This study investigates the impact of IT investments and several contextual variables on the volatility of future earnings. We find evidence that IT investments strongly increases the volatility of future earnings and that four contextual factors - industry concentration, sales growth, diversification, and leverage - strongly moderate IT's effect on earnings volatility. It is notable that while the main effect of IT spending on earnings volatility is strongly positive, not all of the moderators are. This suggests that there are conditions under which the positive risk-return relation can be either offset or even reversed. Taken together, these results suggest an explanation for what has recently been termed the "new productivity paradox", i.e. the apparent under-investment in information technology despite evidence of highly positive returns for doing so.

This thesis investigates the relationship between product market competition and zero leverage behavior within firms, aiming to uncover how these dynamics interact. Additionally, it explores whether firms characterized by higher earnings volatility exhibit a more pronounced positive relationship between product market competition and the likelihood of adopting a zero-leverage strategy. To carry out this investigation, we employed product market competition data (Fluidity) from the Hoberg-Phillips Data Library and financial data from the Compustat (North America) database, spanning from 1989 to 2019. As product market competition intensifies, the probability of firms adopting a zero leverage policy increases. Furthermore, our research illuminates that the positive impact of heightened product market competition on the likelihood of zero leverage policies is accentuated in firms characterized by elevated levels of earnings volatility. This finding corroborates our initial hypothesis, substantiating the notion that increased competition significantly influences a company's earnings volatility. We also strengthened our analysis with insights from existing literature, underscoring how heightened earnings volatility intensifies the propensity to embrace a zero leverage policy. This study contributes insights to the literature, notably as the first to employ the interaction term between product market competition and earnings volatility in exploring these financial dynamics.

The paper empirically tests the relationship between earnings volatility and cost of debt with a sample of more than 77,000 Swedish limited companies over the period 2006 to 2013 observing more than 677,000 firm years. As called upon by many researchers recently that there is very limited evidence of the association between earnings volatility and cost of debt this paper contributes greatly to the existing literature of earnings quality and debt contracts, especially on the consequence of earnings quality in the debt market. Earnings volatility is a proxy used for earnings quality while cost of debt is a component of debt contract. After controlling for firms’ profitability, liquidity, solvency, cashflow volatility, accruals volatility, sales volatility, business risk, financial risk and size this paper studies the effect of earnings volatility measured by standard deviation of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) on Cost of Debt. Overall finding suggests that lenders in Sweden does take earnings volatility into consideration while determining cost of debt for borrowers. But a deeper analysis of various industries suggest earnings volatility is not consistently used by lenders across all the industries. Lenders in Sweden are rather more sensitive to borrowers’ financial risk across all the industries. It may also be stated that larger borrowers tend to secure loans at a lower interest rate, the results are consistent with majority of the industries. Swedish debt market appears to be well prepared for financial crises as the debt crisis seems to have no or little adverse effect borrowers’ cost of capital. This study is the only empirical evidence to study the association between earnings volatility and cost of debt. Prior indirect research suggests earnings volatility has a negative effect on cost debt (i.e. an increase in earnings volatility will increase firm’s cost of debt). Our direct evidence from the Swedish debt market is consistent for some industries including media, real estate activities, transportation & warehousing, and other consumer services.

Submitted by Filipe dos Santos (fsantos@pucsp.br) on 2017-02-22T11:46:35Z No. of bitstreams: 1 Rogério de Paiva Savegnago.pdf: 1829228 bytes, checksum: 99a1638143e41c90fe7405f2bc56422f (MD5) / Made available in DSpace on 2017-02-22T11:46:35Z (GMT). No. of bitstreams: 1 Rogério de Paiva Savegnago.pdf: 1829228 bytes, checksum: 99a1638143e41c90fe7405f2bc56422f (MD5) Previous issue date: 2017-02-15 / This work had the main motivation to verify whether the use of derivative transactions for hedging purposes would be associated with the reduction of earnings volatility and value creation in non-financial Brazilian companies. For that matter, 223 non-financial firms listed on the Brazilian BM&FBovespa stock exchange were surveyed, representing 96.5% of the total market and 85.8% of the quantity of these companies traded in the exchange for the year of 2015, when a profound economic crisis has taken place in this country. As this is a quantitative study based on documental sources, they were carried out based on financial and market data provided by Economativa and BM&FBovespa, through Levene’s test of variance homogeneity, to first test the volatility of earnings represented by the standard deviation of the annual return on equity (ROE) for 2015; and also through a linear multiple regression, being this one used to test the association of hedging transactions through derivatives with value creation of the surveyed companies. The results presented herein demonstrated that companies who hedged their risks in 2015 had volatility in its ROE of 91.39% while the companies who did not hedge in this period had volatility in its returns of 158.02%. Nevertheless, such results were not statistically significant at the level of significance of 5%. The multiple linear regression was performed considering how the quantitative dependent variable value (simplified Tobin's Q) behaved in relation to the independent variable (hedging in 2015) and in relation to control variables as Governance, Size, Profitability and Leverage. In this calculation were also included variables with the multiplicative effect of hedging in conjunction with the control variables size, profitability and leverage. The results from this regression demonstrated that the hedging transactions made in 2015 by the companies herein were negatively associated with value, however such results were not statistically significant. Finally, the results presented herein did not allow the author to infer that non-financial Brazilian companies who used derivative instruments for hedging purposes in its activities in 2015 (a year of a serious economic crisis) significantly incurred in lower volatility in their return on equity nor that such transactions were associated with value creation in the surveyed companies / Este trabalho teve como motivação principal averiguar se a utilização de operações com derivativos para fins de hedge estaria associada à redução da volatilidade dos resultados e à criação de valor nas companhias não-financeiras brasileiras. Para isso, foram pesquisadas 223 empresas não-financeiras listadas na BM&FBovespa, representando 96,5% do valor total de mercado das não-financeiras e 85,8% da quantidade dessas empresas listadas na bolsa, relativamente ao ano de 2015, no qual uma profunda crise econômica se instalou no País. Por se tratar de um estudo de caráter quantitativo, a partir de uma base documental, executado a partir dos dados contábeis e de mercado disponibilizados pela Economatica e pela BM&FBovespa, foram realizados os testes empíricos de homogeneidade de variâncias de Levene para testar a volatilidade dos resultados das empresas, representada pelo desvio-padrão do retorno anual sobre o patrimônio líquido (ROE) em 2015; e o cálculo de regressão linear múltipla, para testar a associação da utilização de instrumentos derivativos em operações de hedge na criação de valor das companhias pesquisadas. Os resultados apresentados demonstraram que as empresas que utilizaram hedge ao longo do ano de 2015 tiveram volatilidade do ROE de 91,39% contra uma volatilidade de 158,02% apresentada pelas empresas que não fizeram hedge no período pesquisado. No entanto tais resultados não se mostraram significativos pelo teste de Levene ao nível significância de 5%. A regressão linear múltipla foi realizada considerando como a variável dependente quantitativa de valor (Q de Tobin simplificado) se comportou em relação à variável independente de utilização de hedge em 2015 e em relação às variáveis de controle Governança, Tamanho, Rentabilidade e Alavancagem. Nesse cálculo foram também incluídas variáveis com o efeito multiplicativo do hedge em conjunto com as variáveis de controle de Tamanho, Rentabilidade e Alavancagem. Os resultados da regressão demonstraram que a utilização das operações de hedge pelas empresas-objeto deste estudo ao longo de 2015 esteve negativamente associada com a criação de valor, contudo esses resultados não se mostraram estatisticamente significativos. Por fim, os resultados apresentados neste trabalho não permitiram inferir que as operações de hedge realizadas ao longo de 2015 (um ano de grave crise econômica) contribuíram significativamente para a redução da volatilidade dos retornos nem que tais operações estariam associadas à criação de valor nas companhias pesquisadas

L’après-crise et l’évolution de la réglementation confrontent les banques à un cadre nouveau, replaçant la performance financière au cœur de leur modèle. A l’exception des risques associés aux opérations financières propres, les effets de la structure des revenus sur la rentabilité et la stabilité des résultats sont toutefois débattus. Le présent travail doctoral propose une poursuite de la recherche sur la performance des banques en s’intéressant à l’influence des conditions économiques et de marchés. Une telle influence est peu explorée au-delà des risques de crédit et de trading. Les conditions économiques et de marchés semblent à même d’expliquer d’importantes variations sur la plupart des postes du résultat des banques. La projection des résultats possibles, et plus généralement la mesure des aléas, requièrent la considération de l’ensemble de la structure des revenus ainsi que des volatilités et corrélations des variables d’influence.Plus avant sur un plan stratégique, la recherche est ensuite orientée vers l’estimation de la performance, selon l’environnement, des activités de banque « traditionnelle » et des services financiers à la clientèle. Enfin, la performance attendue des activités (espérances de rentabilité et de volatilité) ainsi que les écarts possibles à ces attentes sont évalués à l’aide de scénarios multiples. Il apparait que la diversification vers les services financiers, ainsi que des stratégies prudentes de transformation d’échéances de taux entre passifs et actifs, améliorent l’attente de performance vis-à-vis de la banque traditionnelle considérée seule. L’incertitude globale de performance associée à une banque ainsi diversifiée semble également contenue en regard des bénéfices attendus. Si l’influence des conditions économiques et financières est exogène, le choix de la structure des activités parait ainsi offrir des opportunités de mitigation des risques et de soutien au rendement-risque. / The post-crisis and regulatory changes face banks with a new framework, replacing financial performance at the heart of their model. With the exception of risks associated with proprietary financial transactions, effects of the structure of income on the profitability and the stability of results, however, are debated. This doctoral study proposes a further research on bank performance through the influence of economic and financial markets conditions. Such influence is little explored beyond credit risk and trading. Economic and financial markets conditions may explain significant variations for most components of earnings. Hence appraising possible earnings, and more broadly measuring uncertainties, require the consideration of the whole income structure as well as of volatilities and correlations of influencing variables.Further on a strategic level, the research then turns to the estimation of the performance, owing to the environment, of "traditional" banking services and of customers’ financial services. Finally, expectations of performance (profitability, volatility) as well as possible deviations are assessed throughout multiple scenarios. It appears that diversification into customers’ financial services, and prudent interest rate mismatch strategies, improve performance related to traditional banking services alone. Further, the overall uncertainty of performance associated with such a diversified bank seems to be contained when weighted by expected benefits. The influence of economic and financial conditions is exogenous; results however suggest that the choice of the business mix may provide with opportunities for risk mitigation and enhancement of risk-return.

The main objective of this study was to test if the applicability of known capital structure theories holds water in abnormal economic environments, in particular, in Zimbabwe. Using secondary data collected for listed manufacturing firms from 2009-2018, results from a fixed effects regression model concluded that profitability, company size, non-debt tax shields, firm liquidity, inflation and GDP were significant in explaining capital structure decisions in Zimbabwe. In the context of South Africa, company size, asset tangibility, firm liquidity and inflation were found to be significant. The pecking order and trade-off theories were the only two theories that were found to be applicable in the Zimbabwean context, and the application of both theories indicated the use of internally generated funds as opposed to external finance sources, such as debt and equity. These results attribute to the abnormality and instability of the Zimbabwean economy, especially with regards to limited access to capital. / Business Management / M. Com. (Business Management)

本研究探討台灣於2011年依據IAS 39進行34號公報之第三次修訂實施，採用已發生損失模型後的兩項議題：（1）放款壞帳費用之提列與盈餘波動性以及資本適足率波動性之關聯性，（2）以歷史成本評價之期末金額及以公允價值評價之期末金額，究竟何者對於未來之帳款沖銷與不良債權較具有關聯性。 實證結果顯示，自2011年採用已發生損失模型後盈餘波動性無顯著之變化，且壞帳費用對於盈餘波動性無解釋能力；而自2011年後資本適足率波動性亦無顯著變化，但壞帳費用對於資本適足率波動性有顯著的影響，顯示銀行明顯透過壞帳費用之提列進行資本管理而非盈餘管理。在未來信用損失預測之部分，以歷史成本評價之期末放款金額對於未來之帳款沖銷及不良債權有顯著的負相關，而以公允價值評價之期末放款金額對於未來之帳款沖銷及不良債權卻無解釋能力，可能係因未來帳款沖銷與未來不良債權之發生與放款之帳齡有顯著的關聯性，而與未來可收取之現金流量無顯著之相關。 / This study aims to investigate how Incurred Loss Model affects the recognition of loan loss provisions and the valuation of loans due to the third revision of SFAS No. 34 which was revised based on IAS 39 in 2011. For the recognition of loan loss provisions, it focuses on the relationship with earnings volatilities and capital adequacy volatilities, and for the valuation of loans, it specializes on whether credit loss predicting is related to historical cost accounting or fair value accounting. The result shows that, since the implementation of Incurred Loss Model in 2011, both the adoption of Incurred Loss Model and the loan loss provisions have no significant impact on earnings volatilities. For capital adequacy volatilities, implementing Incurred Loss Model has no effect on capital adequacy volatilities neither. However, the loan loss provisions since 2011 significantly enhance the volatilities of capital adequacy. It reveals that banks use loan loss provisions to manage capitals instead of earnings. For credit loss predicting, loans evaluated with historical cost accounting have significant negative relations with future charge-offs and non-performing loans while loans evaluated under fair value accounting do not have any explanation power. It may suggests that future charge-offs and non-performing loans are related to the aging of loans, but not the future payoffs of loans.