Three Essays on the Effect of External Business Environment on Corporate Investment
Notice bibliographique
Résumé
This dissertation consists of three related essays on corporate investment.In Essay I, I examine how the characteristics of the country in which firms operate affect firm's "fourth quarter effect".In Essay II, I study how firm's local risk preference influence their acquiring decisions.And in Essay III, I investigate the relation between country laws and institutions and corporate pension underfunding, as well as the effect of pension underfunding on corporate investment and valuation.Essay I: It is documented that companies and government agencies in the United States invest more in the fourth fiscal quarter without having higher investment opportunities.While previous studies focus on the agency conflicts and information asymmetry within organizations, we are motivated by Scharfstein and Stein's (2000) two-tiered agency model, and examine how firms' external business environment affects the "fourth quarter effect".We implement our study in a sample of 41 countries, and observe similar seasonality in firm investment as documented in the U.S. market.More importantly, using country characteristics, we find that firms from countries with better investor rights and protection, and more developed financial markets show less severe over-investment in the fourth fiscal quarter.Essay II: This essay studies how managers' risk aversion, captured by the local religious beliefs prevailing in the locations of their firms, could affect firms' merger and acquisition activities.We find that firms headquartered in areas with higher Catholics-to-Protestants (CP) ratio, reflective of stronger gambling preferences, tend to conduct more acquisitions.Moreover, these acquisitions are more likely to be international and conglomerate, and more likely to involve targets with high stock return volatility and R&D spending.The acquisitions are also associated with value destruction from the perspective of the acquiring firm's shareholders and the effect is magnified in an environment of weaker corporate governance.When we interact CP ratio with executive's career risk, we find that local gambling preference significantly promotes managerial risk-taking in mergers and acquisitions.iii Essay III: Financial crises, low interest rate, and extended life expectancy cast doubt on whether corporate defined benefit (DB) pensions are sufficiently funded to cover their liabilities.We study the effect of pension underfunding on corporate investment using international data involving 29 countries at heterogeneous economic development stages and different regulatory environments.We document that corporate pensions are significantly underfunded in most countries of our sample in the period of 2001 to 2015.Pension assets are on average less than 50% of pension liabilities among firms that provide DB pension plans.To the extent of pension underfunding effect on corporate investment, we find that the (inverse) relationship is subject to variation in country characteristics.Specifically, firm's investment is more severely constrained by pension underfunding in countries with stronger labor union power and less developed financial market.Finally, while substantial pension underfunding has a negative impact on firm value, our results show that offering more DB pension plans do not reduce firm value.Overall, our findings suggest that DB pension plans could still play a useful role in creating firm value.discussions.All people, especially Haim and Chauncey, have been excellent colleagues and office mates.
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Comment cette classification a été obtenuedéplier
Prédiction machine sur la base complète
Imitation des enseignantsNi prévalence calibrée, ni vérité terrain. Validation humaine à venir. Le volet Gemma est une étiquette directe du modèle pour chaque travail de la base, lue sur la notice réduite au titre. Le volet Codex est un classifieur appris des 10 348 étiquettes directes de Codex et calibré sur les taux pondérés de l'échantillon; les champs sans appui suffisant ne portent aucun appel Codex. Le mode candidate est l'union des deux volets; le consensus est leur intersection. Ces sorties portent le statut machine_predicted_unvalidated et ne sont pas des étiquettes humaines.
Scores du classifieur distillé par catégorie (deux têtes)
| Catégorie | Codex | Gemma |
|---|---|---|
| Métarecherche | 0,001 | 0,011 |
| Méta-épidémiologie (sens strict) | 0,001 | 0,000 |
| Méta-épidémiologie (sens large) | 0,000 | 0,001 |
| Bibliométrie | 0,001 | 0,002 |
| Études des sciences et des technologies | 0,001 | 0,002 |
| Communication savante | 0,003 | 0,002 |
| Science ouverte | 0,001 | 0,002 |
| Intégrité de la recherche | 0,002 | 0,003 |
| Charge utile insuffisante (le modèle a refusé de juger) | 0,011 | 0,002 |
Scores machine (provisoires)
Les deux têtes enseignantes du modèle étudiant, lues sur ce travail. Un score ordonne la base pour la relecture; il n'affirme jamais une catégorie, et le statut de validation accompagne chaque rangée tel quel.
Scores de référence d'un modèle non mature (critères de maturité non atteints, 7 itérations). Un score ordonne; il n'affirme jamais une catégorie.
score_only:v0-immature-baseline · tel quel depuis la passe de notation : score_only signifie que le nombre peut ordonner les travaux, et qu'aucune étiquette de catégorie n'en découleClassification
machine, non validéePrédiction automatique; un appel candidat d’une seule source (Gemma direct ou Codex distillé), pas un consensus.
Le détail, modèle par modèle et score par score, se trouve en fin de page sous « Comment cette classification a été obtenue ».