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Title: Financial market integration and cross-border spillover effects in Europe.
Creator: Bley, Jorg., Florida Atlantic University, Madura, Jeff
Abstract/Description: The ongoing political, legal, and economic harmonization within the European Union has lead to a higher degree of integration of national financial markets. The introduction of the single European currency, the euro, eliminated a traditional source of risk to international portfolio investors. In light of these developments, Part I of the empirical analysis had the following objectives: (1) to determine the relative importance of country, sector, and industry factors in explaining individual...
Show moreThe ongoing political, legal, and economic harmonization within the European Union has lead to a higher degree of integration of national financial markets. The introduction of the single European currency, the euro, eliminated a traditional source of risk to international portfolio investors. In light of these developments, Part I of the empirical analysis had the following objectives: (1) to determine the relative importance of country, sector, and industry factors in explaining individual company's stock return behavior in the wake of the formation of the European Union, (2) to identify the multiple factor model, consisting of country and/or sector and/or industry factors, that was best at explaining European stock returns over the observation period, (3) to discover cross-sectional differences and non-stationarity in the industry portfolio return sensitivity to country, sector, and industry factors, (4) to find out whether the European market had become more independent from the other two major trading areas, the US and the Pacific Rim, over the period 6/1994 to 6/1999, and (5) to quantify industry structure-related changes in portfolio diversification benefits in European stock portfolios. Diversification benefits of country portfolios still outweighed diversification benefits of European industry portfolios. However, evidence was found for a gradual change in the degree of homogeneity within European industries in the wake of the ongoing harmonization of European financial markets. It seems reasonable to assume diversification effects in the future to become even more pronounced for portfolios generated within a country market but across industries. The main objective of Part II, was to determine the valuation effects of merger and acquisition announcements on national rivals (intra-industry effects) and European rivals (inter-country effects). Conducting various cross-sectional return analyses, country and industry-specific sources of intra-industry effects and inter-country effects were identified. With the elimination of foreign exchange rate risks, following the introduction of the single currency on January 1, 1999, cross-border spillover effects have become more pronounced. The hypothesis that the introduction of the euro facilitates the transmission of (private) information across geographic markets boundaries is clearly supported by the findings of the cross-sectional regression analysis.
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Date Issued: 2000
PURL: http://purl.flvc.org/fcla/dt/12640
Subject Headings: European Union countries--Economic conditions, International economic integration, Europe--Economic integration
Format: Document (PDF)

Title: Over- and underreactions in American and global stock market indexes.
Creator: Schnusenberg, Oliver, Florida Atlantic University, Madura, Jeff
Abstract/Description: The primary objectives of this study are to investigate the stock market over- or underreaction of various U.S. stock market indexes, the over- or underreaction of a global stock market index, and the over- or underreaction of various-countries' national stock markets relative to a "global" over- or underreaction. The secondary objectives are to investigate the reasons for the U.S. over- or underreaction and for the relative under- or overreaction of individual countries. For six U.S. stock...
Show moreThe primary objectives of this study are to investigate the stock market over- or underreaction of various U.S. stock market indexes, the over- or underreaction of a global stock market index, and the over- or underreaction of various-countries' national stock markets relative to a "global" over- or underreaction. The secondary objectives are to investigate the reasons for the U.S. over- or underreaction and for the relative under- or overreaction of individual countries. For six U.S. stock market indexes, we find a one-day stock market underreaction to highly positive and negative news releases. Over a sixty-day interval, we find strong evidence of a stock market underreaction (overreaction) to positive (negative) news. Cross-sectionally, we find strong evidence that investors are more optimistic the larger the recent runup in the stock market index is. Also, investors are more optimistic in periods of high economic growth, whether they are faced with positive or negative information. Focusing on the MSCI World Indexes denominated in both local currencies and U.S. dollars, we find that investors underreact to both positive and negative news in both the short- and the long-run. The last objective of this study was to investigate the relative under- or overreaction of nineteen individual countries in response to a global under- or overreaction. We find that several countries exhibit a one-day underreaction relative to the MSCI World Index on the day following a very large positive or negative movement in the MSCI World Index. Over a sixty-day interval, several countries overreact relative to the MSCI World Index when positive information is released on a global basis but underreact to the MSCI World Index when negative information is released on a global basis. Cross-sectionally, results reveal evidence consistent with a hypothesis where investors are more optimistic with respect to both positive and negative news when there is a speculative bubble in the foreign stock market. We also find that investors in countries with high economic growth rates tend to be more optimistic than investors in countries with low economic growth rates when faced with positive and negative global news arrivals.
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Date Issued: 1999
PURL: http://purl.flvc.org/fcla/dt/12606
Subject Headings: Stock Exchanges, Stock Price Indexes
Format: Document (PDF)

Title: Essays on high-tech acquisitions and divestitures.
Creator: Benou, Georgia., Florida Atlantic University, Madura, Jeff
Abstract/Description: Since the early 1990s there has been a substantial increase both in mergers and acquisitions (M&A) as well as in divestitures of high-tech companies. This dissertation examines the takeover and divestiture activity in high-tech markets in an effort to extend our current knowledge regarding high-tech companies. In that context, various firm characteristics and their relation to firm performance are investigated. Furthermore, an attempt is made to examine the role of investment banks and their...
Show moreSince the early 1990s there has been a substantial increase both in mergers and acquisitions (M&A) as well as in divestitures of high-tech companies. This dissertation examines the takeover and divestiture activity in high-tech markets in an effort to extend our current knowledge regarding high-tech companies. In that context, various firm characteristics and their relation to firm performance are investigated. Furthermore, an attempt is made to examine the role of investment banks and their impact---if any---on shareholder wealth. This study finds that for domestic high-tech acquisitions, the higher the level of the target's R&D expenditures, the lower the bidder's announcement period wealth effects. Furthermore, the more MEDIA attention the tech target receives prior to the acquisition the more favorably investors react to news about the acquisition. This finding is common both for domestic and international tech acquisitions. Findings on the role of investment bank advisors vary across the three studies. Essay 1 shows that high-tech acquisitions advised by top-tier investment banks perform worse upon announcement than acquisitions advised by lower-tier investment banks. In Essay 2 the tier of the investment bank advisor makes a difference only during the difficult and uncertain years of the tech downturn time period. Finally, in Essay 3 it is found that sellers benefit from the presence of an investment bank advising the buyer, suggesting that whenever the buyer uses an investment bank, the assets are divested at a high price. However, it is only during the years following the end of the tech-bubble period that buying-firm shareholders reacted less favorably to acquisitions of high-tech divested assets certified by an investment bank.
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Date Issued: 2004
PURL: http://purl.flvc.org/fau/fd/FADT12101
Subject Headings: Corporate divestiture--United States, Consolidation and merger of corporations--Management, High technology industries--Management, Corporations--Finance
Format: Document (PDF)

Title: Two essays on newly public firms.
Creator: Wiggenhorn, Joan, Florida Atlantic University, Madura, Jeff
Abstract/Description: This dissertation examines the stock price behavior of newly public firms following two separate events, acquisition announcements and a large single day price change. For the first essay on overreaction, the changes in both liquidity and information are considered in studying the stock price reaction to a trigger of +/-15%. Over 2,600 events are evaluated for these newly public firms from 1992--2001 with events classified as occurring during either the quiet, lockup or post lockup period....
Show moreThis dissertation examines the stock price behavior of newly public firms following two separate events, acquisition announcements and a large single day price change. For the first essay on overreaction, the changes in both liquidity and information are considered in studying the stock price reaction to a trigger of +/-15%. Over 2,600 events are evaluated for these newly public firms from 1992--2001 with events classified as occurring during either the quiet, lockup or post lockup period. For positive trigger events during the quiet period, a large one-day price change results in a significant underreaction. Positive triggers during the lockup period result in no significant abnormal returns, while a statistically significant overreaction occurs during the post lockup period. For negative triggers, while there are no significant abnormal returns for the reactions in any period, there is nevertheless a statistically significant difference between the reactions during the quiet and the post lockup periods. In addition, the degree of market reaction is found to be significantly different for events with information versus events without information. The second essay examines the stock price reaction when newly public firms make acquisition announcements. The belief is that these firms may experience a more positive reaction due to the firms' smaller size, need for immediate expansion, and increased corporate governance. On the other hand, these firms may lack the expertise to successfully integrate the acquisition targets. The results show that these newly public firms experience significant announcement returns of 2.63%. In general, higher announcement returns are found the smaller the acquirer, the smaller the relative size of the acquisition, and if the target is privately held. While the presence of venture capitalists and top tier underwriters result in lower announcement returns, returns are higher if the acquisition advisor is the same as the original underwriter. The buy and hold abnormal returns calculated using a matched sample are not significant. However, acquisitions with economies of scale for the motive have returns of 15% following one year, while those for economies of scope have -15% and the difference is significant.
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Date Issued: 2003
PURL: http://purl.flvc.org/fau/fd/FADT12063
Subject Headings: Stocks--Prices, Going Public (Securities), Consolidation and Merger of Corporations, Corporations--Finance
Format: Document (PDF)

Title: Announcement-specific stock market and currency market overreaction and under-reaction.
Creator: Larson, Stephen James., Florida Atlantic University, Madura, Jeff
Abstract/Description: This study documents the nature of the underlying information that caused investor overreaction and under-reaction. While research has documented the existence of market overreaction and under-reaction, it has not comprehensively addressed the underlying information releases that caused the extreme price fluctuations. This study controls for the underlying announcements, and finds that the degrees of overreaction and under-reaction vary according to the underlying information releases. A...
Show moreThis study documents the nature of the underlying information that caused investor overreaction and under-reaction. While research has documented the existence of market overreaction and under-reaction, it has not comprehensively addressed the underlying information releases that caused the extreme price fluctuations. This study controls for the underlying announcements, and finds that the degrees of overreaction and under-reaction vary according to the underlying information releases. A primary contribution of this dissertation is the finding that undefined events are associated with higher degrees of overreaction than defined events. The Wall Street Journal Index was used to determine if each event had an announcement that coincided with it. Defined events are those for which an underlying announcement was found in the Wall Street Journal Index. For undefined events, no announcement was found. This finding supports the theory of investor overconfidence and biased self-attribution by Daniel, Hirshleifer, and Subrahmanyam (1998). This study analyzes the overreaction and under-reaction phenomenon in three areas: international securities, domestic securities, and foreign currency. The international securities analyzed are American depository receipts and international closed-end funds. The domestic securities analyzed are financial and non-financial stocks. In the foreign currency area, currencies are classified into two types: emerging country currencies and industrial country currencies. In all of these areas, controlling for the underlying announcements is beneficial in understanding market overreaction and under-reaction. Finally, cross-sectional regression equations are employed to relate post-event returns or exchange rate changes to different variables, such as initial price change, pre-event information leakage, size (market value), month of the year (December or January), day of the week, and announcement type. There is a substantial amount of evidence that suggests larger initial price movements and prevent information leakage are associated with higher degrees of overreaction, and that the tendency towards overreaction is stronger for undefined events.
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Date Issued: 1998
PURL: http://purl.flvc.org/fcla/dt/12564
Subject Headings: Securities, Stock exchanges, Foreign exchange, Foreign exchange rates
Format: Document (PDF)

Title: Determinants of the wealth effects resulting from direct foreign investments: 1980-1989.
Creator: Picou, Armand E., Florida Atlantic University, Madura, Jeff
Abstract/Description: This study empirically investigates direct foreign investments, acquisitions and partial acquisitions with a U.S. firm, from 1980 through 1989. The primary purpose of this study is two-fold: (1) establish the overall effect of direct foreign investments on shareholder wealth surrounding the announcement (the short-term share price reaction) and over a three-year period after the announcement (the long-term share price reaction) and (2) form a greater understanding of the variables influencing...
Show moreThis study empirically investigates direct foreign investments, acquisitions and partial acquisitions with a U.S. firm, from 1980 through 1989. The primary purpose of this study is two-fold: (1) establish the overall effect of direct foreign investments on shareholder wealth surrounding the announcement (the short-term share price reaction) and over a three-year period after the announcement (the long-term share price reaction) and (2) form a greater understanding of the variables influencing the shareholder wealth effect of direct foreign investments. The overall short-term share price reaction is negative but insignificant for U.S firms acquiring foreign firms, positive and significant for U.S. firms partially acquiring foreign firms, and positive and significant for U.S. targets partially acquired by foreign firms. The overall long-term share price reaction is negative and significant for each of the previous three group of U.S. firms, yet positive and significant for foreign targets partially acquired by U.S. firms and negative but insignificant for foreign firms partially acquiring U.S. firms. The variables influencing each group of U.S. firms are a firm's name recognition, the exchange rate, investment in a related industry, investment in a developed country, and the presence of a previous international expansion.
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Date Issued: 1992
PURL: http://purl.flvc.org/fcla/dt/12315
Subject Headings: Consolidation and Merger of Corporations--Economic aspects, Investments, Foreign--Economic Aspects, Stockholders
Format: Document (PDF)

Title: Foreign and domestic contraction: Theory and empirical tests.
Creator: Borde, Stephen F., Florida Atlantic University, Madura, Jeff
Abstract/Description: The purpose of this study is to develop and empirically test theories on wealth effects surrounding divestiture of foreign and domestic subsidiaries by U.S. firms. Two primary research questions are addressed: (1) What are the wealth effects associated with divestiture of foreign and domestic subsidiaries? (2) How do firm-specific and macroeconomic conditions affect these wealth effects? Various methodologies are used to empirically test theories and hypotheses. Two samples of divestitures...
Show moreThe purpose of this study is to develop and empirically test theories on wealth effects surrounding divestiture of foreign and domestic subsidiaries by U.S. firms. Two primary research questions are addressed: (1) What are the wealth effects associated with divestiture of foreign and domestic subsidiaries? (2) How do firm-specific and macroeconomic conditions affect these wealth effects? Various methodologies are used to empirically test theories and hypotheses. Two samples of divestitures that occurred between 1979 and 1991 are used. One sample consists of 111 divestitures of foreign subsidiaries by U.S. firms, and the other sample consists of 148 divestitures of domestic subsidiaries by U.S. firms. The results of this study are relevant to corporate managers, investors, security analysts, and other researchers. Foreign and domestic divestitures elicit positive short-run valuation effects of about 1 and 2 percent respectively. In the long run, firms that divest foreign subsidiaries increase in value on average by about 15 percent over a 5 year post-divestiture period. Conversely, firms that divest domestic subsidiaries decrease in value on average by about 11 percent over the 5 years that follow divestiture. No significant change in firm risk is associated with foreign or domestic divestitures. Relations between short-run and long-run valuation effects in the sample of domestic divestitures are positive and significant for periods of up to 4 years after divestiture, but for foreign divestitures, such relations are not significant. This suggests that the market adjusts more slowly but seems to more accurately predict the long run impact of domestic divestitures. Large divestitures elicit large valuation effects. Financially strong firms divesting foreign subsidiaries experience less favorable valuation effects. Greater valuation effects result from divestiture of unrelated subsidiaries. Strategic divestitures elicit positive valuation effects in the short run but little unique effect in the long run. Domestic divestitures that occur because of liquidity problems elicit positive valuation effects. Larger valuation effects are associated with divestiture of foreign subsidiaries in industrial countries than in less developed countries. A strong U.S. dollar seems to have a positive influence on short-run valuation effects but no material influence on long-run valuation effects associated with foreign divestiture.
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Date Issued: 1993
PURL: http://purl.flvc.org/fcla/dt/12344
Subject Headings: Corporate divestiture, International business enterprises, Subsidiary corporations
Format: Document (PDF)

Title: Pricing behavior of exchange traded funds.
Creator: Richie, Nivine F., Florida Atlantic University, Madura, Jeff
Abstract/Description: This dissertation examines the pricing behavior of exchange traded funds (ETFs) in three essays. (1) The Overreaction of International ETFs, (2) Fragmentation of Night Markets, and (3) The Impact of the Creation of the QQQ on the Underlying Securities. The overreaction study examines the role of information in global overreaction. Univariate analysis reveals that overreaction associated with informed events is less pronounced than with uninformed events following extreme price decreases....
Show moreThis dissertation examines the pricing behavior of exchange traded funds (ETFs) in three essays. (1) The Overreaction of International ETFs, (2) Fragmentation of Night Markets, and (3) The Impact of the Creation of the QQQ on the Underlying Securities. The overreaction study examines the role of information in global overreaction. Univariate analysis reveals that overreaction associated with informed events is less pronounced than with uninformed events following extreme price decreases. Further, positive firm-specific announcements are met with investor overreaction while negative firm-specific announcements are not. Finally, significant reversals of winners during bull markets relative to bear markets support the hypothesis that bull markets contribute to investor overconfidence and overreaction. The fragmentation study examines the cost of market fragmentation across day and night trading sessions. Using a sample of intraday transaction data for three ETFs, I show that night markets do not impound information available in net order flow to the same degree as day markets. Bid-ask spreads are wider at night and these costs are due to higher order processing costs, market maker rents and higher inventory holding costs. Furthermore, market concentration costs at night are associated with significantly higher spreads. The QQQ creation study investigates whether the creation of tradable baskets of securities affects the pricing efficiency and risk of the underlying securities. The results show that extreme price movements in the post-QQQ period are met with less pronounced corrections than in the pre-QQQ period, and that this pricing pattern does not hold true for the control sample. A decomposition of spreads finds that quoted spreads widen and effective spreads tighten in the post-QQQ period. Furthermore, though more heavily weighted components of the QQQ experience tighter spreads, this benefit is less pronounced in the post-QQQ period implying relative benefits to the less heavily weighted components. Cross-sectional analysis reveals that liquidity is directly related to pricing efficiency, but this relationship lessens in the post-QQQ period. The results also show that systematic risk for the underlying securities declines while total risk rises, though the control sample experiences a similar rise in total risk.
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Date Issued: 2004
PURL: http://purl.flvc.org/fau/fd/FADT12071
Subject Headings: Exchange Traded Funds, Securities, Foreign exchange market, Stocks--Prices
Format: Document (PDF)

Title: Special topics in financial intermediation.
Creator: Dempere, Juan M., Florida Atlantic University, Madura, Jeff
Abstract/Description: The dissertation consists of three research works about special topics of financial intermediation. The main goal of the first study is to determine the effect of some corporate governance-related variables on bank initial public offerings (IPOs). The testable hypotheses involve three dependent variables: abnormal offer price, initial return or underpricing, and long-term performance. The proposed independent variables have no explanatory power on the cross-sectional variation of the abnormal...
Show moreThe dissertation consists of three research works about special topics of financial intermediation. The main goal of the first study is to determine the effect of some corporate governance-related variables on bank initial public offerings (IPOs). The testable hypotheses involve three dependent variables: abnormal offer price, initial return or underpricing, and long-term performance. The proposed independent variables have no explanatory power on the cross-sectional variation of the abnormal offer price. The proportion of outside directors, the size of the bank, directors and officers' (D&O) equity based compensation plans, and the age of the bank, all have a positive relationship with the level of underpricing. The variables, nominating committee independence, directors' knowledge and experience, and directors' reputation, have the hypothesized positive relationship with the sample's long-run performance. The main goal of the second research work is the analysis of a sample of self-underwritten IPOs. The analysis includes the IPOs' underpricing; long-term performance; lockup and quiet period; risk; volume; and failure and acquisitions. The main result of this study is that here are no significant differences on the level of underpricing between self-underwritten IPOs and conventional IPOs underwritten by independent underwriters. The only significant result about the long-run performance of self-underwritten IPOs is on the subsample of nonpenny stocks, where the larger the firm the lower the long-run performance. The third research work focuses on going private transactions of financial institutions. This study includes the analysis of the cross-sectional differences of the cumulative abnormal returns (CARs) that result from the public announcement of a going private transaction proposal. Similarly, this study tests the long-run performance and the risk change of those firms that stay public after the withdrawal of a going private transaction. The main results suggest that public announcement of a going-private transaction produces positive CARs of about 15 percent. The public announcement of the withdrawal of a going-private transaction generates negative CARs between -4 percent and -5 percent. The total risk of the sample with respect to the matching group experiences a positive and significant increase after the public announcement of a going-private transaction proposal.
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Date Issued: 2005
PURL: http://purl.flvc.org/fcla/dt/12174
Subject Headings: Intermediation (Finance), Investments--Management, Risk management
Format: Document (PDF)

Title: The impact of industry-specific variables on the performance of initial public offerings.
Creator: Johnston, Jarrod G., Florida Atlantic University, Madura, Jeff
Abstract/Description: This dissertation examines the effect of variables specific to different industries on initial public offerings (IPOs). It has been widely accepted that IPOs perform well in the immediate aftermarket and perform poorly in the subsequent months. The uncertainty surrounding IPOs has been a frequently cited reason for the initial underpricing. The size of the offering, underwriter prestige, the number of uses of gross proceeds, and the level of inside ownership are a few of the variables that...
Show moreThis dissertation examines the effect of variables specific to different industries on initial public offerings (IPOs). It has been widely accepted that IPOs perform well in the immediate aftermarket and perform poorly in the subsequent months. The uncertainty surrounding IPOs has been a frequently cited reason for the initial underpricing. The size of the offering, underwriter prestige, the number of uses of gross proceeds, and the level of inside ownership are a few of the variables that have been found to measure the uncertainty of IPOs across industries. The uncertainty of IPOs in different industries may also be affected by variables that are unique to that industry. The level of interest rates and the amount of regulation may affect the performance of existing financial service firms. The uncertainty of IPOs in the financial services industry may also be affected by these variables. This study finds that some financial service firm IPOs are affected by the level of interest rates. Some regulatory changes increase the uncertainty, and therefore the initial returns, of IPOs of financial service firms. The type of ownership structure affects the management of a firm due to differing agency costs. A mutual holding company (MHC) is a mutual company that issues a minority stake to the public. The MHC structure has been common among savings banks and is growing in popularity in the life insurance industry. The lack of takeover possibilities and stockholder control diminishes the risk taking behavior of MHCs in the thrift industry. Savings banks that choose the MHC structure experience lower initial returns without significant long run differences than savings banks that choose to convert to a completely stockholder owned bank. The operating characteristics may also affect the uncertainty of the firm. The internet allows firms to enter into an industry while having completely different operating structure than many of the other competitors. This study finds that firms that have an internet focus have higher initial returns than a matching set of IPOs. The changing environment, due to technology and low barriers to entry, increases the uncertainty of internet firms.
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Date Issued: 2000
PURL: http://purl.flvc.org/fcla/dt/12644
Subject Headings: Going public (Securities), Stocks--Prices
Format: Document (PDF)

Title: The differential effects of agency costs on multinational corporations: Theory and evidence.
Creator: Wright, Francis William., Florida Atlantic University, Madura, Jeff
Abstract/Description: The corporate form of business organization has associated with it potentially significant agency costs. These costs arise principally from the separation of ownership and control interests in the firm. While it is widely believed that multinational corporations (MNCs) with substantial foreign market exposure face higher agency costs than less-exposed MNCs or domestic firms, empirical evidence in support of this contention is largely absent from the literature. This dissertation uses capital...
Show moreThe corporate form of business organization has associated with it potentially significant agency costs. These costs arise principally from the separation of ownership and control interests in the firm. While it is widely believed that multinational corporations (MNCs) with substantial foreign market exposure face higher agency costs than less-exposed MNCs or domestic firms, empirical evidence in support of this contention is largely absent from the literature. This dissertation uses capital market data to empirically examine the theory that multinational corporations with substantial exposure to foreign markets incur greater agency costs than less-exposed MNCs or domestic corporations. Using the agency cost perspective of common shareholders, this study tests for evidence of a differential agency cost effect for MNCs by examining the market reaction to a series of events that should tend to signal a change in the level of agency costs for all firms. If MNCs with significant foreign market exposure experience higher agency costs than less-exposed MNCs or domestic corporations, then events that tend to reduce (increase) agency costs in all firms should have greater positive (negative) wealth effects for highly exposed MNCs. An event-study methodology is used to measure the abnormal returns associated with the announcements of four separate events: (1) debt offerings; (2) equity offerings; (3) organizational restructurings; and (4) takeover defenses. The observed abnormal returns are then examined cross-sectionally to test whether various firm-specific factors (primarily degree of foreign market exposure) are influential in explaining the pattern of returns. When taken together, the results of the four event-studies and their associated cross-sectional analyses support the main hypothesis of this dissertation that multinational corporations with substantial foreign market exposure experience greater levels of agency costs than less-exposed MNCs or domestic corporations. The strength of these findings depends upon the extent to which the underlying events represent effective proxies for changes in agency costs across firms.
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Date Issued: 1995
PURL: http://purl.flvc.org/fcla/dt/12402
Subject Headings: Corporate Governance, International Business Enterprises, Commercial Agents--Costs
Format: Document (PDF)

Title: An examination of the operational efficiency of mutual funds.
Creator: Zera, Stephen Paul, Florida Atlantic University, Madura, Jeff
Abstract/Description: A pre-determined percentage of the assets of mutual funds is extracted from each portfolio's value on a daily basis to cover operating expenses. The nature of the relationship between these fund operating expenses and fund size is the focus of this dissertation. A negative relationship is shown to exist between mutual fund operating expense percentages and mutual fund size. Next, a double-log estimating equation is utilized to generate a measure of the elasticity of mutual fund operating...
Show moreA pre-determined percentage of the assets of mutual funds is extracted from each portfolio's value on a daily basis to cover operating expenses. The nature of the relationship between these fund operating expenses and fund size is the focus of this dissertation. A negative relationship is shown to exist between mutual fund operating expense percentages and mutual fund size. Next, a double-log estimating equation is utilized to generate a measure of the elasticity of mutual fund operating expenses with respect to mutual fund size. This expense-size elasticity (ESE) is estimated to be.961 for the entire cross-sectional sample, indicating that a one percent increase in fund size is associated with a.961% increase in fund operating expenses. Next, the elasticity of mutual fund operating expenses with respect to mutual fund size is calculated for each of five fund size categories. The ESE of the largest fund size category is shown to not differ in a statistically significant manner from those of the smaller categories of mutual fund size. ESEs are then calculated for various investment objective categories and are shown to differ in a statistically significant manner. ESEs also differ between load and no-load funds as well as between open-end and closed-end funds. The lack of statistically significant differences between the ESEs of various size categories is also evident in an analysis performed on a cross-sectional sample of mutual fund families. Further, evidence of the lack of significance of fund size in explaining variation in fund-specific ESES is found in an analysis of time series data for mutual funds in existence from 1976 through 1994.
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Date Issued: 1996
PURL: http://purl.flvc.org/fcla/dt/12459
Subject Headings: Mutual Funds, Investments, Portfolio Management
Format: Document (PDF)

Title: Market reaction to the acquisitions of thrift institutions and banks since the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
Creator: Whyte, Ann Marie., Florida Atlantic University, Madura, Jeff
Abstract/Description: This study empirically investigates the market reaction to acquisitions of thrift institutions and banks occurring since the passage of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989. The study tests several hypotheses related to characteristics of the acquiring firm, the target firm, and the acquisition. The overall market reaction to the acquisitions is negative. The study also reveals that there are cross-sectional factors which influence the share price...
Show moreThis study empirically investigates the market reaction to acquisitions of thrift institutions and banks occurring since the passage of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989. The study tests several hypotheses related to characteristics of the acquiring firm, the target firm, and the acquisition. The overall market reaction to the acquisitions is negative. The study also reveals that there are cross-sectional factors which influence the share price response. The results of the empirical tests are relevant to depository institutions contemplating acquisitions, to the Resolution Trust Corporation, and to taxpayers.
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Date Issued: 1991
PURL: http://purl.flvc.org/fcla/dt/12277
Subject Headings: Financial Institutions--Valuation, Stocks--Prices, Financial Institutions--Law and Legislation--United States, Banking Law--United States
Format: Document (PDF)

Title: Essays on takeover defenses and cancellations.
Creator: Glegg, Charmaine A., Florida Atlantic University, Madura, Jeff
Abstract/Description: This dissertation analyzes the impact of takeover defenses and cancellations in three essays: (1) The Impact of the Strength of Targets' Takeover Defense Mechanisms on Acquiring Firms; (2) The Impact of the Announcement of Shareholder-Friendly Poison Pill Provisions on Shareholder Wealth; and (3) The Relation between Short Interest Positions and Acquisition Withdrawal Announcements. The first essay examines the impact of the strength of target firms' takeover defenses on acquiring firms'...
Show moreThis dissertation analyzes the impact of takeover defenses and cancellations in three essays: (1) The Impact of the Strength of Targets' Takeover Defense Mechanisms on Acquiring Firms; (2) The Impact of the Announcement of Shareholder-Friendly Poison Pill Provisions on Shareholder Wealth; and (3) The Relation between Short Interest Positions and Acquisition Withdrawal Announcements. The first essay examines the impact of the strength of target firms' takeover defenses on acquiring firms' probability of successfully completing takeover deals, acquiring firms' takeover wealth effects, and their long-term performance. The evidence indicates that acquirers are more likely to complete takeovers if targets have weaker defenses. Additionally, acquisition announcement cumulative abnormal returns are lower for acquirers bidding on targets with stronger defenses. However, acquiring firms underperform in the long-run, which has limited relation with targets' takeover defense strengths. The second essay examines the market's reaction to announcements of the adoption of shareholder-friendly poison pills. The market's reaction is generally favorable to poison pill announcements. Cumulative abnormal returns surrounding friendly poison pill adoptions are positive and statistically significant. Additionally, adoptions of poison pills with sunset and TIDE provisions are positively and significantly related to poison pill announcement wealth effects. However, dead hand and fiduciary out provisions have significant inverse relation with poison pill announcement cumulative abnormal returns. Poison pills with chewable, no hand, and adverse persons clauses do not significantly explain cumulative abnormal returns. The cancellation study analyzes abnormal short selling interests in target firms in the month prior to the announcement of a cancelled takeover bid. Average short selling levels are 4 or 5 times higher than normal short selling levels in the month prior to the announcement of takeover bid cancellation, and are negatively related to announcement wealth effects. These initial findings imply that short sellers may be able to anticipate the negative wealth effects associated with deal failure, and hence increase short interests to benefit from target's (albeit brief) decline in value. However, further analyses point to short sellers using market-to-fundamentals strategies, and imply that increased abnormal short selling in the month prior to the announcement of cancelled takeover bids may be coincidental.
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Date Issued: 2006
PURL: http://purl.flvc.org/fcla/dt/12222
Subject Headings: Consolidation and merger of corporations--United States--Prevention, Corporate governance--United States, Tender offers (Securities)--United States, Actions and defenses--United States
Format: Document (PDF)

Title: Essays on profit warnings.
Creator: Jackson, Dave O., Florida Atlantic University, Madura, Jeff
Abstract/Description: Financial regulations require publicly traded firms to disclose firm-specific information relating to their financial performance as well as forecasts of future prospects disclosed to anyone outside the firm. Profit warnings present important market information as to the recent past firm performance as well as a glimpse into the firm's future prospects. By implementing Regulation Fair Disclosure (FD) in October 2000, the Securities and Exchange Commission (SEC) attempted to change the...
Show moreFinancial regulations require publicly traded firms to disclose firm-specific information relating to their financial performance as well as forecasts of future prospects disclosed to anyone outside the firm. Profit warnings present important market information as to the recent past firm performance as well as a glimpse into the firm's future prospects. By implementing Regulation Fair Disclosure (FD) in October 2000, the Securities and Exchange Commission (SEC) attempted to change the information environment by reducing information asymmetry between analysts and the investing public. This dissertation examines the impact of Regulation (FD) as it relates to three specific areas. Essay One examines Regulation FD's impact on market reaction to profit warnings by U.S. firms and finds significant market reaction over a two-day announcement window. The analysis in this dissertation documents statistically significant changes in the extent of the market reaction in the pre- and post-Regulation FD periods. Evidence is also presented that indicates a significant reduction in information leakage (as measured by negative cumulative abnormal returns (CARs) in stock price for firms in the two-week period immediately prior to a profit warning. Essay Two focuses on American Depositary Receipts (ADRs) and examines differences in comparative market reaction (ADRs versus U.S. stocks) in the pre and post-Regulation FD periods. Essay Three tests the market reaction to profit warnings for commercial bank stocks in the pre- and post-Regulation FD periods with particular attention focused on the contagion effect. The empirical analysis in this dissertation seeks to answer the question of whether the implementation of Regulation FD successfully achieves the SEC's goal of reducing information asymmetry between analysts and investors.
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Date Issued: 2002
PURL: http://purl.flvc.org/fau/fd/FADT12009
Subject Headings: American depository receipts, Business forcecasting, Profit, Financial statements
Format: Document (PDF)

Title: Corporate control: The case of partial acquisitions.
Creator: Spencer, Carolyn A., Florida Atlantic University, Madura, Jeff
Abstract/Description: The form of the partial acquisition provides a unique opportunity to analyze the influence the partial acquirer has on the target firm which is not available in full acquisitions. This dissertation investigates how the subsequent decisions of both the partial acquirer and the partially acquired target affect their own stock valuations and the stock valuations of the other firm. Only partial acquisitions of less than 50% were considered so that the effect of corporate control without overt...
Show moreThe form of the partial acquisition provides a unique opportunity to analyze the influence the partial acquirer has on the target firm which is not available in full acquisitions. This dissertation investigates how the subsequent decisions of both the partial acquirer and the partially acquired target affect their own stock valuations and the stock valuations of the other firm. Only partial acquisitions of less than 50% were considered so that the effect of corporate control without overt control could be measured. An event-study methodology is used to measure the stock price reactions of both firms to the announcement of several type of events: (1) acquisition/divestiture strategies, (2) dividend changes and (3) capital structure changes. The observed stock price reactions are then examined cross-sectionally to test whether firm-specific factors of explicit and implicit controls are influential in explaining the stock price reactions. A second goal of this dissertation was to measure the long term valuations of both firms and the combined entity to determine if the form of the partial acquisition is superior to that of a full acquisition. Again, various firm specific factors of explicit and implicit controls are tested cross-sectionally to determine their explanatory power on the long term valuations of both firms. The results of the event studies support the hypotheses that the actions of the partial acquirer do have an effect on the stock valuations of the partially acquired target (and vice versa) without the acquirer possessing a majority ownership position. In addition, several measures of explicit and implicit controls were found to be significant determinants of the short term stock valuations. The long term valuation studies implied that the form of the partial acquisition may not be superior to that of a full acquisition. However, it was determined that certain firm-specific factors (relatedness of the acquirer and target) have a significant effect on the long-term valuations for both firms.
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Date Issued: 1996
PURL: http://purl.flvc.org/fcla/dt/12472
Subject Headings: Consolidation and merger of corporations, Corporations--Finance, Investments
Format: Document (PDF)

Title: The performance persistence of closed-end funds.
Creator: Bers, Martina K., Florida Atlantic University, Madura, Jeff
Abstract/Description: The purpose of this study is to extend the research on mutual fund performance persistence to closed-end funds. Because closed-end funds trade at market prices different from net asset value (NAV) they are used to test both the performance persistence of their NAV and market price returns. While research has assessed the performance persistence of open-end funds, it has not assessed the performance persistence of closed-end funds. Yet, the unique characteristics of closed-end funds allow...
Show moreThe purpose of this study is to extend the research on mutual fund performance persistence to closed-end funds. Because closed-end funds trade at market prices different from net asset value (NAV) they are used to test both the performance persistence of their NAV and market price returns. While research has assessed the performance persistence of open-end funds, it has not assessed the performance persistence of closed-end funds. Yet, the unique characteristics of closed-end funds allow stronger arguments for their persistence than the arguments previously submitted for open-end funds. The characteristics that can potentially cause closed-end fund return persistence to be different from open-end fund return persistence include investor sentiment, restrictions on liquidity of underlying assets and cash holdings, and performance pressure on fund managers. This study also investigates the NAV and market price return persistence of international closed-end funds. This group of funds is of particular interest because investor sentiment determines a large portion of the market price return. In addition, as some international markets are less efficient due to restricted flow of information, fund managers may have an advantage in portfolio selection. Finally, this study examines cross-sectionally whether the persistence measure is related to the fund characteristics size, goal, management fees, turnover, fund family, fund experience, and the stock exchange a fund is traded on. The results show evidence for NAV and market price performance persistence, which is stronger for past winning than losing funds. NAV return persistence is less for foreign than domestic funds, possibly due to exchange rate fluctuations. However, market price return persistence is greater for foreign than domestic funds, which may indicate that price pressure is affecting foreign funds more than domestic funds. Funds with lower expense ratios, funds that are not members in a fund family, and funds traded on the NYSE show more persistence of strong NAV and market price performance. The results imply that investors should benefit from investing in past winning funds. This is particularly true for foreign funds, funds with lower expense ratios, funds that are not members of a fund family, and funds traded on the NYSE.
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Date Issued: 1998
PURL: http://purl.flvc.org/fcla/dt/12551
Subject Headings: Closed-end funds, Stock exchanges
Format: Document (PDF)

Title: The relationships between exchange rate exposure and European positioning of multinational corporations.
Creator: Martin, Anna D., Florida Atlantic University, Madura, Jeff
Abstract/Description: Exchange rate fluctuations create disparate types and degrees of exposure. Cash flows and net income fluctuate as result of exchange rate fluctuations. Consequently, shareholders, debtholders, and management closely monitor exposure. This dissertation investigates characteristics that explain the differential exposure of U.S.-based multinational corporations (MNCs) and examines conditions that influence exposure to shift over time. Operating characteristics that represent economic and...
Show moreExchange rate fluctuations create disparate types and degrees of exposure. Cash flows and net income fluctuate as result of exchange rate fluctuations. Consequently, shareholders, debtholders, and management closely monitor exposure. This dissertation investigates characteristics that explain the differential exposure of U.S.-based multinational corporations (MNCs) and examines conditions that influence exposure to shift over time. Operating characteristics that represent economic and accounting exposure are empirically studied to determine their impact on the overall exposure of MNCs. First, the results show that MNCs with imbalances in foreign currency inflows and outflows are more sensitive to exchange rate changes. A simple measure of European involvement is not adequate to assess the level of exposure. Second, it is found that the degree of export sales is a significant determinant of exposure. Third, there is strong support that accounting exposure is relevant. The translation effect on earnings is found to be significantly related to overall exposure. It is feasible that the dynamic nature of the international marketplace and MNC operations influence exposure to shift over time. First, the European Community Exchange Rate Mechanism (ERM) crisis is studied. The ERM crisis provides an opportunity to assess the effects on exposure when a tightly-controlled exchange rate regime becomes more relaxed. Using portfolio returns, U.S.-based MNCs operating in Europe experienced a positive shift in exposure, indicating returns are positively related to a strengthening dollar, following the onset of the ERM crisis. The strength of the dollar is another condition examined. Due to potential asymmetric responses, exposure may shift as the strength of the dollar changes. The asymmetric hedging hypothesis is not strongly supported while there is some support for the asymmetric competitive response hypothesis. The effects of repositioning on exposure are also studied. This analysis differs from the previous analyses of shifts in exposure since repositioning activities are predominantly under management's control. There is some evidence that exposure is a variable that continually changes as repositioning occurs. A subset of MNCs with returns that are negatively affected by a strong dollar displays time-varying exposure due to changes in their imbalance of foreign currency inflows and outflows.
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Date Issued: 1995
PURL: http://purl.flvc.org/fcla/dt/12428
Subject Headings: International Business Enterprises, Foreign Exchange Rates, International Finance
Format: Document (PDF)

Title: Essays on Corporate Restructuring.
Creator: Harris, Oneil M., Madura, Jeff, Florida Atlantic University
Abstract/Description: Corporate restructuring may be defined as the reorganization of a company with the aim of improving efficiency. This dissertation examines two corporate restructuring activities, namely (i) spinoffs and (ii) mergers and acquisitions. The first essay examines whether poison pill adoptions by impending spinoff subsidiaries is consistent with goal of shareholder wealth maximization. The main implication of my findings is that poison pills do not deter takeovers; not even in environments where...
Show moreCorporate restructuring may be defined as the reorganization of a company with the aim of improving efficiency. This dissertation examines two corporate restructuring activities, namely (i) spinoffs and (ii) mergers and acquisitions. The first essay examines whether poison pill adoptions by impending spinoff subsidiaries is consistent with goal of shareholder wealth maximization. The main implication of my findings is that poison pills do not deter takeovers; not even in environments where takeovers are more likely. Hence, poison pill adoptions may not be motivated by entrenchment. However, since managers' motives are never clear, investors react adversely to poison pill adoptions because of concerns about potential abuse of power by management. Interestingly, the evidence suggests that poison pills have a positive effect on firm value over the longterm. One possible explanation for this finding is that the potential for abuse associated with poison pills promote shareholder activism. Since activist shareholders closely monitor managers, poison pills indirectly enhance firm value. The second essay examines whether spinoff withdrawals are in response to (i) the market reaction to the initial spinoff announcement, (ii) changes in the estimated value of the unit over the spinoff interval, and (iii) changes in expected spinoff gains owing to changes in market conditions within the subsidiary's industry. It takes 7 months to complete an announced spinoff, on average, over which time industry conditions are likely to change. The main implications of my findings are that managers learn from the market and track changes in industry conditions when making spinoff decisions. It appears that managers time spinoffs for periods when the subsidiary's industry valuations are high to fetch a better price in the market for the unit. These practices are consistent with the goal of maximizing shareholders' wealth. The third essay examines whether having outside blockholders with a higher propensity to monitor managers cause variations in (i) abnormal announcement returns, (ii) proportional wealth gains, (iii) takeover premiums, and (iv) payment methods. The evidence supports the view that the types of outside blockholders that targets and bidders have, in relation to their propensity to monitor managers, affect bargaining position. Firms that have outside blockholders with higher propensities to monitor managers experience higher takeover gains because monitoring limits takeover related agency costs. Therefore, acquisitions create agency problems for minority shareholders of the target and bidder firms, when managers are not monitored.
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Date Issued: 2008
PURL: http://purl.flvc.org/fau/fd/FA00000303
Subject Headings: Poison pills (Securities)--United States, Consolidation and merger of corporations, Corporations--Sociological aspects, Corporate reorganizations--United States
Format: Document (PDF)

Title: Essays on Takeovers of Privately-Held Targets.
Creator: Ngo, Thanh, Madura, Jeff, Florida Atlantic University
Abstract/Description: Takeovers of privately-held targets have outnumbered takeovers of publiclytraded targets over the years. This dissertation focuses on takeover activities of privatelyheld targets and examines several important issues which have never been touched on in the literature. The first essay examines the factors that determine the choice between a privately-held target and a publicly-traded target. After the size of the target and the prevalence of private firms in each industry in each year are...
Show moreTakeovers of privately-held targets have outnumbered takeovers of publiclytraded targets over the years. This dissertation focuses on takeover activities of privatelyheld targets and examines several important issues which have never been touched on in the literature. The first essay examines the factors that determine the choice between a privately-held target and a publicly-traded target. After the size of the target and the prevalence of private firms in each industry in each year are controlled for, I find that the stock bidder tends to target a privately-held firm and the cash bidder tends to target a publicly-traded firm when pursuing a high-tech target. When acquiring a firm in the same industry and being inexperienced in takeover activities, the bidder is more likely to target a publicly-traded firm as opposed to a privately-held firm. The passage of the SarbanesOxley Act (SOX) also has an affect on the choice of a privately-held target or a publiclytraded target; everything else being equal, the cash bidder is more likely choose to acquire a private firm while the stock bidder is less likely to choose a private firm upon the introduction of SOX. The second essay examines the factors that influence the choice of stock versus cash payment in takeovers of privately-held targets. Stock is found to be more frequently used among takeovers in which the bidding firm has more debt and less free cash flow prior to the deal , the target is a high-tech firm, and the target management is retained in the combined entity. In addition, since the adoption of SOX, cash has been used more frequently and to greater extent among the sample of takeovers of privatelyheld targets. The third essay examines the effects of restrictions on resale of stock issued in takeovers on the bidder's wealth effect and long-run stock price performance. I find that restrictions on resale of stock are more popular among takeovers of privately-held targets as compared to takeovers of publicly-traded targets. Restrictions on resale are found to be positively related to the bidder's announcement abnormal return and negatively related to the bidder's long-run stock price performance.
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Date Issued: 2007
PURL: http://purl.flvc.org/fau/fd/FA00000608
Subject Headings: United States --Sarbanes-Oxley Act of 2002, Consolidation and Merger of Corporations--United States, Success in Business, Sale of Business Enterprises
Format: Document (PDF)

Stocks--Prices (4)	+ -
Corporations--Finance (3)	+ -
Consolidation and merger of corporations (2)	+ -
International Business Enterprises (2)	+ -
Investments (2)	+ -

Risk management (2)	+ -
Securities (2)	+ -
Stock exchanges (2)	+ -
Actions and defenses--United States (1)	+ -
American depository receipts (1)	+ -
Banking Law--United States (1)	+ -
Bankruptcy--Case studies (1)	+ -
Business forcecasting (1)	+ -
Closed-end funds (1)	+ -
Commercial Agents--Costs (1)	+ -
Consolidation and Merger of Corporations (1)	+ -
Consolidation and Merger of Corporations--Economic aspects (1)	+ -
Consolidation and Merger of Corporations--United States (1)	+ -
Consolidation and merger of corporations--Management (1)	+ -
Consolidation and merger of corporations--United States--Prevention (1)	+ -
Corporate Governance (1)	+ -
Corporate divestiture (1)	+ -
Corporate divestiture--United States (1)	+ -
Corporate governance--United States (1)	+ -
Corporate reorganizations--United States (1)	+ -
Corporations--Sociological aspects (1)	+ -
Default (Finance)--United States (1)	+ -
Europe--Economic integration (1)	+ -
European Union countries--Economic conditions (1)	+ -
Exchange Traded Funds (1)	+ -

Florida Atlantic University (22)	+ -
Madura, Jeff (22)	+ -
Benou, Georgia. (1)	+ -
Bers, Martina K. (1)	+ -
Bley, Jorg. (1)	+ -

Borde, Stephen F. (1)	+ -
College of Business (1)	+ -
Dempere, Juan M. (1)	+ -
Department of Finance (1)	+ -
Glegg, Charmaine A. (1)	+ -
Harris, Oneil M. (1)	+ -
Jackson, Dave O. (1)	+ -
Johnston, Jarrod G. (1)	+ -
Jory, Surendranath R. (1)	+ -
Larson, Stephen James. (1)	+ -
Martin, Anna D. (1)	+ -
Ngo, Thanh (1)	+ -
Picou, Armand E. (1)	+ -
Premti, Arjan (1)	+ -
Richie, Nivine F. (1)	+ -
Schnusenberg, Oliver (1)	+ -
Spencer, Carolyn A. (1)	+ -
Whyte, Ann Marie. (1)	+ -
Wiggenhorn, Joan (1)	+ -
Wright, Francis William. (1)	+ -
Zera, Stephen Paul (1)	+ -

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