In the first chapter of this dissertation, I hypothesize that several non-tax-driven benefits of debt induce REITs managers to issue debt despite no apparent tax-driven benefit. Several methodologies and tests applied in capital structure literature are introduced to the literature of REITs capital structure. First, I investigate how the market prices leverage in absence of tax-deductibility benefit. Then, I diagnose the relative importance of several non-tax-driven benefits of leverage in deriving the capital structure decisions of REITs. Third, I conduct a thought investment experiment with debt-restricted vs. non-restricted REITs portfolios. I find weak evidence that leverage, by itself, creates value. Nevertheless, I find strong evidence that during financial crisis debt-restricted REITs perform better than non-restricted ones. Also I find evidence that lends support to the pecking order story of leverage. I conclude that REITs managers issue debt mainly to avoid issuing equity and to maximize wealth of existing shareholders. The second chapter addresses corporate diversification discount. I present and test a hypothesis that diversifiers exchange immediate diversification discount with future value gain attributed to unanticipated financial and strategic advantages of diversification. Two implications of this hypothesis are tested in this dissertation. First, the initial diversification discount found in static methodologies should be attenuated in a dynamic analysis. Second, diversifier's value evolution patterns are driven by the materialization of certain financial and strategic efficiencies. The overall results indicate that there is value recovery over time. Diversifiers' performance and value evolution is dynamically linked to synchronous improvements in market power, internal capital market activities, and cost efficiencies. Further, consistent with current evidence in diversification literature, related diversifiers outperform unrelated diversifiers. Moreover, related diversifiers witness faster value recovery relative to unrelated diversifiers.

The determinants of success in venture capital financing are explored in this manuscript. 1247 venture capital funds formed over a twenty-year time period are empirically analyzed with results that support theoretical research from extant finance and economics literature. Venture capitalists' choices of portfolio size, distance from portfolio firms, location, and to some extent, level of diversification in their investment portfolio, are all significant factors in explaining the success rates of venture capital funds. These results are robust even when controlling for other characteristics of venture funds and entrepreneurial firms, such as the stage of development and industry of the portfolio firms, which may affect success rates of venture capitalist portfolios.

Chinese firms are experiencing a rapid increase in technological diversification, which is referred to as maintaining their capabilities in multiple technologies. However, the research on the relationship between technological diversification and firm performance is inconclusive. This PhD thesis tries to re-investigate the technological diversification-firm performance relationship from three different perspectives using data on Chinese listed firms from 2003 to 2014. First, the thesis tries to overcome the shortcomings of previous technological diversification research by unpacking technological diversification into explorative and exploitative technological dimensions from the mechanical view and studying their roles in firm performance. The findings suggest that technological diversification that combines explorative and exploitative dimensions is positively related to firm performance. This relationship is conditional on intangible complementary assets and firm type (high or low-tech firms). Second, this thesis tries to investigate the technological diversification-firm performance relationship through an institutional view that has hardly been mentioned in the previous literature. Here it is argued that firms try to use technological diversification as a way to gain legitimacy. In order to do so, firms' technological diversification need to be similar to the industrial norms. The results reveal a positive relationship between firms' conformity in technological diversification and their performance. The results further delineate the boundary conditions that influence this relationship. While environmental dynamism strengthens the conformity-performance relationship, environmental munificence reduces it. Finally, this thesis tries to integrate both a mechanical view and an institutional view of technological diversification and find evidence to support the optimal distinctiveness view that firms should reach a balance between these views. The results reveal a curvilinear (inverted U-shaped) relationship between firms' conformity in technological diversification and their performance. I also test the boundary conditions of this relationship. While firm age strengthens the conformity-performance relationship, state ownership weakens it.

The question how much internationalization is beneficial for emerging-market small and medium enterprises (EM SMEs) remains challenging to answer for both international business (IB) scholars and managers. We explore export strategies of first time exporters and focus on the scope of EM SMEs internationalization activities. We tackle the question whether more focused or more diversified internationalization through exporting is beneficial for EM SMEs. We examine the impact of foreign market (geographic) diversification, product diversification and export intensity on firm performance of an entire population of EM SMEs from an emerging east European market. In addition, we test whether a complex export strategy-an export strategy of simultaneous product- and geographic export diversification-is beneficial for EM SMEs. We use a panel population data of first time Slovenian exporters in the period 1994-2012. We find that diversified internationalization, both in terms of product and foreign market diversity, significantly improves productivity and sales performance for EM SMEs. Furthermore, EM SMEs with complex export strategies enjoy significantly improved productivity and sales performance. / Series: Working Papers / Institute for International Business

This paper pioneered in examining the impact of diversification on financial performance of technology companies and comparing diversification and its impact between technology and media companies. Diversification and financial performance in 24 leading media companies and 19 leading tech companies from 2012 to 2017 were studied. The empirical results suggest diversification in general has a positive impact on ROE of tech companies. There is also some evidence for a positive impact from related diversification on ROA of media companies with market cap over $10B. The results also show that media companies are more diversified than tech companies. From 2012 to 2017, both tech companies and big media companies have steadily increased their related degree of diversification while slightly reducing their overall diversification. That seems to suggest that the media and tech conglomerates have increased their effort to create synergy.

In the past two decades, Mesoamerican smallholder coffee farmers have had to confront several stressors and shocks, such as price crises and natural disasters, with debilitating impacts on the viability of their livelihoods. More recently, many farmers have suffered crop losses in the wake of the spread of coffee leaf rust disease, and researchers are predicting that some areas will become less suitable for coffee growing in the near future as a result of climate change. In response to these conditions and in the context of the withdrawal of the state from provision of agricultural services, development practitioners have mainly pursued a strategy of helping farmers gain access to specialty markets, including those purchasing coffee from farmers with organic and Fair Trade certifications. They have also promoted farmer organization into marketing cooperatives, which have in turn provided various services to their members, including credit and technical assistance. However, there are doubts as to whether these schemes are sufficient in increasing and stabilizing smallholder incomes, and some have predicted declining returns from these strategies in the future. For these reasons, many have called for the promotion of livelihood diversification as an additional component of rural development programs. This thesis studies both the shortfalls in coffee incomes compared to poverty lines and the current uses and perceptions of different diversification activities. In the first study, the shortfalls are calculated through construction of individual and average enterprise budgets based on grower records and interviews with four organic and organized growers and three conventional growers. It concludes that while some growers have coffee incomes approaching that poverty line, they are all currently below the line. There is wide variation within both groups. The second study uses content analysis of transcripts from 15 interviews with members of a regional coffee cooperative, Asociación Barillense de Agricultores (ASOBAGRI), based on four different interview guides. It concludes that coffee remains the primary livelihood strategy of the respondents, whereas most other activities offer relatively small contributions to incomes, with the exception of honey and a small sewing shop, and some reflect coping rather than risk management. The study also identified other themes mediating diversification, including income-smoothing, optimization, familiarity, social networks, and influences from external actors.

Creating revenue diversification forces nonprofit leaders to create innovative programs and services, build resilience against adverse conditions, and establish a sustainable future. The problem is that some nonprofit managers lack strategies for developing a diversified financial portfolio to achieve sustainability. The purpose of this single-case study was to explore the revenue diversification strategies used by 3 leaders of a nonprofit organization in the eastern region of the United States through the conceptual lens of Markowitz's modern portfolio theory and Thaler's behavioral finance theory. Data were collected using purposeful sampling, semistructured interviews, and analysis of organizational documents, social media platforms, and online databases. Four categories were used to organize the data: process strengths, process opportunities, results strengths, and results opportunities. The key themes that emerged from process strengths and results strengths were utilizing volunteers, collaborating with local partners, developing diverse revenue streams, strong fiscal management, program innovation, and evaluating the market. The key themes that emerged from process opportunities and results opportunities were the lack of written processes and procedures, the lack of process improvement strategies and performance measurement outcomes, the lack of knowledge about donor attrition and retention, and high turnover in the executive director position. Organizational leaders who focus on diversifying revenue streams can serve the mission instead of chasing funding streams that have become more competitive. The social change implication of these findings is that nonprofit leaders could create sustainability through diverse revenue streams, ensuring long-term employment, and sustaining positive social impacts.

Many leaders of nonprofit organizations (NPOs) lack strategies to build and maintain a financially sustainable organization to continue providing vital social services. The purpose of this single case study was to explore the financial strategies some NPO leaders used to maintain financial sustainability during general economic downturns. Five purposively selected leaders of an NPO in northwestern Indiana participated in the study. The resource dependency theory and the change management theory were the conceptual frameworks that guided the study. Data were collected from face-to-face and telephone interviews and a review of company documentation. Member checking was conducted with participants and data triangulation occurred with an analysis of organization documents that reinforced the validity of the findings. Data were analyzed using Yin's 5-step process of coding of participants' responses, including examining, categorizing, tabulating, creating a data display, and testing the data. Data analysis of organizational documents, interview transcripts, and the organization's social media sites revealed 3 themes: partnerships, fundraising, and diversification as the strategies used to maintain financial sustainability during periods of economic downturns. The findings of this study might contribute to positive social change by providing information to NPO leaders to help improve financial strategies and sustainability for community service organizations during general economic downturns and maintain social services.

This paper studies the industrial structure and degree of industrial diversification of Taoyuan County since 1986 to examine if Taoyuan Aerotroplis will meet one of the successful key factors of industrial diversification. It begins with a discussion of strategic analysis on critical factors of Taoyuan International Airport and finds out one of the important factors of successful aerotroplis lies in industrial diversification. This research is conducted by adopting quantitative approach and applying coefficient of industry diversity to value the degree. The Location Quotients (LQs) ratios are applied as well, providing a way to examine the specialization of economic activity in Taoyuan County. The finding reveals that the industrial structure of Taoyuan County is secondary industry from 1986 to 1991. After 1991, the tertiary industry grows enormously and now it trends to service-oriented market. Also, industrial diversification of Taoyuan County is toward positive and high degree of diversity in industry since 1986. Taoyuan County has a relatively higher concentration of employment in manufacturing than Taiwan since 1986. Health Care Services industry, Water Supply and Remediation Services industry and Transportation, Storage and Communication industry are industries which increase concentration of employment in Taoyuan County. This research suggests that the authority concerned could make use of the positive condition of diversity in industry to accelerate industrial cluster in development of aerotroplis that strengthen the competitiveness of Taoyuan Airport and attract more cargo and passengers traffic. Further research is suggested by enlarging the areas such as Taipei County development axis or Hsinchu County, by broadening the sample of the industry scope and classification systems to subsectors, industry group or industry and by comparing the industrial diversification of Taoyuan Aerotroplis with that of the other countries which succeeds in aerotroplis models.

<p>This thesis consists of three self-contained essays in the fields of banking and portfolio choice.</p><p>Banking and Optimal Reserves in an Equilibrium Model:</p><p>I address the question of reserves in banking, particularly the fact that reserves are substantially larger than the stipulated reserve requirements by Bank of International Settlements. My contribution is to show that when the underlying values of borrowers are correlated, banks should hold positive reserves, regardless of the regulation. I use a derived distribution for debt portfolios to show that intermediation in a debt market will outperform direct lending, even if intermediaries are allowed to default. The model used is a generalization of Williamson (1986), with Costly State Verification as asymmetric information. By using a factor model for the value of entrepreneurs' projects, I introduce a positive probability for banks to default. It is shown that, in equilibrium, banks choose to hold capital reserves that are almost large enough to eliminate the expected auditing cost for their depositors. The reason is that auditing does not provide any utility and hence, the cake to be split between banks and depositors is enlarged by reserves as an insurance against bad outcomes. It is also shown that the more correlation there is in the debt portfolio, the larger is the optimal reserve level. This could explain why small regional banks in Sweden often have more than twice the reserve level of their nation-wide competitors.</p><p>Optimal Rebalancing of Portfolio Weights under Time-varying Return Volatility:</p><p>This paper considers horizon effects on portfolio weights under time varying and forecastable return volatility. The return volatility is modeled as a GARCH-M, which is sufficiently general to encompass both constant and time varying means. The analysis confirms earlier results, namely that there are no horizon effects when the stochastic process, which governs asset returns, has a constant mean. However, when time varying and forecastable volatility is included in the mean equation, there are horizon effects. I show three features to be of importance for the horizon effect: First, the size of the parameter on conditional volatility in the mean equation and second, persistence in conditional volatility. Third, the asymmetry in volatility has some effect. In addition, the parameter of relative risk aversion is important. For low levels of risk aversion, only very small effects on portfolio weights are present; when the level of risk aversion increases, so does the effects on portfolio weights. Portfolio weights increase for the first 2-3 years when the investment horizon is increased; the total effect slightly exceeds 10%.</p><p>Can Parameter Uncertainty Help Solve the Home Bias Puzzle?</p><p>A well-known puzzle in international finance is the equity home bias. This paper illustrates a mechanism where exchange rate estimation risk causes equity home bias. Estimation risk is introduced into a standard mean-variance portfolio framework by having return time series with different lengths. We argue that the exchange rate return history, which is a part of the local currency return on a foreign investment, is likely to be substantially shorter than the available return histories of equity indices due to, for example, exchange rate regime shifts. To econometrically deal with return histories of different lengths we utilize a framework devised by Stambaugh (1997). The impact of estimation risk on an optimal portfolio is tested with data from Sweden and the U.S. Our results suggest that explicitly accounting for estimation risk causes the domestic investor to increase his fraction of domestic assets. While the introduction of exchange rate estimation risk is not powerful enough to explain the whole home bias observed in data, the results of this paper illustrate a mechanism that is often overlooked in discussions of international portfolio diversification.</p>