Essays In Corporate Finance And Investment
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Essays In Corporate Finance And Investment
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Author : Lin William Cong
language : en
Publisher:
Release Date : 2014
Essays In Corporate Finance And Investment written by Lin William Cong and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
This thesis consists of two essays that examine several problems in corporate finance and mechanism design. The central theme is endogenous agency conflicts and their impact on dynamic investment decisions. The first essay features auctions of assets and projects with embedded real options, and subsequent exercises of these investment options. The essay shows timing and security choice of auctions endogenously misalign incentives among agents and derives the optimal auction design and exercise strategy. The second essay studies implications of endogenous learning on irreversible investment decisions, in particular, how learning gives rise to asymmetric information between managers and shareholders in decentralized firms. Depending on the quality of the project, the optimal contract between principal and agent distorts investments in ways that has not been examined in the literature. Specifically, in Chapter 1 of the dissertation, I study how governments and corporations auction real investment options using both cash and contingent bids. Examples include sales of natural resource leases, real estate, patents and licenses, and start-up firms with growth options. I incorporate both endogenous auction initiation and post-auction option exercise into the traditional auctions framework, and show that common security bids create moral hazard because the winning bidder's real option differs from the seller's. Consequently, investment could be either accelerated or delayed depending on the security design. Strategic auction timing affects auction initiation, security ranking, equilibrium bidding, and investment; it should be considered jointly with security design and the seller's commitment level. Optimal auction design aligns investment incentives using a combination of down payment and royalty payment, but inefficiently delays sale and investment. I also characterize informal negotiations as timing and signaling games in which bidders can initiate an auction and determine the forms of bids. I show that post-auction investments are efficient and bidding equilibria are equivalent to those of cash auctions. However, in this setting, bidders always initiate the informal auctions inefficiently early. In addition, I provide suggestive evidence for model predictions using data from the leasing and exploration of oil and gas tracts, which leads to several ongoing empirical studies. Altogether, these results reconcile theory with several empirical puzzles and imply novel predictions with policy relevance. In Chapter 2, I examine learning as an important source of managerial flexibility and how it naturally induces information asymmetry in decentralized firms. Timing of learning is crucial for investment decisions, and optimal strategies involve sequential thresholds for learning and investing. Incentive contracts are needed for learning and truthful reporting. The inherent agency conflicts alter investment behavior significantly, and are costly to investors and welfare. But contracting on learning restores efficiency with low future uncertainty or sufficient liquidity. Unlike prior studies, the moral hazard of learning accelerates good projects and delays bad projects. Even the best type's investment is distorted, and only when learning is contractible can adverse selection dominate learning.
Essays On Corporate Finance And Investment
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Author : Jue Wang (PhD)
language : en
Publisher:
Release Date : 2020
Essays On Corporate Finance And Investment written by Jue Wang (PhD) and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with Consolidation and merger of corporations categories.
In this dissertation, I focus on a range of topics in corporate finance and investments.
Essays On Corporate Finance And Investment
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Author : Vladimir Smirnov
language : en
Publisher:
Release Date : 2002
Essays On Corporate Finance And Investment written by Vladimir Smirnov and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002 with Corporations categories.
Two Essays In Corporate Finance And Investment
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Author : Joonghyuk Kim
language : en
Publisher:
Release Date : 2001
Two Essays In Corporate Finance And Investment written by Joonghyuk Kim and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with categories.
Essays In Corporate Financing And Investment Decisions
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Author : Hoang Van Vu
language : en
Publisher:
Release Date : 2015
Essays In Corporate Financing And Investment Decisions written by Hoang Van Vu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
The evolution of corporate debt markets in recent decades, especially short-term debt facilities and bank debt, has made funding more accessible for corporate borrowers. On the other hand, the changing environment of debt markets also creates new challenges for corporate borrowers. First, as the debt maturity structure has become shorter, companies face higher liquidity pressure. Second, since banks also increasingly rely on short-term wholesale funding, the maturity mismatch of bank assets and liabilities has widened, further increasing economy-wide liquidity risk. These problems were illustrated by the most recent liquidity crisis that lasted from 2007 to 2009. Understanding the implications of borrowing using short-term debt therefore is crucial for the modern corporate finance. Moreover, the issues regarding the maturity mismatch of the banking sector imply that fluctuations in bank credit might increase, as banks become more sensitive to liquidity constraints. This thesis explores a number of issues regarding the use of short-term debt by non-financial companies, as well as the implications of fluctuations in bank credit for corporate financial and investment policies. The thesis contains three empirical research essays, presented individually in Chapters 2, 3 and 4. The first essay investigates the implications of debt maturity structure on corporate investment activities in the presence of firm specific default risk. The second and the third essays examine the implications of bank credit cycles on corporate activities. Essay 2 studies the effect of bank credit cycles on firms' choice of external financing issues, whereas Essay 3 examines the effect of bank credit on corporate liquidity management policies and the spending on different types of investment.
Essays On Corporate Finance And Firms Investment Decisions
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Author : Neill Killeen
language : en
Publisher:
Release Date : 2018
Essays On Corporate Finance And Firms Investment Decisions written by Neill Killeen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with Derivative securities categories.
Essays In Corporate Finance
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Author : Hyun Joong Im
language : en
Publisher:
Release Date : 2012
Essays In Corporate Finance written by Hyun Joong Im and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with Corporations categories.
Essays On Corporate Finance Capital Investment And Inventory Investment
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Author : Dong Yan
language : en
Publisher:
Release Date : 2015
Essays On Corporate Finance Capital Investment And Inventory Investment written by Dong Yan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with Capital investments categories.
Essays In Corporate Finance
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Author : Bruno d Laranjeira
language : en
Publisher:
Release Date : 2011
Essays In Corporate Finance written by Bruno d Laranjeira and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
This thesis presents two essays in Corporate Finance. In the first essay, I use the August 2007 crisis episode to gauge the effect of financial contracting on real firm behavior. I identify heterogeneity in financial contracting at the onset of the crisis by exploiting ex-ante variation in long-term debt maturity structure. Using a difference-in-differences matching estimator approach, I find that firms whose long-term debt was largely maturing right after the third quarter of 2007 cut their investment-to-capital ratio by 2.5 percentage points more (on a quarterly basis) than otherwise similar firms whose debt was scheduled to mature after 2008. This drop in investment is statistically and economically significant, representing one-third of pre-crisis investment levels. A number of falsification and placebo tests suggest that my inferences are not confounded with other factors. For example, in the absence of a credit contraction, the maturity composition of long-term debt has no effect on investment. Moreover, long-term debt maturity composition had no impact on investment during the crisis for firms for which long-term debt was not a major source of funding. Our analysis highlights the importance of debt maturity for corporate financial policy. More than showing a general association between credit markets and real activity, my analysis shows how the credit channel operates through a specific feature of financial contracting. In the second essay, I analyze how institutional investors choose which Initial Public Offering to invest. Using a sample of IPOs from 1980 to 2004, I show that the reputation of the lead underwriter is the most significant variable in this decision process. Using Carter-Manaster rankings of underwriter reputation, I report that a one point increase in the reputation ranking leads to a 2% increase in institutional investors` holding. Moreover, I test hypotheses about what kind of certification the underwriter is providing. I provide evidence that underwriters certify un-measurable characteristics, in contrast to measurable characteristics, such as those provided in the financial statements of the issuer.
Essays In Corporate Finance And Investments
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Author :
language : en
Publisher:
Release Date : 2012
Essays In Corporate Finance And Investments written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with categories.