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Gender, Connections, and Social Responsibility: Implications for M&A and Compensation
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)
The Real Effects of Shareholder Proposals: Purpose in the Context of Climate Change
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)
Two Essays on Media Connections and Corporate Finance Policies
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)
THREE ESSAYS ON CEO-BOARD SOCIAL CONNECTIONS AND CORPORATE POLICIES: AN INTERNATIONAL PERSPECTIVE
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)
ESSAYS ON MANAGERIAL OPPORTUNISM, PENSION DE-RISKING, AND CORPORATE INVESTMENT POLICIES
Title
ESSAYS ON MANAGERIAL OPPORTUNISM, PENSION DE-RISKING, AND CORPORATE INVESTMENT POLICIES.
Creator
Silverstein, Brian, Pennathur, Anita K., Javakhadze, David, Florida Atlantic University, Department of Finance, College of Business
Abstract/Description
In the first essay, I examine how managerial opportunism affects corporate investment efficiency and, ultimately, firm performance. Prior research establishes corporate investment efficiency as a function of the firm’s information environment and internal governance. To measure managerial opportunism, I use an ex-ante firm level measure of managerial opportunism based on insider trading patterns and test its effects on investment efficiency and performance. Extant research associates...
Show moreIn the first essay, I examine how managerial opportunism affects corporate investment efficiency and, ultimately, firm performance. Prior research establishes corporate investment efficiency as a function of the firm’s information environment and internal governance. To measure managerial opportunism, I use an ex-ante firm level measure of managerial opportunism based on insider trading patterns and test its effects on investment efficiency and performance. Extant research associates opportunistic insider trading with opaque information environments about the firm and weak firm governance, making it an apropos proxy for opportunistic managerial behavior. Despite the clear establishment of opportunistic insider trading as an agency problem in the literature, it remains unanswered how the managerial insider trading decision’s economic irrationality might reflect a broader agency problem that affects firm investment policy and performance. I introduce competing hypotheses that managerial opportunism may positively associate with overinvestment through “empire building” and excessive risk taking at shareholders’ expense. On the contrary, manv agerial opportunism may lead to underinvestment through rent seeking behavior. My results show that managerial opportunism decreases firm investment efficiency and negatively affects accounting and stock performance. Further tests show that both the quality of the information environment and internal governance moderate the effects of managerial opportunism, providing a unique perspective on how insider trading policy and regulation can affect corporate investment policy.
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Date Issued
2021
PURL
http://purl.flvc.org/fau/fd/FA00013681
Subject Headings
Corporations, Pensions
Format
Document (PDF)
TWO ESSAYS ON PEER EFFECTS AND DIVERSITY WITHIN THE BOARDROOM
Title
TWO ESSAYS ON PEER EFFECTS AND DIVERSITY WITHIN THE BOARDROOM.
Creator
Damm, Jason, Javakhadze, David, Florida Atlantic University, Department of Finance, College of Business
Abstract/Description
In this manuscript, I present two essays which examine the role of diversity within the corporate boardroom. The first essay determines that board compensation practices at competing firms influence the remuneration arrangements of directors. Consistent with the observational learning perspective, directors mimic the behavior of peer firms in setting their own compensation, but that diversity, in the form of gender, race/ethnicity, education, and experience moderates this relationship....
Show moreIn this manuscript, I present two essays which examine the role of diversity within the corporate boardroom. The first essay determines that board compensation practices at competing firms influence the remuneration arrangements of directors. Consistent with the observational learning perspective, directors mimic the behavior of peer firms in setting their own compensation, but that diversity, in the form of gender, race/ethnicity, education, and experience moderates this relationship. Diversity also leads to better board performance measured through its impact on excess CEO compensation and CEO turnover sensitivity. In the second essay, I document the presence of peer influence in diversity hires. As firms within an industry hire more women and minority directors, others will do the same. This type of herding behavior has both positive and negative outcomes. Firm stock and operating performance is worse in the years after a peer-driven diversity hire, yet board performance is better. I conclude that peer-driven decisions may be suboptimal, but that diversity can promote better governance in the boardroom.
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Date Issued
2022
PURL
http://purl.flvc.org/fau/fd/FA00013907
Subject Headings
Boards of directors, Executives--Salaries, etc, Diversity
Format
Document (PDF)
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES & DIRECTOR COMPENSATION STRUCTURE
Title
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES & DIRECTOR COMPENSATION STRUCTURE.
Creator
Dubois, Philippe, Javakhadze, David, Florida Atlantic University, Department of Finance, College of Business
Abstract/Description
This study examines the association between corporate social responsibility (CSR) and director compensation arrangements. I develop two competing hypotheses— based on the optimal contracting and rent extraction frameworks—arguing that CSR could shape director reputation or bargaining power, and consequently director pay structure. I further propose that monitoring or advising needs of the company as well as diversity of the board could moderate the proposed association. Finally, I argue that...
Show moreThis study examines the association between corporate social responsibility (CSR) and director compensation arrangements. I develop two competing hypotheses— based on the optimal contracting and rent extraction frameworks—arguing that CSR could shape director reputation or bargaining power, and consequently director pay structure. I further propose that monitoring or advising needs of the company as well as diversity of the board could moderate the proposed association. Finally, I argue that CSR-induced director compensation changes could have implications for firm performance. I document a positive and significant effect of CSR initiatives on director compensation. I also show that the effect is stronger for boards with greater advising but not monitoring needs. Boardroom gender diversity somewhat diminishes the effect of CSR. Finally, CSR-induced director compensation has mixed implications for firm performance. Overall, my results are more consistent with the rent extraction view of director pay arrangements.
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Date Issued
2022
PURL
http://purl.flvc.org/fau/fd/FA00014080
Subject Headings
Corporate social responsibility, Social responsibility of business, Directors of corporations, Compensation
Format
Document (PDF)
ESSAYS ON GOVERNMENT CONTRACTING AND PRIVATE INVESTMENT FIRMS: IMPLICATIONS FOR CORPORATE FINANCE
Title
ESSAYS ON GOVERNMENT CONTRACTING AND PRIVATE INVESTMENT FIRMS: IMPLICATIONS FOR CORPORATE FINANCE.
Creator
Suleymanov, Masim, Cumming, Douglas, Javakhadze, David, Florida Atlantic University, Department of Finance, College of Business
Abstract/Description
The modern organization is “a nexus of contracts” among various stakeholders. In this two-essay study, I examine how contracts surrounding entrepreneurial firms, namely contracts with the U.S. government agencies as customers and contracts with venture capital (VC) firms as investors, interact. In the first essay, I examine whether and how the ex-post government contracting activity of portfolio companies affects the performance of VC investments. Prior research establishes the impact of...
Show moreThe modern organization is “a nexus of contracts” among various stakeholders. In this two-essay study, I examine how contracts surrounding entrepreneurial firms, namely contracts with the U.S. government agencies as customers and contracts with venture capital (VC) firms as investors, interact. In the first essay, I examine whether and how the ex-post government contracting activity of portfolio companies affects the performance of VC investments. Prior research establishes the impact of government customers on the contractor's operating performance and information quality. I find that government contracting improves the likelihood of successful exits via initial public offering (IPO) or acquisition and reduces the likelihood of a liquidation. I also find that the suppliers’ bargaining power relative to the government moderates the relationship between government contracting and VC investment exits. The increased suppliers’ bargaining power mitigates the positive relationship between government contracting and the likelihood of IPOs. The impact of government contracting on the likelihood of acquisitions and liquidations is more substantial for suppliers with greater bargaining power. The results are robust for reputable and non-reputable VC firms, alternative model specifications, and adjustments for potential endogeneity.
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Date Issued
2022
PURL
http://purl.flvc.org/fau/fd/FA00013917
Subject Headings
Public contracts, Venture capital, Corporations—Finance
Format
Document (PDF)