Business

Publication Search Results

Now showing 1 - 10 of 84
  • (2020) Chen, Jie
    Thesis
    This thesis consists of three chapters. It studies, as a broad theme, the effectiveness of several institutional changes on individual decision-making based on experimental evidence. Chapter 1 is self-contained, with results purely based on a laboratory experiment. Chapter 2 and Chapter 3 are based on one field experiment in education. Chapter 2 describes the experimental settings and presents the overall results of the experiment, whereas Chapter 3 extends the analysis and focuses on treatment effects on women and men respectively. Chapter 1 shows how reward or punishment opportunities change contributions in a public goods game with 'privileged' members, where 'privilege' indicates that one's per-unit contribution to the public good produces a higher monetary return than is the case for others in the group. The main finding is that reward opportunities strongly increase group contributions in such groups while punishment opportunities do not. Reward also mitigates contribution decay over successive periods and improves social welfare. Chapter 2 mainly studies how rank incentives (i.e., relative performance information) in a milestone-based online assignment system affect students' academic performance. I find that rank incentives increase the likelihood of a student putting more effort in the online assignment. Rank incentives also have positive effects on low-performing students' exam marks while they have negative effects on high-performing students' exam marks. The positive effects seem driven by increased self-perceived stress, increased effort, and decreased procrastination. The negative effects seem driven by increased self-perceived happiness and re-allocation of effort. Chapter 3 studies how rank incentives and milestone information (i.e., information with reference to achievement milestones corresponding to different amounts of points earned) affect men's and women's academic performance differently. Women with access to the rank incentives experience a 0.19 SDs mark decrease in the first midterm, compared to women without this access. In the absence of relative performance information, men with access to the milestone information experience a 0.26 SDs mark increase in the final exam, compared to men without the access. The negative effects on women seem driven by their increased stress level, whereas men's improved exam performance seem driven by increased effort.

  • (2020) Yao, Yufeng
    Thesis
    I investigate the role of foreign patents (patents issued in countries outside of the US) in US firms’ patent portfolios. Foreign patents are substantial and prevalent for US firms. Foreign patents form about 39% of the average patent portfolio of US firms. Firms with foreign patent applications are financially stable, and these firms have a higher percentage of foreign sales to total sales. Besides, I exploit exogenous shocks to foreign sales (free trade agreements and bilateral investment treaties) to identify the effect of foreign sales on the propensity to foreign patent. I find firms with a larger percentage of foreign sales have a higher propensity to foreign patent. Additional analysis reveals US firms have a higher propensity to patent in countries with strong patent rights.

  • (2020) Chen, Zhuo
    Thesis
    This thesis is composed of three stand-alone research studies relating to the recent unconventional monetary policy adopted by the Bank of Japan (BOJ). The first study investigates the impact of the BOJ’s policy on stock prices and corporate activities. The empirical results show that the policy has generated heterogenous effects on stock prices. Firms with disproportionately higher BOJ investment experience significantly positive stock returns both in the short term and the long term. Corresponding to the positive price impact, the cost of equity capital reduces and firm value increases. However, further tests fail to find evidence of any real impact. Firms that benefit from a reduction in cost of equity capital do not increase external financing, corporate investment and employment. The concentrated capital structure in Japan and the biased investment scheme adopted may explain this weak policy impact. The second study examines whether and how excess reduction in free float affects stock liquidity. Using the BOJ’s equity purchase program as a natural experiment to tackle endogeneity problems, the results show that firms that experience a larger reduction in free float exhibit a reduction in stock liquidity. The negative effect of free float reduction on stock liquidity survives a battery of robustness tests. Further analyses of the underlying channels show that the number of common shareholders and institutional shareholders in a firm significantly decrease. These findings are consistent with a lack of free floating shares introducing frictions in the process of liquidity provision. The third study examines whether an increase in exchange traded funds (ETF) ownership via indexed investment impedes or improves price efficiency. Utilizing Japan’s ETF purchase program as the identification strategy, empirical tests show that prices of stocks that experience an increase in ETF ownership become less efficient in that they deviate more from a random walk and exhibit longer delays in responding to market information. An increase in ETF ownership is also associated with an increase in post-earnings announcement drift, a decline in analyst coverage, and a reduction in the coefficient of current returns to future earnings. These results together suggest that an excessive increase in ETF ownership curbs information arbitrage activities and results in less informative security prices.

  • (2020) Zhang, Xueting
    Thesis
    This thesis consists of three stand-alone research projects on corporate ownership structure across countries, insider trading, and passive institutional investors. The first study examines the effect of social trust on corporate ownership structure. Using a large sample of public firms across 42 countries, I find that a culture of trust in a country leads to a more dispersed corporate ownership structure. I also investigate how trust affects the evolution of ownership structure following firms’ IPO and the channels through which trust leads to dispersed ownership. I show that corporate ownership is more likely to become widely held and diffuses at a faster speed in countries with a higher level of social trust. Trust also encourages the selling of block ownership by large shareholders and the use of equity financing by firms. The second study investigates whether fast economic integration but slow legal integration leads to more aggressive insider trading by foreigners in possession of material non-public information about domestic firms. Using a large sample of mergers and acquisitions (M&As) around the world, I find systematically a higher likelihood of insider trading in target firm securities before the announcements of cross-border deals compared to domestic deals. The difference is mainly driven by cross-border deals where the acquirer is from a country with high corruption and low social norms, and where the target is in a country with stricter enforcement of insider trading laws. The third study examines the role of family interest in explaining and influencing individual funds’ voting behaviour. Specifically, I focus on the voting patterns of index funds in the event of corporate M&As. I find that the interest of fund families in the target is significantly positively associated with the likelihood of an affiliated index fund voting for a deal in the bidder merger approval meeting. However, an index fund’s own interest in the target does not explain its voting pattern. A higher level of aggregate bidder ownership held by fund families that have greater active interest in the target is also associated with worse deal performance. Taken together, the evidence suggests that cooperation between active and index funds within fund families potentially weakens the resistance of bidder shareholders to bad mergers.

  • (2021) Ho, Tin Long
    Thesis
    Housing wealth is typically the largest component of retirees’ portfolios. Although economic theory predicts that retirees would benefit from using housing wealth as a source of retirement funding, the take-up of enabling products and approaches is low. This thesis addresses three key areas in the utilization of housing wealth in retirement: (i) identification of the preferred home equity release approach for different types of households; (ii) exploration of means to address behavioral impediments to the utilization of housing wealth through equity release products; (iii) investigation of potential demand for long-term care insurance (LTCI) financed through home equity release. Chapter 3 investigates the preferred home equity release approach for retirement, given available options (i.e., downsizing, reverse mortgages, the government-offered Pension Loans Scheme, and home reversion–type schemes) and reflects the current tax, superannuation, and age pension rules in Australia. We use state-of-the-art economic and actuarial modeling to identify the preferred approach for the use of housing wealth by Australian retirees with different marital status, wealth portfolios, and preferences. Chapter 4 uses an online experimental survey administered to a representative sample of Australian (pre-)retiree homeowners to explore whether information framing to address mental accounting and narrow choice bracketing can enhance the demand for reverse mortgages. The information framing to address mental accounting significantly increases the stated demand for reverse mortgages. Chapter 5 presents the results of an online experimental survey administered to a representative sample of Chinese (pre-)retiree homeowners to investigate the demand for LTCI financed through home equity release. We find that access to home equity release products significantly increases the stated demand for LTCI and that the preferred approach is to use a reverse mortgage. Overall, the findings in this thesis confirm that retirees would benefit from using housing wealth to finance retirement. The results also identify approaches to reduce the gap between theoretical and actual demand for home equity release products. The findings provide evidence that government and private providers can use to address barriers to increasing interest in and take-up of home equity release products and to develop new products to enhance the utilization of housing wealth in retirement.

  • (2021) Hastings, Bradley
    Thesis
    Decades of research on organizational change and its leadership has explored the influence of leaders on change outcomes. Yet, despite this accumulated effort, the likelihood of success remains stubbornly low. This dissertation explores: how do leaders improve the likelihood of change success? Prior scholarship has examined this question from two perspectives. Change practice discussion describes change processes, the activities that enable change, with allied suggestions for leader engagement – how to lead change processes. Change leadership discussion studies leader attributes, aiming to identify and generalize those allied with success and, in doing so, provide guidance for leadership development. Addressing the leader-success challenge, scholars have identified two problems: (1) these two discussions lack integration – while it is difficult to talk about change leadership without inherently referring to a change process, the former discussion overlooks the available choices between change processes, and (2) the study of attributes has yielded desired leader behaviors, yet evidence shows that these behaviors do not always manifest in practice. Addressing the first challenge, I commence with a process study of 79 cases of change. This research finds that a dynamic choice between two perspectives of change processes – illustrated as diagnostic and dialogic – significantly improves the likelihood of change success. It also extends an understanding of a leadership practice that facilitates this choice. Integrating these findings, I develop a model that explains how choice connects change leadership to change process knowledge, at the same time as providing a roadmap for leaders to navigate between diagnostic and dialogic processes in practice. Addressing the second challenge, psychologists explain a key limitation of behavioral study is that a large component of people’s behavior is a product of situational cues. To explain this phenomenon, these scholars have explored mindsets, describing how behavioral dispositions result from mental frameworks that stand ‘ready to fire’ based on situational cues. My second study establishes psychology-derived mindsets as relevant for leadership engagement of change processes. It does so by developing a typology of mindset constructs, then conducting an integrative review of mindset knowledge between change leadership and psychology settings. This study matches the fixed and growth mindsets with leadership engagement of diagnostic and dialogic change processes. My third study empirically examines how the fixed and growth mindsets manifest within leaders when change is targeted. It finds that leaders with a growth mindset are likely to choose to oscillate between change processes and achieve change success. Further, I identify that diagnostic change processes can provide situational cues that foster a fixed mindset within leaders, with detrimental effects on outcomes. Integrating these findings from all three studies, this dissertation puts forward a new means for leadership development – mindset activation theory – explaining a means for leaders to take control of their situation-mindset interaction and guide their behaviors in practice. It demonstrates how leaders can increase awareness of and operationalize the situational cues that guide their mindset, facilitating choices between change processes that improve their likelihood of change success.

  • (2020) Weng, Xiaochuan
    Thesis
    The Mandatory Bid Rule (MBR) requires a bidder who acquires control over a firm to make a general offer to all remaining shareholders to purchase their residual shares. It is the most powerful institution that requires controlling shareholders to share the control premium with other shareholders in a control transaction. The MBR is considered to be a key method of protection for minority shareholders, but nevertheless faces strong criticism over high implementation costs and an on-going debate over its effectiveness in practice. From a utilitarianism perspective, the paper shows the relevance between the MBR and the effectiveness of minority shareholder protection mechanisms in a jurisdiction of legal transplantation. Using Mainland China as the test sample where the MBR was adopted, removed then re-introduced, the paper employs the empirical research methodology to highlight market reactions when the rule is removed. The paper analyses the efficiency of the MBR and outlines the types of environments and jurisdictional specifications where the MBR can operate at an optimal level, and alternatively, where the MBR will not be value-maximizing. It offers ideal legislation suggestions for similar jurisdictions considering transplanting MBR.

  • (2021) Hickey, Nicole-Anne
    Thesis
    For decades scholars have detailed the benefits of having embedded workers in the workplace. Increasing embeddedness reduces the costs workplaces incur from workers’ withdrawal behaviours. In comparison, less is known regarding the costs of high embeddedness. Drawing on conservation of resource theory, this thesis examines the negative effects of embeddedness in conjunction with work role overload on burnout and withdrawal. It further considers the impact of workers’ physical and psychological maintenance of barriers between work and life (i.e., work-life boundary control flexstyles) on the aforementioned effects. The results of two waves of survey data from 243 aged care workers, analysed using a moderated mediation framework, showed work role overload and flexstyle moderate the mediated relationship between job embeddedness, burnout, and withdrawal behaviours (lateness, absenteeism, and turnover). These results underscore the importance of workers’ experience of work overload and their work-life control flexstyles when considering the impact of embeddedness on retaining, expanding, and sustaining the aged care workforce. These findings have important implications for employees, managers, and organisations in the aged care industry.

  • (2021) Wan, Cheng
    Thesis
    This thesis studies several important issues for ageing populations in developing countries facing basic public provisions of health services and pensions and high levels of air pollution. In particular, I investigate the demand for longevity, critical illness insurance (CII), and long-term care insurance (LTCI) in developing countries from both theoretical and empirical perspectives. I also study how PM2.5 (particles less than 2.5 micrometres in diameter) affects multimorbidity, cognition, and disability in activities of daily living (ADL) that are important health indicators for the old. The results provide insights into the design and risk management of retirement insurance products and government policies. First, we conduct an online experimental survey to elicit and analyse preferences for retirement portfolio including longevity, CII, and LTCI products after the COVID-19 pandemic outbreak in urban China. We observe a high variation of insurance demand by individual factors and COVID-19 experience, and their effects can be opposite by health-contingent insurance and life annuity. On average, the most preferred retirement portfolio contains health-contingent insurance that covers half of the expected out-of-pocket (OOP) costs for critical illness and long-term care expenditures, a monthly annuity of 20% of the disposable income. The portfolio that covers half of the OOP cost for long-term care, critical illness, or both, is most effective in increasing annuitisation. Next, we derive the optimal portfolio for retirees in China facing uncertain lifespan, catastrophic medical expenditures, and long-term care costs. An optimal portfolio highly depends on a retiree’s economic background. For a retiree with an average pension, we find that at least 30% of retirement wealth is allocated to CII, while at least 40% is allocated to a life annuity for those with a low pension. The demand for LTCI is less than 15% of retirement savings. State-dependent utility and bundled insurance products can both increase annuity demand for some retirees. Finally, we investigate the long-term impact of exposure to PM2.5 on multimorbidity, cognition, and ADL disability for the middle- and old-aged adults in China. We find different non-linear associations between PM2.5 exposure and the three health outcomes, and we also observe different impacts of past and current exposure to PM2.5 on them. We interpret the risk of PM2.5 exposure by comparing it to the effects of ageing.

  • (2022) Feng, Yang
    Thesis
    The stochastic optimal decision-making problem concerns the process of dynamically deciding actions to optimize pre-specified criteria based on specific stochastic models. It is, however, common that a decision-maker is unable to obtain complete information to formulate fully reliable models and faces the issue of model uncertainty. Existing empirical studies have shown that ignoring model uncertainty leads to improper decisions and causes losses in the financial market. Thus, it is important to incorporate model uncertainty into decision-making. To our best knowledge, no existing works on dividend optimization have taken model uncertainty into consideration. This thesis is an early attempt to fill such a gap in the actuarial literature. This thesis studies three popular optimization problems in the framework of model uncertainty, which involve different models with multiple control variables and various assumptions. It consists of three projects. The first project investigates an optimal risk exposure-dividend control problem under a diffusion model with model uncertainty. Due to the concerns about model uncertainty, the ambiguity averse insurer aims at finding the robust strategies such that a penalized reward function is maximized in the worst-case scenario. The problem is formulated as a zero-sum stochastic differential game between the insurer and the market. Explicit expressions for the value functions are obtained and the optimal dividend strategies are identified as barrier strategies. The second project incorporates model uncertainty into a dividend optimization problem of a singular type under the classical risk model with general assumptions on the claim size distribution. Using the standard stochastic control techniques, we characterize the value function as the smallest viscosity supersolution to the existing Hamilton-Jacobi-Bellman equation and show that the optimal strategies are of band type. The third project extends the second project by incorporating fixed and proportional transaction costs on dividend payments. The problem is an impulse control problem and the optimal dividend strategies are shown to be n-level lump sum strategies. Numerical studies are provided for each project and the economic implications of model uncertainty on insurer’s decision-making are discussed. It is shown that the insurer who is more averse to ambiguity tends to be more conservative in the optimal strategies.