Essays On Corporate Financing And Investment Decisions
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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 Financing And Investment Decisions
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Author : Yi Jiang
language : en
Publisher:
Release Date : 2009
Essays On Corporate Financing And Investment Decisions written by Yi Jiang and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with Chief executive officers categories.
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 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 In Empirical Corporate Finance
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Author : Santo Centineo
language : en
Publisher:
Release Date : 2016
Essays In Empirical Corporate Finance written by Santo Centineo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
Two Essays On Corporate Decisions Liquidity And Investment Efficiencies
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Author : Xiaoyun Yu
language : en
Publisher:
Release Date : 2001
Two Essays On Corporate Decisions Liquidity And Investment Efficiencies written by Xiaoyun Yu 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 On Corporate Finance And Disclosure
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Author : Brian Gibbons
language : en
Publisher:
Release Date : 2021
Essays On Corporate Finance And Disclosure written by Brian Gibbons and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.
This dissertation contains three essays. In the first essay, I document that disclosure of financially immaterial environmental and social (E&S) information has material effects on firms' investment and financing decisions using the staggered introduction of 87 country-level regulations that mandate firms report such information. Firms domiciled in countries that mandate E&S transparency increase R&D expenditures and patenting activity after disclosing. Transparent non-financial disclosure reduces financing frictions, resulting in more innovation for equity-dependent firms and increased reliance on external equity. It also improves shareholders' contracting and monitoring abilities, incentivizing managers to invest in innovation. Fixed capital investment, which is less sensitive to information frictions, does not change following E&S disclosure. Additionally, I only observe changes to investment and financing decisions when E&S disclosure is mandatory--highlighting the unique value of consistent and comparable disclosure. In the second essay, I study venture capital firms (VCs) use of public market information and how attention to this information relates to their private market investment outcomes. I link web traffic to public disclosure filings hosted on the Security and Exchange Commission's (SEC's) EDGAR server to individual VCs. VCs analyze public information before most deals. An increase in EDGAR filing views relates positively to the probability of an exit through acquisition, suggesting that public information helps identify paths to acquisition. The effect is stronger when the VC has less access to private information. I conclude that policymakers should consider spillover effects on private markets when setting public disclosure requirements. In the third essay, we identify analysts' information acquisition patterns by linking EDGAR server activity to analysts' brokerage houses. Analysts rely on EDGAR in 24% of their estimate updates, with an average of eight filings viewed. We document that analysts' attention to public disclosure is driven by the demand for information and the analysts' incentives and career concerns. We find that information acquisition via EDGAR is associated with a significant reduction in analysts' forecasting error relative to their peers. This relationship is likewise present when we focus on the intensity of analyst research. Attention to public information further enables analysts to provide forecasts for more time periods and more financial metrics. Informed recommendation updates are associated with substantial and persistent abnormal returns, even when the analyst accesses historical filings. Analysts' use of EDGAR is associated with longer and more informative analyses within recommendation reports.
Essays On Corporate Finance
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Author : David Alan Crane
language : en
Publisher:
Release Date : 2010
Essays On Corporate Finance written by David Alan Crane and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
This dissertation addresses issues in corporate finance. Part I examines the litigation environment of a firm and its impact on financial policy. Chapter 1 discusses prior research, including theory and empirical results, related to firm performance, financial policy, and litigation. It provides the background to support the empirical analyses of Chapters 2 and 3. Chapter 2 examines the wealth effects of litigation events on the firms involved, as well as on their industry peers. I find that litigation events have a strong negative effect on both the firms sued, as well as their competitors. Chapter 3 examines whether managers use financial policy strategically when facing an increased risk of litigation claims. I find that greater litigation exposure leads firms to choose higher leverage. I show that this leverage increase is brought on by an active decision to repurchase shares. These repurchases appear to be financed with a combination of excess cash and short term debt as they coincide with a significant decrease in cash holdings and an increase in short term liabilities. These firms also increase their use of operating leases, which, due to their priority in bankruptcy, have similar characteristics as secured debt. Finally, the effects seem to be stronger for firms with a higher probability of bankruptcy. Part II asks whether there is a disposition effect in corporate investment decisions. Chapter 4 provides a summary of the existing literature related to the disposition effect and discusses both theoretical and empirical findings. In Chapter 5, I utilize the unique nature of Real Estate Investment Trusts (REITs) to test for the presence of the disposition effect in corporate investments. The results show strong statistical evidence that REIT managers tend to sell winners and hold losers, where winners and losers are defined using changes in properties' prices since they were acquired. In addition, I find evidence that this behavior is consistent with the disposition effect. REIT managers are significantly less likely to sell properties that have a loss relative to a reference point based on inflation or historical average returns, controlling for the properties' recent returns.
Essays On Corporate Financing Behavior
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Author : My Dieu CaoHuy
language : en
Publisher:
Release Date : 1996
Essays On Corporate Financing Behavior written by My Dieu CaoHuy and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1996 with categories.
Essays On Corporate Finance And Governance
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Author : Serkan Akguc
language : en
Publisher:
Release Date : 2014
Essays On Corporate Finance And Governance written by Serkan Akguc 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.
The analysis of key corporate decisions is mostly restricted to publicly listed firms even though privately held firms constitute a substantial part of any economy. In this dissertation, my goal is to enhance our understanding of some of the important decisions of private firms, namely: cash holdings, investment and performance using unique and large cross-country samples. In the first chapter, I examine cash holdings of private, unlisted firms versus publicly traded firms in 33 European countries during 2002-2011. I find that the average cash-to-assets ratios are lower in the Eurozone than in non-Eurozone countries by 5.4% due to lower transaction demand under a single currency regime. Public firms have higher cash ratios than private firms. However, the difference in cash ratios between public and private firms is higher in the Eurozone than in non-Eurozone countries, reflecting that: (a) precautionary demand is higher in the Eurozone due to risks and pitfalls of policy coordination, and (b) economic adjustments and transfers in the Eurozone more directly affect publicly traded firms than private ones. Moreover, I show that, during the financial crisis, corporate cash ratios increased in the Eurozone, indicating that the increase in precautionary cash demand was greater than a decrease in transaction demand due to the adoption of the Euro. In the second chapter, I compare the operating performance and efficiency of publicly and privately held firms in the UK over the period 2003-2012. I find that privately held firms typically perform better than publicly traded firms. This finding is robust in various model settings, using industry and size as well as propensity scored matched samples, considering alternative definitions of operating performance, ownership structure and taking into account the endogeneity of firm's exchange listing choice. I also show that average operating profitability of public firms is even lower than that of private firms when both types of firms are financially constrained. Finally, I show that informational value of R&D is higher for private firms than it is for public firms. In the third chapter, I examine the relationship between time horizons and corporate investment, both on the firm and country levels, for private, unlisted firms and publicly traded firms using a unique dataset from 73 countries around the world during the time period of 2003-2012. I show that a longer time horizon (i.e. higher propensity to save and invest) on a cultural and country level also manifests itself as higher investment at the firm level. This is robust to using alternative proxies for the country-level time horizon. Investment behavior of private firms, not public firms, follows a country-level horizon pattern, which is reflective of close monitoring by fewer owners and the absence of stock market pressures in making investment decisions. When I consider time-horizon at the firm-level, we find that firms with a longer time horizon invest more, and this effect is more pronounced for public firms than for private firms, given the former's greater, easier, and cheaper access to capital in the public capital market. I also show that public firms invest more and are more responsive to investment opportunities than private firms.