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Title: ENTREPRENEURIAL ORIENTATION: THE GOOD, THE BAD, AND THE INTERESTING.
Creator: Kloepfer, Kathryn, Neubaum, Donald, Florida Atlantic University, Department of Management, College of Business
Abstract/Description: The purpose of this dissertation is to explore the contingencies that alter the link between entrepreneurial orientation (“EO”; a strategic posture characterized by behaviors and attitudes that display innovativeness, proactiveness, and risk-taking) and firm outcomes. While conceptual claims unite on the belief that firms largely benefit from emphasizing innovation through proactive and risky initiatives, the empirical findings on a positive link between EO and performance are inconclusive....
Show moreThe purpose of this dissertation is to explore the contingencies that alter the link between entrepreneurial orientation (“EO”; a strategic posture characterized by behaviors and attitudes that display innovativeness, proactiveness, and risk-taking) and firm outcomes. While conceptual claims unite on the belief that firms largely benefit from emphasizing innovation through proactive and risky initiatives, the empirical findings on a positive link between EO and performance are inconclusive. As such, several scholars have explored the contingencies that illuminate the boundary conditions to EO, however, most of this research has focused on external contingencies, i.e. those connected to the environment, while internal contingencies, i.e. those connected to the firm, have been fairly disregarded. Not only will the industry and market play a significant role in a firm’s ability to effectively carry out their desired strategic initiatives, so too will firm characteristics, such as communication and culture, as these internal factors are directly related to the level of value created from strategic actions. Therefore, this dissertation is an attempt to further clarify the boundary conditions of EO by focusing on these firm specific attributes. Chapter two, titled “Family communication patterns and entrepreneurial orientation in family firms” exposes the impact of specific family communication patterns on the performance outcomes from an entrepreneurial orientation. This chapter contributes to the corporate entrepreneurship literature, by confining the positive effects of EO to certain firm specific characteristic, as well as to the family business literature by further demonstrating the heterogeneity between family firms. Thereafter, chapter three, titled “Entrepreneurial orientation, organizational culture, and firm performance: The importance of a balanced approach”, argues and tests the importance of organizational culture, as defined by the competing values framework, as a contingency variable of the EO-performance relationship. This empirical chapter exploits a configurational approach, using fuzzy set Qualitative Comparative Analysis (“fs/QCA”) to analyze the arrangements of different entrepreneurial orientation and organizational cultures that yield superior performance. Through this exploration, I advance research on the EO-performance relationship by integrating the firm’s corporate culture as a means of alleviating concerns with resistance by certain stakeholders to the ambiguity associated with entrepreneurial ventures.
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Date Issued: 2020
PURL: http://purl.flvc.org/fau/fd/FA00013455
Subject Headings: Entrepreneurship, Corporate culture, Performance
Format: Document (PDF)

Title: Government Procurement and Financial Reporting Quality.
Creator: He, Zhijian Chris, Kohlbeck, Mark, Florida Atlantic University, School of Accounting, College of Business
Abstract/Description: Government spending is essential for the US economy, and the amount of capital that flows from the government to US firms has increased substantially in recent years. Despite the economic importance of the corporate-government contracting relationship, we know little about the firm-level financial outcomes associated with government contracts. In this study, I investigate whether the corporate government contracting relationship affects firm-level financial reporting quality. Using a sample...
Show moreGovernment spending is essential for the US economy, and the amount of capital that flows from the government to US firms has increased substantially in recent years. Despite the economic importance of the corporate-government contracting relationship, we know little about the firm-level financial outcomes associated with government contracts. In this study, I investigate whether the corporate government contracting relationship affects firm-level financial reporting quality. Using a sample of 58,988 US publicly-traded firms from 2001 through 2017, I find that federal government contracting firms are associated with a lower level of discretionary accruals, lower probability of internal control material weaknesses, and lower probability of restatement and fraud as compared to non government contractors. However, this association is weaker when industry competition on government contracts are lower, and government switching costs in which the cost to find new suppliers are higher. Collectively, my empirical results suggest that having the government as a customer has a positive impact on the quality of financial reports.
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Date Issued: 2020
PURL: http://purl.flvc.org/fau/fd/FA00013438
Subject Headings: Government purchasing, Financial statements, Government contractors
Format: Document (PDF)

Title: THE EFFECT OF WAR ON U.S. ECONOMIC GROWTH: COMPARING THE KOREAN WAR, VIETNAM WAR AND WARS IN MIDDLE EAST.
Creator: Lee, Chaewoong, Yuhn, Ky-Hyang, Florida Atlantic University, Department of Economics, College of Business
Abstract/Description: Analyzing the effect of military expenditure on economic growth has been an essential task for U.S economists. This thesis analyzed macroeconomic components for the last 70 years by estimating the ordinary least squares (OLS) regression model and vector autoregressive model. To interpret the empirical analysis, historical analysis of the Korean War, the Vietnam War, and the Wars in the Middle East, was made. One found the negative effect of military spending during wartime on the economic...
Show moreAnalyzing the effect of military expenditure on economic growth has been an essential task for U.S economists. This thesis analyzed macroeconomic components for the last 70 years by estimating the ordinary least squares (OLS) regression model and vector autoregressive model. To interpret the empirical analysis, historical analysis of the Korean War, the Vietnam War, and the Wars in the Middle East, was made. One found the negative effect of military spending during wartime on the economic growth of the United States. This thesis suggests that the policymakers and military commanders should focus on shortening the state of war to minimize economic damage to the United States.
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Date Issued: 2020
PURL: http://purl.flvc.org/fau/fd/FA00013506
Subject Headings: Economic development--United States, Korean War, 1950-1953, Vietnam War, 1961-1975, War--Middle East, Military spending, Macroeconomics
Format: Document (PDF)

Title: The Real Effects of Shareholder Proposals: Purpose in the Context of Climate Change.
Creator: Tindall, Greg, Javakhadze, David, Florida Atlantic University, Department of Finance, College of Business
Abstract/Description: Extant literature has struggled to identify definitive purpose for shareholder proposals, finding them to depend on their context. Progressively, climate change has gathered interest at annual meetings where shareholders present proposals related to the subject. The literature builds expectations for the role of obsolescence, regulation and other forms of activism to motivate innovation with respect to these proposals. The literature also establishes how diversification can serve as a defense...
Show moreExtant literature has struggled to identify definitive purpose for shareholder proposals, finding them to depend on their context. Progressively, climate change has gathered interest at annual meetings where shareholders present proposals related to the subject. The literature builds expectations for the role of obsolescence, regulation and other forms of activism to motivate innovation with respect to these proposals. The literature also establishes how diversification can serve as a defense. I test the impact that shareholder proposals have on the information environment and on the corporate behaviors of innovation and diversification. I find that capital markets are responsive to proposal pressures and that there are improvements in the information environment. I find that firms in receipt of shareholder proposals related to climate change innovate and diversify more. I find wealth enhancements for these corporate behaviors spurred by climate-related proposals. While definitive statements on causality may elude, my results suggest that shareholder proposals have real effects.
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Date Issued: 2020
PURL: http://purl.flvc.org/fau/fd/FA00013437
Subject Headings: Corporations--Investor relations, Shareholder proposals, Climatic changes
Format: Document (PDF)

Title: TWO ESSAYS ON FINANCIAL REPORTING QUALITY: EXAMINING MANAGERIAL PLACE ATTACHMENT AND CREDIT ACCESS.
Creator: Frost, Tracie Sloop, Kohlbeck, Mark, Florida Atlantic University, School of Accounting, College of Business
Abstract/Description: In essay 1, I investigate the association of place attachment and financial reporting quality. Management characteristics affect a wide range of corporate decisions, including decisions affecting financial reporting quality; however, the influence of managerial place attachment on corporate decision-making has received relatively little attention - even though place attachment is thought to play a significant role in forming individual identity. Place attachment affects the decisions that...
Show moreIn essay 1, I investigate the association of place attachment and financial reporting quality. Management characteristics affect a wide range of corporate decisions, including decisions affecting financial reporting quality; however, the influence of managerial place attachment on corporate decision-making has received relatively little attention - even though place attachment is thought to play a significant role in forming individual identity. Place attachment affects the decisions that individuals make with regards to social and environmental policies, lifestyle, and, in the corporate context, firmlevel policies. Because firms hire local CEOs and CFOs five to eight times more often than expected if geography were irrelevant to the matching process, the question of how managerial place attachment affects financial reporting outcomes is an important one. I investigate the effect of managerial place attachment on financial reporting quality in a sample of publicly traded U.S. firms. My findings indicate that firms with place attached CEOs display higher financial reporting quality, indicating a significant caretaking bond between CEO and stakeholders. CFOs, on the other hand, are marginally associated with lower financial reporting quality, indicating that they are more likely than CEOs to extract personal gain when they are local to their firm headquarters.
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Date Issued: 2020
PURL: http://purl.flvc.org/fau/fd/FA00013442
Subject Headings: Financial statements, Management, Chief executive officers, Chief financial officers, Place attachment
Format: Document (PDF)

Title: LEADER IDENTITY: EXPLORING INTRA-PERSONAL PATTERNS AND DEVELOPING A MULTI-DIMENSIONAL MEASURE.
Creator: McCombs, Kate Marie, Williams, Ethlyn, Florida Atlantic University, Department of Management, College of Business
Abstract/Description: Over the last forty years, there has been ample research examining general leadership development and the characteristics of followers and leaders (Day, 2001). However, although recognized as important for leader development and leadership effectiveness, there is still much to understand about leader identity (Epitropaki et al., 2017). The focus on identity literature has been disproportionately focused on follower identity rather than leader identity (Epitropaki et al., 2017; Johnson et al.,...
Show moreOver the last forty years, there has been ample research examining general leadership development and the characteristics of followers and leaders (Day, 2001). However, although recognized as important for leader development and leadership effectiveness, there is still much to understand about leader identity (Epitropaki et al., 2017). The focus on identity literature has been disproportionately focused on follower identity rather than leader identity (Epitropaki et al., 2017; Johnson et al., 2012). This shortage is unfortunate due to leader identity’s capabilities in developing leaders and effective leader behaviors (Miscenko et al., 2017; Johnson et al., 2012). Due to this deficiency, I focus my dissertation on leader identity and attempt to better grasp the development of one’s leader identity. In line with recent conceptual literature, I examine the four dimensions of leader identity and patterns of development to better understand the development of leader identity. Through the two papers in this dissertation, I aim to enhance our current understanding of leader identity.
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Date Issued: 2020
PURL: http://purl.flvc.org/fau/fd/FA00013508
Subject Headings: Leadership, Leadership--Research
Format: Document (PDF)

Title: DEVELOPMENT AND DEPLOYMENT OF ENTREPRENEURIAL CAPABILITIES IN INTRA- AND INTER-ORGANIZATIONAL RELATIONSHIPS.
Creator: Haim, Faridian Parisa, Neubaum, Donald, Florida Atlantic University, Department of Management, College of Business
Abstract/Description: The two essays in this dissertation investigate how entrepreneurial capabilities are developed in intra- and inter-organizational relationships. Entrepreneurial capabilities are central to firms’ survival and performance. However, the role of various forms of relationships in the development and deployment of entrepreneurial capabilities remains understudied. The constellation of the two essays in this dissertation aims to offer insights about the impact of these relationships and the...
Show moreThe two essays in this dissertation investigate how entrepreneurial capabilities are developed in intra- and inter-organizational relationships. Entrepreneurial capabilities are central to firms’ survival and performance. However, the role of various forms of relationships in the development and deployment of entrepreneurial capabilities remains understudied. The constellation of the two essays in this dissertation aims to offer insights about the impact of these relationships and the potential areas for future research. I investigate various aspects of entrepreneurial capabilities, such as value creation, value capture, and innovativeness. The first essay is an empirical investigation of the impact of alliances, as a form of inter-organizational relationship, on firms’ capabilities to create and capture value and improve performance. The second essay empirically examines the interplay between social capital, as a byproduct of intra-organizational relationships, and causal entrepreneurial process on innovativeness in new ventures.
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Date Issued: 2020
PURL: http://purl.flvc.org/fau/fd/FA00013531
Subject Headings: Entrepreneurship, Entrepreneurship--Research
Format: Document (PDF)

Title: THREE ESSAYS ON CEO-BOARD SOCIAL CONNECTIONS AND CORPORATE POLICIES: AN INTERNATIONAL PERSPECTIVE.
Creator: Bhuyan, Md Nazmul Hasan, Javakhadze, David, Florida Atlantic University, Department of Finance, College of Business
Abstract/Description: The proposed study examines the effect of CEO-board social connections on corporate policies. Motivated by the independent board view and collaborative board view, I propose two opposing hypotheses explaining the effect of CEO-board connections on corporate policies: monitoring hypothesis and advising hypothesis. In my first essay, I validate the two competing hypotheses of CEO-board connections by investigating the effect of CEO-board connections on monitoring and advising role of the board,...
Show moreThe proposed study examines the effect of CEO-board social connections on corporate policies. Motivated by the independent board view and collaborative board view, I propose two opposing hypotheses explaining the effect of CEO-board connections on corporate policies: monitoring hypothesis and advising hypothesis. In my first essay, I validate the two competing hypotheses of CEO-board connections by investigating the effect of CEO-board connections on monitoring and advising role of the board, and firm valuation. I find that CEO-board connections have a negative effect on board monitoring and positive effect on board advising and firm valuation. The results are robust to endogeneity concerns and different model specifications. Disentangling the Channels, I also show that the predicted effect of CEO-board connections on board monitoring and advising have opposite effects on firm valuation. Lastly, I provide evidence that the effect of CEO-board connections on firm performance is stronger in firms with high growth opportunities.
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Date Issued: 2020
PURL: http://purl.flvc.org/fau/fd/FA00013515
Subject Headings: Chief executive officers, Boards of directors, International perspectives
Format: Document (PDF)

Title: HABIT, EMULATION, AND SURVIVAL IN THE SUPERMARKET.
Creator: Brundage, Brendan, Boudreaux, Christopher, Florida Atlantic University, Department of Economics, College of Business
Abstract/Description: Substantivism helps us appreciate two views on the meaning of the economy: the institutional view and the neoclassical view. This study analyzes the behaviors of producers and consumers in the supermarket industry and finds that the neoclassical school lacks a realistic behavioral theory. We observe that institutional behavioral theory is closer to reality because it recognizes that consumers are affected by their social environment through habit and emulation, and producers are survival...
Show moreSubstantivism helps us appreciate two views on the meaning of the economy: the institutional view and the neoclassical view. This study analyzes the behaviors of producers and consumers in the supermarket industry and finds that the neoclassical school lacks a realistic behavioral theory. We observe that institutional behavioral theory is closer to reality because it recognizes that consumers are affected by their social environment through habit and emulation, and producers are survival maximizers. These social obstacles prevent humans from acting like homoeconomicus. We focus only on the supermarket industry, but this conclusion can be applied to all industries.
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Date Issued: 2020
PURL: http://purl.flvc.org/fau/fd/FA00013536
Subject Headings: Economics, Supermarkets, Consumer behavior, Economy
Format: Document (PDF)

Title: Investor Connections and Non-GAAP Reporting.
Creator: Harwood, Chad, Kohlbeck, Mark, Florida Atlantic University, College of Business, School of Accounting
Abstract/Description: I investigate whether a firm’s social capital with investors impacts its non-GAAP reporting decisions. Critics of non-GAAP reporting suggest that non-GAAP earnings are incomplete, inaccurate, and can be misleading (Derby, 2001; Dreman, 2001; Elstein, 2001; Black et al., 2007). Firms might be hesitant to provide non-GAAP information if other means are available to transfer information. Social capital provides an alternate method of informing investors. However, social capital might also play...
Show moreI investigate whether a firm’s social capital with investors impacts its non-GAAP reporting decisions. Critics of non-GAAP reporting suggest that non-GAAP earnings are incomplete, inaccurate, and can be misleading (Derby, 2001; Dreman, 2001; Elstein, 2001; Black et al., 2007). Firms might be hesitant to provide non-GAAP information if other means are available to transfer information. Social capital provides an alternate method of informing investors. However, social capital might also play another role in the information environment by building trust between managers and investors (Gabarro, 1978; Gulati, 1995). This trust may reduce investor skepticism of non-GAAP information, enhancing the value of non-GAAP disclosures. Additionally, I examine what impact social capital might have on investors’ investment decisions with respect to non-GAAP reporting. Despite critics’ concerns over non-GAAP reporting, prior literature suggests investors’ reactions are more aligned with the non-GAAP definition of earnings (Bradshaw and Sloan, 2002; Bhattacharya et al., 2003), suggesting other factors might influence investors’ decisions. I investigate whether social capital plays a role in reducing skepticism in non-GAAP information leading to reduced information asymmetry and increased investor reaction to non-GAAP disclosures. I find that non-GAAP reporting is increasing in social capital with investors. However, I find no evidence that investor reactions to non-GAAP earnings information differ based on firms’ social capital with investors. I also find information asymmetry around earnings announcements is higher for non-GAAP reporting firms with greater social capital with investors in comparison to non-GAAP reporters with lower social capital. Taken together, my results suggest social capital impacts the decisions of firms in reporting non-GAAP earnings information, but not the decisions of investors. My results are relevant to the current disclosure environment in that non-GAAP reporting is a current topic of interest for regulators with several updates to non-GAAP guidance having recently occurred.
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Date Issued: 2019
PURL: http://purl.flvc.org/fau/fd/FA00013214
Subject Headings: GAAP (Accounting), Investors, Social capital (Economics)
Format: Document (PDF)

Title: ONLINE BRAND COMMUNITIES, INTERACTIVE COMMUNICATION, AND RETENTION.
Creator: Brynildsen, Gina, Sashi, C.M., Florida Atlantic University, Department of Marketing, College of Business
Abstract/Description: An estimated 90% of U.S. companies including Tesla, 3M, McDonald’s, and UnitedHealth Group use social media such as Facebook, Instagram, and Snapchat to connect with consumers and form community around their brands; yet little is known about the effects of different social media structures on consumer-brand relationships. The purpose of this research is to understand the unique nature of firm-hosted online brand communities on social networking sites and how they can be used to retain...
Show moreAn estimated 90% of U.S. companies including Tesla, 3M, McDonald’s, and UnitedHealth Group use social media such as Facebook, Instagram, and Snapchat to connect with consumers and form community around their brands; yet little is known about the effects of different social media structures on consumer-brand relationships. The purpose of this research is to understand the unique nature of firm-hosted online brand communities on social networking sites and how they can be used to retain customers. We review the literature on online brand communities as a tool for building relationships and apply network theory to understanding firm-hosted online brand communities on social networking sites. Relationship marketing provides a framework for how consumer-brand relationships are developed, built, and maintained. Network theory explains how different network structures interact with network processes to produce specific outcomes for individuals and groups.
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Date Issued: 2019
PURL: http://purl.flvc.org/fau/fd/FA00013360
Subject Headings: Social media, Online social networks, Customer loyalty, Relationship marketing, Brand loyalty, Online chat groups
Format: Document (PDF)

Title: False News Implications for Auditors and Investors.
Creator: Vakilzadeh, Seyed Hamidreza, Kohlbeck, Mark, Florida Atlantic University, College of Business, School of Accounting
Abstract/Description: I examine the determinants and implications of false news on client business risk and firm credibility. False news is defined as information presented as factually accurate, but which contains fabricated facts and is deliberately made public to mislead the reader. Importantly, it is later denied by a credible source. There is a significant concern about the influence of false news on individuals’ decision-making and judgment processes. However, our knowledge regarding false news and its...
Show moreI examine the determinants and implications of false news on client business risk and firm credibility. False news is defined as information presented as factually accurate, but which contains fabricated facts and is deliberately made public to mislead the reader. Importantly, it is later denied by a credible source. There is a significant concern about the influence of false news on individuals’ decision-making and judgment processes. However, our knowledge regarding false news and its implications for financial markets is minimal. I investigate false news by focusing on negative false news that is not initiated from within the company. Building on financial and political motives behind incidents of false news, I examine whether industry competition and media coverage play a role in making a firm a target for false news. I further examine the impact of false news on the firm’s financial reporting behavior and investigate whether the firm’s auditor prices false news. Lastly, based on the argument that false news increases distrust and uncertainty, I examine whether false news decreases the credibility of the firm’s disclosures and test whether the earnings response coefficient (ERC) is lower after the release of false news. I find that lower competition and higher media coverage are associated with higher likelihood of false news. Consistent with my predictions, I also find that false news target firms have higher abnormal accruals, higher abnormal real earnings activities, and higher audit fees. However, I do not find support for the notion that false news reduces credibility of firm’s disclosure.
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Date Issued: 2019
PURL: http://purl.flvc.org/fau/fd/FA00013273
Subject Headings: Fake news, Investors, Auditors
Format: Document (PDF)

Title: Gender, Connections, and Social Responsibility: Implications for M&A and Compensation.
Creator: Shelton, Austin, Javakhadze, David, Garcia-Feijoo, Luis, Florida Atlantic University, College of Business, Department of Finance
Abstract/Description: In this work I investigate how executive social connections and executive gender diversity dually affect firm Corporate Social Responsibility (CSR), a set of firm policies implemented to benefit the social, economic, and environmental welfare of all stakeholders, and how the changes in CSR driven by executive social connections and executive gender diversity in turn affect a range of corporate policies. This research adds to the social networks, gender, and CSR literature within finance in...
Show moreIn this work I investigate how executive social connections and executive gender diversity dually affect firm Corporate Social Responsibility (CSR), a set of firm policies implemented to benefit the social, economic, and environmental welfare of all stakeholders, and how the changes in CSR driven by executive social connections and executive gender diversity in turn affect a range of corporate policies. This research adds to the social networks, gender, and CSR literature within finance in multiple ways. First, while much past work examines the impact on corporate policy of executive gender or executive social connections in isolation, no major work to date examines the impact of gender dependent executive social connections on corporate policy. Second, this work definitively ties the dual effects of executive gender diversity and social connections to firm CSR. The dual impact of social connections and gender diversity on CSR is shown to affect major corporate policies. In all, this work provides evidence that CSR helps drive important firm polices, including M&A and executive compensation policy, and that CSR is impacted by both a firm’s executive gender diversity and social network connections.
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Date Issued: 2019
PURL: http://purl.flvc.org/fau/fd/FA00013262
Subject Headings: Corporate social responsibility, Social responsibility of business, Executives--Social networks, Gender, Mergers and corporate policy, Executive compensation
Format: Document (PDF)

Title: THE IMPACT OF CEO PAST PROFESSIONAL EXPERIENCE AND SOCIAL CAPITAL ON CORPORATE POLICIES AND FIRM PERFORMANCE.
Creator: Faulkner, Matthew, Garcia-Feijoo, Luis, Florida Atlantic University, College of Business, Department of Finance
Abstract/Description: Increasing evidence suggests the personal traits of chief executive officers (CEOs) can influence corporate policies. We examine how one dimension, past professional experiences, can affect corporate payout policy. Exploiting exogenous CEO turnovers and future employment, we hypothesize that CEOs experiencing a distress event in their past career alter the corporate payout policy at their subsequent firm of employment. We discover that CEOs having experienced prior professional career...
Show moreIncreasing evidence suggests the personal traits of chief executive officers (CEOs) can influence corporate policies. We examine how one dimension, past professional experiences, can affect corporate payout policy. Exploiting exogenous CEO turnovers and future employment, we hypothesize that CEOs experiencing a distress event in their past career alter the corporate payout policy at their subsequent firm of employment. We discover that CEOs having experienced prior professional career distress are less likely to pay dividends and use repurchases and pay out lower levels for each type of payout. Additionally, when CEOs with distress do have a payout policy greater than zero dollars, there exists a preference toward the use of repurchases in the payout policy, adding to the literature of substitution and differences between the two forms of payout. We find that dividend smoothing is reduced by CEOs that have past professional distress.
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Date Issued: 2019
PURL: http://purl.flvc.org/fau/fd/FA00013305
Subject Headings: Chief executive officers, Social capital (Sociology), Experience, Dividends, Payouts
Format: Document (PDF)

Title: Obfuscation of Rent Extraction Behavior: Evidence from Investment Inefficiency.
Creator: Mammadov, Babak, Thevenot, Maya, Florida Atlantic University, College of Business, School of Accounting
Abstract/Description: I investigate the association between rent extraction and qualitative/quantitative characteristics of 10-K filings (i.e. readability, financial statement comparability and earnings transparency), subject to existing monitoring constraints. This study focuses on one type of such rent extraction – investment inefficiency (i.e. overinvestment or underinvestment), as extant research provides evidence that it provides personal benefits to managers, often at the expense of shareholders. Managers...
Show moreI investigate the association between rent extraction and qualitative/quantitative characteristics of 10-K filings (i.e. readability, financial statement comparability and earnings transparency), subject to existing monitoring constraints. This study focuses on one type of such rent extraction – investment inefficiency (i.e. overinvestment or underinvestment), as extant research provides evidence that it provides personal benefits to managers, often at the expense of shareholders. Managers have incentives to invest inefficiently but such behavior may be undesirable and result in negative consequences to the manager, such as turnover. Therefore, I expect that managers are likely to obfuscate information in order to make it difficult for investors to detect investment inefficiency, although monitoring over financial reporting may limit their ability to do so. I test whether monitoring over financial reporting reduces information obfuscation. Last, I study the joint effects of investment inefficiency and information obfuscation on CEO turnover and compensation. I expect that investment inefficiency is positively associated with information obfuscation but this relation is weaker for firms with effective monitoring mechanisms over financial reporting. Further, I examine how these factors affect CEO disciplining. Managers get disciplined for inefficient investment decisions. Obfuscating information makes it difficult for investors to evaluate managers’ investment decisions. Therefore, I examine whether information obfuscation prevents managers from being disciplined as a result of inefficient investment behavior. I find that investment inefficiency is positively associated with information obfuscation. Managers are more likely to obfuscate information for overinvestment type of inefficiency as opposed to underinvestment. Further, the results suggest that, while internal monitoring does not reduce information obfuscation, external monitoring constrains information obfuscation. I find that external monitoring (i.e. auditors) provide more stringent monitoring by reducing information obfuscation. I do not find support for my last prediction that information obfuscation prevents disciplining of CEOs.
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Date Issued: 2018
PURL: http://purl.flvc.org/fau/fd/FA00005952
Subject Headings: Financial statements, Misleading financial statements, Investments--Accounting
Format: Document (PDF)

Title: Essays in Return Predictability After Large Price Shocks.
Creator: Brady, Kevin P., Garcia-Feijoo, Luis, Florida Atlantic University, College of Business, Department of Finance
Abstract/Description: In Essay 1, I use cross-country differences in investors’ traits — trust, patience, overconfidence, and risk tolerance — to test the underreaction, overreaction, and uncertain information theories of stock returns. I find that investors’ reactions to large daily stock price shocks vary between lower and higher levels of these traits. Specifically, investors with lower levels of trust and more patience underreact more (or overreact less) to price shocks, which aligns with the predictions of...
Show moreIn Essay 1, I use cross-country differences in investors’ traits — trust, patience, overconfidence, and risk tolerance — to test the underreaction, overreaction, and uncertain information theories of stock returns. I find that investors’ reactions to large daily stock price shocks vary between lower and higher levels of these traits. Specifically, investors with lower levels of trust and more patience underreact more (or overreact less) to price shocks, which aligns with the predictions of the underreaction hypothesis. Investors with higher levels of overconfidence overreact more to positive price shocks and overreact less to negative price shocks. While this finding does not conform exactly to the predictions of the overreaction hypothesis, it is consistent with more refined theories of how overconfidence affects asset prices. Investors less tolerant of risk overreact less to positive price shocks. I also find that differences in institutional characteristics affect over/underreaction. Specifically, there is less overreaction in countries with stronger investor protections and less insider trading. Additionally, the ability to sell short is associated with more overreaction to negative shocks and less overreaction to positive shocks. In Essay 2, I investigate whether publicly available information (PAI) affects over/underreaction according to predictions of several theoretical models, and then I test if differences in investors’ traits modifies the association between publicly available information and returns. After identifying and correcting for a methodological issue in some prior research, I show that in a pooled international sample of stocks, investors overreact to price shocks not accompanied by information, and also overreact (or react efficiently in some models) to information-based price shocks. I find that the effect of PAI on returns is not the same in each country, which motivates my tests on how this variability relates to differences in investor traits. My results show that investors with higher trust tend to overreact less to shocks accompanied by PAI, while investors less tolerant of risk underreact to positive price shocks. Additionally, investors with higher overconfidence and self-attribution bias overreact more to positive price shocks, but less to negative price shocks, in accordance with behavioral theories.
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Date Issued: 2018
PURL: http://purl.flvc.org/fau/fd/FA00013153
Subject Headings: Investors, Securities--Prices, Individual investors--Attitudes
Format: Document (PDF)

Title: Operating Leverage’s Role in Stock Returns, The Value Premium, and the Profitability Premium: International Evidence.
Creator: Jansen, Benjamin A., Garcia-Feijoo, Luis, Florida Atlantic University, College of Business, Department of Finance
Abstract/Description: This dissertation investigates the association of operating leverage with stock returns, the value premium, and the profitability premium. Results in the first essay support the hypothesis that operating leverage is related to stock returns and the value premium across the sampled countries. Results are robust to cross-country differences, typical controls, multiple definitions of operating and financial leverage, and while controlling for the endogeneity of operating and financial leverage....
Show moreThis dissertation investigates the association of operating leverage with stock returns, the value premium, and the profitability premium. Results in the first essay support the hypothesis that operating leverage is related to stock returns and the value premium across the sampled countries. Results are robust to cross-country differences, typical controls, multiple definitions of operating and financial leverage, and while controlling for the endogeneity of operating and financial leverage. This suggests that the rational explanation for the presence of the value premium lies in the underlying risk exposure of fixed asset risk of operating leverage which is expressed through the value premium. Results further support the hypothesis of strengthening labor protection increasing operating leverage. In turn, increased labor protection marginally negatively associated with the value premium, suggesting that labor protection reduces the value premium through financial leverage. However, because operating and financial leverage are oppositely affected by employment protection, the joint effect of this association may be cumulatively washed out in estimating value premium with employment protection legislation. Results in the second essay further support the hypothesis that operating leverage is related to stock returns and additionally support the hypothesis of operating leverage being associated to the profitability premium. The profit premium tends to be insignificant when generated within operating leverage portfolios, and the profit premium only tends to be significantly positive in the higher operating leverage portfolios. Furthermore, once operating leverage and profitability are orthogonalized from one another, the estimated coefficient of profitability is reduced by a magnitude of roughly 10. These results provide evidence in support of the profit premium being based on the riskiness of the firm through operating leverage, and therefore the profit premium is a rationally priced risk factor in stock returns.
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Date Issued: 2018
PURL: http://purl.flvc.org/fau/fd/FA00013074
Subject Headings: Operating leverage., Stocks., Financial leverage., Corporations--Valuation., Labor--Protection.
Format: Document (PDF)

Title: Two Essays on An Examination of Life Cycle Effects and Firm Policies.
Creator: Danso, Charles K. A., Garcia-Feijoo, Luis, Pennathur, Anita K., Florida Atlantic University, College of Business, Department of Finance
Abstract/Description: In Essay 1, I investigate the impact of corporate life cycle dynamics on the observed negative association between asset growth and stock returns in the crosssection. I find that the asset growth effect on average exists across some life cycle stages measured using cohorts. However, controlling for certain variables associated with the theoretical explanations, I find there is no relation between asset growth and returns. I argue this evidence is consistent with an agency-based explanation of...
Show moreIn Essay 1, I investigate the impact of corporate life cycle dynamics on the observed negative association between asset growth and stock returns in the crosssection. I find that the asset growth effect on average exists across some life cycle stages measured using cohorts. However, controlling for certain variables associated with the theoretical explanations, I find there is no relation between asset growth and returns. I argue this evidence is consistent with an agency-based explanation of the asset growth effect. Furthermore, a decomposition of the drivers of the effect shows that different components of assets (i.e. working capital and financing) drive asset growth effect at different life cycle stages. From a decomposition analyses, results show that in the youngest firms (cohort 1), asset growth effect is mostly driven by both operating liability and stock financing on one side (financing) and noncash current assets, PPE, and growth in other assets (for working capital) while cohort 3’s drivers appear to be stock issuances, together with noncash current assets, which I conclude offer further support for agency issues. In Essay 2, I examine how firms’ life cycle affect insider trading behavior, profits surrounding trades, price informativeness, and financing constraints. I argue that if firms’ policies and characteristics change over time as shown in lifecycle literature, then from firm characteristics that motivate insider-trading behavior, one should observe some differences across varying life cycle stages measured using age cohorts. I find that insiders are net sellers at all life cycle stages of a firm. Furthermore, insiders tend to trade more in younger firms than in older firms even though they have fewer numbers of insiders trading. Trading characteristics are generally statistically significant across cohorts. Overall, insiders appear to predict the correct direction for positive wealth generation when trading. Specifically, at all lifecycle stages, they appear to sell before negative CARs, and buy during periods associated with negative CARs that lead to positive CARs days after insider transactions. The findings on price informativeness suggest that in general insider purchases enhance price informativeness for firms at different lifecycle stages, however, this finding holds only for cohort 4 (oldest firms) in the case of insider sales. The implication of this finding is that regulation should be more lax towards purchases as compared to sales for firms, except for sales in firms that are older. Lastly, insider trades are linked with positive investment-cash flow sensitivities for both insider purchases and insider sales, which generally increase monotonically across cohorts. This finding is robust to using GMM approach.
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Date Issued: 2018
PURL: http://purl.flvc.org/fau/fd/FA00013057
Subject Headings: Corporations--Growth., Stocks--Rate of return., Insider trading in securities.
Format: Document (PDF)

Title: Two Essays on Media Connections and Corporate Finance Policies.
Creator: Hossain, Md Miran, Javakhadze, David, Florida Atlantic University, College of Business, Department of Finance
Abstract/Description: The study examines the effects of executives’ media connection on corporate policies. Extant literature in finance, economics and journalism provide inconclusive evidence in determining whether media works as watchdog to the financial market or whether media facilitates bias through manipulation of corporate news events. I introduce two competing hypotheses that may explain the research question. Information Efficiency Hypothesis predicts that media connected firms mitigate information...
Show moreThe study examines the effects of executives’ media connection on corporate policies. Extant literature in finance, economics and journalism provide inconclusive evidence in determining whether media works as watchdog to the financial market or whether media facilitates bias through manipulation of corporate news events. I introduce two competing hypotheses that may explain the research question. Information Efficiency Hypothesis predicts that media connected firms mitigate information asymmetry among its investors, enjoy better governance, and are less likely to manipulate information on corporate policy choices. Manipulation Hypothesis, in contrary, suggests that firms may strategically utilize media connections to alter the information flow that may paint a tainted picture of the firm’s prospects, thereby facilitating greater misvaluation and devising of opportunistic corporate finance policies. I test these hypotheses on a set of investment policies (mergers outcomes and innovative efficiency) and financing policies (seasoned equity offerings and share repurchases). In the first essay, I find that media connection increases merger announcement return, reduces takeover premium, increases the likelihood of deal completion, although post-merger long term performance exhibit inconclusive results. Also, media connection reduces innovative efficiency and change in innovative efficiency attributable to media connections is harmful for the firm in the long run. Overall, results are consistent with the manipulation hypothesis to some extent though further investigation is required before disregarding the information efficiency effect. In the second essay, results show that media connection increases the likelihood of an SEO event, reduces the announcement period CAR. However, analysis of post SEO long term operating and stock performance show mixed results. For repurchasing firms, media connection increases announcement returns, increases the likelihood of repurchase and the amount repurchased. Media connection also increases the likelihood that repurchase is preferred over dividends as a mode of payout. Post repurchase long term operating and stock performance, however, provide inconsistent results. In general, results are consistent with the manipulation hypothesis though information efficiency hypothesis could not be ruled out entirely.
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Date Issued: 2018
PURL: http://purl.flvc.org/fau/fd/FA00013070
Subject Headings: Corporations--Finance., Mass media and business., Corporations--Public relations.
Format: Document (PDF)

Title: Two Essays on Mutual Funds Herding and the Information Content of Their Trades.
Creator: Carrete Rodriguez, Angel Francisco, Agapova, Anna, Florida Atlantic University, College of Business, Department of Finance
Abstract/Description: Information asymmetry literature has developed models that explain the relation between uninformed traders and informed traders. In general, these models have shown that first, information asymmetry is a driving force for investor buying and selling behavior. Second, the trades of informed investors reveal some of the information they possess suggesting that the trades of informed investors are informative to market makers. Third, when information about a stock enters the market, the...
Show moreInformation asymmetry literature has developed models that explain the relation between uninformed traders and informed traders. In general, these models have shown that first, information asymmetry is a driving force for investor buying and selling behavior. Second, the trades of informed investors reveal some of the information they possess suggesting that the trades of informed investors are informative to market makers. Third, when information about a stock enters the market, the characteristics of the firm can change, e.g., a better information environment reduces the cost of capital (Admati, 1985; Easley and O‟Hara, 2004; Wang, 1993). In this study, I apply information asymmetry theory to explore the trading behavior of active equity mutual fund managers and their role as facilitators of information. In the first essay, I study the information environment of firms mutual funds choose to add to their holdings and how it changes after the inclusion. I identify all new additions to the mutual fund holdings universe from 2002 to 2015 and compare them to the available universe of firms not yet owned by mutual funds. I find that active equity mutual fund managers behave as informed investors and prefer to buy stocks with more opaque information environments i.e., firms with larger spreads, lower trading volume, smaller firms with more growth opportunities, and firms that tend to use more accruals. Fund managers also show a preference for firms that have less analyst following, those in which analysts are less likely to agree on their EPS estimates, and firms in which analysts are more likely to err in their predictions. In other words, mutual fund managers prefer firms that are more likely to be mispriced. Once the funds include the firms, I document a strong improvement in their information environment. Firms attract more analyst coverage, reduce its use of accruals, produce more guidance, increase their market cap, and show increased turnover. The second essay focuses on the herding behavior of mutual funds. The study is the first to document the herding of mutual fund managers after creation of toehold positions by portfolio managers. I use a hand-collected dataset consisting of all toehold acquisitions reported to the SEC from 1995 to 2015 to document a strong herding reaction of active equity mutual funds after toehold announcements. This herding reaction is several times stronger than other mutual fund herding events reported by previous literature. I also document that the strength of the herding reaction varies depending on the identity of the filer or the characteristics of the firm acquired. The herding reaction is stronger for toehold announcements of firms with a smaller market capitalization, better growth opportunities, and those that are more illiquid. I also find that the herding reaction is weaker after the filings of hedge fund managers. My results support the informational herding cascade hypothesis.
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Date Issued: 2018
PURL: http://purl.flvc.org/fau/fd/FA00013127
Subject Headings: Information asymmetry, Mutual funds, Herding
Format: Document (PDF)

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