This research identifies and quantifies horizontal and vertical inequities resulting from selected owner-occupied housing tax policies though micro-simulation. The simulations are spread sheet constructions underpinned by the respective UK and US tax systems. Within each country-specific simulation case families are established varying with regard to income levels and investment choices. The specific tax policies analysed are the acquisition taxes, property taxes, elements specific to housing affecting income taxes (i.e. mortgage interest relief) and capital gains taxes. In addition to the specific tax policies, the overall tax obligations (the sum of the four specific taxes) are considered. The time frame of the study is a twenty-year period from 1990 through 2009. A recurring theme in the literature is that homeowners ought to be taxed as investors in rental properties to ensure tenure neutrality or, alternatively, taxed as any other investor to ensure tax neutrality. This research considers the corresponding effects on horizontal and vertical equity by modifying the UK and US tax systems for increased levels of neutrality through further micro-simulation analysis. Finally, the respective owner-occupied housing tax policy changes and reforms that occurred within the twenty-year period studied are evaluated in terms of enhancements to or hindrances of horizontal and vertical equity. This is accomplished by simulating sixteen five-year periods within the twenty-year time frame and evaluating horizontal and vertical equity on a within-country and a cross- country basis. What appears to be lacking in the literature is an extensive comparative analysis of the specific owner-occupied housing tax policies and their interrelationship with respect to the complex overall tax system in which they are present. The aim of this research is to contribute to the middle/high range of comparative analytical work. The research is set within a comprehensive theoretical framework and systematically ii compares the two countries’ specific tax policies and their overall impact on the respective tax systems. The methodology used is consistent between the two countries, ensuring a robust dual-nation comparison. The US specific tax policies relevant to homeownership and the overall tax system were found to have greater inherent horizontal inequities when compared with the UK tax policies and tax system. Both countries’ specific tax systems were found to have varying inherent vertical inequities. The UK homeowner occupiers experience more vertical equity (progressivity) in the acquisition tax system when compared with the US investors. Conversely, the US homeowner occupiers experience more vertical equity (progressivity) in the property tax, income tax and capital gains tax systems. Overall, the US investors experience a more progressive tax system when compared directly with the UK investors. The abolition of the UK Mortgage Interest Relief at Source (MIRAS) resulted in a less progressive income tax system for homeowner occupiers but one that is more horizontally equitable with other investors. The erosion of the benefits realised from the US mortgage interest and real estate tax deductions has resulted in a more vertically and horizontally equitable income tax system for all but the most wealthy. Vertical equity was improved by the adoption of the UK council tax in that it is a less regressive form of property taxation when compared with its predecessor. The recent reforms to the UK stamp duty (land tax) have made the system of acquisition taxation more vertically equitable but have exacerbated the horizontal inequity of the system with respect to other capital investors. The US capital gains tax system as it relates to the homeowner occupier changed significantly with the Tax Reform Act of 1997, resulting in a simpler but less equitable system depending on circumstances. With regard to the equity of the overall tax systems of the two countries, the UK’s progressivity has decreased while the horizontal equity has improved during the twenty-year period, whereas the progressivity of the US system has remained relatively flat with an improvement in horizontal equity. iii The author concludes with a call for the gradual repeal of the mortgage interest relief in the US, a subsidy shown to be extremely vertically inequitable in this study and one that was estimated to cost the exchequer $79 million in lost tax revenue in 2010 by the US Office for Management and Budget. While a taxable imputed rental income may be theoretically optimal, the well-recognised administrative and compliance issues associated with such tax reform make it untenable. Therefore, the second best option and the one adopted by the UK and most other developed nations, is not to allow a deduction for a cost in generating untaxed income. This research contributes a unique synthesis of methodological techniques to the housing equity literature. The combined analyses of horizontal equity under the classical definition with the chosen structural and distributional techniques in evaluating vertical equity have never been done before. The analysis of the overall tax system comprising four specific tax systems is also original in this area of research and employs the Suits (1977) method for determining overall progressivity. There is an attempt within this research to replicate the results derived from the Suits indices by similarly extending the structural indices, thus testing the transferability of the methodology established by Suits. This is the first attempt to extend the structural indices established decades earlier to researcher’s knowledge. The results from two of the three structural measures are inconsistent with each other and the results from the Suits indices and therefore not believed to be informative. However, the results from the extended Liability Progression of both countries are indeed consistent with the results of Suits indices. This is an interesting research observation and may be indicative of the transferability of the Suits methodology. This area of research continues to be discussed by academics and policymakers given the conflicting underpinning theories and continued fiscal favouritism in many developed countries. This research area has become even more topical in the last few years given the recent financial crisis. The multi-layered, comparative micro-simulation technique employed within this research provides a solid platform from which to appraise conventional wisdoms and proposals for future policy with regard to owner-occupied housing taxation and beyond.

Name of Author: Cornelius Babatunde Alalade Title of the Investigation: THE ECONOMIC PERFORMANCE OF INTERNATIONAL OIL COMPANIES IN NIGERIA: The Effect of Fiscal Taxation and the Separation of Ownership and Control. This research investigates the tax policies of the Nigerian government and the separation of ownership and control and the possibility that they impact on the economic performance of the international oil companies operating in Nigeria. The key areas of the research include a literature review which concentrates on both shareholder and stakeholder theories in corporate governance and on the separation of ownership and control. The literature review is also on government control mechanisms, including state ownership of corporations and taxation. Another key part of this research is the investigation of the relationship between types of contract between host government and the operating companies, and the companies' economic performance in relation to contract type. The second part of this research examines the relationship between the variables representing fiscal taxation and those representing economic performance. Given that there are essentially two types of contracts operating in Nigeria's oil and gas exploitation business, that is, Joint Venture (JV) and Production Sharing Contract (PSC), these two formed the basis of the research. For the purposes of measuring economic performance, the unit cost of production and gross margin per barrel were chosen as the variables for measuring the impact of the separation of ownership and control and the impact of fiscal taxation on the economic performanceof the operating companies. Data obtained from secondary sources served as the basis for the quantitative analysis employed in this research,and the results obtained were statistically tested before any interpretation and recommendations were suggested. Interviews were also conducted for the qualitative aspect of this study in order to obtain information on the factors that influenced Nigeria's oil and gas exploration and production fiscal policy formulation in the past. This research provided the opportunity to arrive at certain conclusions which, even if they sometimes appeared obvious, were never previously empirically substantiated, and the corroboration of some existing theories as being applicable to the Nigerian situation. They also provided a basis for suggesting the inappropriateness of some existing concepts or theories in their application to Nigeria's oil and gas exploration and producing companies. For example, the results suggest that the existence of separation of ownership and control does not guarantee optimization of economic performance (or maximization of wealth) for the production sharing contract type in oil companies operating in Nigeria, even if they do elsewhere. Fiscal taxation was also suggested as critical to economic performance but possibly not the only variable impacting on the economics of petroleum exploitation in Nigeria. This research provided other possible areas for further research in both fields of corporate governance and fiscal taxation.

There is an increasing interest in research on internal marketing in the marketing services literature. This has arisen largely from the suggestion that internal marketing contributes to services companies' success through its role in developing customer orientation among employees, leading to a consistently high level of customer service quality. Most research on internal marketing has however been conducted in large firms and consequently research in this field in small firms is scarce. Specifically, research on internal marketing in small insurance brokers has been limited despite the significance of the insurance sector to the UK economy as a source of both employment and income. The literature review concludes that small insurance brokers are being squeezed out of the market due to the challenging nature of the insurance market. This thesis investigates the understanding and use of internal marketing in small insurance brokers in the UK and its role in developing customer orientation among employees. A qualitative research approach was used to collect data from managers and employees within small insurance brokers in the UK. More specifically, a series of semi-structured interviews was conducted to find out how the terms internal marketing and customer orientation were understood and to explore internal marketing activities and the extent to which it has been used to develop customer orientation among employees. This research contributes to knowledge on internal marketing by identifying: the impact of broker size on the formality of its application; the differences between employees and managers with respect to their understanding of the term; the differences between commercial and personal-insurance with regard to their awareness of the role of internal marketing in developing customer orientation among employees; and the impact of an external factor (the FSA) on the manner of its adoption. The research findings indicated: that there is a lack of understanding of the concept of internal marketing within small insurance brokers; that it is used informally, except for employee training which has been introduced to satisfy the FSA regulations; that there are some linkages between the elements of internal marketing; and that small insurance brokers lack awareness of its role in developing customer orientation among employees.

Britain has the most active and developed Islamic banking sector in the European Union. This sector is set to grow with both Islamic and non-Islamic banks now offering a range of Sharia compliant products. However, are these banks meeting the service quality needs of their customers? Previous studies on service quality within Islamic banks have been restricted to Muslim-based countries and whilst English Muslims will have the same religious beliefs, their values may have been altered by the western society in which they live and work. Hence existing service quality tools are likely to be unsuitable for this market. Using mixed methods, this research developed a modified SERVQUAL model for measuring service quality in English Islamic banks. The resulting instrument is intended to help the managers of Islamic banks based in England to measure their service quality and focus their attention on the service quality dimensions that matter most to Muslim customers Items for the new service quality instrument were taken from the original SERVQUAL model, previous studies that modified SERVQUAL and eight focus groups conducted with members ofthe English Muslim community. The resulting instrument was tested via a questionnaire with more than 300 Muslims in England resulting in the EIBSQ, an English Islamic Banking Service Quality tool. This measures service quality as perceived by English Muslims. Using factor analysis, the instrument includes thirty-four items, which are grouped into five dimensions. The five dimensions are: responsiveness, credibility, Islamic tangibles, accessibility, and bank image. One of the key contributions ofthis thesis is the proposed EIBSQ. Previous studies using SERVQUAL reveal that the use of this original scale in an international context raises a legitimate concern about validity across borders and the scale construct as items can be affected by different contexts. To the researcher's knowledge, very few service quality models have been developed for the Islamic banking industry and none exists to measure the quality of service and customer satisfaction for the English Islamic banking industry.

The research has three objectives. The first is to investigate the extent of publishing delay and its determinants in Libya. The second is to find out how useful the annual report is to five user groups in Libya namely the Tax Authority, Academics, Auditors, Banks and the Auditing Authority. Finally, the research also seeks to determine the impact publishing delay has on banks, Tax and Auditing Authorities. A sample of 33 companies over two year period was used to determine the extent of publishing delay and its determinants. The results indicate that the average publishing delay is 154.86 days. The results of the ordinary least square regression analysis indicate that company size, profitability, company age, number of accountants, accountant qualification, and audit opinion are significantly associated with publishing delay. However, the type of accounting system is not associated with publishing delay. The results of the usefulness of the annual report indicate that the balance sheet is regarded as the most important followed by the profit and loss account, auditors' report, management report and the funds flow statement. The results also suggest that there are significant differences in the perceived usefulness of 'on-time' and 'late' annual reports in terms of predictive value, confirmatory value and faithful representation. The results of the impact of the publishing delay on banks, Tax authority and Auditing authorities are as follows. Loans advanced by banks on the basis of 'on-time' annual reports are more likely to be repaid than those made on the basis of 'late' annual reports. The Tax Authority collect less revenue from companies whose annual reports are produced late compared to those whose annual reports are produced on time and Auditing Authority is more likely to issue a qualified audit report if the annual report is produced late compared to one produced 'on-time'. The results have important implication for the Libyan Authorities in terms of what actions they should take to reduce the publishing delay. Reduction in publishing delay is likely to increase the usefulness of the annual report and reduce the impact the delay is having on banks, Tax and Auditing Authority.

Thesis advisor: Zhijie Xiao / This dissertation contains three essays. It provides an application of quantile regression in Financial Economics. The first essay investigates whether tail dependence makes a difference in the estimation of systemic risk. This chapter develops a common framework based on a copula model to estimate several popular return-based systemic risk measures: Delta Conditional Value at Risk (ΔCoVaR) and its modification; and Marginal Expected Shortfall (MES) and its extension, systemic risk measure (SRISK). By eliminating the discrepancy of the marginal distribution, copula models provide the flexibility to concentrate only on the effects of dependence structure on the systemic risk measure. We estimate the systemic risk contributions of four financial industries consisting of a large number of institutions for the sample period from January 2000 to December 2010. First, we found that the linear quantile regression estimation of ΔCoVaR, proposed by Adrian and Brunnermeier (AB hereafter) (2011), is inadequate to completely capture the non-linear contagion tail effect, which tends to underestimate systemic risk in the presence of lower tail dependence. Second, ΔCoVaR originally proposed by AB (2011) is in conflict with dependence measures. By comparison, the modified version of ΔCoVaR put forward by Girardi et al. (2011) and MES, proposed by Acharya et al. (2010), are more consistent with dependence measures, which conforms with the widely held notion that stronger dependence strength results in higher systemic risk. Third, the modified ΔCoVaR is observed to have a strong correlation with tail dependence. In contrast, MES is found to have a strong empirical relationship with firms' conditional CAPM beta. SRISK, however, provides further connection with firms' level characteristics by accounting for information on market capitalization and liability. This stylized fact seems to imply that ΔCoVaR is more in line with the ``too interconnected to fail" paradigm, while SRISK is more related to the ``too big to fail" paradigm. In contrast, MES offers a compromise between these two paradigms. The second essay proposes a quantile regression approach to stock return prediction. I show that incorporating distributional information together with combining model information can produce a superior forecast for the conditional mean as well as the entire distribution of future equity premium, which significantly outperforms the forecast that utilizes either source of information alone. Meanwhile, the order of combination strategies appears to make a difference in the efficiency of pooling both distributional information and model information. It turns out that aggregating distributional information in the first step, followed by combining model information in the second step is more advantageous in return forecast than the alternative combination strategies which reverse the order of combination strategy. Furthermore, the forecast based on LASSO model selection can be significantly improved as well if the distributional information is further incorporated. In other word, aggregating distributional information via combining multiple quantiles estimators contributes to the improvement of forecasts obtained either from model combination or model selection. This paper not only investigates the forecast of conditional mean, but also studies the forecast of the whole distribution of future stock returns. The approaches of quantile combination together with either model combination or model selection turn out to deliver statistically and economically significant out-of-sample forecasts relative to a historical average benchmark. The third essay proposes a quantile-based approach to efficiently estimate the conditional beta coefficient without assuming a parametric structure on the distribution of data generating process. Multiple quantiles estimates are combined in a weighting scheme to utilize distributional information across different quantile of the distribution. Monte Carlo simulation demonstrated that combining multiple quantile estimates can substantially improve the estimation efficiency for beta risk estimates in the absence of Gaussian distribution. The robustness of quantile-based beta estimates are pronounced during financial crisis when the distribution of stock returns deviates most from normality. I also explored the performance of different beta estimators in an application of portfolio management analysis and found that beta estimates from the proposed quantile combination approaches are superior to the OLS estimates in constructing Global Minimum Variance Portfolio, which generates lower variance of portfolio but does not come at the expense of persistent lower returns. / Thesis (PhD) — Boston College, 2013. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.

A closed-end fund, known as an investment trust in the UK and closed-end fund in the US, is a collective investment company that invests in shares of other companies. This study attempts to describe and explain the persistence of the excess discount return on UK investment trusts and US closed-end funds. The ability to identify which factors best capture return variation is central to applications of multifactor pricing models. So the main purpose of this thesis is the application of a multifactor risk model that will explain the-existence of the excess discount return. Hence, the title of the thesis: "A Multifactor Model of Investment Trust Discounts. A Comparative Study of UK Investment Trusts and US Closed-End Funds" First, the time-series properties of the closed-end funds' net asset values (NAVs) and discounts are investigated. In terms of normality, we find that the UK and US excess NAV returns and discounts are approximately normally distributed. In addition, through Augmented Dickey-Fuller tests, we find that the UK and US discounts are non-stationary, but the excess discount returns and the excess NAV returns are stationary. In terms of multicollinearity, we find that the independent variables included in our models are not closely correlated, so we do not have problems in using them in the regression models in Chapters 7 and 8. Finally, there are no significant differences in the discount during the month of January and other months. In Chapter 7, we study the importance of management performance in terms of excess NAV returns and discount persistence. We use three approaches: Fama and French's (1993) three-factor model, an extended Fama and French model which incorporates a market timing variable, and a performance persistence model used by Carhart (1997) and Dimson and Minio-Kozerski (2001). On average, the six-factor model developed in the thesis can explain 67% of the variation in the excess discount return in the UK market by taking into consideration the market effect, size, the book-to-market effect, momentum, sentiment and expenses. In contrast, Fama and French's (1993) three-factor and Carhart's (1997) four-factor models explain only 42% of the variation of the excess discount return. Similarly, the six-factor model can explain 66% of the variation in the excess discount return in the US market by taking into consideration the same six independent variables. In contrast, Fama and French's (1993) three-factor model explains 59% of the excess discount return variation and Carhart's (1997) four-factor model explains 65% of the variation.

This dissertation contains three chapters in financial economics that theoretically and empirically examine how individuals' investment decisions explain aggregate behavior. The first chapter examines how reputational herding between fund managers depends on the fee structure, fund manager evaluation metric, market efficiency, and density of talented fund managers. Results show there are more equilibria involving herding between fund managers when net fund balance growth depends on reputation of talent rather than fund return. These inefficient equilibria are removed when the ratio of the performance fee rate to management fee rate is larger than calculated thresholds that depend on market efficiency and the density of talented fund managers. In the absence of performance fees, lower predictability of investment returns and a higher density of talented fund managers increase the desire for fund managers to deviate from efficient equilibria. The model also shows having fund managers compete against each other induces herding when net fund balance growth depends on fund returns, but removes herding equilibria when net fund balance growth depends on reputation of talent. The second chapter determines what herding networks exist between institutional investors and how herding depends on stock market volatility, degree of portfolio changes, and stock size. Using quarterly holding data from 2000-2010, I find stronger herding networks between similar types of institutions compared to institutions in the same metropolitan area. Furthermore, the herding network between similar types of institutions exists across metropolitan areas. Results show institutions herd more when making major portfolio changes than when making minor portfolio changes. The difference in herding between the two types of portfolio changes is greatest for small cap stocks which exhibit the highest levels of herding under both types of portfolio changes. The relationship between market volatility and herding by institutions is also examined and found not to have a strong correlation using quarterly holdings data. The third chapter answers the question, "Can reasonable wind energy plant cost reductions or efficiency improvements precipitate immediate investment in wind energy in the absence of renewable energy Production Tax Credits?" I analyze a single entity considering an irreversible investment under uncertainty in wind power energy. The investor's decision to invest is dependent on investment cost, energy production efficiency, government policy, current price of electricity, and beliefs on future electricity prices. The results show that even with substantial cost reductions and efficiency improvements, Production Tax Credits are still needed to encourage immediate investment. / text

The first chapter studies mass layoff decisions. Firms in the SP 500 often announce layoffs within days of one another, despite the fact that the average SP 500 constituent announces layoffs once every 5 years. By contrast, similar-sized privately-held firms do not behave in this way. This paper provides a theoretical model and empirical evidence illustrating that such clustering behavior is largely due to CEOs managing their reputation in financial markets. The model's predictions are tested using two novel datasets of layoff announcements and actual mass layoffs. I compare the layoff behavior of publicly-listed and privately-held firms to estimate the impact of reputation-based incentives on cyclicality of layoffs. I find that relative to private firms, public firms are twice as likely to conduct mass layoffs in a recession month. In addition, I find that the firms that cluster layoff announcements at high frequencies are also the ones that are more likely to engage in mass layoffs during recessions. My findings suggest that reputation management is an important driver of layoff policies both at daily frequencies and over the business cycle, and can have significant macroeconomic consequences. In the second chapter I present a theory of the safe assets market and make three central points. First, the quantity of safe assets has a strong influence on equilibrium risk premium and households’ willingness to hold risky assets. Second, the banking system and its regulation largely determine the quantity of safe assets (money-like claims) available to households. Lastly, by regulating banks’ safe asset creation, central bank policy influences risk premium even in a flexible-price world. I show that the optimal central banking policy involves managing risk in the economy, which sometimes calls for large interventions. The third chapter studies the asset allocation decisions of investors and central banks. This chapter identifies the fundamental drivers for these decisions and determines whether their influence has been altered by the global financial crisis and subsequent low interest rate environment in advanced economies. The fourth chapter analyzes the welfare losses of taxation in a simple dynamic moral hazard model under symmetric information. / Economics

This thesis includes three interconnected essays which, building on the work by Hart and Zingales (2011), lay down the foundations for a new theory of financial intermediation. The first essay explains the Hart and Zingales (HZ) framework and shows that their results are not general. In the HZ model, there is a lack of simultaneous double coincidence of wants, and future income is not pledgeable. This implies that agents need money to trade. However, holding money entails an opportunity cost that leads to a waste of resources. Because of this inefficiency, pecuniary externalities have welfare consequences that private price-taking agents fail to internalize. I find that HZ's result, whereby the market produces inefficiently high levels of liquidity, cannot be generalized, because the conflict between private and social incentives to create money depends on agents' preferences. In the second essay I construct a framework that explains the transactions, precautionary and speculative demand for money. Again, the welfare analysis indicates that, depending on individuals' preferences, the market may produce inefficiently high or low levels of liquidity. The results also evidence that the speculative demand for money exists only when households are risk averse in their wealth. In that case, private and social incentives to hold money are stronger, but the market produces insufficient means of payment relative to the social optimum. The third essay introduces active financial institutions, and examines the role played by moral hazard in the provision of and demand for liquidity. Limited liability and the non-contractibility of bank investment policy induce highly levered financial institutions to invest in an inefficient gambling asset. I find that, when the probability that banks gamble is non-zero, the primary goal of public intervention is to address the moral hazard problem by restricting the creation of liquidity. Several policies to address this inefficiency are discussed and analyzed.