Thesis (Ph.D.)--University of California, Los Angeles, 2003. / Includes bibliographical references (leaves 229-232).

The market conditions in the banking sector, the corporate governance structure of banks, and the financial accounting practices have been highlighted among the key causes of the global financial crisis of 2007-2010. In this thesis, I analyse the ‘dark side' of competition by casting the spotlight on the relationship between competition, corporate governance, financial stability, and financial misreporting. I also bring corporate governance into the fray by analysing its link to financial misreporting. Probing the interplay between banking sector competition, corporate governance, financial stability and financial misreporting provides a fantastic setting to tap into and provide unique insights across the accounting, banking and finance domains. In putting together this piece of work, I extracted data from sources including Bankscope, Compustat, SEC enforcement releases and the World Bank Doing Business survey among others. In the 1st chapter, I regress financial stability proxies against various competition/concentration proxies using the GMM estimator with an instrumental variable technique to address potential endogeneity. In the 2nd chapter I use difference-in-difference analysis to analyse how changes in the competitive landscape in the US financial services industry instigated by the financial crisis as an exogenous factor led to an increase in misreporting incidences. The 4th chapter is an evaluation of how five corporate governance dimensions impacted on financial misreporting in US commercial banks subject to SEC enforcement actions from 2000 to 2016. I uncover strong evidence to support the competition-fragility view, without yet being able to disprove the competition-stability view. My results suggest that greater banking competition yields riskier loan portfolios, but this increased risk is more than offset by banks holding higher capital and liquidity thresholds. I also study the link between competition and incidences of financial misreporting in the US financial services industry and the results suggest a significantly positive association between competition and financial misreporting. Furthermore, there is evidence that an exogenous increase in competition because of the financial crisis also fuelled financial misreporting incidences in the financial services industry. I then investigate the impact of corporate governance on financial misreporting in US commercial banks subject to SEC enforcement actions. My results are mixed across the five corporate governance dimensions utilised for this study. Consistent with the ‘agency cost' hypothesis, I find a negative association between board size and financial misreporting, yet CEO power asserts a positive association with financial misreporting in violation of both the ‘stewardship' and ‘entrenchment' hypotheses. The equity-based portion of executive compensation is negatively related with misreporting, whereas there is a positive association between the cash-based portion and misreporting. My research not only contributes to literature on competition, market power, bank risk, financial stability, corporate governance, and financial misreporting; but also provide several practical and theoretical implications for regulators, academics, governments and policymakers on the effective and efficient regulation of the governance and competitive landscapes in financial services. I specifically shine the spotlight on emerging literature on the pervasive effects (dark side) of competition from a purely financial services perspective and within the context of the global financial crisis of 2007-2010.

Submitted by Rosivalda Pereira (mrs.pereira@ufma.br) on 2017-07-31T18:00:53Z No. of bitstreams: 1 PauloRonchi.pdf: 1766429 bytes, checksum: 76c6360db3e23b56179601ae1d249ed1 (MD5) / Made available in DSpace on 2017-07-31T18:00:53Z (GMT). No. of bitstreams: 1 PauloRonchi.pdf: 1766429 bytes, checksum: 76c6360db3e23b56179601ae1d249ed1 (MD5) Previous issue date: 2017-04-27 / The main objective of this study, based on the economic literature, was to understand Brazilian economic and social development from 1999 to 2014, under the inflation targeting regime. For this, the evolution of the economic thought from Adam Smith to the consolidation of the phenomenon of the economic development as specific subject of study of the economic science was presented. The study was carried out with an extensive bibliographical research, seeking the contribution of several economists, in order to highlight the economic theories that underpin the economic development policies, as well as the theoretical framework of the regime of inflation targets. One of the relevant aspects of this study was to identify the differentiation between growth and economic development. In addition, the study sought to demonstrate the Brazilian development experience from 1999 to 2014, under a form of conducting the specific monetary policy, called the inflation targeting regime. The study sought to evaluate economic policies from the fiscal, monetary, social and commercial perspectives to base and compare the political cycles between 1999 and 2014. / O principal objetivo deste estudo, apoiado na literatura econômica, foi de compreender o desenvolvimento econômico e social brasileiro no período de 1999 a 2014, sob o regime de metas de inflação. Para isso, se apresentou a evolução do pensamento econômico desde Adam Smith até a consolidação do fenômeno do desenvolvimento econômico como matéria especifica de estudo da ciência econômica. O estudo foi realizado com uma ampla pesquisa bibliográfica, buscando a contribuição de diversos economistas, a fim de evidenciar as teorias econômicas que alicerçam as políticas de desenvolvimento econômico, bem como o arcabouço teórico do regime de metas de inflação. Um dos aspectos relevantes desse estudo foi identificar a diferenciação entre o crescimento e desenvolvimento econômico. Além disso, o estudo procurou demonstrar a experiência de desenvolvimento brasileira de 1999 a 2014, sob uma forma de conduzir a política monetária especifica, denominada de regime de metas de inflação. O estudo procurou avaliar as políticas econômicas sob as óticas fiscal, monetária, social e comercial para embasar e comparar os ciclos políticos entre 1999 e 2014.

In this thesis I examine, within a behavioural finance framework, the impact on stock prices of order and trade imbalance in three separate but related studies. The first study, chapter two, begins with a question that plagues behavioural finance theories???do the investors most likely to be influenced by the behavioural biases described in the literature, i.e., individual investors, affect stock prices? My data enable me to consider the impact of net individual investor trading for the entire market over several years. I find that net individual investor purchasing Grangercauses stock price changes. The correlation is negative, however, contradicting common sense by demonstrating that individuals investor buying pressure makes prices go down and selling pressure forces them up. More investigation is required. Chapter three references order imbalance results from experimental finance. I use field data to test a robust laboratory model and my modified versions. My findings suggest that, with appropriate modifications, laboratory results can be applied to real financial markets. Chapter four combines the data from the chapters two and three to revisit the question of individual investor impact on stock prices. Other studies have argued that individual investor influence is strongest in smaller capitalization stocks. Moreover, various theories propose that individual investors are the driving force behind the irrational stock prices of a bubble. I focus on the stocks from chapter three, bubble stocks, and ask whether, in the context of the trading of the entire market, individual investor trades are influential. Once again I find Grangercausality, but in the wrong direction. Moreover, the activity and volume of the individual investor category of the holdings data is completely overshadowed by that of the two large investor categories, domestic and foreign institutions. I conclude that individual investor trades are not influential in determining stock prices. This conclusion has important implications for some behavioural finance models of asset pricing. I suggest that emphasis might be better placed on educating individual investors about the errors to which they are prone, rather than on trying to explain market anomalies with those errors.

In this thesis I examine, within a behavioural finance framework, the impact on stock prices of order and trade imbalance in three separate but related studies. The first study, chapter two, begins with a question that plagues behavioural finance theories???do the investors most likely to be influenced by the behavioural biases described in the literature, i.e., individual investors, affect stock prices? My data enable me to consider the impact of net individual investor trading for the entire market over several years. I find that net individual investor purchasing Grangercauses stock price changes. The correlation is negative, however, contradicting common sense by demonstrating that individuals investor buying pressure makes prices go down and selling pressure forces them up. More investigation is required. Chapter three references order imbalance results from experimental finance. I use field data to test a robust laboratory model and my modified versions. My findings suggest that, with appropriate modifications, laboratory results can be applied to real financial markets. Chapter four combines the data from the chapters two and three to revisit the question of individual investor impact on stock prices. Other studies have argued that individual investor influence is strongest in smaller capitalization stocks. Moreover, various theories propose that individual investors are the driving force behind the irrational stock prices of a bubble. I focus on the stocks from chapter three, bubble stocks, and ask whether, in the context of the trading of the entire market, individual investor trades are influential. Once again I find Grangercausality, but in the wrong direction. Moreover, the activity and volume of the individual investor category of the holdings data is completely overshadowed by that of the two large investor categories, domestic and foreign institutions. I conclude that individual investor trades are not influential in determining stock prices. This conclusion has important implications for some behavioural finance models of asset pricing. I suggest that emphasis might be better placed on educating individual investors about the errors to which they are prone, rather than on trying to explain market anomalies with those errors.