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The thesis presents three studies that focus on the wealth effects of hybrid securities namely: convertible bonds and warrant-bonds. The wealth effects of these hybrid securities are investigated through both meta-analysis and event-studies. Chapter 2 incorporates a review of the literature on wealth effects associated with the announcement of convertible bonds and warrant-bond loans. The findings of 35 event studies, which include 84 sub-samples and 6,310 announcements, are analysed using meta-analysis. A mean cumulative abnormal return of 1.14% for convertible bonds compared with 0.02% for warrant-bonds are observed, the significant difference confirming a relative advantage for warrant-bonds. Abnormal returns for hybrid securities issued in the United States are significantly more negative than for those issued in other countries. In addition, issuing hybrid securities to refund debt does not seem to be favoured by investors. Finally, several factors identified as important by theory or in prior research are not significant within the cross-study models, suggesting that more evidence is needed to confirm whether they are robust. Chapter 3 presents a study that examines the market reaction to hybrid security announcements in an emerging country, specifically Malaysia, from January 1996 to December 2009. The results indicate that announcements of the intention to issue convertible bonds in Malaysia are associated with significantly negative abnormal returns of 1.10% (significant at the 10% level) on the event window of (-1, 1). On the other hand, announcements of the intention to issue warrant-bonds document significantly positive abnormal returns of 2.25% (significant at the 10% level) on the same event window. The ‘univariate’ test confirms that the wealth effects associated with the announcement of the intention to issue warrant-bonds is larger (i.e., more positive) than convertible bonds in line with few studies in different markets: Japan (Kang, Kim, Park, and Stulz, 1995), the Netherlands (De Roon and Veld, 1998), and German (Gebhardt, 2001). Non-significant abnormal returns of 0.81% and 0.23% on the event window ( 1, 1) are reported for announcements of hybrid securities by means of private placements and rights offerings, respectively, contradict with the ‘certification hypothesis’ of Hertzel and Smith (1993), and ‘signalling hypothesis’ of Heinkel and Schwartz (1986). This chapter also finds that there is no support for ‘information-signalling’ hypothesis (Ross, 1977), as non-significant abnormal returns are observed in the event window ( 1, 1) for announcements of hybrid securities for all purposes of offering (i.e., debt restructuring, mergers and acquisitions, capital expenditure, and working capital). These findings also highlight that listed firms in Malaysia with high risk uncertainty contribute to more negative abnormal returns in comparison to lower risk uncertainty firms, which contradicts with the ‘risk uncertainty hypothesis’. The final study presented in this thesis, Chapter 4, considers the wealth effects of hybrid security announcements in a developed country, the United Kingdom. This third study investigates the wealth effects of announcements of the intention to issue convertible bonds in the UK market over a period from January 1990 until July 2010. The study period also allows for an investigation on the market reaction to announcements of convertible bonds during the financial crisis that started in August 2007. Using the standard event study methodology, a negative abnormal return of 1.75% (significant at the 5% level) on the two-day event window is reported, confirming the findings of previous UK studies (Abyhankar and Dunning, 1999, and Wolf et al., 1999) which are also in line with studies performed using data from other countries such as US, Canada, Australia, and others. There are no significant differences between the results of the sub-samples before and during the financial crisis, suggesting that the economic conditions do not influence the market response. The results of the event study and the multivariate analysis in this chapter are consistent with the ‘market timing hypothesis’ implying that managers in the UK announce their intention to issue convertible bonds after a period of good stock price performance.

Chapter 1 investigates whether physicians' financial incentives influence health care supply, technology diffusion, and resulting patient outcomes. In 1997, Medicare consolidated the geographic regions across which it adjusts payments for physician services, generating area-specific price shocks that are plausibly exogenous with respect to health care demand. Areas with higher payment shocks experience significant increases in health care supply. On average, a 2 percent increase in payment rates leads to a 5 percent increase in care provision per patient. Elective procedures such as cataract surgery respond twice as strongly as less discretionary services like dialysis. Higher reimbursements also increase the pace of technology diffusion, as non-radiologists acquire magnetic resonance imaging scanners more readily when prices increase. The magnitudes of our empirical findings imply that changing provider incentives explain up to one third of recent growth in spending on physician services. The incremental care has no significant impacts on mortality, hospitalizations, or heart attacks. In chapter 2, we analyze bargaining between health care providers and private insurers in the shadow of large public insurance programs. Using several distinct sources of variation in Medicares payment rates, we find robust evidence that private insurers adapt to Medicare pricing. The relationship between private and public prices is both significantly positive and significantly less than one-for-one. The results reject both the strong view that private insurers mimic Medicare and views that emphasize cost-shifting as the predominant feature of these markets. Private responses to Medicare payments are larger in states with more competitive insurance markets. The evidence is consistent with models in which Medicares payment rates serve as a basis for negotiations between insurers and provider networks. Chapter 3 revisits the standard user cost model of housing prices and concludes that the predicted impact of interest rates on prices is much lower once the model is generalized to include mean-reverting interest rates, mobility, prepayment, elastic housing supply, and credit-constrained home buyers. The modest predicted impact of interest rates on prices is in line with empirical estimates, and suggests that lower real rates can explain only one-fifth of the rise in prices from 1996 to 2006. / Economics

In this dissertation a new method is proposed to estimate willingness-to-pay (WTP). The method works as an additional interview scene appended to conjoint analysis and it is named throughout this dissertation as the Price Estimation scene (PE scene). In the preceding conjoint analysis price is not included as an attribute. Instead the exchange rate between conjoint utilities and willingness-to-pay is estimated in the PE scene. This is achieved by the use of product stimuli in addition to price scales that are adapted for each respondent in the interview reflecting his or her previously estimated part-worth utilities. In the PE scene the respondents are presented with a sequence of product choices with assigned prices and indicate whether they would actually purchase each of the presented product profiles. The PE scene is a method to estimate willingness-to-pay at an individual level based only on each respondent's provided information. Shortcomings of existing approaches that use conjoint analysis, such as a missing choice rule as well as problems that arise when price is included as an attribute are overcome. The PE scene was tested in an empirical investigation in which the WTPs of the customers of the Nokia online shop in Germany for different product bundles were estimated. (author's abstract)

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published_or_final_version / Urban Design / Master / Master of Urban Design

published_or_final_version / Economics / Master / Master of Social Sciences

published_or_final_version / Urban Design / Master / Master of Urban Design

published_or_final_version / Urban Design / Master / Master of Urban Design