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Essays on Empirical Corporate Finance.

Record Type:	Electronic resources : Monograph/item
Title/Author:	Essays on Empirical Corporate Finance./
Author:	Akkoyun, Huseyin Cagri.
Published:	Ann Arbor : ProQuest Dissertations & Theses, : 2019,
Description:	168 p.
Notes:	Source: Dissertations Abstracts International, Volume: 81-06, Section: A.
Contained By:	Dissertations Abstracts International81-06A.
Subject:	Finance. -
Online resource:	http://pqdd.sinica.edu.tw/twdaoapp/servlet/advanced?query=13882777
ISBN:	9781392832318

Essays on Empirical Corporate Finance.
Akkoyun, Huseyin Cagri.

Essays on Empirical Corporate Finance. - Ann Arbor : ProQuest Dissertations & Theses, 2019 - 168 p.

Source: Dissertations Abstracts International, Volume: 81-06, Section: A.

Thesis (Ph.D.)--Northwestern University, 2019.

This item must not be sold to any third party vendors.

In my dissertation, I investigate multiple factors that impact corporations' financing decisions by using three different empirical settings. Specifically, I first empirically identify the impact of government debt increase on both corporate debt and equity financing. Second, I document how investor protection laws and institutions ease the access of innovative firms (startups) to external finance, which is necessary for innovation and producing patents. Finally, I measure the impact of industry competition on the terms of financial contracts between lenders and corporations.In the first chapter, I focus on the World War I period to empirically identify the impact of government debt on corporate financing. Although the literature has long discussed the financial crowding-out effect-which occurs when investors use their resources to finance government debt that would diminish available funds for corporations-there is no convincing empirical evidence of its existence. The main empirical challenge is that economic conditions could drive both government debt and corporate financing, and produce a spurious relationship. To address this problem, I leverage several features of the World War I period. In particular, I collect a novel data set on individual corporate bond and stock offerings and calculate the unsold amounts for each offering. Then I measure the crowding-out effect by comparing the unsold amounts of corporate securities during the months that treasurybonds flooded the markets with the remaining months in the same year when economic conditions were similar. The comparison of unsold amounts shows that long-term treasury bonds crowded out long-term corporate bonds, but did not have an effect on short-term corporate notes. Moreover, corporate stocks, especially those paying stable dividends, were crowded out. My findings support theories that stress the role of segmented financial markets (in which a subgroup of investors primarily prefer long-term fixed income securities) and predict that financial crowding-out should be stronger for corporate securities that have a similar maturity, risk, and payment schedule to treasury bonds.The second chapter investigates how investor protection laws and institutions encourage investors to provide more funds for innovative firms (startups), which in turn stimulates firm- level patenting activity. Even though some cross-country studies document that startups located in countries that provide strong investor protection can easily access external finance (venture capital) and innovate more, the documented evidence does not establish a causal relationship, since the countries could have other characteristics, e.g. education system and financial sector, that could stimulate innovation. To address this issue, I use the enactment of the first form of state-level investor protection laws in the U.S. when there was no federal regulation. Specifically, I use firm-level financial and patent data and compare innovation activity between the early and late adopting states in a difference-in-differences setting. My findings indicate that investor protection laws helped firms to raise more external finance and produce more patents.In the third chapter, joint work with Ahmet Degerli, we study how industry competition could affect loan contract terms between lenders and firms. Although some studies focus on competition's impact on the interest rate, to the best of our knowledge, there is limited evidence on other contract terms such as performance and capital covenant strictness, measured as the probability of violating the covenants associated with the income statement and balance sheet ratios, respectively. To fill this gap, we use syndicated loan data between 1994 and 2007 and investigate the impact of the change in the industry competition on the interest rate, performance, and capital covenant strictness. By using the electricity deregulation wave across some U.S. states around 2000 as a plausibly exogenous shock to the competition, we find that increase in the competition translates into looser performance covenants, which makes it easier for electricity firms to adjust their prices and strategies in response to higher competition. In addition, we find that higher competition could result in a lower interest rate and lower capital covenant strictness.

ISBN: 9781392832318Subjects--Topical Terms:

542899
Finance.
Subjects--Index Terms:

Competition

Essays on Empirical Corporate Finance.
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100 1 $a Akkoyun, Huseyin Cagri. $3 3544361
245 1 0 $a Essays on Empirical Corporate Finance.
260 1 $a Ann Arbor : $b ProQuest Dissertations & Theses, $c 2019
300 $a 168 p.
500 $a Source: Dissertations Abstracts International, Volume: 81-06, Section: A.
500 $a Advisor: Benmelech, Efraim;Ferrie, Joseph.
502 $a Thesis (Ph.D.)--Northwestern University, 2019.
506 $a This item must not be sold to any third party vendors.
520 $a In my dissertation, I investigate multiple factors that impact corporations' financing decisions by using three different empirical settings. Specifically, I first empirically identify the impact of government debt increase on both corporate debt and equity financing. Second, I document how investor protection laws and institutions ease the access of innovative firms (startups) to external finance, which is necessary for innovation and producing patents. Finally, I measure the impact of industry competition on the terms of financial contracts between lenders and corporations.In the first chapter, I focus on the World War I period to empirically identify the impact of government debt on corporate financing. Although the literature has long discussed the financial crowding-out effect-which occurs when investors use their resources to finance government debt that would diminish available funds for corporations-there is no convincing empirical evidence of its existence. The main empirical challenge is that economic conditions could drive both government debt and corporate financing, and produce a spurious relationship. To address this problem, I leverage several features of the World War I period. In particular, I collect a novel data set on individual corporate bond and stock offerings and calculate the unsold amounts for each offering. Then I measure the crowding-out effect by comparing the unsold amounts of corporate securities during the months that treasurybonds flooded the markets with the remaining months in the same year when economic conditions were similar. The comparison of unsold amounts shows that long-term treasury bonds crowded out long-term corporate bonds, but did not have an effect on short-term corporate notes. Moreover, corporate stocks, especially those paying stable dividends, were crowded out. My findings support theories that stress the role of segmented financial markets (in which a subgroup of investors primarily prefer long-term fixed income securities) and predict that financial crowding-out should be stronger for corporate securities that have a similar maturity, risk, and payment schedule to treasury bonds.The second chapter investigates how investor protection laws and institutions encourage investors to provide more funds for innovative firms (startups), which in turn stimulates firm- level patenting activity. Even though some cross-country studies document that startups located in countries that provide strong investor protection can easily access external finance (venture capital) and innovate more, the documented evidence does not establish a causal relationship, since the countries could have other characteristics, e.g. education system and financial sector, that could stimulate innovation. To address this issue, I use the enactment of the first form of state-level investor protection laws in the U.S. when there was no federal regulation. Specifically, I use firm-level financial and patent data and compare innovation activity between the early and late adopting states in a difference-in-differences setting. My findings indicate that investor protection laws helped firms to raise more external finance and produce more patents.In the third chapter, joint work with Ahmet Degerli, we study how industry competition could affect loan contract terms between lenders and firms. Although some studies focus on competition's impact on the interest rate, to the best of our knowledge, there is limited evidence on other contract terms such as performance and capital covenant strictness, measured as the probability of violating the covenants associated with the income statement and balance sheet ratios, respectively. To fill this gap, we use syndicated loan data between 1994 and 2007 and investigate the impact of the change in the industry competition on the interest rate, performance, and capital covenant strictness. By using the electricity deregulation wave across some U.S. states around 2000 as a plausibly exogenous shock to the competition, we find that increase in the competition translates into looser performance covenants, which makes it easier for electricity firms to adjust their prices and strategies in response to higher competition. In addition, we find that higher competition could result in a lower interest rate and lower capital covenant strictness.
590 $a School code: 0163.
650 4 $a Finance. $3 542899
650 4 $a Economic history. $2 fast $3 548503
653 $a Competition
653 $a Corporate finance
653 $a Financial contracting
653 $a Government debt
653 $a Innovation
653 $a Investor protection
690 $a 0508
690 $a 0509
710 2 $a Northwestern University. $b Economics. $3 1020895
773 0 $t Dissertations Abstracts International $g 81-06A.
790 $a 0163
791 $a Ph.D.
792 $a 2019
793 $a English
856 4 0 $u http://pqdd.sinica.edu.tw/twdaoapp/servlet/advanced?query=13882777