Theses and Dissertations from UMD
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New submissions to the thesis/dissertation collections are added automatically as they are received from the Graduate School. Currently, the Graduate School deposits all theses and dissertations from a given semester after the official graduation date. This means that there may be up to a 4 month delay in the appearance of a give thesis/dissertation in DRUM
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Item CREDIT RATING AGENCIES AS GATEKEEPERS FOR NON-GAAP DISCLOSURE IN THE DEBT MARKET(2024) Yan, Lu; Kimbrough, Michael; Business and Management: Accounting & Information Assurance; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)To aid investors in assessing earnings persistence, managers often voluntarily provide non-GAAP disclosure, which excludes certain items they characterize as non-recurring from GAAP earnings. The quality of non-GAAP disclosures and their impact on the equity market have been well studied. By contrast, there is little evidence on the impact of these disclosures in the debt market. Credit rating agencies (CRAs) serve as gatekeepers in the debt market, playing an important role in evaluating creditworthiness by actively incorporating accounting information from corporate disclosure. Like shareholders, CRAs also seek to isolate the transitory component of GAAP earnings. For example, Moody’s (2006) and Standard & Poor’s (2008), the two largest rating agencies, state that they derive their credit ratings from adjusted accounting figures by excluding non-recurring items that do not reflect long-term credit risks. Thus, in this paper, I explore the possibility that managers’ non-GAAP disclosures are relevant to CRAs. Consistent with CRAs’ emphasis on long-horizon corporate performance, I provide evidence that CRAs exhibit stronger responses to non-GAAP earnings than GAAP earnings. Using mediation analysis, I find that bondholders rely on CRAs to incorporate earnings information, and such reliance is notably greater for non-GAAP earnings than GAAP earnings. While CRAs do not specifically emphasize the direction of exclusions (i.e., gains or losses), they are attentive to identifying high-quality non-GAAP disclosure, as evidenced by the more positive associations observed between their credit ratings and high-quality non-GAAP earnings. I further find that non-GAAP earnings outperform GAAP earnings for non-GAAP reporters in their predictive power for long-term bankruptcy and default risks, validating CRAs’ motivations to incorporate non-GAAP earnings when assigning credit ratings. Finally, managers appear to be aware of CRAs’ utilization of their non-GAAP disclosure and are thus inclined to offer high-quality but conservative non-GAAP metrics to either achieve or maintain higher ratings when approaching rating upgrades or downgrades. My findings collectively suggest that CRAs view non-GAAP metrics as more relevant tools when evaluating borrowers’ long-term performance and default risks, serving as key intermediaries between non-GAAP reporters and bondholders.Item DO ECONOMIC SHOCKS MATTER? THE EFFECT OF THE ECONOMY ON PRESIDENTIAL SUPPORT(2018) Cabezas Navarro, Jose Miguel; Calvo, Ernesto; Government and Politics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)For decades researchers argued that individual’s political attitudes, perceptions and evaluations were explained by early political socialization principles or, on the other hand, they react to different stimuli from the environment. Party identification or changes in the state of the national economy turned into the biggest predictors or explanatory independent variables when analyzing individual’s political behavior. Campbell et al (1960) coined the term ``perceptual screen” when describing the effect that party identification had over the individuals. 60 years later, different authors argued in the same fashion. ``Partisans ignore or deflect information that is inconsistent with their party” (Green et al (2002)) or ``Political party is a crucial mediating force” (Lewis-Beck et al 2008). I use mediation analysis to introduce for the first time a systematic measurement of whether this mediation effect exists and how important is it. Bringing together individual’s responses to nationally representative surveys and national macroeconomic performance indicators, I start analyzing the US from 1980 to 2016. I expand the scope of my dissertation findings incorporating 17 Latin American countries from 2006 to 2016 and I finalize analyzing Chile from 1900 to 2017. My dissertation put together a multilevel regressions approach analyzing more than 235,000 cases across different political, economic and cultural institutions. I found that changes and shocks in the economy affect directly how individuals evaluate the state of the economy, not being mediated significantly by party identification. Party identification mediates economic perceptions on what I defined as the ``Responsibility attribution stage”, or when individuals reward or punish the incumbent due to their economic management. Almost 30% of the presidential support is mediated by party identification when attributing responsibility to the incumbent in the US. Only 15% of the attribution is mediated by party identification in Latin America and 9% in the Chilean case. I also found important differences respect to the effect of party identification once one considers if the party is in office or in the opposition. I argue that this is explained by different political institutions but also because individuals evaluate variables different than macroeconomic performances.