scholarly journals Three Essays on Corporate Financial Constraints

2021 ◽  
Author(s):  
◽  
Kwabena Boasiako
Keyword(s):  
Credit Risk ◽  
Financial Markets ◽  
The United States ◽  
Data Breach ◽  
Data Breaches ◽  
The Third ◽  
Financial Deregulation ◽  
Disclosure Laws ◽  
The Impact ◽  
The U.S

<p><b>This thesis is composed of three self-contained empirical essays in corporate finance, with the first two exploring the financial policy and credit risk implications of data breaches, and the third examining whether financing influences the sensitivity of cash and investment to asset tangibility. In the first essay, we contribute to the growing debate on cybersecurity risks and how firms can insulate themselves, at least partially, from the adverse effects of data breach risks. Specifically, we examine the effects of data breach disclosure laws and the subsequent disclosure of data breaches on the cash policies of corporations in the United States (U.S.). Exploiting a series of natural experiments regarding staggered state-level data breach disclosure laws, we find that the passage of mandatory disclosure laws leads to an increase in cash holdings. Our finding suggests that mandatory data breach disclosure laws increase the ex ante risks related to data breaches, hence, firms hold on to more cash as a precautionary motive. Further, we find firms that suffer data breaches adjust their financial policies by holding more cash as well as decreasing external finance and investment.</b></p> <p>The second essay examines the impact of data breaches on firm credit risk. Using firm-level credit ratings and credit default swap (CDS) spreads to proxy for credit risk, we find that data breaches lead to increases in firm credit risk. Firms exposed to data breaches are more likely to experience credit rating downgrades and an increase in the CDS spread of traded bonds. Also, firms who suffer data breaches report lower sales and ROA, experience an increase in financial distress, and conditional on a data breach incident, the likelihood of a future data breach increases. Lastly, these effects are magnified for firms with low-interest coverage ratios.</p> <p>In the third essay, using the financial deregulation of seasoned equity issuance in the U.S. as an exogenous shock to access to equity markets, I investigate the influence of financing on the sensitivity of cash and investment to asset tangibility. I show that financing dampens the sensitivity of cash and investment to asset tangibility and promotes investment and firm growth. This provides evidence that public firms even in well-developed financial markets such as the U.S., benefit from financial deregulation that removes barriers to external equity financing, shedding light on the role of financial markets in fostering growth.</p>

scholarly journals Three Essays on Corporate Financial Constraints

2021 ◽  
Author(s):  
◽  
Kwabena Boasiako
Keyword(s):  
Credit Risk ◽  
Financial Markets ◽  
The United States ◽  
Data Breach ◽  
Data Breaches ◽  
The Third ◽  
Financial Deregulation ◽  
Disclosure Laws ◽  
The Impact ◽  
The U.S

<p><b>This thesis is composed of three self-contained empirical essays in corporate finance, with the first two exploring the financial policy and credit risk implications of data breaches, and the third examining whether financing influences the sensitivity of cash and investment to asset tangibility. In the first essay, we contribute to the growing debate on cybersecurity risks and how firms can insulate themselves, at least partially, from the adverse effects of data breach risks. Specifically, we examine the effects of data breach disclosure laws and the subsequent disclosure of data breaches on the cash policies of corporations in the United States (U.S.). Exploiting a series of natural experiments regarding staggered state-level data breach disclosure laws, we find that the passage of mandatory disclosure laws leads to an increase in cash holdings. Our finding suggests that mandatory data breach disclosure laws increase the ex ante risks related to data breaches, hence, firms hold on to more cash as a precautionary motive. Further, we find firms that suffer data breaches adjust their financial policies by holding more cash as well as decreasing external finance and investment.</b></p> <p>The second essay examines the impact of data breaches on firm credit risk. Using firm-level credit ratings and credit default swap (CDS) spreads to proxy for credit risk, we find that data breaches lead to increases in firm credit risk. Firms exposed to data breaches are more likely to experience credit rating downgrades and an increase in the CDS spread of traded bonds. Also, firms who suffer data breaches report lower sales and ROA, experience an increase in financial distress, and conditional on a data breach incident, the likelihood of a future data breach increases. Lastly, these effects are magnified for firms with low-interest coverage ratios.</p> <p>In the third essay, using the financial deregulation of seasoned equity issuance in the U.S. as an exogenous shock to access to equity markets, I investigate the influence of financing on the sensitivity of cash and investment to asset tangibility. I show that financing dampens the sensitivity of cash and investment to asset tangibility and promotes investment and firm growth. This provides evidence that public firms even in well-developed financial markets such as the U.S., benefit from financial deregulation that removes barriers to external equity financing, shedding light on the role of financial markets in fostering growth.</p>

scholarly journals Miraculous financial engineering or toxic finance? The genesis of the U.S. subprime mortgage loans crisis and its consequences on the global financial markets and real economy.

2012 ◽  
Vol 1 (3) ◽  
pp. 114-125 ◽  
Author(s):  
Ivo Pezzuto
Keyword(s):  
Credit Risk ◽  
Financial Markets ◽  
Interest Rates ◽  
Housing Prices ◽  
The United States ◽  
Central Banks ◽  
Economic Damage ◽  
Mortgage Loans ◽  
Subprime Mortgage ◽  
The U.S

In the fall of 2008, the U.S. subprime mortgage loans defaults have turned into Wall Street’s biggest crisis since the Great Depression. As hundreds of billions in mortgage-related investments went bad, banks became suspicious of one another’s potential undisclosed credit losses and preferred to reduce their exposure in the interbank markets, thus causing interbank interest rates and credit default swaps increases, a liquidity shortage problem and a worsened credit crunch condition to consumers and businesses. Massive cash injections into money markets and interest rates reductions have been assured by central banks in an attempt to shore up banks and to restore confidence within the financial system. Even Governments have promoted bail-out deal agreements, protections from bankruptcies, recapitalizations and bank nationalizations in order to rescue banks from disastrous bankruptcies. The credit crisis originated in the previous years when the Federal Reserve sharply lowered interest rates (Fed Funds at 1%) to limit the economic damage of the stock market decline due to the 2000 dot.com companies’ crisis. Lower interest rates made mortgage payments cheaper, and the demand for homes began to rise, sending prices up. In addition, millions of homeowners took advantage of the rate drop to refinance their existing mortgages. As the industry ramped up, the quality of the mortgages went down due to poor credit origination and credit risk assessment. Delinquency and default rates began to rise in 2006 as interest rates rose (Fed Funds at 5,25%) and poor households across the US struggled to pay off their mortgages. Many of them went bankrupt and lost their homes but the pace of lending did not slow. Banks have transformed much of the high-risk mortgage debt (securitizations) into mortgage-backed securities (MBS) and collateralised debt obligations (CDO), and have sold these assets on the financial markets to investment firms and insurance companies around the world, transferring to these investors the rights to the mortgage payments and the related credit risk. With the collapse of the first banks and hedge funds in 2007 the rising number of foreclosures helped speed the fall of housing prices, and the number of prime mortgages in default began to increase. As many CDO products were held on a “mark to market” basis, the paralysis in the credit markets and the collapse of liquidity in these products let to the dramatic write-downs in 2007. When stock markets in the United States, Europe and Asia continued to plunge, leading central banks took the drastic step of a coordinated cut in interest rates and Governments coordinated actions that included taking equity stakes in major banks. This paper written by the Author (on October 7th, 2008) at the rise of these dramatic events, aims to demonstrate, through solid and fact-based assumptions, that this dramatic global financial crisis could have been addressed and managed earlier and better by many of the stakeholders involved in the subprime mortgage lending process such as, banks’ and investment funds management, rating agencies, banking and financial markets supervisory authorities. It also unfortunately demonstrates the corporate social responsibility failure and the moral hazard of many key players involved in this crisis, since a lot of them probably knew quite well what was happening but have preferred not to do anything or to do little and late in order to change the dramatic course of the events.

scholarly journals THE U.S. QUEST FOR NEW TECHOLOGICAL FOUNDATIONS OF MILITARY SUPERIORITY: DILEMMAS OF THE THIRD OFFSET STRATEGY

2016 ◽  
pp. 30-42
Author(s):  
V. I. Bartenev
Keyword(s):  
United States ◽  
The United States ◽  
World Politics ◽  
Asia Pacific ◽  
The Third ◽  
Technological Gap ◽  
Defense Research ◽  
Recent Initiative ◽  
The Impact ◽  
The U.S

The last decades have witnessed a remarkable surge of interest in studying the influence of science and technology on world politics. However, not all channels of such influence have been examined with equal rigor. Whereas numerous researchers have explored meticulously the impact of technologies on warfare, the issues of using military-technological breakthroughs to achieve political goals have been addressed less frequently. This paper seeks to fill this gaping niche by decomposing the Third Offset Strategy (TOS), a recent initiative of the U.S. Department of Defense (DoD) aimed at ensuring military-technological superiority of the United States in the XXI century, predominantly, by offsetting the new capabilities of the Russian Federation and the Popular Republic of China. The first section unveils a conceptual framing of the TOS, the second section examines a variety of technological priorities, and the final section identifies key uncertainties around implementation of this initiative in the mid-term and long-term perspective. The conclusion postulates that the emergence of the TOS was determined by both an erosion of the U.S. military superiority and budget constraints, and, therefore, its content might change if budget austerity imperatives will stop dominating the DoD strategists' thinking. The launch of the third offset strategy has also important international-political aspects. First, the TOS fits in the context of the U.S. rebalance to the Asia-Pacific. Second, the American allies in Europe might face a threat of a widening technological gap with the United States and a need to boost their spending on defense research and development, which might be unfeasible in the current fiscal environment. Third, the concentration of the United States on countering high-end opponents might lead to a further marginalization of the Middle East. Fourth, the TOS is likely to contain a disinformation component and aim at dragging the peer competitors of the U.S. into an exhaustive arms race.

THE INFLUENCE OF SCOTTISH ACCOUNTANTS IN THE UNITED STATES: THE EARLY CASE OF THE SOCIETY OF ACCOUNTANTS IN EDINBURGH

1997 ◽  
Vol 24 (1) ◽  
pp. 117-141 ◽  
Author(s):  
T. A. LEE
Keyword(s):  
United States ◽  
General Theory ◽  
Research Program ◽  
The United States ◽  
The World ◽  
Early Case ◽  
The Impact ◽  
Chartered Accountants ◽  
The U.S

This study represents part of a long-term research program to investigate the influence of U.K. accountants on the development of professional accountancy in other parts of the world. It examines the impact of a small group of Scottish chartered accountants who emigrated to the U.S. in the late 1800s and early 1900s. Set against a general theory of emigration, the study's main results reveal the significant involvement of this group in the founding and development of U.S. accountancy. The influence is predominantly with respect to public accountancy and its main institutional organizations. Several of the individuals achieved considerable eminence in U.S. public accountancy.

Crystallex Int'l Corp. v. Bolivarian Rep. Venez. (3D Cir.)

2021 ◽  
pp. 1-21
Author(s):  
Kevin D. Benish
Keyword(s):  
United States Supreme Court ◽  
The United States ◽  
United States Supreme ◽  
Decision To Leave ◽  
Court Of Appeals ◽  
The Third ◽  
To Come ◽  
Alter Ego ◽  
Oil Company ◽  
The U.S

On May 18, 2020, the United States Supreme Court denied a request by the Bolivarian Republic of Venezuela and its state-owned oil company, Petróleos de Venezuela, S.A. (PDVSA), to review the merits of Crystallex Int'l Corp. v. Bolivarian Republic of Venezuela, a decision by the U.S. Court of Appeals for the Third Circuit. In Crystallex, the Third Circuit affirmed a trial court's determination that PDVSA is the “alter ego” of Venezuela itself, thus permitting Crystallex to enforce a $1.4 billion judgment against Venezuela by attaching property held in PDVSA's name. Given the Supreme Court's decision to leave the Third Circuit's opinion undisturbed, Crystallex is a significant decision that may affect parties involved in transnational litigation for years to come—especially those pursuing or defending against U.S. enforcement proceedings involving the property of foreign states.

scholarly journals How Representative Are Snowball Samples? Using the Ethnosurvey to Study Guatemala-U.S. Migration

2016 ◽  
Vol 666 (1) ◽  
pp. 64-76
Author(s):  
David P. Lindstrom
Keyword(s):  
Rhode Island ◽  
Composite Index ◽  
The United States ◽  
Mexican Migration ◽  
Background Characteristics ◽  
Household Location ◽  
Sample Weighting ◽  
Migrant Integration ◽  
The Impact ◽  
The U.S

This analysis draws on binational data from an ethnosurvey conducted in Guatemala and in the United States in Providence, Rhode Island, to develop a refinement of the weighting scheme that the Mexican Migration Project (MMP) uses. The alternative weighting procedure distinguishes between temporary and settled migrants by using a question on household location in the Guatemala questionnaire that is not used in the MMP. Demographic characteristics and integration experiences of the most recent U.S. trip are used to assess the composition and representativeness of the U.S. sample. Using a composite index of migrant integration to compare the impact of alternative U.S. sample weights on point estimates, I find that although the U.S. sample is broadly representative across a range of background characteristics, the MMP sample weighting procedure biases estimates of migrant integration downward.

scholarly journals International Trade and Foreign Direct Investment as Innovation Factors of the U.S. Economy

2014 ◽  
Vol 41 (1) ◽  
pp. 60-75
Author(s):  
Tomasz M. Napiórkowski
Keyword(s):  
Foreign Direct Investment ◽  
International Trade ◽  
Direct Investment ◽  
Positive Impact ◽  
The United States ◽  
Annual Data ◽  
Main Portion ◽  
The Impact ◽  
Total Impact ◽  
The U.S

Abstract The aim of this research is to asses the hypothesis that foreign direct investment (FDI) and international trade have had a positive impact on innovation in one of the most significant economies in the world, the United States (U.S.). To do so, the author used annual data from 1995 to 2010 to build a set of econometric models. In each model, 11 in total) the number of patent applications by U.S. residents is regressed on inward FDI stock, exports and imports of the economy as a collective, and in each of the 10 SITC groups separately. Although the topic of FDI is widely covered in the literature, there are still disagreements when it comes to the impact of foreign direct investment on the host economy [McGrattan, 2011]. To partially address this gap, this research approaches the host economy not only as an aggregate, but also as a sum of its components (i.e., SITC groups), which to the knowledge of this author has not yet been done on the innovation-FDI-trade plane, especially for the U.S. Unfortunately, the study suffers from the lack of available data. For example, the number of patents and other used variables is reported in the aggregate and not for each SITC groups (e.g., trade). As a result, our conclusions regarding exports and imports in a specific SITC category (and the total) impact innovation in the U.S. is reported in the aggregate. General notions found in the literature are first shown and discussed. Second, the dynamics of innovation, trade and inward FDI stock in the U.S. are presented. Third, the main portion of the work, i.e. the econometric study, takes place, leading to several policy applications and conclusions.

scholarly journals Retail Deli Slicer Inspection Practices: An EHS-Net Study

2018 ◽  
Vol 81 (5) ◽  
pp. 799-805 ◽  
Author(s):  
LAUREN E. LIPCSEI ◽  
LAURA G. BROWN ◽  
E. RICKAMER HOOVER ◽  
BRENDA V. FAW ◽  
NICOLE HEDEEN ◽  
...  
Keyword(s):  
Food Industry ◽  
The United States ◽  
Cross Contamination ◽  
Prevention Strategies ◽  
Assessment Data ◽  
Worker Training ◽  
The Third ◽  
Control And Prevention ◽  
Retail Food ◽  
The U.S

ABSTRACT The Centers for Disease Control and Prevention (CDC) estimates that 3,000 people die in the United States each year from foodborne illness, and Listeria monocytogenes causes the third highest number of deaths. Risk assessment data indicate that L. monocytogenes contamination of particularly delicatessen meats sliced at retail is a significant contributor to human listeriosis. Mechanical deli slicers are a major source of L. monocytogenes cross-contamination and growth. In an attempt to prevent pathogen cross-contamination and growth, the U.S. Food and Drug Administration (FDA) created guidance to promote good slicer cleaning and inspection practices. The CDC's Environmental Health Specialists Network conducted a study to learn more about retail deli practices concerning these prevention strategies. The present article includes data from this study on the frequency with which retail delis met the FDA recommendation that slicers should be inspected each time they are properly cleaned (defined as disassembling, cleaning, and sanitizing the slicer every 4 h). Data from food worker interviews in 197 randomly selected delis indicate that only 26.9% of workers (n = 53) cleaned and inspected their slicers at this frequency. Chain delis and delis that serve more than 300 customers on their busiest day were more likely to have properly cleaned and inspected slicers. Data also were collected on the frequency with which delis met the FDA Food Code provision that slicers should be undamaged. Data from observations of 685 slicers in 298 delis indicate that only 37.9% of delis (n = 113) had slicers that were undamaged. Chain delis and delis that provide worker training were more likely to have slicers with no damage. To improve slicer practices, food safety programs and the retail food industry may wish to focus on worker training and to focus interventions on independent and smaller delis, given that these delis were less likely to properly inspect their slicers and to have undamaged slicers.

scholarly journals Language and translation practices of Spanish-language newspapers published in the U.S. borderlands between 1808 and 1930

2019 ◽  
Vol 14 (2) ◽  
pp. 218-242 ◽  
Author(s):  
Laura Gasca Jiménez ◽  
Maira E. Álvarez ◽  
Sylvia Fernández
Keyword(s):  
United States ◽  
Language Use ◽  
The United States ◽  
Spanish Language ◽  
Hispanic American ◽  
Language Policies ◽  
The Creation ◽  
The Impact ◽  
The U.S

Abstract This article examines the impact of the anglicizing language policies implemented after the annexation of the U.S. borderlands to the United States on language use by describing the language and translation practices of Spanish-language newspapers published in the U.S. borderlands across different sociohistorical periods from 1808 to 1930. Sixty Hispanic-American newspapers (374 issues) from 1808 to 1980 were selected for analysis. Despite aggressive anglicizing legislation that caused a societal shift of language use from Spanish into English in most borderland states after the annexation, the current study suggests that the newspapers resisted assimilation by adhering to the Spanish language in the creation of original content and in translation.

scholarly journals Patterson v. McLean: A Confirmation of the New Right at the U.S. Supreme Court

2005 ◽  
Vol 30 (4) ◽  
pp. 987-1009
Author(s):  
George M. Sullivan
Keyword(s):  
Civil Rights ◽  
Supreme Court ◽  
Reagan Administration ◽  
Ronald Reagan ◽  
The United States ◽  
National Elections ◽  
Presidential Appointments ◽  
The Supreme Court ◽  
The Impact ◽  
The U.S

In two consecutive national elections a conservative, Ronald Reagan, was elected President of the United States. When Justice Lewis Powell announced his retirement during the late months of the Reagan administration, it was apparent that the President's last appointment could shift the ideology of the Court to conservatism for the first time since the presidency of Dwight Eisenhower. President Reagan's prior appointments, Sandra Day O'Connor and Antonin Scalia, had joined William Rehnquist, an appointee of President Nixon and Bryon White, an appointee of President Kennedy to comprise a vociferous minority of four in many instances, especially cases involving civil rights. The unexpected opportunity for the appointment of a conservative jurist caused great anxiety in the media and in the U.S. Senate, the later having confirmation power over presidential appointments to the Supreme Court. This article examines the consequences of the Senate's confirmation of Justice Anthony Kennedy to the Supreme Court. The impact, which was immediate and dramatic, indicates that conservative ideology will predominate on major civil rights issues for the remainder of this century.

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