Finance Commons^™

Pay-Performance Sensitivity: How Firm Performance Impacts Ceo Compensation, Yuefeng Ma

CMC Senior Theses

This study investigates the relationship between firm performance and CEO compensation, revisiting and extending the foundational framework established by Jensen and Murphy (1990). The sample comprises compensation data for the Chief Executive Officer (CEO) of all publicly traded companies on the Wharton Research Data Services (WRDS) Compustat – ExecuComp dataset from 1994 to 2023. Using Ordinary Least Squares (OLS) regression models, the analysis evaluates the sensitivity of CEO pay to changes in shareholder wealth and other performance metrics, while accounting for structural and temporal shifts driven by corporate governance, macroeconomic environment, and legislation. The findings reveal that changes in shareholder …

Entire Volume Journal Of Banking And Financial Economics 2025, 2(24)

Journal of Banking and Financial Economics

Entire Volume Journal of Banking and Financial Economics 2025, 2(24)

Are Csr Incidents Truly Bad News?, Chen Chen, John A. Doukas, Rongyao Gloria Zhang

Finance Faculty Publications

We revisit whether disclosures of negative Corporate Social Responsibility (CSR) incidents adversely affect firms' stock prices. While univariate tests reveal significant negative abnormal returns around incident announcements, the effect disappears once firm characteristics, industry, and time‐fixed effects are controlled for. We find no robust evidence that CSR incidents or firms' Environmental, Social, and Governance (ESG) commitments influence stock price reactions on the event day or across broader windows. These results suggest that previously documented negative market responses may be attributable to endogeneity. Our baseline results are consistent with informed trading behavior: short‐sellers do not increase activity in incident‐related stocks relative …

Potential Fiscal Stability Effects Of The African Continental Free Trade Area: An Empirical Analysis, Simon Abendin, Duan Pingfang, Umer Shahzad

Journal of African Trade

This study analyzes the potential effects of the African Continental Free Trade Area (AfCFTA) on fiscal stability, using panel data from 54 African economies that have ratified the AfCFTA from 2010 to 2021. The study uses a dynamic system GMM model to address endogeneity, simultaneity, measurement bias, and reverse causality issues. The findings indicate that the AfCFTA agreement may reduce government revenue and spending. Furthermore, the study found that the AfCFTA could lead to an increase in government debt

Redesigning Home Reversion Products To Empower Retirement For Singapore's Public Flat Owners, Koon Shing Kwong, Jing Rong Goh, Jordan Jie Xin Lee, Ting Lin Collin Chua

Research Collection School Of Economics

This paper introduces an innovative sell-type home reversion product aimed at monetizing Singapore’s public flats, serving as a new alternative to the existing Singapore Lease Buyback Scheme (LBS). This new product not only retains the LBS’s guaranteed period of residence in the property along with life annuity incomes but also enhances the product features to meet specific homeowner needs, including the ability to age in place, flexibility in retaining part of the property, options for bequests, and guaranteed principal return. By incorporating these additional features, the new product seeks to stimulate greater demand for monetizing public flats among asset-rich but …

Three Essays On The Interaction Between Macroeconomics, Money, And Government Bonds, Zejun Jiang

Graduate Theses, Dissertations, and Problem Reports (ETD)

This dissertation, ''Essays on the Interaction between Macroeconomics, Money, and Government Bonds,” has three chapters that study how macroeconomics (e.g., inflation), government bonds, and money interact with each other. It provides insights into how households make optimal maturity choices in government bonds, how households own different types of government bond assets, and how money growth can help understand the cross-country inflation after COVID-19.

The first chapter develops an intertemporal portfolio choice model to investigate the optimal household portfolio choice for government bonds across maturities. The U.S. Treasury data displays a higher holding share of long-term government bonds. Adding uncertain labor …

Capital Structure Models And Contingent Convertible Securities, Di Meng

Theses and Dissertations (Comprehensive)

The 2007-09 financial crisis showed financial institutions are vulnerable during distressed times. As an alternative resolution to a government bail-out, contingent convertible securities (contingent capital or CoCos) were proposed by various researchers. CoCo is a hybrid capital security that converts from a bond to common equity when a pre-determined event occurs. The loss absorption mechanism of CoCo is essential to the financial health of a bank during a crisis as it provides an instant capital infusion when public capital is difficult to access.

In this thesis, we first implement a methodology to calibrate capital structure models for large Canadian banks. …

Examining The Industrial Impact Of Fintech Lending In The Post-Next Normal Era, Nur 'Asyiqin Ramdhan, Imbarine Bujang, Amirul Afif Muhamat, Purwatiningsih Lisdiono

The Indonesian Capital Market Review

The financial sector has undergone a substantial paradigm shift as a consequence of the COVID-19 pandemic prompting industries actively innovate their financing method. Utilizing ARDL, our analysis reveals intriguing insights into the interaction of financing determinants interruptions caused by the epidemic, and the P2P lending success. The long-term effects of economic conditions alluding to the significant influence of investment size across various industrial sectors. The industrial differences suggest interesting connections between the size of investments, and loan tenure to the P2P lending in different industries. The wholesale and retail trade sector demonstrates intricate reactions to changes in investment size, while …

Hunting And Fishing Ceos: Environmental Plunderers Or Saviors?, Thomas Covington, Steve Widler, Keven Yost

Finance Faculty Works

CEOs who participate in hunting and fishing benefit by appreciating natural environments and permanently consuming natural resources. We examine whether CEOs who hunt and fish make different environmental decisions and find that firms led by CEOs who obtain the most hunting and fishing licenses have lower environmental performance as measured by MSCI-KLD. This effect is strongest in the environmental category of climate change but also extends to pollution, waste, and the protection of natural capital. Furthermore, firms led by CEOs with the most hunting and fishing licenses are significantly more likely to pay a regulatory settlement for an environmental regulatory …

Too Essential To Fail: Lessons From County Fiscal Crises, Michael A. Francus

Journal Articles

This Article draws out the lessons of counties for municipal finance. To do so, the Article begins by unpacking the municipal finance regulations that have provided counties with extraordinary fiscal safety. The Article then turns to case studies of the eleven counties that either filed for bankruptcy or had state fiscal interventions since the passage of the Bankruptcy Code in 1978. Those case studies show how counties' finances can (in rare cases) go wrong despite well-designed municipal finance regulations. The case studies also show how counties have successfully responded to those crises through bankruptcy and fiscal intervention.

Using that analysis, …

Covariance Matrix Forecasting Of Equity Portfolios, Michael Nebor

Graduate Research Theses & Dissertations

This dissertation consists of two papers. The first paper introduces DCC-SVR, a hybrid Dynamic Conditional Correlation (DCC) and Support Vector Regression (SVR) method of forecasting the covariance matrix. This paper shows that DCC-SVR is able to outperform the traditional methods of DCC and rolling historical on multiple data sets. Performance is shown for both standard GARCH and GJR-GARCH methods. This paper also analyzes performance when dimensions are increased to 49 dimensions and when an application using equal weighted portfolio allocation is used.

The second paper introduces a covariance matrix forecasting method based on copula-GARCH simulated returns. The accuracy of this …

Efficient Algorithms For Nearest Correlation Matrix Computation With Missing Data, Ibrahim Eniola Oyeyinka

Graduate Research Theses & Dissertations

This thesis investigates efficient algorithms for computing the Nearest Correlation Matrix (NCM) under incomplete financial data. Correlation matrices are vital in portfolio optimization and risk management, yet empirical estimates often violate symmetry, positive semidefiniteness, and unit diagonal conditions due to missing observations. Two projection-based methods are analyzed: the Modified Alternating Projections (MAP) and Anderson Acceleration (AA). Theoretical analysis using convex optimization and normal cone characterization supports numerical evaluation on synthetic and real-world stock-return matrices (550×550, 2020–2025). Missing data are modeled through Missing Completely at Random (MCAR) and Not Missing at Random (NMAR) mechanisms. The results show that AA converges faster …

Gauging Growth Risk In An International Financial Centre: Some Evidence From Singapore, Hwee Kwan Chow

Research Collection School Of Economics

This paper applies the growth-at-risk framework proposed by Adrian et al. (2019) to Singapore, an international financial centre whereby financial shocks are intermediated away quickly. We gauge near-term risks around growth projections taken from the survey of professional forecasters by accounting for financial stress in both local and global financial markets, as well as worldwide economic uncertainty. The conditioning variables are first linked to future growth through quantile regressions, and the estimated quantiles are fitted with skew t-distributions to produce full predictive distributions. Scenario analysis reveals that greater local financial strain tends to widen the uncertainty of growth outlook, higher …

Bogging Down Investors: An Unintended Consequence Of Litigation Risk, Siwen Fu, Ke Wang, Liandong Zhang, Liu Zheng

Research Collection School Of Accountancy

Securities litigation risk is a well-recognized yet underexplored source of financial reporting complexity or unreadability. This study examines the effect of litigation risk on the readability of corporate financial reports. The 1999 Silicon Graphics Inc. (SGI) court ruling unexpectedly reduced litigation risk for firms within the Ninth Circuit Court’s jurisdiction. Using a difference-in-differences design centered on the SGI court ruling, we find that, while the readability of financial reports generally declines over the sample period, treated firms in the Ninth Circuit experience a comparatively smaller decline in readability than control firms in other states after the ruling. Put differently, treated …

External Financing, Governance, And Infrastructure Development: Evidence From Sub-Saharan Africa, Afees Oluwashina Noah, Oladipo Olalekan David

CSID Journal of Infrastructure Development

Infrastructure development in Sub-Saharan Africa (SSA) requires diversified financing strategies to address a significant funding shortfall that cannot be met by domestic resources alone. This research evaluates the contributions of external financing—namely Official Development Assistance (ODA), Foreign Direct Investment (FDI), and Private Participation in Infrastructure (PPI)—in complementing domestic efforts to advance infrastructure in SSA. It examines their influence, alongside governance, on the development of physical and social infrastructure components. Employing methodologies such as Panel-Corrected Standard Errors (PCSE) and System Generalized Method of Moments (SGMM) across 43 SSA economies from 2000 to 2022, the analysis reveals that FDI substantially enhances physical …

An Assessment Of Macroeconomic Effects Of Financial Liberalization In Tanzania: 1990-2022, Cornel Joseph

Journal of Humanities and Social Sciences

This study provides a comprehensive analysis of the effects of financial liberalization on key macroeconomic indicators in Tanzania, specifically focusing on savings, investment, and economic growth. Utilizing extensive annual time series data from 1990 to 2022, the research employs the Autoregressive Distributed Lag (ARDL) method and incorporates bound testing procedures to ensure robust results. The analysis reveals several significant findings: financial liberalization has a positive impact on savings and promotes economic growth in the long-run, demonstrating its role as a catalyst for economic advancement in Tanzania. However, the study also uncovers a concerning trend: while savings and growth benefit from …

Ceo General Ability And The Takeover Market, A. Can Inci, Leila Zbib

Finance Department Faculty Journal Articles

The purpose of this study is to examine the mechanisms behind the higher performance of generalist CEOs in the takeover market compared to their specialist counterparts as measured by the market reactions to the deal announcement. We study three non-inclusive mechanisms that could enhance the performance in the takeover market for the generalist CEOs: target complexity, deal structure, and the CEO’s past merger and acquisitions (M&A) activity. We proxy target complexity by the size of the target firm, the number of segments, and the level of R&D. For the deal structure, we study the effect of tender offer, horizontal acquisition, …

Does Central Bank Transparency Curb Foreign Exchange Vulnerability?, Muhammad Aftab, Kate Phylaktis

CBER Conference

This study examines the relationship between central bank transparency (CBT) and foreign exchange market vulnerability, focusing on exchange market pressure (EMP) to provide a comprehensive understanding. Using panel bounds testing approach to cointegration based analysis, the study covers both developed and emerging markets, incorporating the global financial crisis (GFC) and various control variables. External policy uncertainty and FX regimes are also considered to elucidate the nuanced relationship between CBT and EMP. Findings reveal that improved CBT reduces EMP, with financial development moderating this effect, suggesting well-developed financial systems lead to more stable exchange markets. CBT consistently relieves EMP during both …

Bank Competition Amid Digital Disruption: Implications For Financial Inclusion, Erica Xuewei Jiang, Yang Gloria Yu, Jinyuan Zhang

Sim Kee Boon Institute for Financial Economics

We study how digital disruption impacts bank competition, considering consumers’ heterogeneous digital preferences. We find that the rollout of 3G networks contracts bank branch networks and leads to divergence in branching and pricing strategies across banks. These developments benefit young consumers but increase the unbanked rate for poorer and older consumers. A structural model shows that the higher perceived digital quality by younger borrowers mainly prompts these adjustments, causing significant surplus losses for older savers. Counterfactual exercises illustrate that subsidizing older savers opting for mobile banking effectively offsets these disparities at minimal cost, facilitating a smoother digital transition.

How Millennials Make Investment Decisions: Financial Literacy And Financial Behavior, Dewi Tamara, Anita Maharani

Economics and Finance in Indonesia

This study investigates the effect of financial literacy, financial attitude, risk perception, and financial behavior on investment decisions. Employing a survey method with 342 respondents in Jakarta, the findings reveal that financial literacy has a negative and insignificant effect on investment decisions. In contrast, risk perception plays a crucial role in influencing investment decisions. Furthermore, financial behavior has an indirect mediating effect between financial literacy and risk perception on investment decisions but does not affect financial attitude. This study concludes that risk perception and financial behavior are important factors in investment decisions. Future research may consider incorporating other variables such …