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Author: Woojin Youn
Publisher:
ISBN:
Category : Business enterprises
Languages : en
Pages : 366
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Author: Woojin Youn
Publisher:
ISBN:
Category : Business enterprises
Languages : en
Pages : 366
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Author: Kirill Valerievich Zavodov
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: HoWook Shin
Publisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 236
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This dissertation consists of three essays exploring firm behaviors and performance under information asymmetry and uncertainty. While the first two essays examine investment in firms and divestment by firms respectively by depending on real options theory, the final essay investigates determinants of performance of microenterprises receiving microfinance funds. In the first essay (Chapter 1), I examine the determinants of private investments in firms newly going public through reverse mergers (RMs). Using real options theory, I argue that reverse merger firms (i.e., firms going public through reverse merger) with institutional and industrial backgrounds, indicating a wider distribution of potential future values, will attract larger investments. I further examine how an institutional change reducing the cost of initial public offerings (IPOs), which is the more lucrative alternative to the reverse merger, affects investment in reverse merger firms. I thus argue that the influence of those backgrounds on the investment size in RM firms will be weaker. Using data of reverse mergers in the United States from 2009 to 2014, I found empirical support for my arguments. My second essay (Chapter 2) explores the determinants of foreign subsidiary divestment by multinational corporations (MNCs). I argue that MNCs with higher operational flexibility and/or cultural diversity will be less likely to divest their foreign subsidiaries even if those subsidiaries confront host country economic downturn. Using a panel data of 511 Korean MNCs and event history analysis, I found empirical support for our arguments. In my third essay (Chapter 3), I investigate the determinants of performance improvement of microenterprises receiving microfinance funds. I argue that damage from a natural disaster that increases a microenterprise’s risks of going out of business will provide entrepreneurs with self-control incentives to use microfinance funds effectively. Thus, the entrepreneurs’ self-control incentives will be positively associated with microenterprises’ post-funding performance improvement. I also contend that cash is more effective than in-kind funds in improving microenterprise performance by generating fewer moral hazards. Using a sample of Sri Lankan microenterprises that experienced a tsunami and difference-in-difference estimations, I found empirical support for my arguments.
Author: Seungmoon Park
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Mario Ramirez Basora
Publisher:
ISBN:
Category :
Languages : en
Pages : 128
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It can be easily argued that most, if not all, real economic settings are asymmetric in nature. Particularly, it is often the case that one or several agents possess more or better information than the rest when agreeing upon an economic transaction. Although the information economics revolution of the 1970s laid out the majority of the theoretical foundations, the effects of asymmetric information are subtle and have not been studied in some very interesting contexts, which motivate this thesis. In the first essay, which is based on joint work with Antonio Bento and Benjamin Ho, we study the problem of an uninformed regulator who wishes to use a voluntary price instrument under varying degrees of uncertainty, specifically in the context of a carbon offset market. In this scenario, a regulator offers private land owners a contract that compensates them for producing carbon offsets while minimizing adverse selection and welfare losses. The model shows that monitoring should decrease as the uncertainty of offset quality decreases, but should increase as uncertainty over agricultural productivity increases. Also, in response to those who argue that the problem of additionality is so large that carbon offsets should not be allowed in carbon regulation, the model quantifies the amount of additionality and finds that even in the case of a regulator with no information, welfare is improved by allowing offset contracts. Finally, the model offers guidance for calculating the optimal offset price as a function of the regulator's information. The second essay consists of a cardinal tournament used by a representative firm to choose its next CEO. Candidates are managers of different types: they are heterogeneous over levels of ability and risk aversion. The managers have private information about their ability. In this context, a two-dimensional solution set of levels of ability and risk aversion corresponding to each possible mean of cash flow realization is identified. Using two different specifications (CARA preferences with normally distributed cash flows, and CRRA preferences with log-normally distributed cash flows), the trade-off between managerial ability and risk aversion is found to be characterized by a concave function. Furthermore, for better levels of technology, the relative importance of risk aversion with respect to ability increases, while for worse levels of technology, the reverse holds. Finally, in the third essay, using a model based on the optimal consumption and investment models from the operations research literature, I study how the CEO characteristics studied in Chapter 2 impact dividend policy and the longrun evolution of the firm. Specifically, when assuming CRRA preferences and a concave trade-off between ability and risk aversion, I find that the optimal dividend policy of the CEO is non-monotonic with respect to risk aversion. In other words, CEOs with a combination of both high (or low) ability and risk aversion, will pay out lower dividend yields than CEOs with a more balanced combination of ability and risk aversion. Furthermore, firm survival is a function of the dividend yield and is also non-monotonic: while the probability of firm survival converges to either zero or one as risk aversion (and, by extension, ability) converges to either zero or infinity, there exists a range for which lower investment counteracts a potentially higher dividend yield, and the resulting change in the probability of survival is ambiguous.
Author: Natasa Bilkic
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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The recently increased number of social conflicts, natural disasters and economic turbulences has shown that many stochastic events are rare but have a devastating impact on economic activity. Many economic agents suffered from huge losses, which increased the attention of professional interest to develop new evaluation methods of investment projects. As the literature discussion of this thesis emphasizes, for a long time disasters were not regarded as an essential element of investment decisions and only their recent impact changed this practice. The central question that arises in this context is how decision makers can account for large variability. This doctoral thesis sheds further light onto this question by developing methods for evaluating marginal and non-marginal stochastic shocks for non-sequential and sequential investment decisions. Furthermore, it provides an analysis of their effects on investment behaviour as well as statements about optimal investment decisions. ; eng
Author: Jonathan Eaton
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 434
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Author: Apostolos Serletis
Publisher: World Scientific Publishing Company Incorporated
ISBN: 9789814390675
Category : Business & Economics
Languages : en
Pages : 142
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The relationship between the price of oil and the level of economic activity is a fundamental issue in macroeconomics. There is an ongoing debate in the literature about whether positive oil price shocks cause recessions in the United States (and other oil-importing countries), and although there exists a vast empirical literature that investigates the effects of oil price shocks, there are relatively few studies that investigate the direct effects of uncertainty about oil prices on the real economy. The book uses recent advances in macroeconomics and financial economics to investigate the effects of oil price shocks and uncertainty about the price of oil on the level of economic activity.
Author: Bongseok Choi
Publisher:
ISBN:
Category :
Languages : en
Pages : 103
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This dissertation investigates asymmetries of financing patterns, depending on group characteristics - firm size or riskiness, which have shown in the empirical literature. The dissertation consists of two essays. This first essay, Financial innovation, Firm size and Growth, proposes a model of Schumpeterian growth endogeneizing the disproportionate impact of financial innovation on small firm sectors. Entrepreneurial skill on a continuum of types is private information. Hence, the severity of adverse selection problems between investors and entrepreneurs varies based on firm size. In the absence of financial innovation, the arrival of a new technology frontier renders existing screening technology obsolete, thereby making it more challenging for an investor to design a truth-telling mechanism, particularly with small firm (and size-dispersed) sectors. Thus, successful financial innovation is more pronounced in such sectors. The link between financial innovation and the small firm (and size-dispersed) sectors is weak in financially developing countries. I test my model prediction by using cross-country and cross-sector data at the European industry level. This result is consistent with my prediction. The second essay, Firm risks, Capital allocation frictions and the Business cycles, attempts to address new findings in business cycles: the cross-sectional standard deviation of firm level investment rate (investment dispersion) is at most acyclical or procyclical. This differs from the dispersion of productivity, output, and interest rates, which is countercyclical. I develop a dynamic stochastic general equilibrium model of physical capital matching frictions between heterogeneous firms and investors. In the mode, economic fluctuations are caused mainly by shocks to heterogeneity in firms' risks. One main feature is that investors search firms with priority given to loans to safe firms. Because safe firms are most likely to benefit from capital accumulation, this setting drives asymmetric patterns of firm-level business cycles - output, investment rate, and interest rates in a unified framework. In essence, the uncertainty in heterogeneous risks across firms generates the pro- or a-cyclical behavior of investment dispersions which is the data demonstrates.
Author: Jacques Drèze
Publisher: CUP Archive
ISBN: 9780521386975
Category : Business & Economics
Languages : en
Pages : 460
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Professor Dreze is a highly respected mathematical economist and econometrician. This book brings together some of his major contributions to the economic theory of decision making under uncertainty, and also several essays. These include an important essay on 'Decision theory under moral hazard and state dependent preferences' that significantly extends modern theory, and which provides rigorous foundations for subsequent chapters. Topics covered within the theory include decision theory, market allocation and prices, consumer decisions, theory of the firm, labour contracts, and public decisions.
