xiii, 124 p. : ill. (some col.) / This dissertation emphasizes three aspects of structural change in economic development. Structural change is the process by which the distribution of economic output shifts from one sector to another and is crucial to understanding overall economic growth. The first chapter demonstrates that property rights and the relative value of land in rural credit markets have significant implications for the rate and level of economic development. When borrowers have little net worth, access to credit is limited and the transition from agriculture to industry proceeds at a slower rate. A quantitative model provides estimates of the welfare cost of such frictions. The second chapter argues that differential costs of technology adoption across developing countries can explain the failure of some import-substitution strategies. An analytical model demonstrates the importance of such adoption costs, and an empirical section finds evidence in support of it. The primary result is that import-substituting policies aimed at rapid industrialization may in fact inhibit economic growth, explaining why some countries have experienced lower rates of economic development. The third chapter uses a robust econometric procedure to estimate sector-specific productivity growth for a sample of OECD countries. It finds that the sources of productivity growth vary widely across countries. Productivity growth is not concentrated in industrial sectors alone but can also result from advances in service sectors. / Committee in charge: Dr. Shankha Chakraborty, Chair; Dr. Chris Ellis, Member; Dr. Bruce Blonigen, Member; Dr. Jean Stockard, Outside Member

This thesis comprises of three essays. The first essay is titled 'Do Acquiring Firms Manage Earnings?' and is co-authored with Professor Anand M. Vijh. The second essay is titled 'Do Firms Have a Target Leverage? Evidence from Credit Markets' and is joint work with Professors Anand M. Vijh and Redouane Elkamhi. The third is essay is single authored and titled 'Bondholder Wealth Effects of Fraudulent Reporting.' In the first essay, we investigate possible earnings management by inflating discretionary accruals in a sample of 1,719 cash acquirers and 895 stock acquirers during 1989-2005. Following previous literature, we document higher ROA-matched discretionary accruals for stock acquirers than for cash acquirers. However, simulation evidence with quarterly data shows that ROA-matched discretionary accruals are misspecified for both high-growth and low-growth firms. This is relevant to the current investigation because the median sales growth rate equals 12.1% for cash acquirers and 38.5% for stock acquirers (besides similar differences in other growth measures). We propose a new discretionary accrual measure that controls for both ROA and sales growth. This measure is well-specified and powerful in detecting earnings management in stratified random samples, and it leads to an insignificant difference between discretionary accruals of cash and stock acquirers. Other tests of acquirer incentives to manage earnings, market reaction to earnings management, and time delay between earnings announcement and merger announcement strengthen the evidence against earnings management attributed to stock acquisitions. In the second essay, we propose credit market based test of whether firms have a target leverage. The static tradeoff theory of capital structure hypothesizes that firms have a target leverage which optimizes firm value in the presence of benefits and costs of leverage (such as taxes and bankruptcy costs). If firms adjust their actual leverage toward this target leverage over time, then rational investors should consider both current and target leverage in pricing contracts whose value depends on the firm's default risk. Using a large sample of corporate bonds and credit default swap (CDS) contracts during 2000 to 2007, we document evidence consistent with this prediction. In particular, target leverage is both an economically and statistically significant determinant of bond and CDS spreads, and its role increases with contract maturity. Credit ratings also reflect the effect of target leverage, which suggests that the credit rating agencies rate firms as if their capital structure decisions are consistent with the tradeoff theory. In the third and final essay, I examine how the disclosure of fraudulent reporting affects bondholder wealth, credit ratings, and contract features of new bond issues. I find that fraud announcements trigger swift, sharp, and long lasting credit rating downgrades and are associated with significant declines in bondholder wealth. An examination of new bond issues confirms a significant increase in both the yield spread and the gross spread charged by the investment bank compared to pre-fraud levels. Moreover, a significant proportion of bonds issued after a fraud contain call provisions that are more expensive in the short run but may be potentially value maximizing in the long run if credit conditions improve. Thus, I argue that managers are optimistic that the increase in the cost of debt induced by the fraud is temporary. However, contrary to managers' optimistic beliefs, I find that corporate credit ratings, once decreased, remain significantly depressed for at least three years following the fraud announcement.

Le but de cette thèse est d'étudier par quatre essais l'économie de migration de pays en voie de développement. Le premier chapitre évalue l'effet des catastrophes naturelles (principalement en raison du changement climatique), dans les pays en voie de développement, sur des taux de migration et regarde comment cet effet varie selon le niveau d'enseignement des personnes. Nos résultats montrent que les catastrophes naturelles sont positivement associées aux taux d'émigration et impliquent aussi la migration des personnes fortement qualifiés. Le deuxième chapitre présente les différents canaux expliquant l'intention de migrer illégalement. Une des nouveautés de l'analyse est qu'elle utilise une enquête sur mesure parmi des individus sénégalais urbains. Nous constatons que les migrants illégaux potentiels sont enclins à accepter un risque substantiel de mort et sont souvent jeunes, célibataires et avec un niveau bas d'éducation. Nous montrons aussi que le prix de l'immigration illégale, les réseaux d'immigrés, de hautes espérances, des politiques d'immigration serrées et le pays de destination jouent tous un rôle dans l'empressement de migrer illégalement. Le troisième chapitre complète le deuxième en étudiant le rôle d'aversion des risques et le taux d'escompte dans la migration illégale du Sénégal. Nos résultats montrent que ces préférences individuelles comptent dans l'empressement de migrer illégalement et payer à un contrebandier. Finalement dans le quatrième chapitre, nous nous sommes intéressés à la place des migrants sur les marchés de crédit dans un contexte rural. Selon nos résultats, avoir un migrant dans un ménage augmente autant la probabilité d'avoir un prêt que sa taille, que le prêt soit formel ou informel. Nous constatons aussi que cet effet positif reste significatif peu importe si le prêt est pris pour des raisons professionnelles ou simplement pour acheter de la nourriture. / The aim of this thesis is to study through four essays the economics of migration from developing countries. The first chapter assesses the effect of natural disasters (mainly due to climate change), in developing countries, on migration rates and looks at how this effect varies according to the level of education of people. Our results show that natural disasters are positively associated with emigration rates and also involve the migration of highly skilled people. The second chapter presents the different channels explaining the intention to migrate illegally. One of the novelties of the analysis is that it uses a tailor-Made survey among urban Senegalese individuals. We find that potential illegal migrants are willing to accept a substantial risk of death and tend to be young, single and with a low level of education. We also show that the price of illegal migration, migrant networks, high expectations, tight immigration policies and the preferred destination country all play a role in the willingness to migrate illegally. The third chapter completes the second one by studying the role of risk-Aversion and discount rate in illegal migration from Senegal. Our results show that these individual preferences matter in the willingness to migrate illegally and to pay a smuggler. Finally in the fourth chapter, we are interested in the effect of migrants on credit markets in a rural Senegalese context. According to our results, having a migrant in a household increases both the likelihood of having a loan and its size, whether the loan is formal or informal. We also find that this positive effect remains significant no matter if the loan is taken for professional activities or simply to buy food.

This thesis consists of three chapters and investigates the issues related to liquidity risk, credit market contagion, and corporate cash holdings. The first chapter is coauthored work with Professor Jay Sa-Aadu and Associate Professor Ashish Tiwari and is titled ‘Market Liquidity, Funding Liquidity, and Hedge Fund Performance.’ The second chapter is sole-authored and is titled ‘Credit Market Contagion and Liquidity Shocks.’ The third chapter is coauthored with Steven Savoy and titled ‘Ambiguity Aversion and Corporate Cash Holdings.’ The first chapter examines the interaction between hedge funds’ performance and their market liquidity risk and funding liquidity risk. Using a 2-state Markov regime switching model we identify regimes with low and high market-wide liquidity. While funds with high market liquidity risk exposures earn a premium in the high liquidity regime, this premium vanishes in the low liquidity states. Moreover, funding liquidity risk, measured by the sensitivity of a hedge fund’s return to the Treasury-Eurodollar (TED) spread, is an important determinant of fund performance. Hedge funds with high loadings on the TED spread underperform low-loading funds by about 0.49% (10.98%) annually in the high (low) liquidity regime, during 1994-2012. The second chapter provides evidence on credit market contagion using CDS index data and identifies the channels through which contagion propagates in credit markets. The results show that funding liquidity and market liquidity are significant channels of contagion during periods with widening credit spreads and adverse liquidity shocks. These results provide support for the theoretical model proposed by Brunnermeier and Pedersen (2009) according to which negative liquidity spirals can lead to contagion across various asset classes. Furthermore, during periods with tightening credit spreads and positive liquidity shocks, the results indicate that a prime broker index and a bank index are important channels contributing to co-movement in credit spreads. This suggests that financial intermediaries play an important role in spreading market rallies across credit markets. The third chapter investigates the link between investors’ ambiguity aversion and precautionary corporate cash holdings. Investors’ ambiguity aversion is measured by the proportion of individual investors in a firm’s investor base who are hypothesized to be more ambiguity averse compared to institutional investors. We show that the value of cash holdings is negatively associated with the extent of ambiguity aversion in a firm’s shareholder base for firms that are financially constrained. Our results also show that financially constrained firms with a higher proportion of ambiguity averse investors hold less cash. These results provide support for models in which ambiguity averse investors dislike the cash holdings of firms, that are held for precautionary reasons to fund long term projects, given that the returns on long term projects are ambiguous.

This thesis consists of four independent chapters, in which well-known economic theories are employed to investigate, and better understand, data and facts from the real world. Although in fairly distant topics, each paper is an example of how economics, and more precisely microeconomics, offers a rigorous and effective framework to reason about what happens around us. In this sense, my dissertation fully represents what I have learnt in these five years. The first paper addresses the experimental behavior of subjects that interact with each other, non-cooperatively, in a laboratory setup. The experimental evidence is found to be at odds with the predictions of classical game-theory, and I explore whether a model of bounded rationality can instead succeed in explaining the data. The second paper looks at another type of data, historical rather than experimental. Together with Björn Wallace, we raise doubts, methodological and interpretational, regarding the validity of a recent finding that documents a sizeable effect of Africa's past slave trades on current economic performance. The last two papers investigate the phenomenon of limited records, understood as the limited availability of past public data regarding a transacting partner. The former is a survey, written jointly with Giancarlo Spagnolo, wherein we discuss the literatures that have independently studied whether limited records may actually prompt beneficial reputation effects. We argue that what is known about this type of informational arrangement is little and scattered, and that this is problematic given the large number of real-life situations featuring limited records. These conclusions prepare the ground for the last paper of this dissertation, which presents a model of limited credit records. The model aims at providing a framework for evaluating the current privacy provisions in the credit market which mandate the removal of information about borrowers' past performance from public registers after a finite number of years. / Diss. Stockholm : Handelshögskolan i Stockholm, 2011

The aim of this thesis is to study through four essays the economics of migration from developing countries. The …rst chapter assesses the e¤ect of natural disasters (mainly due to climate change), in developing countries, on migration rates and looks at how this e¤ect varies according to the level of education of people. Our results show that natural disasters are positively associated with emigration rates and also involve the migration of highly skilled people. The second chapter presents the di¤erent channels explaining the intention to migrate illegally. One of the novelties of the analysis is that it uses a tailor-made survey among urban Senegalese individuals. We …nd that potential illegal migrants are willing to accept a substantial risk of death and tend to be young, single and with a low level of education. We also show that the price of illegal migration, migrant networks, high expectations, tight immigration policies and the preferred destination country all play a role in the willingness to migrate illegally. The third chapter completes the second one by studying the role of risk-aversion and discount rate in illegal migration from Senegal. Our results show that these individual preferences matter in the willingness to migrate illegally and to pay a smuggler. Finally in the fourth chapter, we are interested in the e¤ect of migrants on credit markets in a rural Senegalese context. According to our results, having a migrant in a household increases both the likelihood of having a loan and its size, whether the loan is formal or informal. We also …nd that this positive e¤ect remains signi…cant no matter if the loan is taken for professional activities or simply to buy food.

In this thesis we examine the shared characteristics of companies that undergo leveraged buyouts from public markets in Europe between 2005-2015 and whether credit markets have an impact on these characteristics. This is done by conducting logistical regressions on public data and through interviews with industry professionals. Our results indicate that companies that undergo leveraged buyouts from public markets have low financial liquidity and are undervalued, while high free cash flow, potential tax savings and pre-acquisition debt levels were found to be insignificant. Credit markets are found to have a profound effect on the characteristics that are sought after by private equity firms, as the statistical analysis give different significant variables depending on the state of the credit market, which is in line with the interview results. In good credit markets, potential financial distress costs are higher for bought out companies than the control group, while in bad credit markets a strong growth potential and undervaluation are the significant characteristics. The interviews also showed that investment professionals focus more on qualitative aspects, e.g. competitive advantage, when evaluating an investment opportunity, while the financial characteristics play a subdued role / I denna uppsats undersöker vi de delade karaktäristika hos företag som genomgår leveraged buyouts från de publika marknaderna i Europa mellan år 2005 och 2015, och huruvida dessa gemensamma drag skiljer sig åt beroende på tillståndet på kreditmarknaden. För att göra detta genomförs logistiska regressioner på publik data och intervjuer med industrierfarna. Våra resultat indikerar att företag som genomgår leveraged buyouts från publika marknader har låg finansiell likviditet och är undervärderade, medan höga kassaflöden, potentiella skattebesparingar och skuldnivåer inte särskiljer dem. Kreditmarknader visar sig ha en stor effekt på de karaktäristika som sökes av riskkapitalbolag, då den statistiska analysen ger olika signifikanta variabler beroende på tillståndet på kreditmarknader. Detta styrks också av intervjusvar. I goda kreditmarknader är potentiella kostnader av finansiella problem (financial distress) högre för de företag som köps upp än för kontrollgruppen. I dåliga kreditmarknader är en god tillväxtpotential och undervärdering särskiljande för de bolag som blir uppköpta. Intervjuerna visade också att investerare fokuserar mer på kvalitativa aspekter, såsom konkurrensfördelar, när de utvärderar en investeringsmöjlighet, medan finansiella karaktäristika är faktorer de utvärderar i andra hand.

Cette thèse étudie les évolutions du marché du crédit de long terme (les censos) dans l'Espagne moderne. Après une description des acteurs et du fonctionnement de ces marchés dans le premier chapitre, le deuxième chapitre s'intéresse aux conséquences de la fragmentation juridictionnelle sur l'intégration du marché du crédit. Ensuite, le troisième chapitre étudie le fonctionnement et la gouvernance d'un ordre religieux en particulier et met en évidence le rôle d'intégration joué par les institutions ecclésiastiques. Enfin, le dernier chapitre examine la répression financière exercée par la Couronne à la fin du XVIIIe siècle et son rôle déterminant dans le retrait des institutions religieuses des marchés du crédit et la contraction de l'offre de crédit qui s'en est suivie. / This project analyses the evolutions of long-term credit markets (the censos) in eraly modern Spain. After a description of the actors and the functioning of these markets in the first chapter, the second chapter focuses on the consequences of jurisdictional fragmentation on credit market integration. Then, the third chapter examines the functioning and the economic governance of a single religious order and sheds light on the integration role performed by ecclesiastical institutions. The last chapter studies the financial repression implemented by the Crown in the late eighteenth century and its decisive role in the withdrawal of religious institutions from the credit market and the subsequent credit contraction.