This thesis consists of three essays that study mutual fund manager abilities and investment performance. Extant research suggests that mutual fund managers, as a representative group of professional investors, fail to outperform passive benchmarks. My thesis explores potential sources of fund manager underperformance. Specifically, it investigates whether fund managers have "bad" skills that persistently affect fund performance and, in addition, sheds new light on mutual fund underperformance by investigating the prevalence of behavioural biases among fund managers. My first empirical study examines whether mutual fund managers possess distinct trading skills. By decomposing aggregate characteristic-timing performance into buying and selling components, I show that on average mutual fund managers exhibit positive characteristic-timing ability when buying stocks but negative characteristic-timing ability when selling stocks. Further persistence tests demonstrate that these differential trading skills are not merely due to chance: fund managers who exhibit superior characteristic-timing performance when buying stocks continue performing buying tasks well, while those who were poor performers in selling tend to underperform in the selling domain in the future. These results suggest that the lack of evidence of timing ability in the literature masks the distinct trading abilities that fund managers really possess. Moreover, using changes in portfolio style along size, book-to-market, and momentum dimensions (i.e., active style drift) as a proxy for strength of conviction, my analysis reveals an inverted U-shaped relationship between fund manager conviction and subsequent characteristic-timing performance. In particular, when fund managers engage aggressively in active style drift, their poor selling ability is overwhelming, leading to negative aggregate performance. My second study advances my investigation of fund performance and trading skills by considering the fact that fund managers are often forced to trade in response to investor flows. I find strong support for the hypothesis that the liquidity provision imposes significant indirect trading costs on mutual funds. Fund managers exhibit negative characteristic-timing performance only when they experience significant fund inflows. By conditioning fund trades on the direction and magnitude of fund flows, my results are consistent with the theoretical predictions that liquidity-driven trades underperform valuation-motivated trades. In particular, fund managers making purely valuation-motivated purchases generate significant characteristic-timing performance but are not able to do so when compelled to work off excess cash from investor inflows. Fund managers are not able to produce characteristic-timing returns from their selling decisions, even when they are highly motivated by valuation beliefs. Further results reveal that fund managers who possess superior selling ability are also significantly better at buying stocks than the remaining funds and as a result, these fund managers exhibit significant higher aggregate characteristic-timing returns. Strikingly, fund managers who appear to buy stocks well are not able to outperform other funds when selling stocks and they exhibit no significant aggregate performance. Overall, these results highlight and reinforce the insight that fund managers have positive buying skill and negative selling skill. My final empirical study explores the effect of overconfidence on actively managed equity mutual fund managers. Using the sum of absolute deviations from the fund’s benchmark index (i.e., Active Share) as a proxy for confidence level, my results show that fund managers tend to boost their confidence after outstanding past performance: they are more likely to increase Active Share and also choose a much higher Active Share level. Such bias is more pronounced among solo-managed funds than team-managed funds. More importantly, I uncover an inverted U-shaped relationship between confidence level and subsequent performance. In particular, excessive overconfidence, as reflected in an extremely high level of Active Share, is associated with diminished future fund performance, as well as more extreme performance outcomes and greater performance dispersion. I further document irrational investor reaction to fund manager overconfidence. There is a marked bonus for good performance by overconfident managers, as rewarded by higher fund inflows, while there is no pronounced penalty for poor performance, compared to other funds with comparable performance. Investors are not averse to overconfident fund managers even if they lose them money!

This thesis provides a comparative analysis of how the power of the United States Federal Reserve, the Bank of England and the European Central Bank has changed as a consequence of the reorientation of central banking towards financial stability since the global financial crisis. Drawing on a wide range of primary and secondary sources, including more than 30 interviews with central bankers and other public officials, the thesis demonstrates that to different extents, each of these organisations has exhibited a more authoritative relationship with its key interlocutors in recent years. The thesis attributes this variegated transformation to the policy entrepreneurship of transgovernmentally networked central bankers, who acted in concert with sympathetic executive politicians to operationalise new ‘macroprudential’ policy frameworks after the financial crisis. Central bankers’ collective policy entrepreneurship was guided by shared normative beliefs about their appropriate role in respect of financial stability, but their embrace of macroprudential ideas was far from uniform. Central bankers in each jurisdiction pursued subtly different policy objectives within idiosyncratic political, cultural and institutional terrains, leading to distinctive local varieties of reform. The thesis argues that central banks’ heightened authority since the financial crisis has been underpinned by an increase in their structural power, which owed to the heightened reliance of politicians and financial market actors on central banks’ unique ability to create new base money. It also demonstrates how transformations in central banks’ authority and structural power feed into their overall capacity to achieve their financial stability objectives. The thesis argues that in the post-crisis regulatory framework, central banks are at risk of underdelivering on their mandates. A bias towards inaction in the face of uncertainty and insufficient willingness to break with pre-crisis economic tropes threaten to undermine central banks’ efforts to maintain financial stability over the medium term.

The corporate finance literature generally views open market share repurchase announcements as a signal of equity undervaluation. Managers also frequently cite undervaluation as a rationale for their decision to repurchase firm equity. However, such an announcement cannot necessarily be viewed as a strong signal of firm undervaluation as it lacks characteristics of a credible signal. Firstly, managers are increasingly relying on share repurchases as a mechanism for distributing cash to shareholders. Secondly, open market buyback announcements are not binding obligation on the part of firm management to complete. In addition, such programmes have a positive effect on executive compensation, so managers can also employ these opportunistically to accumulate personal wealth at the expense of shareholders. Thus, buyback announcements can be either value signalling or agency driven. Since these two theories (agency vs signalling) are not mutually exclusive and a pure ex ante measure of managerial intent does not exist, the challenge is to distinguish value signalling announcements from “cosmetic” ones. My thesis consists of three papers (chapters 2-4). In my first paper, I test whether the market distinguishes between agency driven and value signalling open market share buybacks by observing the underlying managerial wealth and repurchase incentives. In theory, better convergence between the executive and shareholder wealth interests and risk preferences should lower agency costs thus increasing the “perceived” credibility of managements’ buyback announcements (signals). My results suggest that executive compensation arrangements play an important role in explaining the market reaction to, and actual share repurchase decisions of, firms that announce buyback programmes. This study makes an original contribution to the literature by demonstrating that investors approximate the value signalling effect of a buyback announcement by observing the underlying managerial repurchase incentives and respond accordingly. My second paper addresses the open market buyback announcement credibility issue directly by capitalising on the soft information conveyed in such announcements. This is novel to the literature on share buybacks. Recent studies show that news disclosure tone affects investor reaction to an information event. In my study, I demonstrate that the disclosure tone of buyback press releases contains value relevant information and has significant explanatory power for short term announcement returns. The hand collected data I use in this chapter also allows me to explore other aspects of buyback announcements where the extant literature is limited. In my third paper, I analyse insider trading behaviour around buyback announcements. The key insight of this paper is to infer insiders’ private information about firm value by observing their trading behaviour around the repurchase announcement event. Insiders add credibility to the (repurchase) undervaluation signal by trading parallel to their signal (i.e., purchasing more or selling fewer shares in advance of the repurchase announcement). However, insiders seeking to time the market (cash out at a higher price) will sell more shares post-announcement. My analysis shows that, consistent with the undervaluation signalling argument, investors respond more positively to buyback announcements where insiders buy more or sell less equity before the announcement event. However, I also document that insiders sell more shares (time the market) in the first 3-months post-announcement. This is especially true for firms that are less (more) likely to be undervalued (overvalued) and for smaller firms that present the greatest potential for gain through insider trading. My results suggest that net insider sales are significantly positively related to repurchase announcement returns. Finally, I show that higher post-announcement net insider sales are slightly negatively related to longer-term returns suggesting such firms do not out perform in the long-run. My research adds significantly to the literature on share buybacks by addressing the agency issues associated with share repurchase programmes. It finds that the market is conscious of the managerial incentives attached to repurchase programmes and the potential for their opportunistic use. Investor reaction to repurchase programme announcements is sensitive to executive compensation arrangements, the information content and disclosure tone of buyback announcement press releases and insider trading behaviour. This study seeks to add to our understanding of share buybacks and how the market treats and reacts to these announcements. The market realises that managements’ promises to spend billions of dollars on share repurchases may not necessarily add to shareholders’ wealth. Repurchase announcements cannot be uniformly viewed as a signal of equity undervaluation; insiders also use such programmes for personal gains. In summary, my research highlights novel factors that explain investor reaction to share buyback announcements.

Adaptation and personalisation is aimed at improving the user experience in e-systems. Personalisation was initially applied in the fields of distance learning and web-based educational systems. Adaptation can be also used in e-advertising, to increase customer satisfaction and encourage repeat visits to websites. Several models/frameworks have been designed for adaptation, for instance AHAM, LAOS, AdRosa, and MyAds. Many systems have been developed based on these frameworks. Most previous models/frameworks were primarily designed for personalised educational experience and were aimed at standalone systems, which cannot be (easily) integrated into existing websites in a lightweight manner. In addition, some of them are used in the portal model of advertising, since they match the interests of the publisher and the advertiser. The aim of this work is to overcome the limitations and weaknesses of these models and systems to deliver adaptive advertising. This work firstly attempts to support and facilitate the integration between adaptive systems and business websites. It also introduces a method to control and adapt advertisements located and owned by businesses. This thesis further proposes a generalised model, the Layered Adaptive Advertising Integration (LAAI), as the starting point for the development of an adaptive advertisement system. In a second stage, it presents a study that assesses the effectiveness of a system (AEADS) based on this model, via a trial run of a model prototype with users (both customers and business owners). In a third stage, social networks are used as inputs for the user model of customers, to enhance the efficiency of acquiring user information, as an addition to the user registration process. Furthermore, social interactions, such as the facility to use “like”, are added to the user model, and the delivery process has the ability to apply actions based on this data. Finally, an evaluation of the whole system proposed is conducted, with business owners and Internet users alike.

The relationship between nonfinancial and financial performance measures has been extensively investigated (Banker and Mashruwala, 2007; Banker et al., 2000; Ittner and Larcker, 1998a; Sun and Kim, 2013). However, prior studies have tended to focus their investigation on the relationship between one nonfinancial measure in isolation with another financial measure (Bryant et al., 2004). While these studies provide valuable insights into the contemporaneous and temporal relationship between nonfinancial and financial performance, they are criticized for failing to capture the “trade-off” between various performance measures, which may in turn lead to unreasonable conclusions (Bryant et al., 2004; Ittner and Larcker, 2001). This research, therefore, attempts to address this limitation by conducting a simultaneous investigation of the links between productivity, service quality, customer satisfaction, and financial performance in the US Airline industry. Drawing on the Resource Based View and Stakeholder Theory, an integrative framework is developed to investigate the linkages between airline productivity, service quality, customer satisfaction, and financial performance. This theoretical framework is tested using a longitudinal panel data set drawn from seven major US Airlines over 15 years (1995-2009). Using the partial least square approach to structural equation modelling, findings of this research suggest that improvements in airline productivity can lead to enhancement of service quality as reflected in reductions in flight delays, mishandled baggage, and customer complaints. Airline productivity is also positively linked to current and future periods of financial performance. Further, the results uncovered in this research also suggest that service quality problems, such as flight delays and mishandled baggage, have strong negative effects on current and future customer satisfaction. The results also show that changes in service quality are not reflected concurrently in financial performance. Such changes in service quality are found to have significant impact on future financial performance. However, the link between customer satisfaction and current and future financial performance is not significant. This research contributes to literature by (1) developing an integrative framework drawing on the Resource Based View and The Stakeholder Theory, and (2) identifying the lag length required for the changes on exogenous variables to be reflected on the endogenous variables. Empirically, this research contributes by applying the PLS-SEM that enables simultaneous investigation of multiple variables. It also contributes to practice by providing useful insights for managers for strategy formulation and evaluation.

The success of microfinancing methodology, as a development tool for poverty alleviation, has been accompanied by a number of challenges. These challenges have resulted in increasing concerns about performance of those entities that act as vehicles for delivering microfinance, i.e. the microfinance institutions (MFIs). A major problem in this regard relates to selection of appropriate technique/s for evaluating MFIs’ performance. Data Envelopment Analysis (DEA) is an established nonparametric methodology that has been used to assess the performance of MFIs. This study proposes a significant extension to standard DEA models. This is achieved by the identification of various trade-offs between the inputs and outputs and their subsequent incorporation in the DEA models. With this application, the current study contributes to existing knowledge in the field of operational research; by providing practical demonstration of the procedure, through which the trade-off approach can be used to enrich standard DEA models. The improvement to standard DEA models is accomplished through incorporation of additional information, in the form of technologically realistic trade offs. In addition, application of the trade-off approach is shown to help in overcoming the problem of insufficient discrimination; resulting from having a relatively small number of DMUS, in comparison to the total number of input and output variables. The current study also proposes a framework for DEA-based performance evaluation of MFIs. This framework acknowledges the need to evaluate both the social and financial dimensions of MFIs, in order to achieve a more holistic view of their performance. For this purpose, the social and financial performance aspects of a group of MFIs’, working in an under-researched economy, are analysed individually as well as simultaneously. A comparison of the efficiency scores is also used for investigating the conflict compatibility dilemma, which is a frequently discussed issue in the microfinance literature.

This thesis consists of three essays each studying insurance markets from a different perspective. The first studies competition in the domestic Finnish non-life insurance market using a persistence of profits model, where it is assumed that firms use competitors' past profits as signals of attractiveness of given submarkets. The firms were divided into two strategic groups. The existence of these groups, the effects of two mergers, and the level of competition were tested for. It emerged that the groups compete hard against each other, that fringe firms compete more with the leader group than with each other, that leaders' either follow some kind of tacit collusion strategy or compete very aggressively against each other, and that the mergers lead to a tightening of competition. The second essay is theoretical. The question asked is: does it pay for an insurance firm to acquire information of its customers' type and level of effort. Adverse selection and moral hazard analyses are combined, using geometric tools. Welfare analysis is central in this essay. Decision rules are derived for a monopoly to become vertically integrated. It is shown that in oligopoly it is possible to have an equilibrium where firms use asymmetric vertical strategies. Welfare effects of vertical integration prove to be ambiguous. The model has several other applications, eg. job market, organization of regulatory institutions. In the third essay it is argued that oligopolistic firms do not necessarily minimize costs when maximizing profits, and that this affects cost function specification and estimation. A cost function is constrained so that it can be estimated even though the number of products is large. The proposed specification gives a better fit them traditional specifications, and the quantitative and qualitative results are very different. The costs of branch proliferation are calculated, and the lowest mean for five biggest firms is 37% of total operating costs.

This thesis investigates the use of ICT in Saudi Arabia to support collaboration between segregated genders. It attempts to understand the emerging technology practices of workers in higher education institutions, which are aimed at bridging the culturally imposed spatial divide between men and women in the workplace. In examining the gender-segregated context, the study also looks into the consequent organisational and structural changes resulting from technology use. This includes evaluating new practices in terms of progressive change, and how this specifically relates to the work experiences of women as a subordinated and marginalised group. Furthermore, the study uses the Saudi context as a vehicle to explore IS discussions regarding the human and material/technical aspects of agency in technology use, and the role attributed to each in theoretical perspectives on organisation. Prior research has extended Giddens' (1984) structuration theory to incorporate material agency as part of a social-technical ensemble. Yet the ways in which physical-digital spaces contextualise interactions and structure work practices are under explored. Thus, the study develops a conceptual model that extends concepts of 'locale' and 'regionalisation' from structuration theory to the IS field, and defines 'technical settings of interaction' constituted by human and material agencies. The research presented in this study uses a single case design, and collects data by conducting interviews and non-participant observation at Umm AI-Qura University (UQU) in Makkah. The case of gender segregated work in Saudi is used to illustrate the performativity of digital spaces, and demonstrates how workers use technical configurations of ICTs to create zones of interaction that can challenge existing cultural norms, or hinder progressive change. Finally, the study finds that attending to Giddens' focus on time-space not only adds an additional level of analysis to technology studies, but also shows the potential of structurational research in contributing to sociomaterial discussions on materiality.

Credit risk management is becoming more and more important in recent years. Credit risk refers to the risk that an obligor fails to make payments on any type of debt at the time of maturity. Credit risk models are statistical tools to infer the future default probabilities and loss distribution of values of a portfolio of debts. This doctoral thesis focus on the application of credit risk management in different areas. To better understand the credit risk management, in the first chapter, we introduce the basic ideas in credit risk management and review the models developed in the last decades. To empirical test the performance of models reviewed in the first chapter, in the second chapter, we compare the reduce-form model with the structural model based on the China’s stock market. It turns out that both models contribute to explaining the default risk of listed firms, however, reduce-form model outperformances the structural model. The empirical results from the second chapter suggests that reduce-form model can better predict the firm’s default risk, but the correlated default risk between firms has not been answered yet. So therefore in the third chapter, we investigate the correlated default risk using copula theory which has been introduced in the first chapter. Based on the insurances firms and other financial firms in the US market, both short-term and long-term default dynamic correlations are found. Another interesting finding from the third chapter is that insurance firms which were considered to be stable actually have higher default risk. This motive us to further explore the determinants of default risk of insurance firms in the fourth chapter and new risk factors (macroeconomic and insurance-specific variables) are found.

Performance appraisal is an important element of Human Resource Management and one which can directly contribute to the achieving of organizational goals. The process of performance appraisal can also result in employee development, enhanced communication and a strengthening of a feeling of belonging. The central conceptual framework for the study embraced performance appraisal within the wider framework of performance management, stakeholder theory and the diversity of national culture. Much of the previous research into performance appraisal has predominantly focused on Western organizations, with limited attention being paid to its practice in developing economies. The entry, in 2001, of the People's Republic of China to the World Trade Organisation (WTO), provided an opportunity for foreign banks to operate in China which, in turn, increased competition for Chinese banks. As the banking sector, particularly the state-owned banks, is an extremely sensitive area for the nation's economy, the contribution that performance appraisal can make to a bank's success is important and thus provided a natural setting for the research. Adopting an exploratory approach, a specifically-designed questionnaire was used to gather data from salient stakeholders in Chinese state-owned banks between 2006 and 2007. Over 700 questionnaires were returned and analysed using parametric statistics to determine how stakeholders perceived performance appraisal within their bank. Biographic data provided independent variables which were evaluated against the areas of satisfaction, loyalty and the perception of an 'ideal' performance appraisal system. Levels of employee satisfaction provided a strong cultural perspective on the appraisal process, with this being contrasted at different levels within the banks and between each bank. The findings suggest a relationship between salient stakeholders' positive perceptions of procedural and distributive justice and levels of satisfaction. Findings from stakeholder perceptions of an 'ideal' appraisal process were used to provide recommendations as to how performance appraisal can be intertwined within a national culture. The unique setting provided direct contributions of knowledge with respect to developing the conceptual framework of performance appraisal from a stakeholder perspective. The associated areas of performance management and evaluation of performance appraisal in a developing economy extended the literature with respect to international HRM. From an organizational perspective, the empirical study provided recommendations that contributed to the development of employees in Chinese state-owned banks, which would enhance their strategic aims, in the new post-WTO competitive environment.