This dissertation consists of two independent essays on corporate finance. The first essay explores the trend in the profitability of U.S. firms, why it occurs and how firms respond to it. We document that the return on assets (ROA) of U.S. firms has decreased by about two-thirds from 1980 to 2015; the trend is pervasive across industries and firms with different characteristics. We argue that the inefficacy of corporate investment could be the driver behind the deteriorating profitability. We show that firms have been cutting investments in response to the poor investment efficiency. However, the current level of investment cut does not seem to offer a satisfactory solution. At the firm-level, we do not find evidence that a significant cut in total investments helps improve accounting performance of low-investment-efficiency firms; and at the market-level, the cost of capital (COC) has been consistently above ROA over the entire sample period. The second essay studies the role of CEO’s managerial ability in the firms’ choice of board leadership. Using a sophisticated measure of managerial ability, we show that whether the CEO is capable or not does not affect whether he/she will be awarded the board chairman position. In general, the firms’ choice of board leadership does not reflect the balance between the benefits and costs of dual leadership. These findings are in sharp contrast to the claim found in many companies’ CEO-chairman appointment announcement that the two positions are given to a person of high managerial ability and cast doubt on the validity of “the efficiency argument” of dual leadership. / A Dissertation submitted to the Department of Finance in partial fulfillment of the requirements for the degree of Doctor of Philosophy. / Spring Semester 2019. / January 9, 2019. / Includes bibliographical references. / James S. Ang, Professor Directing Dissertation; Anastasia Semykina, University Representative; Yingmei Cheng, Committee Member; Baixiao Liu, Committee Member.
| Identifer | oai:union.ndltd.org:fsu.edu/oai:fsu.digital.flvc.org:fsu_709772 |
| Contributors | Jiang, Zhiqian (author), Ang, James S. (Professor Directing Dissertation), Semykina, Anastasia (University Representative), Cheng, Yingmei (Committee Member), Liu, Baixiao (Committee Member), Florida State University (degree granting institution), College of Business (degree granting college), Department of Finance (degree granting departmentdgg) |
| Publisher | Florida State University |
| Source Sets | Florida State University |
| Language | English, English |
| Detected Language | English |
| Type | Text, text, doctoral thesis |
| Format | 1 online resource (102 pages), computer, application/pdf |
Page generated in 0.1967 seconds