Essays in financial economics/

[摘要] This thesis examines three questions in Corporate Finance. The first chapter investigates the effect of institutional ownership on the governance dynamics and behavior of firms. I exploit the exogenous change in equity index membership generated by the reconstitution of the Russell indices. Following reconstitution, I show that firms just included in the Russell 1000 index have higher institutional ownership (IO) concentration than those just excluded - both a change in indexers and a change in active 10, suggesting a complementarity between these types of investors. Firms just included in the Russell 1000 increase the performance sensitivity of their CEO;;s pay, have a higher likelihood of CEO turnover, and have lower capital expenditures. Overall, these results suggest a significant impact of institutional preferences on corporate behavior. Chapter 2, joint with Antoinette Schoar, shows that CEOs;; management styles and philosophy vary with the control rights of the founder and/or owning family, using a survey of over 800 CEOs in 22 emerging economies. CEOs of firms with greater family involvement have more hierarchical management, feel more accountable to stakeholders than they do to shareholders and see their role as maintaining the status quo rather than bringing change. In contrast, professional CEOs of non-family firms display a more textbook approach of shareholder-value-maximization. Between these types we find a continuum of leadership styles and philosophies that vary with how intensively family members are involved in management. Chapter 3 examines whether and how companies benefit from campaign contributions. To obtain exogenous variation in such political connections, I use U.S. congressional elections that were decided by less than 1% of votes in a RDD. Such close elections are akin to randomized assignment: Prior to the election, companies;; political connections have similar expected values. My estimates suggest that companies connected to the winning candidate experience both a significant increase in long-term firm value and a positive short-term stock market reaction around the election date. I further document evidence supporting four channels through which political connections may enhance firm value: 1) allocation of procurement contracts, 2) reduced legislative and regulatory risks, 3) improved bank financing, and 4) improved access to lobbying.

[发布机构] Massachusetts Institute of Technology