Two Essays On Corporate Investment Decision
DOWNLOAD
Download Two Essays On Corporate Investment Decision PDF/ePub or read online books in Mobi eBooks. Click Download or Read Online button to get Two Essays On Corporate Investment Decision book now. This website allows unlimited access to, at the time of writing, more than 1.5 million titles, including hundreds of thousands of titles in various foreign languages. If the content not found or just blank you must refresh this page
Two Essays On Corporate Investment Decision
DOWNLOAD
Author : 何柏欣
language : en
Publisher:
Release Date : 2011
Two Essays On Corporate Investment Decision written by 何柏欣 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.
Two Essays On Corporate Decisions Liquidity And Investment Efficiencies
DOWNLOAD
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.
Two Essays On Investments
DOWNLOAD
Author : Jie Zhu
language : en
Publisher:
Release Date : 2017
Two Essays On Investments written by Jie Zhu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
In my dissertation, I study factors that influence investments from either corporate or institutional perspective. First, I examine the sensitivity of corporate investment to internally generated cash flow and its pattern of change over time across countries. Second, I investigate how a firm's customer profile can shape its ownership structure of institutional investors. Existing studies have documented a puzzling disappearance of investment-cash flow (ICF) sensitivity in the U.S.. In the first chapter, I explore whether economic and financial development can explain the extent of a country's ICF sensitivity and its evolution through time. I find that, in aggregate, ICF sensitivity has also faded around the world; yet it has remained high in countries with low economic and financial development. Further, I find that the access to external finance, especially equity finance, is a key channel through which country-level development affects the sensitivity of investment to internal cash flow. In more developed countries, external finance has become more accessible for firms when their internal cash flow is insufficient, thereby reducing their reliance on internal cash flow. The results indicate that once a country advances to a certain degree of financial and economic development, it becomes more efficient in allocating resources and therefore financial constraints at the individual firm level become less binding. A growing literature has documented different financial implications of a concentrated customer base. In the second chapter, I examine how customer concentration affects institutional investors' investment decisions. I find that a firm's customer concentration tends to attract different groups of institutional investors, depending upon their investment horizons. Specifically, those institutions who trade actively (short-term) would buy the stocks of firms with a more concentrated customer base. Conversely, those institutions who trade less actively (long-term) would buy the stocks of firms with a less concentrated customer base. While the preference of long-term investors is supported by the increased risk associated with the dependency on a few large customers, I find that the improved stock liquidity is the channel through which a concentrated customer base attracts short-term investors. Further, my findings cannot be explained by information transfer along the supply chain.
Essays In Corporate Finance And Investment
DOWNLOAD
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.
Corporate Investment Behavior In The Imperfect Capital Market
DOWNLOAD
Author : Sijing Zong
language : en
Publisher:
Release Date : 2006
Corporate Investment Behavior In The Imperfect Capital Market written by Sijing Zong and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with Capital market categories.
My dissertation is a study of corporate investment behavior under market imperfections. This dissertation is structured as three inter-related essays that each addresses a particular aspect of the investment behavior of firms and all share common themes which are 1) market imperfections complicate managerial decisions on investments; and 2) the models based on perfect market assumptions may not be correct. The first essay, The relationship between internal cash flow and investments, studies the puzzle of the sensitivity of corporate investments to internal cash flows and finds that a U-shaped sensitivity curve between investment and cash flows can be clearly identified in the U.S. and in most other countries studied. The second essay, The relationship between market valuation and corporate investments, studies the relationship between stock market valuation and firm investments using a model controlling for many market imperfection components and employing simultaneous equations estimates. Essay two finds that both market perceptions and fundamental factors are important influences on corporate investment decisions. Moreover, we document that market valuation has a much higher impact on investment than fundamental variables, which seems to be consistent with the contentions in Barro (1990) and Baker et al. (2003). The third essay, Who will benefit from diversification: a transaction cost view of diversified firms, studies the issue of diversification and using data for a number of countries finds that both firm-level and country-level variables are important determinants of the excess values of diversified firms. We find that country risk, legal system, country disclosure level, information asymmetry measures, and agency cost measures are all important factors that influence diversified firm values. Our findings are largely consistent with those suggested by the transaction cost theory and provide a new perspective for the evaluations of firm diversification. In summary, this dissertation studies the impacts of market imperfections on corporate investment decisions and suggests that when operating in an imperfect market, a firm's investment decision-making process is influenced by cash flows, stock prices, and transactions costs, and is much more complicated than in perfect markets.
Essays In Corporate Policy
DOWNLOAD
Author : Tae Eui Lee
language : en
Publisher:
Release Date : 2015
Essays In Corporate Policy written by Tae Eui Lee and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with Cash flow categories.
This dissertation consists of two essays on corporate policy. The first chapter analyzes whether being labeled a "growth" firm or a "value" firm affects the firms dividend policy. I focus on the dividend policy because of its discretionary nature and the link to investor demand. To address endogeneity concerns, I use regression discontinuity design around the threshold to assign firms to each category. The results show that "value" firms have a significantly higher dividend payout - about four percentage points - than growth firms. This approach establishes a causal link between firm "growth/value" labels and dividend policy. The second chapter develops investment policy model which associated with duration of cash flow. Firms are doing their business by operating a portfolio of projects that have various duration, and the duration of the project portfolio generates different duration of cash flow stream. By assuming the duration of cash flow as a firm specific characteristic, this paper analyzes how the duration of cash flow affects firms investment decision. I develop a model of investment, external finance, and savings to characterize how firms decision is affected by the duration of cash flow. Firms maximize total value of cash flow, while they have to maintain their solvency by paying a fixed cost for the operation. I empirically confirm the positive correlation between duration of cash flow and investment with theoretical support. Financial constraint suffocates the firm when they face solvency issue, so that model with financial constraint shows that the correlation between duration of cash flow and investment is stronger than low financial constraint case.
Essays On Corporate Investment Decisions
DOWNLOAD
Author : Zhikun Li
language : en
Publisher:
Release Date : 2004
Essays On Corporate Investment Decisions written by Zhikun Li and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Corporations categories.
Essays In Corporate Financing And Investment Decisions
DOWNLOAD
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 Mergers Acquisitions And Corporate Investment
DOWNLOAD
Author : Sangwon Lee
language : en
Publisher:
Release Date : 2018
Essays On Mergers Acquisitions And Corporate Investment written by Sangwon Lee and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with Corporate reorganizations categories.
This dissertation consists of three essays on mergers and acquisitions (M&As) and corporate investment. In the first essay, I examine the divergence of investor opinions about target firm values after the announcement of M&A deals ("investor disagreement"). I create three measures of investor disagreement using the target firm's trading volume, bid-ask spread, and stock return volatility during a two-week window following a deal announcement. I find that investor disagreement is positively associated with deal complexity, and negatively with the offer premium. Deals with larger investor disagreement are more likely to be renegotiated, to feature slower completion time, and to fail, even after controlling for announcement returns and merger arbitrage spreads. Consistent with the divergence of opinion theory, a trading strategy that invests in target firms with low investor disagreement yields positive abnormal returns. Overall, my results highlight the importance of investor disagreement in predicting M&A outcomes. The second essay shows that M&A deals that are announced when the bidder's relative value (ratio of bidder's equity value to target's equity value) is closer to its 52-week high feature higher offer premium, lower (higher) announcement returns for the bidding (target) firm, and are more likely to fail, all else equal. Yet, bidders in such deals also experience large abnormal returns in the two-year period surrounding the announcement. Our results suggest that bidders strategically choose announcement timing to exploit relative misvaluation, and cast doubt on the idea that announcement returns represent the gains to long-term shareholders of bidding firms. In the third essay, I examine how the effect of uncertainty on capital investment varies between focused firms and conglomerate segments. One of the advantages of conglomeration is that segments have access to the conglomerate's internal capital market and are thus less likely to be financially constrained. Consistent with the idea that uncertainty exacerbates financial frictions, I find that industry-level uncertainty has a negative effect on the investment of focused firms but has no statistically significant effect on the investment of conglomerate segments. Further analysis suggests that corporate diversification may improve the efficiency of capital investment decisions under uncertainty.
Essays On Corporate Investment And Managerial Attribution
DOWNLOAD
Author : Wahib Ghazni
language : en
Publisher:
Release Date : 2023
Essays On Corporate Investment And Managerial Attribution written by Wahib Ghazni and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023 with Corporations categories.
The dissertation empirically investigates the role of managerial traits, skill, and biases on corporate investment decisions. The first essay causally explores the impact of Diversity Inclusion and Equity (DEI) in the ranks of executive leadership on corporate intangible capital. Using a machine learning algorithm that is trained on the U.S Census to build a novel database that identifies the ethnicity of all C-Suite Executives. It explores the differentiating dimensions of leadership traits that are brought to the managerial decision-making process by DEI. The findings reveal that minority executives pioneer in building a firm's intangible capital by increasing its innovation output and growing its organizational capital. The second essay shows that the sharp decline in option compensation following SFAS 123R in 2005 has diminished the effectiveness of previous option-based managerial overconfidence measures. Thus, it proposes a new measure of managerial overconfidence: dollars at risk from voluntarily holding vested shares and options. It tests 16 predictions from the literature regarding overconfidence and finds strong evidence validating the proposed measure. The third and last essay lends empirical support to the premise that boards consider dynamic CEO performance to make their estimates about true CEO skill. It expands the focus of the relative performance evaluation from studying the relationship of CEO pay and turnover with contemporaneous skill performance to including persistent skill. Its findings show that boards do consider dynamic skill performance in their assessment of managerial skill and that persistent skill is associated with higher pay and a lower probability of turnover.