This paper looks at the drivers of monthly IPO volume. Different factors have impacted IPO volume in successive time periods since 1960. By using monthly data, there are sufficient data points to draw conclusions about some of the main factors that have continuously had an effect on IPO volume, as well as some variables that have shifted in importance. This paper shows that trailing monthly S&P returns are a potential predictor of future IPO volume, and emphasizes the seasonal boost found at the end of the calendar year. *page numbers do not line up with removed copyright images.

This paper examines the theoretical applicability and empirical rates of use for real options valuation and planning techniques. In theory, real options are the best valuation and planning tool for a biotechnology start-up, primarily due to the staged nature of investments and the discrete changes in probability between FDA approval stages. However, in a survey of 48 members of the Biotechnology Industry Association, results showed a low level of real options implementation. This paper then examines the possible reasons for the lack of implementation of real options and possible solutions, with the most popular surveyed reason being a lack of knowledge of the technique.

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In the first essay, we extend the research of Grinstein and Michaely (2005) on the relation between institutional ownership and payout policy by focusing on the institutions most likely to vote their shares. We account for heterogeneity among institutional investors as well as for firms. This paper accounts for heterogeneity among institutional investors based on their portfolio concentration and investment horizon and firms are differentiated based on their importance for institutional investors (based on percentage of total portfolio invested in the firm), free cash flow and debt-to-equity ratio. We examine the institutional holding data from 1980 to 2006. Like Grinstein and Michaely (2005) we don’t find evidence that institutional investors influence dividend payouts even after controlling for heterogeneity among institutional investors and firms. Our results indicate that institutional investors increase their holding prior to increase in repurchases in firms where they are long-term institutional investors. We also find similar relation between firm importance and repurchases. Our results do not support the notion that institutional investors are attracted to high dividend paying firms or firms with higher repurchases. In the second essay, we investigate relation between institutional holding and firm value. We examine whether institutional investor influence firm performance or they just follow momentum strategies. This paper takes into account the heterogeneity among institutional investors in that firm, firm importance for an institutional investor and institutional focus on a particular firm. We analyze annual data from 1980 to 2006. We don't find statistically significant evidence that institutional investors monitor and influence firm decisions to increasing firm value. In addition, our results suggest that that firms that increase their firm value attract investment from institutional investors. We also find that this relationship is stronger for institutional investors with long-term investment horizon.

Thesis advisor: Philip Strahan / In the first two essays of this dissertation, I examine the role of third-party debt collectors in consumer credit markets. First, using law enforcement as an instrument, I find that higher density of debt collectors increases the supply of unsecured credit. The estimated elasticity of the average credit card balance with respect to the number of debt collectors per capita is 0.49, the elasticity of the average balance on non-credit card unsecured loans with respect to the number of debt collectors per capita is 1.32. There is also some evidence that creditors substitute unsecured credit for secured credit when the number of debt collectors increases. Higher density of debt collectors improves recoveries, which enables lenders to extend more credit. Finally, creditors charge higher interest rates and lend to a larger pool of borrowers when the density of debt collectors increases, presumably because better collections enable them to extend credit to riskier applicants. In the second essay I investigate the economics of the debt collection industry. The existence of third-party debt collection agencies cannot be explained by the benefits of specialization and economies of scale alone. Rather, the debt collection industry can serve as a coordination mechanism between creditors. If a debt collection agency collects on behalf of several creditors, the practices it uses will be associated will all creditors that hired it. Hence, consumers will be unable to punish individual creditors for using harsh practices. As a result, the third-party agency may use harsher debt collection practices than individual creditors collecting on their own. As long as the costs of hiring third-party debt collectors are below the benefits from using harsh debt collection practices, the debt collection industry will create economic value for creditors. The last essay, written jointly with Thomas Chemmanur, develops a theory of corporate boards and their role in forcing CEO turnover. We show that in general the board faces a coordination problem, leading it to retain an incompetent CEO even when a majority of board members receive private signals indicating that she is of poor quality. We solve for the optimal board size, and show that it depends on various board and firm characteristics: one size does not fit all firms. We develop extensions to our basic model to analyze the optimal composition of the board between firm insiders and outsiders and the effect of board members observing imprecise public signals in addition to their private signals on board decision-making. / Thesis (PhD) — Boston College, 2011. / Submitted to: Boston College. Carroll School of Management. / Discipline: Finance.

Thesis advisor: Philip Strahan / In my first essay, I find that CEOs with more control over the firm have smaller compensation packages and are less likely to have severance contracts. Despite lower pay, these CEOs have longer tenure and their boards' replacement decisions are less sensitive to their performance, which is consistent with the view that there is a trade-off between pay and dismissal risk. To mitigate endogeneity concerns, I use divorce as an exogenous shock to CEO equity ownership, and find that following a divorce, turnover risk goes up and pay increases significantly. My findings highlight the importance of turnover risk in studying executive compensation. The second essay shows that staggered boards are associated with higher private benefits of control. We find that companies de-staggering their boards experience a decrease in control premiums. Using two court rulings in 2010 with opposite decisions on the effectiveness of staggered boards, we show that our findings are not driven by the endogeneity of the corporate control. Finally, we find evidence that the stock market reactions to the court rulings are negatively associated with the changes in control premium. Overall, our results suggest that staggered boards decrease shareholder value via entrenchment. In my third essay, I study the impact of accounting practices on debt renegotiations and covenant violations. Firms that recognize losses in a timelier manner (i.e., have more conservative accounting practices) have less slack at any given time and are more likely to violate loan covenants. But the consequences of a covenant violation by such firms differ from those of firms with aggressive accounting practices. I also find that firms with more conservative accounting practices are more likely to renegotiate their loans with creditors. / Thesis (PhD) — Boston College, 2015. / Submitted to: Boston College. Carroll School of Management. / Discipline: Finance.

In 1958, Modigliani and Miller initiated an important debate in modern corporate finance literature, when they stated that in the absence of taxes, the cost of capital of a firm is independent of its capital structure. They modified and then corrected their view in 1963 when they stated that the introduction of corporation taxes into their model implied that there is a tax advantage to leverage and therefore taxes influenced the cost of capital. Subsequently, in the 1970s and 1980s, this debate has focused on the interaction of personal taxes and corporation taxes with the cost of capital and on the determination of whether taxes influence the cost of capital at all. This thesis contributes to this debate by addressing the following issues: (a) Do personal taxes matter at all for calculating the cost of capital. How sensitive is the influence of personal taxes to differences in the capital structure and pay out policies of the firms. (b) How can more realistic features of the tax code be incorporated in the determination of the cost of capital. (c) Taxation systems can be classified into 4 main types according to the degree of integration of personal and corporation taxes. These systems are the Classical, Imputation, Two-Rate and the Integrated systems. The cost of capital, in the presence of uncertainty as well as corporation and personal taxes, is derived for each of the above systems in this thesis. (d) Taxation systems can also be classified into 2 main types according to the taxable base used. These are the Comprehensive Income Tax and the Expenditure Tax systems. The cost of capital, in the presence of uncertainty as well as corporation and personal taxes, is derived under both the above regimes. (e) Application of the results of (a), (b) and (c) above to address practical issues such as using the cost of capital equation to determine the effect of changes introduced by the 1988 Budget on the cost of capital. (f) Application of the results of (d) above to contradict the claims made in the Meade Committee regarding the tax neutrality issue. A system that is tax neutral even when uncertainty is taken into account, is proposed. All the above issues have the common theme of the determination of the appropriate cost of capital in the presence of both uncertainty as well as corporation and personal taxes. The conclusions reached are stated at the end of the relevant chapters.

University, Diss., 2003--Mannheim.

Using the methodology developed by Caginalp and Laurent (1998), this study tests the predictive ability of eight three-day reversal candlestick patterns on a sample of sixty listed shares on the Johannesburg Stock Exchange (JSE) from 1 January 2010 to 31 December 2019. The study further investigates the predictability of the patterns on three sub-sectors of the JSE; this included the resource, financial and industrial sectors. As the final step, the study tests the use of the candlestick pattern as a trading strategy before and after costs. To the authors knowledge, it is the first study of candlestick patterns on South Africa's JSE. However, similar studies have been conducted in other emerging markets such as Thailand, Taiwan and Brazil. The study finds that only one of the candlestick patterns, the Three Outside Down pattern, has predictive ability on the JSE. However, when looking at the JSE sub-sectors, the results are more divergent. Candlestick patterns have no predictive ability on the resources and financial sector but on the industrial sector three patterns (Three Inside Up, Three Black Crows and Morning Star) were significant at the ten percent level of significance; and the Three Outside Up and Three Outside Down were at the five percent level of significance. The study finds that after fees the use of candlestick patterns is unable to outperform passive benchmarks. The evidence suggests some violations of the Random Walk Theory, but the study finds that the JSE and its sub-indices are weak-form efficient in terms of the Efficient Market Hypothesis. The Thai and Brazilian markets were also found to be weak-form efficient.

This dissertation highlights the performance comparison between two popular contemporary consumer loan credit scoring techniques, namely logistic regression and classification trees. Literature has shown logistic regression to perform better than classification trees in terms of predictiveness and robustness when forecasting consumer loan default events over standard twelve-month outcome periods. One of the major shortcomings with classification trees is its tendency to overfit data eroding its robustness, making it vulnerable to underlying population characteristic shifts. Classification trees remains a popular technique due to its ease of application (algorithm machine learning basis) and model interpretation. Past research has found classification trees to perform marginally better than logistic regression with respect to predictiveness and robustness when modelling short term consumer credit default outcomes related to previously unseen new customer credit loan applications. This dissertation independently tested this finding on reloan consumer loan data, repeat customers who renewed loan facilities at a significant South African micro lender. This dissertation tests the finding if the classification tree technique would outperform logistic regression when modelling this new type of loan data. Credit scoring models were built and tested for each respective technique across identical data sets with the intent to eliminate bias. Robustness tests were constructed via careful iterative data splits. Performance tests measuring predictiveness and robustness were conducted via the weighted sums of squared error evaluation approach. Results reveal logistic regression to outperform classification trees on predictiveness and robustness across the designed uniform iterative data splits, which suggests that logistic regression remains the superior technique when modelling short term credit default outcomes on reloan consumer loan data.