This dissertation examines the appointment of designated directors on boards of directors. Designated director appointments are uncontested board appointments by activist investors, whereby normal nominating and voting election procedures are circumvented. Instances such as these, where directors are appointed rather than elected, are a form of shareholder access to the proxy. In this dissertation, new evidence is provided that is relevant to the proxy access debate by investigating the hypothesis that firms with appointed designated directors have different firm and governance characteristics than firms with elected directors. In particular, the following questions are asked: what are the shareholder wealth effects surrounding the announcement of (i) a designated director on a board, (ii) the appointment of a new designated director to a board, and (iii) a designated director continuing service on the board? Also, what firm and governance characteristics lead to the appointment of a designated director on the board? The answers to these questions can help determine whether firms with better corporate governance structures are more likely to have designated directors appointed to their boards because they are serving all shareholders’ interests, or whether firms with worse corporate governance are less likely to have designated directors appointed because of the board of directors’ insulation.

Die vorliegende Studie analysiert die Ergebnisse einer bundesweiten Unternehmensbefragung zum Finanzierungsverhalten deutscher KMU. Im Fokus stehen die Verfügbarkeit konkreter Finanzierungsinstrumente für KMU und deren Akzeptanz im Mittelstand. Dies soll die derzeitigen Möglichkeiten und Grenzen des heimischen Banken- und Finanzsystems verdeutlichen. Darüber hinaus werden verschiedene Aspekte des Innovationsverhaltens der befragten Unternehmen beleuchtet. Es zeigt sich, dass die Finanzierung aus erwirtschafteten Gewinnen einen überragenden Stellenwert besitzt. Zudem werden neben dem traditionell verankerten Bankdarlehen, vor allem kurzfristige, flexible, aber teure Kontokorrent- und Lieferantenkredite für Investitionszwecke genutzt. Alternative Finanzierungsinstrumente, wie Mezzanine, Beteiligungskapital sowie auch Kapitalmarktfinanzierungen haben bisher nur eine marginale Bedeutung erlangt. Als mögliche Ursachen hierfür sind mangelnde Kenntnisse und persönliche Vorbehalte auf Unternehmensseite, aber auch die grundsätzliche Nichteignung dieser Alternativen festzustellen. So liegt das nachgefragte Finanzierungsvolumen bei KMU häufig unter den Mindestgrenzen derartiger Kapitalgeber. Staatliche Förderinstrumente, welche vor allem von größeren mittelständischen Unternehmen in Anspruch genommen werden, können dabei nur einen Teilbeitrag leisten, um die Finanzierungsrestriktionen zu reduzieren. Im Bereich der Innovationsfinanzierung zeigt sich daher vor allem bei mittelgroßen Projekten ein besonderer Finanzierungsengpass. / This study analyzes the results of a nationwide survey on the corporate financing behavior of German SMEs. The availability of specific financial instruments for SMEs and their acceptance from an entrepreneurial perspective is investigated. Therefore, the current possibilities and limitations of the domestic banking and financial system are illustrated. Moreover, various aspects of the innovation behaviour of the companies are highlighted. It is shown that funding from earned profits has an outstanding importance. Furthermore, beside the traditional Bank loan, especially the short-term, flexible but also expensive overdraft and supplier credit are frequently used for investment purposes. Yet alternative financing capital such as mezzanine, private equity as well as capital market financing instruments had only a marginal importance. Possible reasons for these findings are on the one hand a lack of knowledge and personal reservations from the entrepreneurial perspective. On the other hand, a general unsuitability of these alternatives partially is noted, e.g. the funding volume from SMEs is often below the requested minimum limits of these alternatives. State subsidies, which are taken mainly from larger SMEs, can only make a partial contribution to reduce these financing constraints. Finally, a special funding shortfall is highlighted for medium-sized project´s in the field of innovation financing.

<p>Diss. Stockholm : Handelshögsk.</p>

During the eighties a new type of financial transaction started to emerge on an increasing basis. It was the so called “leveraged buyout” also known as the LBO. In the US private equity firms made it to the headlines in financial media from engaging in leveraged buyouts with small equity investments and large amounts of borrowed capital, their targets where large solid multinational corporations. Much has happened since the eighties. Back then leveraged buyouts where often associated with terms such as “Slash and Burn” or “Buy, Flip and Strip” often meaning hostile takeovers and huge layoffs. Today private equity firms focus more on active ownership, fast decisions without the bureaucracy of the stock market and long term value creation in order to profit from their buyouts. As private equity firms today invest tremendous amounts of capital through their private equity funds. Leveraged buyouts have become one of the major areas within investment banking. Even though the LBO is a common transaction it is often hard to find models used for valuation of such a deal. Private equity funds and investment banks all have their own valuation models but these are regarded as strictly confidential and seldom revealed to the public. Therefore the creation and publication of an LBO valuation model should be of great interest for everyone aiming at a future career within private equity, corporate finance or investment banking. This thesis derives a complete LBO valuation model including a framework for finding a suitable LBO target. The LBO valuation model is created in cooperation with the debt capital markets department at one of the leading investment banks in the Nordic region. The framework is based on a qualitative study conducted on seven of the most distinguished private equity firms active in Sweden. In order to show how the LBO valuation model and the framework works, both are applied on the retail company Björn Borg listed on NASDAQ OMX. To verify the accuracy of the framework, calculated return from the model is analyzed and compared to the indications given by the framework.

SMEs are established as an important cornerstone for the Swedish economy, due to the amount of people they employ and the economic activity they present. Due to a changing world SMEs are faced with new competition from foreign firms. In order to counter the new environment, an option for the firms is to move abroad, to internationalize. Furthermore China is established as an attractive country for SMEs to expand into, due to the major economic growth. During internationalization the Swedish agency for regional and economic growth identified SMEs to experience a lack of knowledge and capital, which hinders them in their expansion. The paper observes how four different Swedish SMEs, with activity in China moved abroad and how the mentioned lack of capital and knowledge was bridged. A theoretical framework is acquired through established research questions which are meant to analyze the problem description. The firms are identified as Swedish SMEs. In order to acquire empirical data, face to face interviews are conducted with the identified Swedish SMEs. Through the interview the empirical data is gathered, at which point, the paper analyzes the empirical data using the problem statement and the theories previously derived. The paper establishes that the experiential knowledge is the major influence on the resources committed by the firm. The amount of resources committed influences the type of entry mode as well as the accompanied advantages. In affect all firms have limited knowledge and ergo their resources committed are limited. This paper draws the conclusion that due to this, the firms were all able to finance their internationalization and no capital gap was experienced. The firms which were interviewed held experiential knowledge within the firm except one case where it was bridged with the assistance of a consultant. The experiential knowledge is held by individuals and has had a deep impact on the manner of the internationalization. It is identified that the personal relationships between individuals is shown to be of great importance to the firm. The knowledge constraints were bridged by the individuals’ experiential knowledge.

In this thesis, I investigate economic and policy implications of corporate debt financing. In the first chapter, I examine whether or not leverage has a negative effect on corporate investment due to a debt overhang problem. Existing empirical studies face a challenging endogeneity problem inherent in the investment-leverage relationship, the source of which is the firm's anticipation of its growth opportunities. I develop a novel approach to control for this problem by using analysts' earnings forecasts as an anticipation measure. I show that anticipations influence the investment-leverage relationship in that firms that do anticipate future growth opportunities suffer less from debt overhang. In the second chapter, I extend Chapter One's analysis to a dynamic setting. I first establish that there is a stable long-term relationship between investment and leverage, and then disentangle the short-term dynamics of leverage and investment and find that the deviation of leverage from its benchmark path has a negative impact on the change in investment. I also employ dynamic panel models to estimate the causal dynamic effects of leverage on investment. The estimations show that the impact is negative for recent leverage, but positive for leverage in the more distant past. Also, the effects of leverage are attenuated when the investment uncertainties are further controlled. This suggests that the firm's response to investment uncertainties might explain dynamic effects of leverage on investment. In Chapter Three, I investigate the effects of the U.S. Chapter 11 bankruptcy-reorganization law on firm operating performance, and adopt matching methods to account for self-selection and heterogeneity in firms' pre-filing characteristics. Matching methods entail the selection of a control group of non-bankrupt firms that are comparable to Chapter 11 filing firms in a wide range of pre-filing characteristics that affect filing decisions. Comparing the operating performances of the two groups, I find that filing firms' net cash flows, but not operating incomes, improve significantly during bankruptcy. Furthermore, firms reduce their leverage levels and incur lower interest expenses after bankruptcy. The results suggest that the reduction in interest expenses contributes to the improvement in firms' net cash flows during bankruptcy.

This paper develops a framework that analyzes how mergers and acquisitions in Alberta’s oil and gas industry affect stock prices. In this experiment, a multivariate regression is applied to several industry-specific variables to determine if they have impacts on the abnormal stock returns of acquirers. The results show that abnormal returns 5 days prior to the public announcement of the transaction are, in fact, driven by several industry-specific variables. However, the returns immediately after the M & A announcements are similar to previous research done in other industries. Acquirers’ gains 2 days after the announcement are essentially unaffected by the transaction. After a 90-day period, the share performances of acquiring firms tend to beat the index by 7% on average, but this is not thoroughly explained by the variables in the regression analysis.

This paper utilizes a sample of firms over the years 2000–2009 to test the effects of credit rating changes, the financial crisis, interest rates, and other variables on short-term, long-term, and total debt levels on the balance sheet. Each independent variable was created using a one year lag in order to run the regressions. The values of these variables from the previous year are being analyzed to see if they can predict debt levels for the following year. The results of this paper suggest that levels of long-term and total debt are somewhat reliant on and are positively correlated with the federal funds rate. The results indicate that short-term debt levels are much harder to predict, but they appear to be negatively correlated with the financial crisis. Long-term debt levels were also affected by this variable, but were positively correlated with it. Z-score was a significant predictor of all types of debt, and was positively correlated with each. In an effort to acquire as many data points as possible for the regressions, strict data filtration techniques were used. This limited the sample to 177 firms. The overall insignificance of the results in this study suggest that further research on what drives debt levels on the balance sheet is necessary. This will generate a greater understanding of firm behavior both inside and outside of a financial crisis.

This paper examines tracking stock issuances, a relatively uncommon method of equity restructuring. I utilize likely the entire population of tracking stock issuances on US exchanges – from the first ever in October 1984 to the most recent one in November 2009 – in order to analyze the effect that they have on the shortrun excess returns of issuing companies. I analyze the excess returns of companies that issue tracking stock that trade in the US, one year before and one year after completion of their restructuring. The results of this paper indicate that companies perform worse relative to a benchmark market index in the year following their tracking stock restructuring. However, it is important to note that the number of observations studied is relatively small, as there have been only 41 issuances of tracking stock since the first recorded case. This suggests that more data and greater research are necessary in order to more accurately measure the effects of tracking stock restructurings. With the limited data available, I find that there is a statistically significant decrease in excess stock returns following tracking stock issuances.

Through-out the history of the United States, there have been many bank panics starting with the first one in 1819. I use important data from bank panics which happened prior to 1934 to shed light on the most recent Panic of 2007. This data analysis will not only be important to explain the Panic of 2007, but will be essential to help provide insights to what can be done to remedy the situation. Even in 2012, the United States is still feeling the impact of what happened in 2007. Therefore by understanding history and analyzing the past, solutions to prevent future panics can be implemented.