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Two essays on corporate finance
Descriptive
TitleInfo
Title
Two essays on corporate finance
Name
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(type = family)
Kim
NamePart
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Tae-Nyun
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1976-
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Tae-Nyun Kim
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author
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Palia
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Darius
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Darius Palia
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Advisory Committee
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chair
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Brick
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Ivan E
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Ivan E Brick
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internal member
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Ravid
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Abraham
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Abraham Ravid
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Advisory Committee
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internal member
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John
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Kose
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Kose John
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Advisory Committee
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outside member
Name
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Rutgers University
Role
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degree grantor
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Graduate School - Newark
Role
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school
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Text
Genre
(authority = marcgt)
theses
OriginInfo
DateCreated
(qualifier = exact)
2011
DateOther
(qualifier = exact);
(type = degree)
2011-05
Place
PlaceTerm
(type = code)
xx
Language
LanguageTerm
(authority = ISO639-2b);
(type = code)
eng
Subject
(authority = RUETD)
Topic
Management
Subject
(authority = ETD-LCSH)
Topic
Corporations--Cash position
Subject
(authority = ETD-LCSH)
Topic
Corporations--Finance
Subject
(authority = ETD-LCSH)
Topic
Cash management
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TitleInfo
Title
Rutgers University Electronic Theses and Dissertations
Identifier
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ETD
RelatedItem
(type = host)
TitleInfo
Title
Graduate School - Newark Electronic Theses and Dissertations
Identifier
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rucore10002600001
Note
(type = degree)
Ph.D.
Note
(type = bibliography)
Includes bibliographical references
Note
(type = vita)
Includes vita
Note
(type = statement of responsibility)
by Tae-Nyun Kim
PhysicalDescription
Form
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electronic resource
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application/pdf
InternetMediaType
text/xml
Extent
ix, 111 p. : ill.
Abstract
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The first essay looks at the impact of dynamic financial constraints and corporate cash holdings on investment-cash flow sensitivity. In this essay, I find that a firm increases its investment-cash flow sensitivity when it has higher level of financial constraints than previous period. In addition, I find that financially constrained firms have significantly bigger impact of corporate cash holdings on investment-cash flow
sensitivity than unconstrained firms. Moreover, I show that cash holdings of a firm has a negative relationship with its investment-cash flow sensitivity if the level of its
investment does not exceed internal financing sources, where the level of internal financing is defined as the sum of the previous period’s cash holdings and the current period’s cash flow. Lastly, I find that bank-dependent firms experience higher increase in
investment-cash flow sensitivity than non-bank-dependent firms during the IT bubble burst period in the early 2000s and the subprime mortgage crisis in the late 2000s, which suggests that firms facing financial constraints increase investment-cash flow sensitivity. The second essay investigates the influence of the external shock on the speed of adjustment (SOA) toward several target ratios of firms. To look at the impact of an exogenous shock on SOA, I employ mandatory contributions (MCs) of defined benefit (DB) pension plans as a measure of the external shock, and I find a negative impact of the exogenous shock on the level of leverage and SOA toward target leverage. This result is robust when including firm and year fixed effects, when using GMM or long differencing
estimation to reduce the biases in estimation, and when assuming that mandatory contributions are endogenously determined. The negative impact of MCs on SOA is especially bigger for firms which have volatile historical leverage or stronger governance structure. Though the total liability level of DB pension plans has a negative impact on both the level of leverage and SOA toward target leverage, it becomes statistically
insignificant or trivial in magnitude after including firm fixed effects and year dummies in the model. When examining the impact of MCs on SOA toward other target ratios of firms, I find a negative impact of MCs on SOA toward the target investment level.
sensitivity than unconstrained firms. Moreover, I show that cash holdings of a firm has a negative relationship with its investment-cash flow sensitivity if the level of its
investment does not exceed internal financing sources, where the level of internal financing is defined as the sum of the previous period’s cash holdings and the current period’s cash flow. Lastly, I find that bank-dependent firms experience higher increase in
investment-cash flow sensitivity than non-bank-dependent firms during the IT bubble burst period in the early 2000s and the subprime mortgage crisis in the late 2000s, which suggests that firms facing financial constraints increase investment-cash flow sensitivity. The second essay investigates the influence of the external shock on the speed of adjustment (SOA) toward several target ratios of firms. To look at the impact of an exogenous shock on SOA, I employ mandatory contributions (MCs) of defined benefit (DB) pension plans as a measure of the external shock, and I find a negative impact of the exogenous shock on the level of leverage and SOA toward target leverage. This result is robust when including firm and year fixed effects, when using GMM or long differencing
estimation to reduce the biases in estimation, and when assuming that mandatory contributions are endogenously determined. The negative impact of MCs on SOA is especially bigger for firms which have volatile historical leverage or stronger governance structure. Though the total liability level of DB pension plans has a negative impact on both the level of leverage and SOA toward target leverage, it becomes statistically
insignificant or trivial in magnitude after including firm fixed effects and year dummies in the model. When examining the impact of MCs on SOA toward other target ratios of firms, I find a negative impact of MCs on SOA toward the target investment level.
Identifier
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http://hdl.rutgers.edu/1782.1/rucore10002600001.ETD.000061084
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NjNbRU
Identifier
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doi:10.7282/T3GM86NP
Genre
(authority = ExL-Esploro)
ETD doctoral
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Rights
RightsDeclaration
(ID = rulibRdec0006)
The author owns the copyright to this work.
RightsHolder
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Name
FamilyName
Kim
GivenName
Tae-Nyun
Role
Copyright Holder
RightsEvent
Type
Permission or license
DateTime
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(qualifier = exact);
(point = start)
2011-04-18 12:57:33
AssociatedEntity
Name
Tae-Nyun Kim
Role
Copyright holder
Affiliation
Rutgers University. Graduate School - Newark
AssociatedObject
Type
License
Name
Author Agreement License
Detail
I hereby grant to the Rutgers University Libraries and to my school the non-exclusive right to archive, reproduce and distribute my thesis or dissertation, in whole or in part, and/or my abstract, in whole or in part, in and from an electronic format, subject to the release date subsequently stipulated in this submittal form and approved by my school. I represent and stipulate that the thesis or dissertation and its abstract are my original work, that they do not infringe or violate any rights of others, and that I make these grants as the sole owner of the rights to my thesis or dissertation and its abstract. I represent that I have obtained written permissions, when necessary, from the owner(s) of each third party copyrighted matter to be included in my thesis or dissertation and will supply copies of such upon request by my school. I acknowledge that RU ETD and my school will not distribute my thesis or dissertation or its abstract if, in their reasonable judgment, they believe all such rights have not been secured. I acknowledge that I retain ownership rights to the copyright of my work. I also retain the right to use all or part of this thesis or dissertation in future works, such as articles or books.
Copyright
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Copyright protected
Availability
Status
Open
Reason
Permission or license
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