans in the underlying portfolio leads to a smaller equity tranche in the CLO deal and a lower yield spread of the AAA tranche, on average. These results suggest that the CLO manager uses private information from trading relationships …

Two Essays On Corporate Finance, Yongdong Wang

Theses and Dissertations

This dissertation consists of two essays on corporate finance. In my first essay, I investigate the effect of the top management team (TMT) political heterogeneity on the CEO’s ability to implant her/his ideology onto the firm’s CSR policies. We present evidence that a CEO’s ideology can shape CSR policies only in the existence of a politically homogeneous TMT. This result is robust to the use of the propensity score matching (PSM) approach to address selection bias, the instrumental variable (IV) approach to address endogeneity, and Oster’s test to address omitted variables bias. Further analysis shows that the association between CSR …

Actions Taken At Firm-Level To Mitigate The Adverse Impacts Of Climate Risk, Deepak G. More

Theses and Dissertations

This dissertation comprises of two essays on actions taken at firm-level to mitigate the adverse impacts of climate risk. Our first essay documents a positive relation between firm-level climate change exposure (CCE) and long-term tax avoidance. Our results suggest that firms use tax avoidance to mitigate the adverse impacts of CCE. The positive effect of CCE on tax avoidance is stronger post the release of Stern Review and weaker after the enactment of the Tax Cuts and Jobs Act, 2017. Our study is the first to show that firms with high CCE use tax avoidance to increase cash holdings as …

Two Essays On Corporate Finance. The Impact Of Ceo Cultural Heritage And Corporate Decision Making, Md Showaib Rahman Sarker

Theses and Dissertations

This dissertation consists of two essays that investigate the effect of CEOs’ cultural heritage on corporate decision-making. In the first essay, I examine the impact of CEOs’ cultural heritage on corporate social responsibility (CSR). I present empirical evidence that CEOs originating from countries with high power distance, more uncertainty avoidance and long-term orientation have high CSR scores, while those from individualistic and indulgent cultures have low CSR scores. This effect lasts up to three generations before it disappears due to acculturation. These results are robust to using propensity score matching, entropy balancing, and Oster’s test to address endogeneity and selection …

Centralized Finance And Decentralized Finance, Leili Pour Rostami

Theses and Dissertations

This dissertation explores different facets of financial markets, focusing on the interplay between decentralized finance, traditional banking systems, and private market relationship lending. By examining these diverse areas, we aim to provide a comprehensive understanding of how emerging financial instruments and market behaviors interact with traditional financial systems. Decentralized Finance (DeFi) offers an escape from the challenges of centralized finance (CeFi). The first essay explores whether and how returns on DeFi instruments, particularly cryptocurrencies, manage to evade the traditional “rules” in response to exogenous central bank monetary policy shocks. The findings reveal that crypto abnormal returns decline significantly with shocks, …

Measurements In Kautilya’S Arthasastra, In The Domains Of Public Finance And Governance, Saraswathi Murali M

Theses and Dissertations

Ancient Sanskrit literature has rich discussion of measurements by different authorities. Examples from the Vedic Age and the period of Itihāsas can be found in Ṛgveda (c. 1500 BCE), Rāmāyaṇa, and Mahābhārata. A subsequent, and more elaborate, exercise of codification of measurements, relevant to finance and administration, is observed in Arthaśāstra, written by Kauṭilya, also known as Cāṇakya and Viṣṇugupta (c. 350-275 BCE).

The author, a scholar from Takṣaśilā, was the advisor during Cāndragupta Maurya’s reign (c. 321-297 BCE). After millennia of hibernation, Kauṭilya’s Arthaśāstra resurfaced, in the beginning of the twentieth century. Ever since, Arthaśāstra has been a subject …

Policy Frameworks And Citizens’ Use Of Fintech Solutions: The Pros And Cons In Egypt, Salma Al-Mohamady

Theses and Dissertations

This thesis provides a comprehensive analysis of the significant influence of financial technology (FinTech) on the banking industry, consumer finance, and economic growth. It specifically concentrates on the swiftly changing FinTech environment in Egypt. The study investigates the impact of incorporating advanced technologies on worldwide financial practices, which has significantly transformed traditional banking models and facilitated the emergence of inventive financial services. The transition is clearly apparent in Egypt, where the expansion of FinTech has been driven by advances in regulations, adaptation to technology, and a population that is becoming more comfortable with digital solutions.

Using a combination of quantitative …

Bitcoin And Stock Market Return Correlation: A Sectoral Analysis Of The S&P500, Michael Narouz

Theses and Dissertations

This thesis studies the correlation between Bitcoin returns and stock market price returns for the S&P500 US stock market index by dividing the index into 11 sectors based on the industry and checking for correlation between Bitcoin returns and the returns of the stocks in each sector individually. The GARCH model is used due to its ability to account for the empirical phenomenon of volatility clustering that is usually present in financial time series datasets such as those used in this thesis. The results show statistically significant positive correlation between Bitcoin returns and stock market returns for all 11 sectors, …

An Analysis Of New York State Education Funding As It Relates To Minority Student Achievement, Linda Elizabeth Macias

Theses and Dissertations

he purpose of this nonexperimental quantitative study was to explore the relationship between New York State education funding for public school districts, the academic achievement of Black and Latinx students, and educational opportunity gaps that may result from a lack of access to Advanced Placement courses. These relationships were assessed with multiple linear regressions using the variables of student enrollment rates by race, English and math proficiency scores, the number of Advanced Placement, and levels of state education funding per district. The data were obtained from New York State Education Department financial reporting. The problem addressed by this study was …

Two Essays On Credit Risk Correlation, Theophilus Teye Osah

Theses and Dissertations

This dissertation comprises two essays on credit risk correlation. In the first essay, we provide robust empirical evidence that lenders charge higher loan spreads to borrowers with higher credit risk correlation. This effect is concentrated in investment grade firms, driven by tightening lending conditions, and more pronounced for firms with higher rollover risk. Furthermore, banks whose borrowers have higher average credit risk correlation, have greater default risk themselves. In the second paper, we find that a trading strategy that buys high- and sells low-credit risk correlation stocks generates significant risk-adjusted expected return of about 121 bps per annum. Cross-sectional regressions …

Stock Splits And Corporate Peer Effects, Albert J. Saad

Theses and Dissertations

We find that a company’s decision to execute a stock split is affected by the number of stock splits carried out by its peers. Through the use of a broad peer group construction methodology, we also reveal the presence of asymmetric effects with regard to companies of different market capitalization size. In the periods of 1983–1996 and 1997–2009 we find that firms are more likely to split their stock if more of their peers have recently done so. However, in the period of 2010–2019 we see that the opposite is true. These results provide further evidence on social learning from …

Lobbying – A Financial Perspective, Sean Byrne

Theses and Dissertations

U.S. based bank holding companies (BHCs) exert influence at every step in the legislative process where financial regulatory reforms are enacted into law, such as the Dodd-Frank Act, to promulgation of regulations. In Chapter II, we maintain that BHCs, upon facing salient regulation, lobby regulators to have their opinions heard with the goal of favorable regulatory change and to increase non-traditional revenues. We undertook a novel collection of political and financial data from 2003 to 2018, matching 180 pairs of parsed proposed and final regulations. BHCs that participated in commenting on proposed rules are highly successful at having their views …

Macroeconomic Determinants Of Stock Market Development In Sample African Economies, Ehab Ayoub

Theses and Dissertations

This research paper studies the relationship between macroeconomic determinants as independent variables and different measures of stock market development as dependent variables across selected emerging economies in Africa for the period of 2002 to 2021, with a quarterly frequency using time series analysis. The independent variables used are Core Inflation, Deposit Rate, Foreign Direct Investment (FDI), FX Rate against USD, Domestic Credit, Gross Domestic Product (Real GDP), Exports, Imports, External Debt, and Foreign Reserves. We use these variables as our main determinants of measuring economic growth. With regards to stock market development, we use four proxy measures as our benchmark, …

Cryptocurrencies Bandwagon…Fad Wave Or Investment Asset? Firm Level Analysis Of Panel Data In Egypt, Yasmine Galal

Theses and Dissertations

The crypto market is growing rapidly and gaining momentum globally. The current study is tackling the impact of the crypto exchanges on the stock market in Egypt. The author consolidated firm level data from DataStream and Cryptocurrency data from CoinDesk to conduct this study over the period 2014-2020. The methodology is based on Fixed Effect and IV-GMM models to study the differential impact across sectors and firm attributes. Our main findings can be highlighted as follows: (a) cryptocurrencies are substitutes to stocks. (b)Two periods are highlighted in the analysis: 2016 post currency devaluation and COVID-19 pandemic, where the adoption was …

Financial Inclusion And Monetary Policy - Investigating The Relationship Between Financial Inclusion And Monetary Policy: The Case Of Egypt, Salma Maher

Theses and Dissertations

In the past decade, financial inclusion has become an issue of increasing importance to developing nations. This is due to its perceived effects on poverty alleviation, sustainable growth and enhancing monetary policy effectiveness. Unfortunately, there is little empirical research on the effects of financial inclusion. The thesis hopes to contribute to the literature by inspecting the relationship between financial utilization indices and monetary policy in Egypt. The thesis utilizes quarterly data on outstanding deposits and loans from 2004 to 2020 as well as a VAR model – supplemented with an ARDL model – to test the aforementioned relationship. The thesis …

The Effects Of Environmental Corporate Social Responsibility On Financial Returns, Kevin Acevedo

Theses and Dissertations

A major issue concerning companies is global warming and the impact that firms have on the environment. Companies are taking steps towards sustainability, but it is unclear if sustainable business practices are beneficial to companies’ financial performance. This paper examines the effect of environmental corporate social responsibility (CSR) of Fortune 250 companies on financial performance. The analysis reveals significant effects on financial performance, but they are inconsistent and hard to interpret.

Growing During A Global Crisis, Ahmad E. Shahin

Theses and Dissertations

Employing the data from the World Bank Enterprise surveys, we examine how the first shock of the COVID-19 pandemic has affected firm dynamics across the world. Our first group of robust models have tested the effect of internal firms’ managerial decisions and other external factors on the sales’ growth, where we found that the most important decisions are related to preserving and increasing liquidity levels, in addition to utilizing the workforce in giving more input to maintain and grow the firms’ sales. Our second group of robust models have tested the firms’ financial decisions and other external factors on the …

Three Essays On Agency Costs In Corporate Finance, Eyad Alhudhaif

Theses and Dissertations

This dissertation attempts to explain several firm corporate choices under the classical framework of contractual agency problems in corporate finance. Essay 1 examine firms’ debt maturity structure following exogenous changes in growth opportunities due to the COVID-19 shock. I Find companies experiencing an increase in growth options choose longer-term debt, a result that supports the arguments presented by Diamond and He, 2014 and Childs et al., 2005. Essay 2 examine the effect of firm’s risk exposure concentration on debt maturity choices. We find shortterm debt is preferred over covenants in mitigating debt-related agency problems of risk-shifting. These results indicate that …

The Impact Of The Capital Market, The Insurance Sector And The Mortgage Finance Sector On Economic Growth In Egypt, 2005-2019, Hana Anis

Theses and Dissertations

This thesis aims to explore the relationship between financial markets and economic growth in Egypt for the 15 years period, starting from 2005 to 2019. The study concentrates on the non-banking financial sector which includes the stock market, the debt market, the mortgage and the insurance sectors. The Vector Autoregressive (VAR) model is utilized to describe the relationship between GDP growth rate, as a proxy for economic growth, and a number of variables from the financial sector. Results of the analysis show that there is a significant relationship and statistical causality between the growth rate and the debt market, represented …

Environmental Governance For Whom? Examining The Political, Institutional, Fiscal, And Legal Determinants Of State Environmental Agency Budget Policy In The Us, Andrew R. Duggan

Theses and Dissertations

Budgets are a prospective tool of governance, and appropriations are a planning vehicle reflecting: bureaucracies’ values, complex interactions, collective preferences, political influences, and available resources. Research spanning 30 years finds that environmental pollution is a key determinant of environmental budgets in the US, though myriad factors, actors, and subsystems are important to consider. Due to federalism and devolution of responsibilities and authorities, environmental governance falls largely to the states. While the dynamics that shape state environmental budget policy have received scholarly interest, theoretically-driven examinations of environmental appropriations remain limited within the public budgeting and environmental policy literature.

Using panel data …

Garch Modeling Of Value At Risk And Expected Shortfall Using Bayesian Model Averaging, Ismail Kheir

Theses and Dissertations

This thesis conducts Value at Risk (VaR) and Expected Shortfall (ES) estimation using GARCH modeling and Bayesian Model Averaging (BMA). BMA considers multiple models weighted by some information criterion. Through BMA, this thesis finds that VaR and ES estimates can be improved through enhanced modeling of the data generation process.

The Quality Of Xbrl Structured Financial Statements: An Empirical Examination Of Custom Tags, Aidana Razhap Kyzy

Theses and Dissertations

In 2009 the US Securities and Exchange Commission (SEC) adopted the eXtensible Business Reporting Language (XBRL) system to improve the process by which financial statements can be used. Interactive financial data filed with the SEC using XBRL provides easily readable and comparable financial data, thereby improving transparency and efficiency in the corporate market. SEC rules permit companies to use custom tags in their financial reports in cases when an appropriate element cannot be found in the Financial Accounting Standards Board (FASB) standard XBRL taxonomy. The inordinate use of custom tags may result in a reduction of financial report quality by …

Credit Risk And Corporate Governance, Olivier Mugisho Mudekereza

Theses and Dissertations

Is the executive’s compensation structure influenced by the credit rating assigned to his company? I analyze a panel of U.S. public firms using the random-effects and fixed-effects estimations. Compared to firms with lower credit risk, I find that firms facing higher probability of default provide more incentives for their CEOs.

Tertiary Degrees And The Market: Cross-Country Statistical Evidence, Boontharika Meesuwan

Theses and Dissertations

Substantial differences in stock market behavior exists across the world. Many determinants have been explored and empirically studied, yet the exact reasons for these differences remain unclear. The purpose of this paper is to contribute some insight into the question of why market behavior differs across countries and between social groups despite continuing globalization within financial markets. I hypothesize that there is a direct relationship between personality and trading behavior that directly affects market liquidity.