<p> This dissertation explores motivations behind setting voluntary greenhouse gas (GHG) emission reduction goals. It seeks to understand how the institutional environment in which firms operate shape their profit-maximizing decisions regarding GHG emissions. Such an environment is populated by various stakeholder groups that exert influence on the firm. Understanding how such groups impact the firm can (1) inform policies that take advantage of institutional arrangements to encourage more aggressive emissions reductions by firms and (2) demonstrate the limits of voluntary approaches in reducing GHG emissions. </p><p> The first essay develops a theoretical framework in which corporate social responsibility (CSR) related to climate change is modeled as the proportion of clean inputs firms use in their production processes. Stakeholder groups can have preferences for environmental CSR that impact a firm's profit function and constraints. The resulting framework demonstrates the various considerations that a firm may have in deciding on a profit-maximizing level of environmental CSR given various characteristics. </p><p> The second essay delves more deeply into the decision making process within the firm as it develops a strategic response to the issue of climate change. This is done by analyzing 17 interviews conducted with experts on environmental sustainability efforts in large firms. These suggest that companies may be prompted to respond to the issue of climate change by pressure from different groups, but cost considerations shape the degree of that response. Reduction goals often encourage innovation at the firms as they examine their production process with the dual objectives of reducing costs and emissions. </p><p> The third essay explores the characteristics of firms that joined the U.S. Environmental Protection Agency's Climate Leaders program, a voluntary program through which member firms set and achieved GHG emissions reductions from 2002 to 2010. A panel of the S&P; 500 members from 2002, 87 of which eventually joined Climate Leaders, is analyzed using a panel probit model and survival analysis. Results suggest that firms already engaged in sustainability activities were more likely to join the program. Additionally, larger firms, those located in more environmentally friendly states, and those located in areas with cleaner air are more likely to be in the program.</p>

<p> This dissertation uses cooperative and non-cooperative game theory to examine the role of investment (broadly defined) in social organization. It's composed of three chapters. The first chapter examines bidirectional investment in partnerships and characterizes the stable relationships among the benefits players produce and receive, their costs, and their payoffs. The second chapter extends the model of the first chapter to allow for multilateral matching and investment; it shows that many of the results of the bilateral case remain true in the more general case. The third chapter examines investment in social links to secure future help and characterizes the equilibrium network/linking architecture and welfare.</p>

<p> Questions of design in real economic situations are often dynamic. Managerial compensation, repeated auctions, and taxation are good examples. These demand the economic theory of mechanism design to be adept to changing underlying environments and evolving information. Adjusting existing static results to the dynamic models and introducing new ones is thus what the doctor orders. This collection of essays is a contribution to the theory and applications of dynamic mechanism design. </p><p> Chapter 1 asks the question: <i>when can efficient institutions be made self enforcing?</i> To answer it, the setting of bargaining with two sided asymmetric information is chosen&ndash; a buyer has a hidden valuation for a good and a seller can produce the good at a hidden cost, both of which can change over time. The essay provides necessary and sufficient conditions for efficiency in this bilateral trading problem. In the process of establishing this result, a new notion of budget balance is introduced that allows the budget to be balanced dynamically, borrowing from the future but in a bounded fashion. Through a set of simple examples the comparative statics of the underlying economics forces of discounting and level of asymmetric information are explored. </p><p> In chapter 2, a <i>dynamic and history dependent version of the payoff equivalence</i> result is established. It provides an equivalence class of all mechanisms that are incentive compatible. Given two mechanisms that implement the same allocation, expected utility of an agent after any history in one must differ from the other through a history dependent constant. This result is then exploited to unify a host of existing results in efficient dynamic mechanism design. In particular a mechanism, and necessary and sufficient conditions are provided for the implementation of the efficient allocation in a general <i>N</i>-player dynamic mechanism design problem under participation constraints and budget balance. </p><p> Finally, in chapter 3 (coauthored with Marco Battaglini), we explore the <i>applicability and limitations of the first-order approach in solving dynamic contracting models, and the nature of contracts when local constraints are not sufficient to characterize the optimum.</i> A dynamic principal-agent model in which the agent's types are serially correlated forms the backbone of the analysis. It is shown that the first-order approach is violated in general environments; when the time horizon is long enough and serial correlation is sufficiently high, global incentive compatibility constraints generically bind. By fully characterizing a simple two period example, we uncover a number of interesting features of the optimal contract that cannot be observed in special environments in which the standard approach works. Finally, we show that even in complex environments, approximately optimal allocations can be easily characterized by focusing on a class of contracts in which the allocation is forced to be monotonic.</p>

<p> This dissertation studies trading and investment in financial markets through the lens of financial econometrics. Chapter 1 develops a continuous-time model of the optimal strategies of high-frequency traders (HFTs) to rationalize their pinging activities - defined as rapid submissions and subsequent cancellations of limit orders inside the bid-ask spread. The current worry is that HFTs ping inside the spread to manipulate the market. In contrast, the HFT in my model uses pinging to control inventory or to chase short-term price momentum without any learning or manipulative motives. I use historical message data to reconstruct limit order books, and characterize the HFT's optimal strategies under the viscosity solution to my model. By gauging the model's implications against data, I show that pinging is not necessarily manipulative and is rationalizable as part of the dynamic trading strategies of HFTs. </p><p> In Chapter 2, joint with Harrison Hong, we use overdispersed Poisson regression models to study social networks in finance. We count an investor's social connections in different cities as proportional to the number of stocks held by this investor that are headquartered in those cities. When connections are formed in an i.i.d. manner, the count of such connections in any city follows a Poisson distribution. Using data from institutional investors' holdings, we find instead overdispersion for a number of cities like San Jose and San Diego, which suggests that investors have non-i.i.d. propensities to be connected to these cities. Overdispersed cities have a large number of graduates from local universities who work in the fund industry. Managers with relatively high non-i.i.d. propensities to have social contacts significantly outperform other managers. </p><p> In Chapter 3, I propose a continuous-time model for the joint stochastic process of asset price and trading volume to study the transmission mechanism from changes in trading volume to price movements at the high-frequency level. A GMM-based estimation procedure is developed based on the model's closed-form moment conditions. I estimate the model on real-world high frequency financial data and find that, jumps in volume have a strong cross-excitation effect on jumps in price. Other implications of the model are also discussed. </p>

<p>Researchers have calculated the relationship between human capital development and economic output by various means of econometric modeling and by use of numerous indicators under the context of an assortment of human capital theory. This study was conducted to identify new interpretations of the expansion of human capital in the form of tertiary education enrollment in the countries of Israel, Japan, and Norway from 2000 to 2010. The researcher applied an OLS non-linear regression to establish four hypotheses, including modeling with regional dummy variables to generate point estimates for each country in order to analyze each country&rsquo;s educational policy implementation. The researcher collected data from UNESCO UIS, OECD, and the World Bank on tertiary enrollments, tertiary expenditures, and other measures utilized during modeling. Regional dummy variables allowed the researcher to calculate educational returns for five different regions: Africa, Asia, Europe and the United States, Latin America, and Former Communist countries. Optimization of tertiary education enrollment to maximize the real growth rate in each region was estimated and point estimates were computed for Israel, Norway, and Japan. Results indicated that tertiary education did in fact effect economic growth, but whether this growth was positive or negative was dependent on a country-by-country basis. Israel and Norway reported positive returns to tertiary education in terms of economic growth, where Japan exhibited negative returns to tertiary education in terms of economic growth. Government and educational policy recommendations were made based on computed outputs. </p>

<p> This dissertation consists of three essays that examine the role that financial intermediaries played in the housing market and the credit default swap market in the years leading up to the U.S. financial crisis in 2008. The first essay studies the impact that increased mortgage lending during the 2004-2006 housing boom period had on future 2007-2009 home price crashes in Florida. The second essay focuses on the predictability of home prices prior to 2006 and looks at how bank lending across different metropolitan statistical areas responded to past increases in home prices in 2006. The third essay turns to the credit default swap market and investigates how the market perceived investment bank counterparty risk by analyzing credit default swap prices during the time period leading up to and immediately after the collapse of Bear Stearns in 2008.</p><p> In the first essay, "Loan Supply and Home Price Crashes: Evidence from Florida," I examine whether neighborhoods that experienced higher loan growth during the recent housing bubble later experienced larger home price crashes when the bubble burst. I use microeconomic data on mortgages and home sales to answer this question in Florida. A simple OLS regression reveals that, within Florida's metropolitan statistical areas, a 1 percent increase in 2004 to 2006 census tract loan growth is associated with a relatively modest 0.1 percent decline in 2007 to 2010 census tract home prices. However, this exercise ignores the fact that loan growth may be driven by demand as well as supply factors. Using information on bank lending practices outside of Florida, I am able to isolate changes in loan growth that are uncorrelated with local demand. From the more sophisticated analysis, I find that a 1 percent increase in earlier loan growth actually results in a 0.9 percent decline in home prices. I find some evidence that supply-driven loan growth led to greater home price crashes by pushing home prices up to unsustainable levels. These results contribute to an understanding of the relationship between credit booms and financial crises by linking loan growth to asset prices.</p><p> In the second essay, "The Subprime Crisis and House Price Appreciation," (co-authored with William Goetzmann and Liang Peng) we argue that econometric analysis of housing price indexes before 2006 generated forecasts of future long-term price growth and low estimated probabilities of extreme price decreases. These forecasts of future increases in home-loan collateral values may have affected both the demand and the supply of mortgages. Standard time series models using repeat-sales indexes suggest that positive trends had a long half-life. Expectations based on such models support expectations that could lead to an asset bubble. Analysis of data from the HMDA loan database and LoanPerformance.com at the MSA level and at the loan level substantiates the effects of past price trends on the demand and supply of subprime mortgages. On the demand side, at the MSA level, past home price increases are associated with more subprime applications, higher loan to income ratios and lower loan to value ratios of applications for both prime and subprime mortgages. This is consistent with the notion that households not only borrowed more but also invested more in home equity conditional on greater past house price increases. On the supply side, past home price appreciation had a significantly greater impact on the approval rate of subprime applications than the approval rate of prime applications. Loan level analysis indicates that past home price appreciation increased the approval rate of subprime applications but did not affect the approval rate of prime applications. Further, approved HMDA subprime loans had higher loan to income ratios in MSAs with greater past house price trends.</p><p> In the last essay, "Counterparty Risk in the Credit Default Swap Market," I use a panel data set of credit default swap (CDS) spreads that covers 157 companies over 188 weeks from 2005 to 2008 to test whether counterparty risk in the CDS market, as measured by the financial health of the major CDS dealers, has an effect on market-wide CDS spreads. The results suggest that after controlling for changes in firm and market conditions, a rise in counterparty risk increases CDS spreads of investment grade firms. Counterparty risk's ability to explain changes in CDS spreads of investment grade firms remains the same before and after the Bear Stearns crisis, suggesting that perhaps investors were unprepared when Lehman Brothers was not saved by the Fed and went bankrupt six months later.</p>

<p> There are always painful tradeoffs in environmental problems. In the current period, the tradeoff. has to be made between consuming environmental goods and "dirty" goods. Since many pollutants accumulate in nature and cause long time problems, the current period's decision also has important impacts on future generations. This yields another tradeoff. between control of the pollution flow and cleanup of the pollution stock in the future. For a local government, tradeoffs between strict environmental policies and local economic prosperity are also concerns.</p><p> This thesis analyzes the tradeoffs made by households, firms and government under different policy regimes. Chapter 2 considers assigning tradable permits to households that are suffering from pollution generated by firms. The households can sell a limited number of permits to polluters according to personal preferences for environmental goods and "dirty" goods. It is shown that, the market transaction between households and polluters can achieve the efficient pollution level. Chapter 3 considers a case in which the stock pollution is reversible with capital investment. In a natural resource extraction model with externalities of heavy metal pollution in the surrounding farmland, the firms tradeoff. between controlling the pollution flow and abating the pollution stock, as well as the firms extraction decisions are analyzed. Chapter 4 derives the optimal environmental bond required by a local government as a financial assurance for inducing firms to do pollution abatement. A local government needs to make tradeoffs between charging a large amount of bond and encouraging local economic prosperity. For a local government, the optimal bond amount does not necessarily cover the worst-case scenario. This thesis contributes to environmental policy design by considering the interests of different parties. </p>

This thesis examines the principles of tariff classification in Canadian customs law. Tariff appeals prior to implementation of the Harmonized System in January 1988 are analyzed. The General Rules for Interpretation of the Harmonized System are then discussed. The thesis throughout is that interpretation should not be limited to physical characteristics such as material composition. The naming of goods requires a contextual approach to interpretation which also takes into account their use in application.

Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 2007. / Source: Dissertation Abstracts International, Volume: 68-06, Section: A, page: 2560. Adviser: Elizabeth T. Powers. Includes bibliographical references (leaves 159-163) Available on microfilm from Pro Quest Information and Learning.

Thesis (Ph.D.)--Indiana University, Kelley School of Business, 2007. / Source: Dissertation Abstracts International, Volume: 68-09, Section: A, page: 3999. Advisers: Charles Trzcinka; Andrey Ukhov. Title from dissertation home page (viewed May 5, 2008).