Abstract The laws and financial structure of a country can affect firm decisions and outcomes by affecting financial constraints and agency problems. Power theories of credit suggest that the legal rights of creditors, such as the ability to grab collateral in bankruptcy, increase the willingness of lenders to extend credit. Shareholder protection can reduce information asymmetry and agency problems by mandating quality disclosures, stipulating approval procedures for potentially conflicted transactions and facilitating the private litigation process. The bank-based financial structure can reduce moral hazard by alleviating the free-rider problem in monitoring. This dissertation contains various novel results. The first essay presents evidence of an inverse relation between creditor rights and the value of cash. This is consistent with financial constraints increasing the marginal value of cash, and creditor rights alleviating financial constraints. The second essay suggests that the bank-based financial structure improves the operating performance of large investments especially for diffusely held firms, consistent with the less prevalent free-rider problem in monitoring. The third essay shows that shareholder protection raises investment hazard for the smallest firms. This is consistent with the notion that shareholder protection alleviates those asymmetric information-related problems that delay investment, such as cash flow diversion by corporate insiders. In addition to contributing to the scientific literature, the results of this dissertation can have practical implications for companies, suppliers of finance and policymakers. A value-maximizing company should take into account its legal environment when deciding on cash holdings. Suppliers of finance should consider the interplay between financial structure and ownership structure when evaluating the profitability of investments. Policymakers often encourage investments due to their effect on employment and tax income. The results of this dissertation show that investor protection increases the frequency of large investments and their profitability. / Tiivistelmä Maan lait ja rahoitusrakenne voivat vaikuttaa yrityksen päätöksentekoon rahoitusrajoitteiden ja agenttiongelmien kautta. Velkojien vaikutusvaltaan perustuvien teorioiden mukaan velkojan oikeudet, kuten oikeus vakuuteen konkurssin yhteydessä, lisäävät velanantajan lainaamishalukkuutta. Osakkeenomistajia suojaavat lait voivat puolestaan vähentää yrityksen ja sijoittajien välistä epäsymmetristä informaatiota ja agenttiongelmia esimerkiksi vaatimalla laadukkaita ilmoituksia ja hyväksymisprosesseja koskien potentiaalisesti eturistiriitoja sisältäviä transaktioita sekä mahdollistamalla yksityisen kanteen nostamisen. Lisäksi maan pankkiperusteinen rahoitusrakenne voi vähentää moraalikatoa lievittämällä vapaamatkustajaongelmaa yritysjohdon monitoroinnissa. Tämä tutkielma sisältää useita uusia tuloksia. Ensimmäisessä esseessä havaitaan käänteinen yhteys velkojien oikeuksien ja kassan arvon välillä. Johdonmukainen selitys tälle havainnolle on, että rahoitusrajoitteet lisäävät kassan marginaaliarvoa ja velkojien oikeudet lieventävät rahoitusrajoitteita. Toisen esseen tulosten mukaan pankkiperusteinen rahoitusrakenne parantaa suurten investointien vaikutusta operatiiviseen tulokseen eritysesti hajaantuneen omistusrakenteen omaavien yritysten osalta. Tämä voi johtua pankkiperusteisen rahoitusjärjestelmän vapaamatkustajaongelmaa vähentävästä vaikutuksesta. Kolmannen esseen tulosten mukaan osakkeenomistajansuoja kohottaa suurten investointien hasardifunktiota pienimpien yritysten osalta. Tämä puolestaan voi johtua siitä, että osakkeenomistajansuoja lievittää investointeja hidastavia epäsymmetrisen informaation ongelmia, kuten yrityksen sisäpiiriläisten mahdollista taipumusta ohjata yrityksen kassavirtoja heitä itseään hyödyttäviin kohteisiin. Tieteellisen kontribuution lisäksi tutkimustuloksia voidaan hyödyntää yritysten, rahoittajien ja politiikkojen päätöksenteossa. Yrityksen arvoa maksimoivan johtajan tulisi kassan suuruutta päättäessään ottaa huomioon maassa vallitseva lakiympäristö. Rahoittajien tulisi puolestaan huomioida maan rahoitusrakenteen ja yrityksen omistusrakenteen vaikutus investointien kannattavuuteen. Politiikkojen yleinen tavoite on lisätä yritysten investointeja, koska ne parantavat työllisyyttä ja synnyttävät verotuloja. Tämän tutkielman mukaan sijoittajansuoja lisää suurten investointien frekvenssiä ja kannattavuutta.

By using five measures of corporate governance, this paper sheds light on the relationship between corporate governance, firm performance and firm valuation in a sample of large Swedish firms between 2013-2016. The study is conducted on the grounds of the Agency Theory as proposed by Jensen and Meckling (1976) and influenced by corporate governance research by Bhagat and Bolton (2008). Using Tobin’s Q and return on assets (ROA) as estimates of firm valuation and firm performance respectively, we find mixed results compared to prior research concerning the effects of good corporate governance. Our study shows that greater equity holdings of board members are significantly and positively impactful on Tobin’s Q as well as ROA. Furthermore, we find that a larger board size has a significant inverse relationship with both Tobin’s Q and ROA, which is consistent with prior research suggesting that smaller boards are more effective. Interestingly and partly inconclusive with prior research however, we find that greater equity holdings of the CEO is significantly and negatively impactful on Tobin’s Q as well as ROA. These results are robust for multiple controls and various models.

Submitted by Luda Lee (luda.lee.sc@gmail.com) on 2017-05-03T20:29:55Z No. of bitstreams: 1 Dissertation_EBAPE_mestrado_Luda Lee_Final.pdf: 1581307 bytes, checksum: 547ae26c1c51f28e87c3cc2c14cc27f0 (MD5) / Approved for entry into archive by ÁUREA CORRÊA DA FONSECA CORRÊA DA FONSECA (aurea.fonseca@fgv.br) on 2017-05-05T12:21:08Z (GMT) No. of bitstreams: 1 Dissertation_EBAPE_mestrado_Luda Lee_Final.pdf: 1581307 bytes, checksum: 547ae26c1c51f28e87c3cc2c14cc27f0 (MD5) / Made available in DSpace on 2017-05-16T14:52:51Z (GMT). No. of bitstreams: 1 Dissertation_EBAPE_mestrado_Luda Lee_Final.pdf: 1581307 bytes, checksum: 547ae26c1c51f28e87c3cc2c14cc27f0 (MD5) Previous issue date: 2017-02-22 / This study examines the sequential relationship between a firm’s innovation activity, export intensity and performance in emerging economies. Hypotheses were generated based on this framework, and they also modeled the roles played by government subsidy as moderator. Our hypotheses were tested on a sample that includes Chinese, Indian and Russian manufacturing firms. Results in a sequential model show that (1) innovation activity positively and indirectly affects firm performance through exporting, (2) government subsidy strengthens the positive relationship between export intensity and firm performance in emerging economies. However, although previous studies have theoretically identified that the government has a significant role on the relation between firm innovation and export performance, no empirical evidence could be found through this study. Our findings uphold previous theories that the effort of firms to develop their innovation leads to a firm’s increase of export and profit, and the moderating role of the government substantially affect export intensity in emerging economies.

A pesquisa trata da relação entre as transações com partes relacionadas (RPT\'s) e o desempenho nas companhias do Novo Mercado. Teve como objetivo identificar se esta relação pode ser afetada pelos mecanismos de governança corporativa, especificamente de supervisão e monitoramento por elas adotados voluntariamente. Foram consideradas as hipóteses dicotômicas apresentadas por Gordon, Henry e Palia (2004), denominadas de \"conflitos de interesse\" e \" transações eficientes\". Na tentativa de mensurar estas relações, adotou-se o modelo de análise de dados em painel por permitir a incorporação de informações temporais e reduzir o problema do viés de variáveis omitidas. Evidências sugerem que há relação entre as transações com partes relacionadas operacionais e o desempenho das companhias estudadas. No entanto, os resultados a respeito do efeito de moderação dos mecanismos de supervisão e monitoramento na utilização de tais contratos foram inconclusivos. / The study deals with the relationship between related party transactions (RPT\'s) and firm performance in the Brazilian \"Novo Mercado\", and its goal is to identify whether this relationship can be affected by mechanisms of corporate governance. Audit committee was used to measure corporate governance mechanisms. The two assumptions made by Gordon, Henry and Palia (2004), called \"conflicts of interest\" and \"efficient transactions\" were considered in this study. In an attempt to measure these relationships, it was adopted the model of panel data analysis to reduce the problem of omitted variable bias. The empirical results provide evidence that there is a relationship between related party transactions and firm performance. However, the results regarding the moderating effect of the mechanisms of supervision and use of such contracts have been inconclusive.

This thesis explores whether independent directors in the USA and Canada are effective in holding management accountable by: (1) analyzing how the policy of relying on independent directors developed and operates; (2) introducing the main theoretical critiques of independent directors’ monitoring effect; and (3) examining whether empirical studies in the field of management science and financial economics support the policy in both countries of relying on independent directors as corporate monitors. Empirical evidence shows that boards with a majority of independent directors, in some circumstances, were associated with better firm performance (in the post-SOX period) and fulfilled certain board tasks effectively in the United States. Canadian studies, however, have not shown a positive association with improved firm performance. Audit committees composed entirely of independent directors have been effective in ensuring the quality of financial reporting in the United States, but this effect has not been found in Canada. Compensation committees composed fully of independent directors neither constrained the level of executive compensation nor tied CEO pay to firm performance in either country. US firms with an audit committee member who had accounting expertise, rather than financial analysis or supervisory expertise, were associated with a higher quality of financial reporting, while Canadian firms with an audit committee member who has financial expertise, instead of financial literacy, were associated with a similar effect. Studies also showed that independent directors perform better in certain circumstances. Based on empirical evidence, US regulators should consider: (1) changing the current mandatory requirements for an independent board and a completely independent compensation committee to a comply-or-explain requirement; (2) narrowing the qualification of a financial expert to an individual who has accounting expertise; and (3) recruiting independent directors who have two or fewer outside directorships, hold more of the corporation’s shares, have lower cost of acquiring corporate information, and have no social connections with the CEO. In Canada, weak evidence of the monitoring effectiveness of independent directors supports the existing comply-or-explain approach. Canadian regulators may only need to require or recommend that at least one audit committee member has financial expertise, instead of only financial literacy.

Board gender diversity has been on the corporate agenda for several years, despite numerous gender diversity initiatives around the EU-Member States, women remain underrepresented in the boardroom. There is an intense debate and the problem is frequently raised and discussed by politicians, journalists, shareholders and investors. The thesis examines if gender diversity in the boardroom has any significant effects on firm performance and stock volatility based on 318 firm-year observations with firms listed on the Stockholm Stock Exchange, Copenhagen Stock Exchange and Helsinki Stock Exchange from 2013 to 2015. The authors find no significant relationship between gender diversified board and firm performance for the overall sample at any conventional level. However, the authors find a positive and statistically significant relationship between gender diversified board and firm performance for only Swedish firms, measured by Tobin’s q. Furthermore, the empirical findings from the relationship between board gender diversity and stock volatility using 1 272 firm-quarter observations, are statistical significant and shows that firms with high gender diversified board have lower stock volatility compared to firms with low gender diversified board.

abstract: Firms have increasingly taken on the commitment to sustainability due to environmental and social concerns. Environmental and social sustainability can create firm value and social welfare through cost reduction and revenue growth. While indicating a desire to do more, firms face challenges while engaging with stakeholders in their supply chains – suppliers and consumers. Suppliers are key partners to achieve cost reduction while customers can be the driver for revenue growth. If firms do not overcome the challenges properly, such a win-win situation of both firms and their supply chain stakeholders may not exist. This dissertation aims to understand and suggest ways to overcome the challenges which firms and their supply chain stakeholders face while collaboratively pursuing sustainability. In the first essay, I investigate the financial impact of a buyer-initiated supplier-focused sustainability improvement program on suppliers’ profitability. The results indicate that a supplier sustainability program may lead to short-term financial loss but long-term financial gain for suppliers, and this effect is contingent on supplier slack resources. The second essay of this dissertation focuses on the consumers and investigates their reactions to two types of firm environmental sustainability claims – sustainable production versus sustainable consumption. The results indicate that firm sustainable consumption claims increase consumers’ purchase, thus leads to larger firm sales, whereas firm sustainable production claims decrease consumers’ buying intention, then result in smaller firm sales. Therefore, I show that, contrary to extant belief, firm environmental sustainability can decrease consumers’ intention to buy. Finally, a firm may be impacted when some of its upstream or downstream stakeholders, or its own operations, are impacted by a natural disaster, which are becoming more frequent due to climate change. In the third essay I study the joint effect of market attention and donation timing on firm stock returns based on the experiences of firms who donated to the 2017 Hurricane Harvey. I conclude that neither the first donors nor the followers can mitigate the negative stock returns due to disasters. However, firms who match their donation timing with market attention experience less negative stock market returns compared to other counterparts. / Dissertation/Thesis / Doctoral Dissertation Business Administration 2020

Background: Formal CEO board membership is a unique feature of Swedishboards. The share of firms having Formal CEO board membership hassignificantly decreased in the last 20 years and thus, this feature might haveevolved to be used as a signal of high CEO quality. CEO quality is in turnlikely to, through Formal CEO board membership, serve as a moderator of therelationship that both CEO power and CEO discretion has to firm performancewhich has previously been somewhat ambiguous. Purpose: The purpose of this study is to explain how the CEO’s power anddiscretion is related to firm performance and if this relation is moderated byFormal CEO board membership. Method: To fulfill the purpose of this thesis, a deductive research approachwas used. The theoretical model used is built on four theories namely,Stewardship theory, CEO power, CEO discretion and Signaling theory. With a five-year interval stretching between 1998 to 2018, the quantitative empiricalmethod relies on compensation and financial data from Swedish firms. Conclusion: The results indicate that the relation that both CEO power andCEO discretion have to firm performance, consistent with the theoreticalmodel, is positive. The results further indicate that Formal CEO boardmembership as a signal of CEO quality can moderate these relationships. Thisfinding is, however, exclusive to the years after 2008.

L’objectif de cette recherche est d’analyser deux mécanismes de la gouvernanced’entreprise. L’activisme des investisseurs institutionnels d’un côté et le pouvoirmanagérial de l’autre sont décryptés dans le but d’étudier leur degré d’influence sur lesdécisions de fusions acquisitions.Une analyse empirique est destinée à étudier l’impact de l’activisme institutionnel sur laperformance des opérations de croissance externe et le pouvoir managérial desdirigeants à accomplir ces opérations malgré une réaction négative sur le marchéfinancier.En mettant en exergue le poids des investisseurs institutionnels face aux décisionsstratégiques de croissance externe, cette recherche permet de mieux cerner le pouvoirdes dirigeants au sein de la gouvernance d’entreprise. En effet, la performance desopérations de fusions acquisitions est l’apanage d’un pouvoir managérial face à uneinfluence institutionnelle. / The purpose of this research is to analyze two mechanisms of corporate governance.The activism of institutional investors and managerial power are decrypted in order tostudy their degree of influence on the decisions related to mergers and acquisitions.An empirical analysis is conducted to examine the impact of institutional activism onthe performance of external growth operations and managerial power to accomplishthese operations despite a negative reaction from the financial market.Highlighting the importance of institutional investors with regards to strategicacquisitions’ decision, this research provides a better understanding of leaders’ powersin corporate governance. Indeed, the performance of mergers and acquisitions is theprerogative of a managerial power with regards of institutional influence

This study investigated the effect of organizational culture on firm performance in the restaurant industry. Despite the importance of organizational culture in the organizational functioning, empirical evidence for the organizational culture-performance relationship remains fragmented. The inconsistency in the literature was aroused from a lack of theoretical development, a negligence of industry-specific factors, a small sampling issue, and a lack of longitudinal examination. Therefore, this study proposed to use text analysis in measuring organizational culture and examined the organizational culture-restaurant performance with a consideration of moderating effect of service orientation, franchising, and economic condition. This study found that different organizational culture influences restaurant performance differently. Specifically, the result of this study reveals that: clan culture immediately increases restaurant productivity; adhocracy culture decreases restaurant growth; and hierarchy immediately decreases restaurant productivity. In terms of moderating role of service orientation, this study found that: that tangible service orientation positively moderates both hierarchy culture-profitability and hierarchy culture-productivity relationships. This result implies that tangible service orientation works better with the hierarchy culture in improving restaurant performance than intangible service orientation. As for the moderating effect of franchising on the organizational culture-performance relationship, this study found that franchising positively moderates the clan culture-profitability relationship and the clan culture-productivity relationship. This result implies that operational and economic benefit of franchising could be passed on to create synergetic effect with the clan culture and maximize the positive clan-productivity relationship while offset the clan-profitability relationship. Last, this study found that recession positively moderates the hierarchy culture-profitability relationship and the hierarchy culture-productivity relationship. Theoretically, this study contributes to the literature by: providing logical link between the organizational culture and firm performance; providing empirical evidence that reveals the performance implication of the organizational culture; and by using alternative organizational culture measurements based on text analysis of firms’ 10K filings. Practically, this study offers insightful implications for industry professionals in understanding the effect of organizational culture on restaurant performance.