We develop an expanded asset evaluation model dubbed the environmental, social and governance (ESG) model, which includes a sustainability factor that accounts for the value of ecological and natural capital. We incorporate a sustainability factor into the Fama-French [2015. “A Five-Factor Asset Pricing Model.” Journal of Financial Economics 116 (1): 1–22] five-factor model plus the momentum factor. Further, we expand previous models by basing ours on microeconomic principles of value maximization and the macroeconomic principles of ecological economics. We estimate the sustainability factor premium and its factor loadings and find that following sustainable strategic management practices reduced the cost of equity by 1.6% to 2.9% per year worldwide. This implies that in 2018, sustainable strategic management practices increased world GDP by $1.3 to $2.3 trillion. Our results support previous research that there is a negative relationship between sustainability performance and the cost of capital.

The nature of how capital structure can affect firm value is often investigated in the discipline of financial economics. Less investigated is how the nature of the type of assets can affect the choice of capital structure! I demonstrate that in the context of a Modigliani-Miller-type model that a firm financing social capital and physical capital will favor equity financing over debt financing without bankruptcy. With bankruptcy, debt financing will be used, but equity financing will be favored by firms that use large amounts of social capital, as it will increase their value. This demonstrates that social capital alters the financing relationship and helps to explain the preference of firms for equity financing.

BACKGROUND: The increasing prevalence of undiagnosed and diagnosed type 2 diabetes (T2D) posed a major challenge for public health and thus screening for T2D becomes essentially important. The social-demographical factors associated with the use of T2D screening have been widely studied, however, little is known about the impact of behavioral factors, mental health and chronic diseases on prevalence of screening, especially by gender and age groups. METHODS: We investigated the impact of behavioral factors, mental health and chronic diseases across gender and age groups on the usage rate of T2D screening. To analyze the likelihood of the use of T2D screening, we performed weighted binomial logistic regression analyses. RESULTS: Obesity, physical activity and smoking increased the use of T2D screening for females more than for males, and alcohol use increased screenings only for females. Serious psychological distress (SPD) was found to have a positive association with the use of T2D screening for females rather than for males; whereas hypertension and diabetes increased the use of T2D screening for males more than for females. Physical activity was an effective predictor of screening for T2D in the groups of 45-64 years and 65 years or older. Former drinking was positively associated with T2D screening for people aged 65 or older, and smoking was found to increase the odds of screening for T2D for people aged less than 65. CONCLUSIONS: Behavioral factors, mental health, and chronic diseases were significantly associated with the use of T2D screening and further demonstrated that gender differences exist in the role of above factors.

Examining the S&P 1500 stocks, the responses of the stocks to fiscal and monetary policy are found to differ due to E, S and G scores by the type of legislation. Non-Financial firms that manage environmental and governance risks better performed better over the pandemic. Part of this was due to their high environmental and governance scores allowing them to hedge the negative effects of the announcements of fiscal policies during the pandemic.

I measure the influence of ESG activities on Free Cash flow to the Firm and Free Cash Flow to Equity. I find that ESG activities primarily benefit the cash flows to creditors of firms in developed markets. The ESG effect predominantly comes from the excess spending of the firm on communicating how it integrates the economic (financial), social and environmental dimensions into its day-to-day decision-making processes. For developed market firms, the additional factor of excess spending on conditions for the workforce plays a role in boosting Free Cash Flow to the Firm.

Using a hybrid of the Heckscher–Ohlin model and specific factor model of trade, this article considers the phenomenon of FDI inflows only in the exportable sector of developing economies. We investigate the impact of such capital flow on factor prices and the real exchange rate (RER) in the host country. Our results indicate that the exportable production expands while both the non-traded good production and the return to the factor specific to the non-traded good decrease, consequent upon an inflow of capital specific to the exportable sector. The effect of such inflow of foreign capital on the RER is unambiguous and it increases. JEL Codes: F1, F21, F31

This thesis investigates abnormal trading volume around scheduled and unscheduled announcements. The research is an extension of Chae (2005), Journal of Finance, Vol 60, which tests corporate announcements in the US stock market. In this thesis, Australian stocks are used to establish whether market characteristics affect trading behaviour around announcements. In addition, I extend the traditional methodology to overcome possible shortcomings in the previous studies. This thesis also discusses how information asymmetry affects the abnormal trading volume on the announcement day. In contrast to earlier studies, I nd abnormal trading volume does not change before either scheduled or unscheduled announcements, but, as expected, increases on and after the scheduled and unscheduled announcements. Information asymmetry increases trading volumes when unscheduled announcements are made, but has no effect for scheduled announcements. I show that the failure to adjust for the correlation between corporate events, results in abnormal trading volumes being detected prior to announcements. Differences between the Australian and US results can not all be explained by methodological differences. It appears that the underlying dynamics of the Australian market are different; casting doubts on the ability to generalize market characteristics from US based studies on abnormal trading volumes.

Whole document restricted, see Access Instructions file below for details of how to access the print copy. Subscription resource available via Digital Dissertations / My research question is: Why do countries with similar rates of saving differ in economic growth? My thesis addresses this question by formulating an endogenous growth model using the Cobb-Douglas production function. My model disaggregates the rate of saving into the retention ratio and the household saving ratio and connects these ratios with three new parameters representing respectively the efficiency of financial institutions, the decision-making of managers, and barriers to technology diffusion. These three financial parameters make it possible to distinguish between quantitative and qualitative investments and to measure the growth rates of output, capital, and technological progress. Endogenous growth in technology neutralizes diminishing returns to capital. The Cobb-Douglas production function assumes diminishing marginal productivity under constant returns to scale. My model, however, measures the growth rate of per capita output under the balanced growth state/constant returns to capital situation. This situation is guaranteed when the relative share of profit is within the critical relative share of profit. A set of combination of the three financial parameters holds under diminishing returns to capital, yet the diminishing returns to capital situation turns to the balanced growth state situation by using delta defined as the elasticity of quality improvement with respect to effective labour units attached to a machine. An extreme case corresponds with the Solow and O'Connell (including Harrod-Domar) models, where the three financial parameters are all 1.0, with no technological progress. Simulation results demonstrate several new fact-findings. These fact-findings come from the characteristics of my model or the relationships between the growth rate of “per capita” output in the long-run (hereunder the growth rate) and the three financial parameters and delta, where the growth rate converges by setting delta = the relative share of profit. First, if the rate of saving increases, the growth rate also increases linearly. This is more definitely evident than the result of Mankiw, Romer, and Weil [1992]. Second, under a fixed rate of saving, the growth rate changes significantly differently if each of three parameters changes: the relative share of profit, the growth rate of population, and the retention ratio. In particular, the change in the retention ratio influences the growth rate positively or negatively depending on the relationship between the three financial parameters that reflect corporate behaviour and the nature of financial institutions. In this respect, I cannot find literature that relates the retention ratio or dividend policy to the growth rate in the Cobb-Douglas production function. Also the change in the growth rate of population does not influence per capita growth at all. This finding is also more definite than that found in the literature. In short, the three financial parameters play an important role in economic growth. When we divide saving into corporate saving and household saving, the rate of saving as a whole is not independent of the growth rate. A proportion of corporate saving and a proportion of household saving are used for investment in quality, which accelerates productivity enhancement. Consequently, the characteristics of the corporate sectors and financial institutions of a country play a significant role in determining its long run growth rate of per capita income (even under a fixed rate of saving).

Whole document restricted, see Access Instructions file below for details of how to access the print copy. Subscription resource available via Digital Dissertations / My research question is: Why do countries with similar rates of saving differ in economic growth? My thesis addresses this question by formulating an endogenous growth model using the Cobb-Douglas production function. My model disaggregates the rate of saving into the retention ratio and the household saving ratio and connects these ratios with three new parameters representing respectively the efficiency of financial institutions, the decision-making of managers, and barriers to technology diffusion. These three financial parameters make it possible to distinguish between quantitative and qualitative investments and to measure the growth rates of output, capital, and technological progress. Endogenous growth in technology neutralizes diminishing returns to capital. The Cobb-Douglas production function assumes diminishing marginal productivity under constant returns to scale. My model, however, measures the growth rate of per capita output under the balanced growth state/constant returns to capital situation. This situation is guaranteed when the relative share of profit is within the critical relative share of profit. A set of combination of the three financial parameters holds under diminishing returns to capital, yet the diminishing returns to capital situation turns to the balanced growth state situation by using delta defined as the elasticity of quality improvement with respect to effective labour units attached to a machine. An extreme case corresponds with the Solow and O'Connell (including Harrod-Domar) models, where the three financial parameters are all 1.0, with no technological progress. Simulation results demonstrate several new fact-findings. These fact-findings come from the characteristics of my model or the relationships between the growth rate of “per capita” output in the long-run (hereunder the growth rate) and the three financial parameters and delta, where the growth rate converges by setting delta = the relative share of profit. First, if the rate of saving increases, the growth rate also increases linearly. This is more definitely evident than the result of Mankiw, Romer, and Weil [1992]. Second, under a fixed rate of saving, the growth rate changes significantly differently if each of three parameters changes: the relative share of profit, the growth rate of population, and the retention ratio. In particular, the change in the retention ratio influences the growth rate positively or negatively depending on the relationship between the three financial parameters that reflect corporate behaviour and the nature of financial institutions. In this respect, I cannot find literature that relates the retention ratio or dividend policy to the growth rate in the Cobb-Douglas production function. Also the change in the growth rate of population does not influence per capita growth at all. This finding is also more definite than that found in the literature. In short, the three financial parameters play an important role in economic growth. When we divide saving into corporate saving and household saving, the rate of saving as a whole is not independent of the growth rate. A proportion of corporate saving and a proportion of household saving are used for investment in quality, which accelerates productivity enhancement. Consequently, the characteristics of the corporate sectors and financial institutions of a country play a significant role in determining its long run growth rate of per capita income (even under a fixed rate of saving).

Whole document restricted, see Access Instructions file below for details of how to access the print copy. Subscription resource available via Digital Dissertations / My research question is: Why do countries with similar rates of saving differ in economic growth? My thesis addresses this question by formulating an endogenous growth model using the Cobb-Douglas production function. My model disaggregates the rate of saving into the retention ratio and the household saving ratio and connects these ratios with three new parameters representing respectively the efficiency of financial institutions, the decision-making of managers, and barriers to technology diffusion. These three financial parameters make it possible to distinguish between quantitative and qualitative investments and to measure the growth rates of output, capital, and technological progress. Endogenous growth in technology neutralizes diminishing returns to capital. The Cobb-Douglas production function assumes diminishing marginal productivity under constant returns to scale. My model, however, measures the growth rate of per capita output under the balanced growth state/constant returns to capital situation. This situation is guaranteed when the relative share of profit is within the critical relative share of profit. A set of combination of the three financial parameters holds under diminishing returns to capital, yet the diminishing returns to capital situation turns to the balanced growth state situation by using delta defined as the elasticity of quality improvement with respect to effective labour units attached to a machine. An extreme case corresponds with the Solow and O'Connell (including Harrod-Domar) models, where the three financial parameters are all 1.0, with no technological progress. Simulation results demonstrate several new fact-findings. These fact-findings come from the characteristics of my model or the relationships between the growth rate of “per capita” output in the long-run (hereunder the growth rate) and the three financial parameters and delta, where the growth rate converges by setting delta = the relative share of profit. First, if the rate of saving increases, the growth rate also increases linearly. This is more definitely evident than the result of Mankiw, Romer, and Weil [1992]. Second, under a fixed rate of saving, the growth rate changes significantly differently if each of three parameters changes: the relative share of profit, the growth rate of population, and the retention ratio. In particular, the change in the retention ratio influences the growth rate positively or negatively depending on the relationship between the three financial parameters that reflect corporate behaviour and the nature of financial institutions. In this respect, I cannot find literature that relates the retention ratio or dividend policy to the growth rate in the Cobb-Douglas production function. Also the change in the growth rate of population does not influence per capita growth at all. This finding is also more definite than that found in the literature. In short, the three financial parameters play an important role in economic growth. When we divide saving into corporate saving and household saving, the rate of saving as a whole is not independent of the growth rate. A proportion of corporate saving and a proportion of household saving are used for investment in quality, which accelerates productivity enhancement. Consequently, the characteristics of the corporate sectors and financial institutions of a country play a significant role in determining its long run growth rate of per capita income (even under a fixed rate of saving).