My dissertation consists of two chapters which explores various aspects of empirical corporate finance and institutional ownership.
In the first chapter, I examine whether common owners – an institution with holdings in both the distressed and the lending firm – ameliorates this conflict given that common owners should seek to maximize the equity value of both firms. The results show that when a common owner holds a stake in both the borrowing and lending firm, distressed firms are over 3.3-times more likely to file for Chapter 11 freefall bankruptcy (rather than prepack) as compared to borrowing-lending firms without a common owner. Using ownership of passive funds as an instrument for the presence of a common owner, I provide evidence of a causal relation between common ownership and bankruptcy filing choice. Overall, the analysis indicates that common ownership in both financially distressed borrowing firms and their lending firms leads to a greater likelihood of Chapter 11 freefall bankruptcy filing; suggesting that common owners typically side with creditors to maximize their combined equity value in both the borrowing and lending firm.
Next, I examine the effect of CEO social connections on stock returns. An equally weighted (value weighted) long-short portfolio strategy earns investors excess returns of 5.39% (4.44%) per year. Three potential reasons explain the relation between CEO social connections and excess returns; better firm performance, investor information asymmetry, and/or greater investor risk-bearing. Our analysis provides evidence consistent with CEO connections both increasing firm risk and improving firm performance. / Business Administration/Finance
| Identifer | oai:union.ndltd.org:TEMPLE/oai:scholarshare.temple.edu:20.500.12613/307 |
| Date | January 2020 |
| Creators | Durrani, Farooq, 0000-0001-8518-0132 |
| Contributors | Naveen, Lalitha, Anderson, Ronald, Bakshi, Gurdip, John, Kose |
| Publisher | Temple University. Libraries |
| Source Sets | Temple University |
| Language | English |
| Detected Language | English |
| Type | Thesis/Dissertation, Text |
| Format | 110 pages |
| Rights | IN COPYRIGHT- This Rights Statement can be used for an Item that is in copyright. Using this statement implies that the organization making this Item available has determined that the Item is in copyright and either is the rights-holder, has obtained permission from the rights-holder(s) to make their Work(s) available, or makes the Item available under an exception or limitation to copyright (including Fair Use) that entitles it to make the Item available., http://rightsstatements.org/vocab/InC/1.0/ |
| Relation | http://dx.doi.org/10.34944/dspace/291, Theses and Dissertations |
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