This paper applies a short-term event study methodology to analyze the performance of common stock recommendations made by the Wall Street Journal’s Ahead of the Tape, CNBC’s Mad Money and Value Investors Club. The results suggest that a portfolio that replicates the long and short recommendations from Value Investors Club earns significant abnormal returns. These returns persist even after accounting for trading costs, the bid-ask spread and stock loans. Abnormal returns to Mad Money’s positive endorsements are also significant for the two days after announcement, but are erased by transaction costs. Across all three sources, abnormal returns rarely correspond with abnormal trading volume, an unexpected dichotomy that invites further research.

This dissertation examines the effect of gender diversity on firm risk and financial performance, and on the stock ownership preferences of institutional investors. For the firm risk and financial performance analysis, we use U.S. firms listed on the S&P 500 and NSE-listed Indian companies. The two samples provide our study with the ability to study gender diversity in a developed and emerging market with distinct economic frameworks, cultural traditions, and legal environments. Our empirical tests show that firms with more gender diversity are less risky and have higher financial performance than firms with less gender influence. These results are consistent with the notion that the addition of female directors increases the collective intelligence of the board and, thus, leads to higher quality deliberations and decision-making. The results are robust to propensity score matching which help control for endogeneity. Additionally, the results are robust to various measures of firm risk, financial performance, legal environments, industry and time fixed effects, and clustered standard errors. Furthermore, this dissertation examines the ownership preferences of institutional investors, a group of investors known for their ability to acquire private information and analyze publicly-disclosed information quickly. Researchers find that firms with female directors tend to disclose more firm-specific information and tend to serve on monitoring-related committees. As higher disclosure and more monitoring decreases institutional investors’ incentive to collect and profit from private information, we hypothesize that they will invest less in gender diverse firms. For our empirical tests we use the data on US firms. We find that institutional investors tend to hold less shares in firms with more gender diversity. These results are robust to industry and time fixed effects, heteroscedasticity, and serial correlation.

Thirty-four percent of people in the United States of America work for businesses that employ fewer than 100 people. However, many small business owners lack the strategies necessary to retain their valuable employees. Businesses that fail to retain valuable employees are as much as 28% less efficient. The purpose of this qualitative multiple case study was to explore strategies small construction business owners use to retain their valuable employees. Contingency theory provided the conceptual framework. The participants were three owners of three small businesses in the construction industry located in Mississippi which implemented successful policies and procedures to retain their employees. The data sources for this study were semistructured interviews, financial statements, newspaper articles, websites, and social media. A thematic analysis was used to analyze the data. Three themes morphed to include challenging employees and reward them accordingly, mitigating unplanned turnover, and treating employees and others fairly. Potential implications for positive social change are that increased profits among small business owners may enable them to provide better benefits and pay and incentive increases to their employees. Small business owners with increased profits may also be better equipped to participate in community-based charitable organizations.

At the end of the 20th century and beginning of the 21st century, China implemented several new asset write-down regulations. This study addresses the claim that these regulations significantly enhanced the usefulness of financial statements for investors in China. The effect of the regulations on usefulness of financial statements has implications for financial accountants, standard-setters, educators, and auditors. This study derives and tests some of the empirical implications of the claim. I operationalize usefulness of accounting information in terms of the valuerelevance framework, in which information usefulness is construed as a tradeoff between relevance and reliability. These two dimensions are the primary criteria underlying the FASB’s Conceptual Framework for choosing alternative accounting rules. Asset write-down, if correctly applied to over-stated assets, should increase the decision relevance to investors; however, measurement errors due to either unintentional mistakes involving professional judgment or intentional misrepresentations involving earnings management may decrease the reliability of reported amounts. While there is substantial value-relevance research, the role of reliability is generally absent. Reliability of regression estimates, also known as measurement error, is often implicitly assumed and not measured. Following nonnested model selection techniques and relative measurement error research, I explicitly measure the relative reliability of asset write-down accounting in various valuation models. Therefore, this study contributes to value-relevance research. First, I examine the incremental value relevance of asset write-down estimates through their associations with market values: the ability of asset write-down provisions to explain market value of equity; the ability of asset write-down gains and losses to explain annual market-adjusted return; and the ability of both the above provisions and earnings to explain market value of equity. All the models provide evidence for value relevance of asset write-down estimates, indicating an acceptable level of information usefulness with mixed effects of relevance and reliability. I apply my tests to a balanced panel sample of exchange-listed firms in China over the period 1998-2001. The sample is limited to A shares—the shares subject to the new rules. Next, the above three valuation models are applied again in a reliability analysis. Model appropriateness tests, i.e. non-nested model tests, are used to answer the question: did asset write-down practices improve reliability in the valuation models? I find that the asset write-down practices are approximately comparable in reliability to historical cost methods in the balance sheet valuation model but somewhat less reliable in the income statement valuation model. The results are ambiguous when both assets and earnings are included in a third valuation model. My relative measurement error tests yield similar results. I conclude that the asset write-down regulations in China have not improved the usefulness of financial statements to investors in terms of reliability. Because the asset write-down rules are subject to interpretation and judgment, I consider the motivation for write-downs in the final part of the study. The results support a relation between discretionary motivations and the amount of current or cumulative write down. A sub-sample analysis shows that asset write-down rules improve usefulness of financial information in the absence of discretionary motivations.

This dissertation is composed by two essays that explore the changes in corporate governance around the passage of Sarbanes-Oxley (SOX) 2002. In the first essay, I examine the relation between board structure and compensation as a bargaining game between the board and the CEO. Bargaining game theories describe an endogenous process of determining the structure of director and CEO compensation. The Sarbanes-Oxley Act (SOX) altered the equilibrium of power between the board and CEO by changing the monitoring role of the board. SOX essentially provides a natural experiment to test how a shock to the bargaining game alters the balance of power between directors and the CEO. Using the ratio of director compensation to CEO compensation to proxy for bargaining power, I find a significant increase following the passage of SOX, consistent with directors gaining bargaining advantage. Moreover, firms with strong shareholder rights exhibit even greater evidence of power shifting to the directors. Overall, the results suggest that directors gain more power relative to the CEO in determining compensation plans and strong shareholder rights help firms to align directors' incentives with those of shareholders. In the second essay, I examine the relation between CEO compensation structure and acquirer returns. In the literature, researchers find that executive compensation structures influence corporate acquisition decisions. Equity-based executive compensation should reduce the non-value-maximizing behavior of acquiring managers. A series of corporate reforms such as SOX and the FASB expensing rule affected the structure of CEO equity-based compensation. I find a significant increase in CEO restricted stock compensation and a significant decrease in CEO option-based compensation following these reforms. I also find that CEOs with strong managerial power are more likely to receive more restricted stock in their compensation package after the 2002 reforms. Finally, I find a significant positive relation between the restricted stock compensation of acquiring firm CEOs and abnormal stock returns after 2002. This provides empirical support on the effectiveness of the shift away from options towards restricted stock in executive compensation packages. Restricted stock is associated with better merger decisions.

In this paper, I analyze how firm attributes such as their age, industry, nature of industry, spinoff status and debt ratio influence venture-capital financing decision. I look at a sample of 280 firms that went public in the United States between 2015- 2019. This paper finds that firm age and debt are negatively related to the likelihood of being venture-capital backed. It also finds that firms in technology and biotechnology industries are more likely to be backed by a venture-capitalist.

The shift to defined contribution plans from defined benefit plans have left future retirees concerned about having the necessary funds to retire. The purpose of this phenomenological study was to explore how investment behaviors have changed due to losses in retirement accounts because of the global financial crisis of 2008. Building upon the conceptual framework of attribution theory and risk perception theory, this study explored what might encourage future retirees to use the stock market for retirement. A purposeful sample of 20 Hampton Roads, Virginia residents who held retirement accounts prior to the financial crisis of 2008 consented to interviews about their retirement planning. Through open coding of the interview data, themes emerged on the need for financial education and a fear of losing retirement savings. Increasing education regarding retirement accounts and reducing the fear of losing retirement savings encourages the use of the stock market in retirement planning. The findings suggested social change implications as future retirees increase use of retirement plans and reduce their reliance on public assistance programs.

Multinational enterprises (MNEs) engage in tax-planning strategies between their related parties that affect their profit and consequently their tax liability. Transfer pricing (TP) legislation addresses these tax planning strategies of MNEs resulting in increased tax revenues. Despite the updated 2006 TP legislation, shifting of profit and taxes is still occurring by MNEs; therefore, the implications of this legislation need to be examined. The purpose of this study was to compare the reporting of profit, before and after change in legislation, as well as to examine the cost of services mediation of the relationship between the status of the legislation and profit reported. The study's theoretical framework was a combination of economic and strategic management theories. This ex-post facto quantitative study addressed two research questions with the first examining the difference in the reporting of operating profit before and after the updated TP legislation. The second assessed how the cost of services mediates the relationship between the status of the TP legislation and the reporting of operating profits. Data collected on a sample of tax returns, representing 32 industry sectors for each of 14 years, from the Internal Revenue Service were used in applying statistical tests for answering these research questions. The results indicated that the updated TP regulations influenced MNEs for reporting greater profit than before the update as well as possibly inconsistent mediation with the proposed mediator of cost of services. These results support having TP legislation since it would increase tax revenues resulting in positive economic and social changes as well as contributing to achieving sustainable development.

Consumer research has indicated that financially uneducated adults who live in rural areas often make poor financial decisions that plague them for decades. As a result of increased home foreclosures, student loan defaults, and bankruptcies, policymakers at the state and federal level, business leaders, academic communities, and non-profit agencies have identified a need for quality financial education programs. The purpose of this study was to examine the effectiveness of a financial literacy program created for financially uneducated adults living in a rural community, as measured by participants' perceptions of their financial concepts knowledge and financial management ability after program completion. The conceptual framework was guided by the transtheoretical model of change theory, which holds that an individual's behavior and beliefs affect his or her surroundings and self-perceptions. Data were collected from 36 former program participants through a mailed 3-part survey developed by the Federal Deposit Insurance Company. The data were analyzed using descriptive statistics and one-sample chi-square tests to determine whether responses to 3 survey items measuring knowledge gain and improved ability to manage finances were equally distributed. The tests were significant and indicated that all participants (100%) agreed/strongly agreed that they were more financially knowledgeable after the financial literacy program and could use what they learned independently. Most participants (86%) also reported that, after completing the financial literacy program, they were better able manage their finances on their own. Implications for positive social change include providing research-based findings to the program administrators, which may assist in promoting the program and improving the financial literacy of the adults in this rural community.

Despite policies for U.S. federal agencies to use open competitive procedures that increase small business participation in federal contracting, some small businesses do not win open competitive federal contracts. The purpose of this multiple case study was to explore the strategies some leaders of small businesses in the service industry have used to win open competitive U.S. federal contracts. The conceptual framework for this study was agency theory. The participants in this study were 6 leaders of small businesses in the state of Washington who successfully implemented strategies to win open competitive U.S. federal contracts. Data were collected through face-to-face, semistructured interviews and a review of company documents. Data were analyzed using Yin's 5-phase cycle of compiling, disassembling, reassembling, interpreting, and concluding the data, resulting in the 3 key themes: opportunity identification strategy, requirements strategy, and bid submission strategy. The findings indicated that leaders of small businesses win U.S. federal contracts by identifying contracting opportunities that meet their business model and risk tolerance, strengthening their knowledge of contract requirements, and increasing their participation in competitive public procurements. The implications of this study for positive social change include the potential for leaders of small businesses to lower the unemployment rate through the creation of jobs, increased innovation, and contribution to the economic growth of the local community.