Finance Commons^™

Tournament-Based Incentives And Mergers And Acquisitions, Nam H. Nguyen, Hieu V. Phan, Hung V. Phan, Dung T. T. Tran, Hong Vo

School of Economics and Finance Faculty Publications

This research examines the relation between tournament-based incentives, which are proxied by the difference between a firm’s CEO pay and the median pay of the senior managers, and mergers and acquisitions (M&As). We find that tournament-based incentives are positively related to firm acquisitiveness and acquiring firms’ stock and operating performance. Further analysis indicates that positive acquisition performance increases the likelihood of the CEO being promoted from inside the acquiring firm. Our evidence is consistent with the view that tournament-based incentives motivate acquiring firms’ managers to make greater efforts and take more risk that result in superior acquisition performance.

Does Early Access To Pension Wealth Improve Health?, Seonghoon Kim, Kanghyock Koh

Research Collection School Of Economics

We examine the health impacts of early access to public pension wealth by exploiting a unique policy in Singapore allowing individuals to withdraw a proportion of their pension savings after their 55th birthday. For the identification, we employ a regression discontinuity design by comparing individuals before and after their 55th birthday. To address anticipated and lagged health impacts, we adopt the donut regression discontinuity approach. Using nationally representative monthly panel data, we find that early access to pension wealth improves self‐reported overall health.

Human Flourishing And The Subjective Dimension Of Work, Geoffrey Friesen

Department of Finance: Faculty Publications

This essay considers the Christian understanding of the subjective dimension of human work and the implications for economics, finance, and the modern firm. The biblical account of people profoundly captures the fullness of human nature and the role of work and economy in developing the full person. People’s reality is both individual and collective, encompassing their subjective interior and objective exterior dimensions of reality. This issue is important because economic models affect economic decisions, and these decisions help shape social reality. Current economic and financial models are problematic because they are self-limiting: They close off certain outcomes by assuming they …

Financial Literacy And French Behaviour On The Stock Market, Luc Arrondel

Numeracy

This article looks back over the different dimensions of financial literacy: theoretical, methodological, empirical and political. The theoretical foundations of the notion of financial literacy are presented with reference to recent contributions by psychological or behavioural economics: “household finance” refers to the concept of financial literacy based on the empirical dead-ends of standard saver theory. This raises the fundamental question as to how to measure and evaluate financial literacy. Here, we are especially interested in the empirical robustness of a standard measure of financial literacy based on three straightforward questions (interest calculations, notion of inflation and risk diversification). Is this …

Socially Useless? The Crucial Contribution Of Finance To Economic Life, Philip Booth, Diego Zuluaga

Journal of New Finance

The value of financial markets is under-appreciated. Financial markets perform fundamental functions which are vital in reducing transactions costs in the economy for businesses and households. Without well-functioning financial markets, business would find if much more costly to raise capital and ordinary households would find retirement, protection against everyday risks and day-to-day transactions impossible. Those who criticise financial markets ignore the breadth of their functions and focus on a narrow range of activities. However, even activities such as trading, speculation and so on have social value. The evidence that they cause social problems appears more circumstantial when put under closer …

Brand Equity, Earnings Management, And Financial Reporting Irregularities, Ghada M. Ismail, Fariz Huseynov, Pankaj K. Jain, Thomas H. Mcinish

School of Economics and Finance Faculty Publications

Owning valuable brands enhances the financial well-being of firms not only through increased revenues and profitability but also by mitigating agency problems, earnings management, and financial reporting irregularities. Firms with high brand equity are less likely to have income-inflating discretionary accruals, announce earnings restatements, or experience SEC investigations. Brand equity reduces the likelihood of manipulation through incentive and opportunity channels, which we capture in CEO characteristics and compensation, and corporate governance measures. Brand equity reduces the likelihood of financial reporting irregularities more for durable goods firms and firms with shorter-tenured CEOs, as the latter are most vulnerable to performance pressures.

Family Matters: Decade Review From Journal Of Family And Economic Issues, Heather H. Kelly, Ashley B. Lebaron, E. Jeffery Hill

Faculty Publications

This article reviews research regarding economic influences on a variety of family matters published in Journal of Family and Economic Issues from 2010 to 2019. As finances permeate nearly every facet of everyday life, scholarly research related to finances and family issues has spanned a wide array of topics. We briefly review research focused on the following 11 areas related to finances and family matters: (a) family formation decisions, (b) gender and relational power in family finances and relationships, (c) finances and fathers, (d) finances and mothers, (e) finances and parenting, (f) finances and elderly family members, (g) finances and …

Do Short Sellers Use Textual Information? Evidence From Annual Reports, Hung Wan Kot, Frank Weikai Li, Ming Liu, K.C. John Wei

Research Collection Lee Kong Chian School Of Business

We examine short-sellers’ use of textual information in annual reports for shorting activities. We find that more uncertainty and negative words in annual reports are associated with greater abnormal shorting volume. Short selling motivated by textual information negatively predicts stock price reaction around the filing date of 10-K reports. We further provide some evidence that textual information used by short-sellers are related to revisions of analysts’ earnings forecasts, changes in firm fundamentals, and increasing crash risk subsequently. Our results suggest that textual information in annual reports forms an important part of short-sellers’ information advantage.

Microfinance Credit And Micro Enterprise Development In The Agricultural Sub-Sector Of The Nigerian Economy, Ademola A. Adebisi

Bullion

This study seeks to examine the relevance of micro financing credit loans to Agri-business in Lagos State, Nigeria - the development of Agricultural sub-sector centering the attention to the contribution of the institutions involved in the provision of these credits.It makes a critical review of the performance of microfinance institutions in Nigeria, based on a survey of the Agricultural Credit Guarantee Scheme Fund (a microfinance scheme established to boost the agricultural sub-sector of Nigeria). The study examines the scheme – the institutions involved and analyses the performance using the outreach paradigm via the mixed approach research techniques – qualitative and …

An Adjusted Classical Model For Interest-Free Financing In Nigeria, Abdul Ibrahim, Habibu M-G Salihu

Bullion

This paper examines an interest-free macroeconomic models by adjusting the classical model into an interest-free macroeconomic model as a basis for developing a comparative analysis. The study adopted a descriptive approach by describing the mechanics for obtaining an interest-free macroeconomic model from a prototype western model. It was observed that most Muslims in Nigeria are interested in adopting interest free financing under the western system. This is a reason for converting a western model into an interest-free model.This conversion allows policy-makers to gain useful insight in the process in transition from the western system to the Islamic system. The Islamic …

The Role Of The Central Bank Of Nigeria Analytical Balance Sheet In Monetary Policy Implementation, Salihu Audu

Bullion

This paper examines the role of the Central Bank of Nigeria (CBN) analytical balance sheet in the implementation of monetary policy. The Bank currently uses a mix of both quantity-based (monetary base) and price-based (short-term interest rate) nominal anchors. However, irrespective of the targeting regime adopted, both depends on the central bank's ability to manage its balance sheet given the huge fiscal influence on banking system liquidity in Nigeria. Therefore, the paper analyses the various liquidity management operations of the CBN and their implications for the size and structure of the analytical balance sheet.

Firm Survival Of Listed Nigerian Financial Institutions: A Consolidated Methods Approach, Sunusi Garba, Adamu M. Abubakar, Ahmad I. Mohammed, Mohammed S. Damamisau

Bullion

The firm's survival is regarded as an essential element usually used by the capital market participants in making vital decisions. This study examines the combined roles of bankruptcy, earnings management, and profitability in explaining a firm's survival in the listed Nigerian financial institutions. To achieve this, a descriptive research design is adopted and data were generated from databases of the listed companies in the Nigerian Stock Exchange for the period 2006 to 2015. Panel data analysis was employed in analysing collected data of the sampled 29 financial institutions in the Nigerian financial sector. The study found that most of the …

Fiscal And Monetary Policies And Stock Market, Ilhami Gunduz

Dissertations, Theses, and Capstone Projects

This dissertation consists of three chapters.

The first chapter analyzes the stock market transmission channel of the monetary policy of the Turkish economy not only at the aggregate but also at the sectoral level in a structural vector autoregression (SVAR) framework. I adopt alternative variables as a policy instrument. When the spread is used as a policy instrument, I find that contractionary monetary policy has a significant negative effect on both output and the price level and it appreciates the Turkish Lira. In addition, tight monetary policy reduces both aggregate and sectoral market returns. Hence, the results suggest that policymakers …

Alternative Economic Indicators, C. James Hueng, Editor

Upjohn Press

Policymakers and business practitioners are eager to gain access to reliable information on the state of the economy for timely decision making. More so now than ever. Traditional economic indicators have been criticized for delayed reporting, out-of-date methodology, and neglecting some aspects of the economy. Recent advances in economic theory, econometrics, and information technology have fueled research in building broader, more accurate, and higher-frequency economic indicators. This volume contains contributions from a group of prominent economists who address alternative economic indicators, including indicators in the financial market, indicators for business cycles, and indicators of economic uncertainty.

Stock Market Transmission Channel Of Monetary Policy: Empirical Evidence From Turkey, Ilhami Gunduz

Publications and Research

Monetary policy is one of the instruments that policymakers use to provide both sustainable economic growth and price stability. In this study, I analyze the stock market transmission channel of the monetary policy of the Turkish economy not only at the aggregate but also at the sectoral level in a structural vector autoregression (SVAR) framework. I adopt alternative variables as a policy instrument. When the spread is used as a policy instrument, I find that contractionary monetary policy has a significant negative effect on both output and the price level, and it appreciates the Turkish Lira. Besides, the tight monetary …

New Kid On The Blockchain: The Rise Of Cryptocurrency In The Global Arena: Humanitarian Usage With Blockchain, Rhonda S. Binda

Open Educational Resources

In 2018, the world was shaken by the fast rise of Bitcoin and other cryptocurrencies that use a decentralized, blockchain technology for payment transfers outside of the traditional banking system. The potential impact this alternative form of banking could have in the medium and long term on the over 2 billion people globally unbanked is tremendous. Additionally, blockchain itself is being used for value transfer combined with bio and genetic tagging technologies in refugee camps for example, bringing to rise a new era where technology for development is disrupting education, healthcare and security programs globally.

Empirical Asset Pricing Of Saudi Stock Market, Muath Alolayan

LSU New Orleans Theses and Dissertations

This essay tests the differences in equity returns between Islamic and conventional firms using the Capital Asset Pricing Model (CAPM), Fama & French three factors model, and Fama & French four factors model. We us the Fama-Macbeth methodology to test the adequacy and explanatory power of the various model specifications. We find that the CAPM can better predict the factors for Islamic firms but not the conventional firms. There was a failure of Fama and French three factors and four factors model for Islamic, conventional and the total market. The estimated Beta is very close to the market for the …

Chinese Equity Market Pricing And Loan Sales Discount In Us Banking, Yichi Zhang

LSU New Orleans Theses and Dissertations

Abstract

In the recent decades, the Fama–French three-factor (1992, 1993, 1996) and five-factor (2015) models become the most widely used asset pricing models in the world. The U.S. (i.e., developed financial market) country-specific 2 additional factors in the 5-factor model, RMW and CMA or profitability and investment premium, empirically cannot further capture the return variation of the classic three-factor/characteristic in China’s stock market (i.e., developing financial markets). In China, based on our result, therefore, the classic three-factor outperforms the five-factor model. We do not presume that firms in different countries share the same features. Following Liu, Stambaugh, and Yuan (2019), …

We Can Use Machine Learning To Determine Which Financial Ratios Are Best For Investors, Collin Butterfield

All Graduate Plan B and other Reports, Spring 1920 to Spring 2023

This study develops and tests the hypothesis that the machine learning algorithm, Random Forests, can be used to systematically pick financial ratios that would be best for indicating market trends and be used subsequently to perform comparable analysis to speculate whether a firm is over- or under-valued. Results show that financial ratio selection differs depending on the market sector to which a firm pertains. We examine the 11 financial sectors representing the key areas of the economy. We also look at four possible trading strategies that an investor could have: month-long, quarter-long, semi-annual, and annual to capture differing trading horizons.

Why Do Nonprofits Fail? A Quantitative Study Of Form 990 Information In The Years Preceding Closure, Mackenzie Arbogust

School of Public Service Theses & Dissertations

Nonprofit organizations are an important piece of the community and economy in the United States. Each year, nonprofit organizations close their doors and stop providing services to the community. While there are large amounts of literature around financial health and vulnerability and governance best practices of nonprofit organizations, few of the studies have ever looked specifically at failed organizations. In general, the end stages of the life cycle of nonprofit organizations have not been well studied and are not well understood. This study draws on resource dependency theory and institutional theory to identify financial and governance factors that may serve …