Finance Commons^™

The Zero-Leverage Policy And Family Firms, Pedram Fardnia, Maher Kooli, Sonal Kumar

Finance Department Faculty Journal Articles

Purpose – The purpose of the study is to examine the zero-leverage (ZL) phenomenon in family and non-family firms.

Design/methodology/approach – The authors consider three hypotheses and empirically test them using a sample of the largest US firms over the 2001–2016 period.

Findings – The authors find that, on average, 19.20% of family firms have zero debt vs 10.42% for non-family firms. The authors also find that family firms strategically choose to be ZL to maintain financial flexibility for future investments and exercise control over the decision-making process, consistent with the hypotheses of financial flexibility and control considerations. However, non-family …

Hedging Cryptos With Bitcoin Futures, Francis Liu, Natalie Packham, Meng-Jou Lu, Wolfgang Karl Haerdle

Sim Kee Boon Institute for Financial Economics

The introduction of derivatives on Bitcoin enables investors to hedge risk exposures in cryptocurrencies. Because of volatility swings and jumps in cryptocurrency prices, the traditional variance-based approach to obtain hedge ratios may not be suitable for hedgers. In this work, we consider two extensions of the traditional approach: first, different dependence structures are modelled by different copulae, such as the Gaussian, Student-t, Normal Inverse Gaussian and Archimedean copulae; second, different risk measures, such as value-at-risk, expected shortfall and spectral risk measures are employed to find the optimal hedge ratio. Extensive out-of-sample tests using the data from the time …

Exchange-Traded Funds And Real Investment, Constantinos Antoniou, Frank Weikai Li, Xuewen Liu, Avanidhar Subrahmanyam, Chengzhu Sun

Research Collection Lee Kong Chian School Of Business

We investigate the link between exchange-traded funds and real investment. Cross-sectionally, higher ETF ownership is associated with an increased sensitivity of real investment to Tobin's q and a heightened ability of stock returns to forecast future earnings. Inclusion of stocks in industry ETFs enhances investment-q sensitivity and implies greater incorporation of earnings information into prices prior to public releases. Greater nonmarket ETF ownership leads to increased (reduced) reliance of real investment on own (peers') stock prices. Overall, the evidence is consistent with ETFs positively affecting real investment efficiency via greater flows of information.

Policies For Digital Banking : Part - I, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The State Bank of Pakistan has recently granted five licences for Starting digital banks that would provide the whole range of banking services through digital platforms or electronic channels from the comfort of homes and offices without making trips to brick-and-mortar branches of the banks. Two types of banks – digital retail banks and digital full banks – have been allowed both in the conventional as well as Islamic variants. The minimum capital requirement for digital banks is much lower than those for banks that are operating branches. A diverse range of applicants including domestic commercial banks, microfinance banks, electronic …

The Impact Of Social Network Friendship On Lending Behaviors: An Empirical Analysis Of Peer-To-Peer Lending In China, Xianyun Chen

Fordham Dissertations and Theses

This dissertation builds on the theoretical framework of information asymmetry, signaling theory, and social network, and empirically studies the impact of social network friendship on peer-to-peer lending (P2P). Using the P2P lending data from China, it studies how social network affects the lending willingness in China’s P2P lending. In particular, it examines the effect of social network on the adverse selection in P2P lending in China, and the effect of social network on interest and default rates. It also explores how P2P loans use the advantages in low-cost customer acquisition and fast …

Assessing The Odds Of A Us Recession, Thomas Lam, David Fernandez

Sim Kee Boon Institute for Financial Economics

In this commentary, SMU Sim Kee Boon Institute for Financial Economics (SKBI) Principal Researcher Thomas Lam and SKBI Director SMU Professor of Finance (Practice) Dave Fernandez offer their perspectives on the current multifaceted and highly charged US recession debate. While America is currently not in a downturn, the near-term odds of one have edged up, according to models based on key monthly and weekly indicators.

Research On The Influence Of Management Practices On Hospital Performance: An Empirical Study Based On Hospitals In Eastern China, Zhihua Zhang

Fordham Dissertations and Theses

Since the beginning of the 21st century, a series of challenges have been confronting global health development, including significant factors affecting human health such as population aging, severe infectious diseases, and climate change. In particular, the COVID-19 that swept the globe in the past three years has posed a major comprehensive test to the global health governance system. As both the last line of defense for human health and the largest consumer of health resources, how the hospital can "improve quality and promote efficiency" based on limited resources is the core of the first priority. Previous studies have proven that …

Impact Of Geographical Diversification And Limited Attention On Private Equity Fund Returns, Victor Ong

Research Collection Lee Kong Chian School Of Business

This article analyzes the effect of geographical diversification on global private equity (PE) fund returns. We find that there is a negative correlation between geographical diversification and PE fund returns. To establish the causality between geographical diversification and PE fund returns, we employ an instrumental variable analysis where the instrument used is the stock market capitalization of the host country where the PE fund is based. Our results apply to Net IRR, TVPI and DPI as dependent variables used to proxy for PE fund returns in the main regression model. A one standard deviation increase in geographical diversification results in …

Chinese Yuan Interest Rate Swap Yields, Tanweer Akram, Khawaja Mamun

WCBT Working Papers

This paper models the dynamics of Chinese yuan (CNY)–denominated long-term interest rate swap yields. The financial sector plays a vital role in the Chinese economy, which has grown rapidly in the past several decades. Going forward, interest rate swaps are likely to have an important role in the Chinese financial system. This paper shows that the short-term interest rate exerts a decisive influence on the long-term swap yield after controlling for various macrofinancial variables, such as inflation or core inflation, the growth of industrial production, percent change in the equity price index, and the percentage change in the CNY exchange …

Asymmetric Effects In Geopolitical Risk And Foreign Reserves Accumulation Among Brics Countries, Kwame O. Asomaning

Doctoral Dissertations (DBA)

Over the past decade, the rise of Geopolitical Risk (GPR) has had a significant effect on macro financial variables, prompting central banks to accumulate reserves as a "war chest" to protect their economies from the detrimental effects of such shocks. This study examines the asymmetries in the long run, short run, and locational asymmetric effects on foreign reserves in the BRICS countries, using both the Nonlinear ARDL (NARDL) and Quantile ARDL (QARDL) models over the period 2000Q1–2021Q4. The results of the NARDL model suggest that GPR has long-run asymmetric effects for BRICS, while in the short run, all countries display …

The Financialization Of Cryptocurrencies, Lei Huang, Tse-Chun Lin, Fangzhou Lu, Jian Sun

Research Collection Lee Kong Chian School Of Business

We show that change in Grayscale Bitcoin Trust premium is the single most significant predictor of Bitcoin daily return. This sentiment measure is similar to the closed-end fund discount measure as in Baker and Wurgler (2006), but more likely to reflect the excess demand from traditional investors than from blockchain specialists. Although there is a substantial variation in Bitcoin price quotes worldwide, this Grayscale premium and discount predict Bitcoin daily return for the most liquid Bitcoin exchanges. Using K-means clustering and LDA analysis, we find that this predictability is especially significant when there is a large variation in bullish and …

Endogenous Money And The Structure Of Interest Rates, Grishma Neupane

Electronic Theses and Dissertations

My thesis examines the empirical patterns of interest rates in the United States in the period from 1992 to 2019. Looking into the patterns of interest rates, the spread between the Federal Funds rate and long-term interest rate is widening in the post-1990s period with the remarkable acceleration of financial innovation and financial deregulation. There has been increasing concerns about the power of monetary authorities in controlling market interest rates by setting the Federal Funds rate.

My thesis builds on the theoretical as well as the empirical literature discussing the debates among the Post-Keynesians about the determination of interest rates …

Do Students Buy “Familiar” Stocks? A Field Experiment, George Psaradakis, Scott Deacle, Rudolph Henkel, Steve Aukers

Pennsylvania Economic Review

Existing literature shows that biases related to awareness can influence investors’ decisions when constructing portfolios or making financial decisions. In this paper, we examine whether student investors are drawn to stocks issued by companies with large general marketing budgets, based on the Ad Age 200, and stocks that are associated with popular brands. A field experiment was conducted in which undergraduate students constructed their own virtual stock portfolios. A treatment group of students was given a training seminar in stock market fundamentals in order to enhance their skillsets for stock market analysis and stock selection. The treatment group was compared …

A Study On Bangladesh's Grameen Bank And The Ready-Made Garment Industry: The Effects Of Rising Industrialization On The Reliance Of Microfinance, Elaine Yang

Scripps Senior Theses

Microfinance institutions offered a solution to borrowing to the ultra-poor through a group lending scheme where social capital drove repayment rates. In Bangladesh, the Grameen Bank was globally recognized as a successful microfinance institution, increasing financial literacy and mobility to the ultra-poor. Tangentially, the ready-made garment industry boomed in some districts with a Grameen Bank presence, while other districts were not impacted at all. Using a difference-in-difference regression model and focusing on the Grameen Bank districts before and after their exposure to the RMG industry on the number of branches, branch members, outstanding loan amount, and zone membership percentage of …

The Impact Of Financial Literacy On Financial Capability: Evidence Based On The National Financial Capability Study, Ramon Müller

Master's Theses and Doctoral Dissertations

This research examines the relationship between financial literacy and financial capability using cross-sectional data of the United States population from five different triennial surveys. Financial literacy is measured in terms of financial education attendance, and financial capability is measured in terms of how well people make ends meet in a typical month. Regression analysis was performed using probit models to determine the likelihood of financial difficulty in relation to financial education and other demographic characteristics. Results confirmed that individuals who had financial education were 5% less likely to suffer financially The results also demonstrated that when financial practices commonly taught …

Two Essays On Industrial Hemp Firms In The United States, Abraham Olakunle Ajibade

Theses and Dissertations--Agricultural Economics

After a long absence from American fields, industrial hemp was reintroduced to growing fields starting with state pilot programs in 2014 and received the green light for commercial cultivation in the US through the 2018 Farm Bill. Being an industry in its resurgence, investment is crucial for growth and the stock market and over-the-counter markets help US hemp firms get these much-needed funds for growth and expansion. This thesis consists of two essays on US hemp firms.

The first essay uses descriptive statistics, correlation analysis, and the Kruskal-Wallis Test to investigate how US hemp stocks compare to mid-cap and large-cap …

Optimal Portfolio Construction For Oil-Based Sovereign Wealth Funds, Mohammed Saeed Alshowaikhat

CGU Theses & Dissertations

Chapter 1 of this dissertation delves into the economic challenges faced by oil-exporting countries that rely heavily on a single income source, with a particular focus on Saudi Arabia as a case study. The primary objective is to examine the efforts of Saudi Arabia's sovereign wealth fund in diversifying revenue streams and mitigating risks associated with an excessive dependence on oil. To achieve this, the study proposes an adaptation of the subset-optimization algorithm within the mean-variance model, aiming to enhance portfolio construction in sovereign wealth funds. Chapter 2 of the dissertation conducts a comparative analysis between portfolios constructed using the …

Did Demonetization Have A Bigger Impact On Ppis (Prepaid Payment Instruments) Or Mobile Banking In India?, Ansh Vora

CMC Senior Theses

On November 8, 2016, Narendra Modi, prime minister of India, tele-advertised the entire nation and announced that India's highest value banknotes, the 500 and 1000 rupee “Rs” notes would be demonetized and taken out of circulation, effective midnight. Modi stated that this is an effort to reduce the large economy of black money, transition India into a digital economy, abolish funding of terrorist groups and illicit circulation of counterfeit notes. In this study, I choose to analyze the impact of demonetization on two digital payment methods - Prepaid Payment Instruments, “PPI” and Mobile Banking. The data used in this study …

Application Of Sentiment Analysis And Machine Learning Techniques To Predict Daily Cryptocurrency Price Returns, Edward Wu

CMC Senior Theses

This paper examines the effects of social media sentiment relating to Bitcoin on the daily price returns of Bitcoin and other popular cryptocurrencies by utilizing sentiment analysis and machine learning techniques to predict daily price returns. Many investors think that social media sentiment affects cryptocurrency prices. However, the results of this paper find that social media sentiment relating to Bitcoin does not add significant predictive value to forecasting daily price returns for each of the six cryptocurrencies used for analysis and that machine learning models that do not assume linearity between the current day price return and previous daily price …

Offshore Entanglements, Martin W. Sybblis

Faculty Articles

For decades, scholars have struggled to determine how to deploy laws and legal institutions to spur economic prosperity. But, without knowing which legal rules and institutions to prioritize for a particular social context, the outcomes have been generally unsatisfactory. The case of offshore financial centers provides fresh and compelling new insights into this puzzle. This Article uses the sociological concept of community economic identity (“CEI”) to understand why some offshore financial centers prioritize investments in legal institutions that bolster their offshore finance enterprises while others do not. CEI refers to a community’s shared identity that is linked to a specific …