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Essays in Corporate Finance

dc.contributor.advisorFaulkender, Michael Wen_US
dc.contributor.authorDuquerroy, Anne Nicoleen_US
dc.date.accessioned2017-01-25T06:35:39Z
dc.date.available2017-01-25T06:35:39Z
dc.date.issued2017en_US
dc.identifierhttps://doi.org/10.13016/M2KZ6V
dc.identifier.urihttp://hdl.handle.net/1903/19063
dc.description.abstractThis dissertation presents two essays in Corporate Finance. In the first essay, I study how political institutions affect corporate investment through the policy uncertainty channel. I examine investment response to changes in the ability of the governing party to implement its political agenda due to checks and balances. I use US gubernatorial elections from 1978 to 2010 and a regression discontinuity design to estimate the causal effects of giving a single party full versus split control over a state government. I find that shifts from a divided to a unified government depress investment and job creation. Investment drops by an average of 3 to 5 percent in the year after the election giving a single party control of the government. The effect is not limited to public firms, is stronger for firms operating in a single state and firms with more irreversible investment. The findings support the hypothesis that moving from divided to unified government translates into policy uncertainty, which in turn affects the investment and employment cycles. The second essay is joint with William Mullins and Christophe Cahn. How to support private lending to SMEs during aggregate contractions is a crucial but still open policy question. This paper exploits an unexpected drop in 2012 in the cost of funding bank loans to some firms but not others in France to uncover how banks adjust their SME lending portfolios in a crisis. The cost reduction causes bank debt to rise and payment defaults with suppliers to fall, providing evidence that funding cost can be an effective policy lever. The effect is driven by firms with only one bank relationship, a numerous but understudied group. The size of the effect varies, with additional credit flowing to firms with stronger observables, to high growth firms, to firms with high demand, and to firms with a deeper banking relationship. Further, a richer relationship appears to substitute for stronger observables in the lending decision. Finally, we provide suggestive evidence that, compared to multi-bank firms, single bank firms are particularly credit constrained in crisis periods.en_US
dc.language.isoenen_US
dc.titleEssays in Corporate Financeen_US
dc.typeDissertationen_US
dc.contributor.publisherDigital Repository at the University of Marylanden_US
dc.contributor.publisherUniversity of Maryland (College Park, Md.)en_US
dc.contributor.departmentBusiness and Management: Financeen_US
dc.subject.pqcontrolledFinanceen_US
dc.subject.pqcontrolledEconomicsen_US
dc.subject.pquncontrolledbank lendingen_US
dc.subject.pquncontrolledcorporate financeen_US
dc.subject.pquncontrolledelectionsen_US
dc.subject.pquncontrolledpolicy uncertaintyen_US
dc.subject.pquncontrolledSMEsen_US
dc.subject.pquncontrolledunconventional monetary policyen_US


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