<p> In the past two decades, retailers have witnessed rapid changes in markets due to an increase in competition, the rise of e-commerce, and ever-changing consumer behavior. As a result, retailers have become increasingly aware of the need to better coordinate inventory control with pricing in order to maximize their profitability. This dissertation was motivated by two of such problems facing retailers at the interface between pricing and inventory control. One considers inventory control decisions for settings in which planned prices fluctuate over time, and the other considers pricing of multiple substitutable products for settings in which customers hold inventory as a consequence of stockpiling when promotional prices are offered. </p><p> In Chapter 1, we provide a brief motivation for each problem. In Chapter 2, we consider optimization of procurement and inventory allocation decisions by a retailer that sells a product with a long production lead time and a short selling season. The retailer orders most products months before the selling season, and places only one order for each product due to short product life cycles and long delivery lead times. Goods are initially stored at the warehouse and then sent to stores over the course of the season. The stores are in high-rent locations, necessitating efficient use of space, so there is no backroom space and it is uneconomical to send goods back to the warehouse; thus, all inventory at each store is available for sale. Due to marketing and logistics considerations, the planned trajectory of prices is determined in advance and may be non-monotonic. Demand is stochastic and price-dependent, and independent across time periods. We begin our analysis with the case of a single store. We first formulate the inventory allocation problem given a fixed initial order quantity with the objective of maximizing expected profit as a dynamic program and explain both technical and computational challenges in identifying the optimal policy. We then present two variants of a heuristic based on the notion of equalizing the marginal value of inventory across the time periods. Results from a numerical study indicate that the more sophisticated variant of the heuristic performs well when compared with both an upper bound and an industry benchmark, and even the simpler variant performs fairly well for realistic settings. We then generalize our approaches to the case of multiple stores, where we allow the stores to have different price trajectories. Our numerical results suggest that the performance of both heuristics is still robust in the multiple store setting, and does not suffer from the same performance deterioration observed for the industry benchmark as the number of stores increases or as price differences increase across stores and time periods. For the pre-season procurement problem, we develop a heuristic based on a generalization of the newsvendor problem that accounts for the two-tiered salvage values in our setting, specifically, a low price during end-of-season markdown periods and a very low or zero salvage value after the season has concluded. Results for numerical examples indicate that our modified newsvendor heuristic provides solutions that are as good as those obtained via grid search. </p><p> In Chapter 3, we address a retailer's problem of setting prices, including promotional prices, over a multi-period horizon for multiple substitutable products in the same product category. We consider the problem in a setting in which customers anticipate the retailer's pricing strategy and the retailer anticipates the customers' purchasing decisions. We formulate the problem as a two-stage game in which the profit maximizing retailer chooses prices and the utility maximizing customers respond by making explicit decisions regarding purchasing and consumption, and thus also implicit decisions regarding stockpiling. We incorporate a fairly general reference price formation process that allows for cross-product effects of prices on reference prices. We initially focus on a single customer segment. The representative customer's utility function accounts for the value of consumption of the products, psychological benefit (for deal-seekers) from purchasing at a price below his/her reference price but with diminishing marginal returns, costs of purchases, penalties for both shortages and holding inventory, and disutility for deviating from a consumption target in each period (where applicable). We are the first to develop a model that simultaneously accounts for this combination of realistic factors for the customer, and we also separate the customer's purchasing and consumption decisions. We develop a methodology for solving the customer's problem for arbitrary price trajectories based on a linear quadratic control formulation of an approximation of the customer's utility maximization problem. We derive analytical representations for the customer's optimal decisions as simple linear functions of prices, reference prices, inventory levels (as state variables), and the cumulative aggregate consumption level (as a state variable). (Abstract shortened by ProQuest.) </p><p>

According to the Code on Corporate Governance Practices (CG Code), listed firms should be overseen by a board of directors that promotes the success of the firm through effective direction and supervision of the listed firm’s affairs. Remuneration paid to directors should be sufficient to attract and retain directors of a caliber required to run the company successfully, but companies should avoid paying more than is necessary. The board should appoint a remuneration committee consisting wholly or mainly of non-executive directors and chaired by a non-executive director. The role of the committee is to make recommendations to the board on executive director remuneration in all of its forms, drawing on outside advice as necessary. According to the CG Code, the committee should consult with the chairman of the board and/or chief executive officer regarding its proposals relating to the remuneration of other executive directors. However, as many listed firms in Hong Kong are majority-owned by individuals and their families, the positions of the chairman and/or chief executive officer are usually held by family members who can influence the level of remuneration paid to directors. In an effort to assess how well the CG Code works, this study examines whether directors’ remuneration is influenced by independent non-executive directors where the chairman of the board is a family member. Findings show that since the introduction the CG Code, where the number of independent non-executive directors on the remuneration committee is high, the committee acts as means of control, which leads to lower directors’ remuneration than in situations where family members have more influence on remuneration committee decisions.

This thesis seeks to formulate concepts and develop methods that facilitate the mining of urban big mobility data. Specifically, the aim of the formulations and developed methods is to identify and predict certain events that occur as a result of urban mobility. This thesis, studies unexpected gathering and dispersal events. A Gathering event is the process of an unusually large number of moving objects (e.g. taxi) arriving at the same area within a short period of time. It is important for city management to identify emerging gathering events which might cause public safety or sustainability concerns. Similarly, a dispersal event is the process of an unusually large number of moving objects leaving the same area within a short period of time. Early prediction of dispersal events is important in mitigating congestion and safety risks and making better dispatching decisions for taxi and ride-sharing fleets. This thesis solves the problems of early detection and forecasting of gathering and predicting dispersal events. Prior work to detect gathering events uses undirected patterns which lack the ability to specify the dynamic flow of the traffic and the destination of the gathering. Forecasting gathering events is a predictive approach as apposed to descriptive approaches of detection. This thesis is the first to use destination prediction to forecast gathering events. Moreover, the presented destination prediction technique relaxes independence assumptions of related work and addresses the resulting challenges to achieve superior performance. Literature of dispersal event prediction solves this problem as a taxi demand prediction problem. Those methods aim at predicting the regular pattern and are unable to predict rare events. This thesis presents the SmartEdge Algorithm for early detection of gathering events. SmartEdge outputs a gathering footprint that specifies gathering paths and gathering destination. To forecast gathering events, this thesis presents DH-VIGO, which uses a dynamic hybrid model to forecast rare gathering events ahead of the time. Comprehensive evaluations using real-world datasets demonstrate meaningful results and superior performance compared to baseline methods. To predict dispersal events, this thesis uses a two-stage framework based on survival analysis called DILSA+, to predict the start time of the event and an event demand predictor to predict the volume of the demand in case of a dispersal event. Extensive evaluations on real-world data demonstrate that DILSA+ out-performs baselines and can effectively predict dispersal events.

In this dissertation, I examine two main topics in corporate finance: executive compensation and corporate investment. First, in the chapter titled “Import Penetration and Executive Compensation”, we investigate the impact of import penetration on executive compensation. We find that import penetration reduces executives’ total compensation, stock grants, and opportunistic grant timing, suggesting that competition mitigates agency problems and the need for conventional alignment mechanisms. Furthermore, we show that import penetration increases option grants and option duration, thus incentivizing more innovation and risk-taking. Second, I study the relationship between entrenchment and corporate investment. In the chapter titled “Entrenchment, Managerial Shirking, and Investment”, I find that entrenchment reduces capital expenditures, R&D, and productivity, weakens a firm’s competitiveness in the product market, and diminishes firm value. These findings are consistent with the shirking hypothesis that entrenchment enables managers to evade the responsibilities of overseeing investment projects.

Research has determined that measures of general mental ability (GMA) and personality are valid predictors of a wide range of work outcomes. Two of the most well established findings in the field of organizational psychology are that GMA and two of the Big Five personality traits, conscientiousness and emotional stability, predict overall job performance and training performance across all jobs. Though both GMA and personality are valid predictors of job performance, the validities of personality measures are much weaker than those observed for measures of GMA. Some argue that personality may play a larger role in predicting work outcomes than currently believed, but that current measures of personality do not capture the construct fully. Several researchers have attempted to increase the validity of personality measures by altering the items in the measures so that they refer specifically to work contexts, and others have examined the validity of observer ratings of personality. This study draws on the theory of cognitive buffering to test the possibility is that GMA itself that causes the impact of personality traits on real life performances to be limited. That is, that people may use their GMA to control the expression of their personality tendencies in their behavior. The results showed that GMA and personality interacted to predict peer ratings of personality, but not as initially hypothesized. Self-monitoring and personality also interacted to predict peer ratings of personality, but, again, not as hypothesized. Several possible explanations for the results of this study are discussed, including the notion that that individuals may make efforts to manage only those personality traits that are most relevant in given situations. Moreover, it may be the case that dispositions are less subject to the process of cognitive buffering than are emotions and affect. Limitations of this study and opportunities for future research are also discussed.

Loyalty programs for convenience stores generate consumer shopping histories that are both large in size and sparse in content. Analyzing such data with traditional basket models is computationally difficult since most models are not scalable to a large set of categories. However, analyzing large data with traditional models has important advantages: the models capture consumer (shopping) behaviors that assist managers in making strategic decisions. In this thesis, we develop two studies to analyze this large and sparse convenience store shopping data. In the first study, we bridge the gap between traditional basket model analysis and the challenges of large shopping data by developing a retail market basket modeling system that captures essential elements of consumer shopping behavior in a computationally attractive manner. An application of the model to convenience store basket data yields excellent results. The main outputs of the model (segmentation structure, cross-category dependence, price elasticities) align well with managerial intuition. Moreover, the model provides excellent forecasts to a holdout sample of consumers. Using the model, we examine the revenue impact of a change in promotion policy. In the second study, we add spatial extensions to the previous model to solve a more complex problem: retail location analysis. We develop a spatial basket model to analyze the spatial pattern of consumer heterogeneity across stores, and show how to use this model to predict the demand of a new store (without any data of consumer purchase history). The main outputs of the extended model also align well with managerial intuition. Additionally, the model provides excellent forecasts to the demand of the hold-out store.

This thesis comprises of three chapters. The first essay is titled ‘Managers: Their Effects on Accruals and Firm Policies' and is joint work with Douglas V. DeJong. The second essay is titled ‘Can the Capital Market Recognize a Manager's Financial Reporting Style?' and is sole-authored. The third essay is titled ‘Executive Compensation in a Matching Model’ and is joint work with Douglas V. DeJong, Elena Pastorino and B. Ravikumar. Chapter one investigates whether top executives have significant individual-specific effects on accruals that cannot be explained by firm characteristics. Exploiting 37 years of individual executives and firm data, we find that individual executives play a significant role in determining firms' accruals. In addition, we examine whether executives' effects on accruals are related to their personal styles in investment, financing and operating decisions. Our results show that individual executives' effects on accruals are more correlated to their operating decisions than investment and financing decisions. We also compare effects exerted by CEOs to CFOs. We find CEOs are more likely to affect accruals through firm policy decisions and CFOs are more likely to affect accruals through accounting decisions. CFOs tend to report more "solid" earnings than CEOs, i.e., CFOs are more likely to push accruals to zero. Chapter two examines whether investors can recognize idiosyncratic differences in managers' financial reporting behavior. Specifically, I investigate whether the capital market can recognize a manager's financial reporting aggressiveness and whether investors' recognition of a manager's style follows a Bayesian learning process. I use a manager's specific effect on discretionary accruals to measure her financial reporting aggressiveness. My results show that investors find earnings forecasts issued by aggressive managers to be less credible and thus respond less strongly. I also find investors follow a Bayesian learning process to identify a manager's individual style. As a manager's financial reporting history becomes longer, there is less uncertainty about the manager's true style. Consequently, the discount on the market reaction to earnings forecast news due to the manager's aggressiveness becomes larger. In sum, these results suggest that a manager's prior financial reporting history allows her to develop a financial reporting reputation, which can be inferred by investors through rationally processing historical information. Chapter three outlines our future research plan to revisit the relative importance of returns to firm-specific tenure and to general labor market experience in the labor market for executives. We shed light on the importance of explicitly accounting for an executive's firm-to-firm and job-to-job mobility, within and across firms, over the course of the executive's career in order to measure the magnitude of each type of returns.

I examine the extent to which acquirers exercise discretion in the application of FIN 48 when estimating target tax reserves. By examining the change in target tax reserves recorded through purchase accounting, I am able to hold constant the underlying tax positions, and any changes can be attributed to differences in how the managers of the target and acquirer apply the recognition and measurement principles of FIN 48. For a sample of large public-for-public M&A transactions in which the amount of target tax reserves is observable pre- and post-acquisition, approximately one third (half) of the acquirers adjust target tax reserves by more than half (a quarter) of the preexisting balance. Substantially more acquirers increase rather than decrease target tax reserves, and the average change in target tax reserves recorded through purchase accounting is $25 million. I also find evidence that the change in tax reserves recorded through purchase accounting is increasing in short-term financial reporting pressures and decreasing in the costs of overstating goodwill.

This thesis comprises of three chapters. The first essay is coauthored with Professor Matthew T. Billett and is titled ‘Asymmetric Information and Open Market Share Repurchases.' The second essay is join work with Professor Matthew T. Billett and Professor Jon A. Garfinkel and is titled ‘The Effect of Asymmetric Information on Product Market Outcomes'. The third essay is sole-authored and is titled ‘Crash Risk and Firms' Cash Policies'. Chapter one reveals cross sectional differences in undervaluation by combining open market share repurchase (OMR) announcements with asymmetric information. We find that opaque firms experience significantly larger abnormal returns than transparent firms upon an OMR. Following Ikenberry, Lakonishok an Vermaelen (1995), we strategy the sample by book-to-market, which may relate to undervaluation, and examine the effect of firm opacity within book-to-market groupings. High book-to-market opaque firms experience average three-day market-adjusted returns of 5.05% compared to 1.86% for high book-to-market transparent firms. We also document significantly positive long run post-announcement returns for opaque firms, but not for transparent firms. Our results suggest undervaluation motive for OMRs is concentrated in opaque firms, and that undervaluation due to asymmetric information attenuates at the announcement of OMRs. Chapter two explores how asymmetric information in financial markets affects outcomes in product markets. Given endogeneity concerns, we study firms in industries that experience deregulatory shocks. Post-deregulation, firms with greater opacity about their financial condition lose market share to their industry rivals. We further show that opaque firms have lower capital raising activity after deregulation. We conclude that asymmetric information in financial markets is an important determinant of product market outcomes. Chapter three examines the effect of crash risk on firms' cash policies. We find high crash risk firms which experience large negative stock returns over the fiscal year or show large conditional negative return skewness tend to hold more cash than low crash risk firms. The phenomena are more pronounced for financial constraint firms and small firms. In addition, we show that the marginal value of cash for high crash risk firms is lower compared to low crash risk firms. Based on our findings, we argue that crash risk has been taken into account when firms make their cash decisions.

This paper examines the impact of the U.S. tax and financial reporting treatment of foreign earnings on the payouts to shareholders of U.S. multinational companies (MNCs). I find the U.S. tax and financial reporting treatment of foreign earnings weakens the otherwise strong, positive association between foreign earnings and the probability and level of dividend payments, but I do not observe an effect on the probability or level of stock repurchases or on the level of total payout. I also find U.S. MNCs with tax and/or financial reporting incentives to keep their foreign profits reinvested abroad make more extensive use of repurchases than dividends when making distributions to shareholders. This study contributes to our understanding of the impact of the current U.S. worldwide tax system on U.S. MNCs' real decisions.