• Login
    View Item 
    •   DSpace@RPI Home
    • Rensselaer Libraries
    • RPI Theses Online (Complete)
    • View Item
    •   DSpace@RPI Home
    • Rensselaer Libraries
    • RPI Theses Online (Complete)
    • View Item
    JavaScript is disabled for your browser. Some features of this site may not work without it.

    Three essays in international corporate finance and banking

    Author
    Kostova, Gergana L.
    View/Open
    173119_Kostova_rpi_0185E_10440.pdf (2.282Mb)
    Other Contributors
    Francis, Bill; Hasan, Iftekhar; Clark, Brian J.; Wu, Qiang;
    Date Issued
    2014-08
    Subject
    Management
    Degree
    PhD;
    Terms of Use
    This electronic version is a licensed copy owned by Rensselaer Polytechnic Institute, Troy, NY. Copyright of original work retained by author.;
    Metadata
    Show full item record
    URI
    https://hdl.handle.net/20.500.13015/1230
    Abstract
    The second chapter explores the importance of home sovereigns to banks. It tests how the market values international diversification of banks in good times and in bad times. Particularly, it looks at the market reaction when a bank's home sovereign debt rating changes and when foreign sovereigns' debt ratings change before and during the European sovereign debt crisis. The analysis shows that international diversification strategies like geographic diversification, income diversification, U.S. cross-listing and lending relationships are beneficial to banks in the most adverse situations in the crisis period. At the same time these strategies sometimes harm banks' stock market returns.; The third chapter assesses the importance of industry peers for a firm's own financial policy decision making strategy. I find that, similar to U.S. firms, foreign firms do follow their peers when they make financial policy decisions. Specifically, a 11(15) percentage point increase in peer firms' average book(market) leverage leads to about 5 percentage points increase in a firm's own leverage. Additionally, I show that firms are more likely to follow their peers when investor protection laws including information disclosure and minority shareholder protection are weak, when creditor rights laws are strong, and when equity markets are more developed, suggesting that peers matter the most when firms have the greatest need to learn and to demonstrate their quality.; The first chapter looks at how corporate investment levels and decision factors change subsequent to a U.S. cross-listing. Foreign firms list their stocks on the U.S. market for various reasons, among which are increased valuation, better access to capital at a lower cost, legal and reputational bonding with investors, improved liquidity, better price informativeness, etc. I focus on a recent theory, which suggests that firms cross-list in the U.S., so that they can obtain more precise information from the market and thus make better investment decisions. I find that after a non-exchange U.S. cross-listing, firms decrease their investment levels significantly. I also show that the sensitivity of investment to stock price changes after a U.S. cross-listing only when a firm's price informativeness is considered. I conclude that cross-listing, voluntary or involuntary, and the level of firm specific information reflected in a firm's stock price are both important factors considered by managers when they make investment decisions.; This dissertation covers three distinct topics in international corporate finance and banking. In each of the three chapters I ask questions, which cannot be answered from a single country's perspective. Each country has distinct legal and institutional characteristics which to some extent determine the decisions of the firms and banks domiciled in it. In the three chapters of my thesis I study the importance of a firm's or a bank's origin by exploring financial decisions in multiple heterogeneous countries.;
    Description
    August 2014; School of Management
    Department
    Lally School of Management;
    Publisher
    Rensselaer Polytechnic Institute, Troy, NY
    Relationships
    Rensselaer Theses and Dissertations Online Collection;
    Access
    Restricted to current Rensselaer faculty, staff and students. Access inquiries may be directed to the Rensselaer Libraries.;
    Collections
    • RPI Theses Online (Complete)

    Browse

    All of DSpace@RPICommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsThis CollectionBy Issue DateAuthorsTitlesSubjects

    My Account

    Login

    DSpace software copyright © 2002-2022  DuraSpace
    Contact Us | Send Feedback
    DSpace Express is a service operated by 
    Atmire NV