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Essays on Information Diffusion and Stock Markets
My dissertation is a compilation of three separate research studies that explore how information diffuses in financial markets. The first chapter examines how non-uniform information diffusion through distinct networks segments U.S. financial markets. Using changes in newspaper ownership networks, I document that a network ...
Two Essays on Corporate Finance: Financing Frictions and Corporate Decisions
(2013-07-25)
My dissertation focuses on the effect of financial market frictions on firm value in the context of corporate mergers, capital structure and growth. The first chapter explores how financing frictions faced by potential buyers of industry specific real assets affect the transaction value of merger targets that consist of such ...
Monitoring, Contractual Incentive Pay, and the Structure of CEO Equity-Based Compensation
(2013-07-25)
I find that a CEO who is better monitored tends to have smaller total contractual incentive pay, measured by the delta of the CEO's total portfolio. The realized wealth-to-performance sensitivity (WPS) of such a CEO, however, is not significantly different from that of a CEO who is worse monitored. The findings suggest that ...
Is the risk of product market predation a cost of disclosure?
Competitors engage in product market predation when they lower prices or increase expenditures on non-price competition with the goal of forcing a rival to exit. This study provides evidence consistent with the hypothesis that financially constrained firms avoid financial statement disclosure to mitigate the risk of product ...
Institutional Investors: Arbitrageurs or Rational Trend Chasers
(2013-11-14)
This paper studies the relationship between institutional investor holdings and misvalued stocks over the last three decades in the U.S. equity market. Using multiple proxies of stock mispricings, I find that institutional investors overweigh overvalued and underweigh undervalued stocks in their portfolio, taking the market ...
An Investment-based Explanation for the Post-merger Underperformance Puzzle
(2012-09-13)
Extant evidence of acquirers' post-merger underperformance is often viewed as support for the behavioral theory of mergers that investors overvalue acquirers during the pre-acquisition period. Motivated by recent developments in asset pricing, which show that firms' expected returns and investment rates are negatively related, ...
Ownership Structure and Firm Value: Evidence from Mergers of Institutional Investors and Genetics, Homeownership and Home Location Choice
In the first chapter I investigate the effect of the dispersion of institutional shareholders on firm value. By using mergers of institutional investors as exogenous changes to the ownership structure of firms in their portfolios I find that institutional investor monitoring is a complement to monitoring by other institutional ...
Feedback and Firm Value
(2012-09-13)
This essay analyzes the potential real economic effects of a feedback mechanism on firms' real investment and financing policies. Using a matched sample method with option-listed firms between 1973 and 2009, I document some evidence consistent with the presence of the feedback effect described in Goldstein and Geumbel (2008).
Two Essays on Payout Policy: Strategic Interaction Effects and Union Effects
(2012-09-13)
Previous literature on payout policy has focused on the effects of firm-level characteristics on firms' dividend payouts or stock repurchases. My dissertation investigates whether industry characteristics affect these payout decisions. The first chapter focuses on effects of strategic interaction between firms in product ...
Essays on Personal Bankruptcy Law and Small Business Financing
In the first chapter of my dissertation I ask whether and how debtor protection affects aggregate small business credit quantity. Using comprehensive data on the number and amount of small business loans granted by commercial banks, and employing a robust difference-in-difference empirical design utilizing staggered shocks ...