RUcore Resource Object
RUcore Resource Object
PDF-1(404.97 KB)
TitleEssays on the monitoring role of institutional bond ownership and corporate bond liquidity
NameChang, Keh-Chian (author), Kedia, Simi (chair), Wu, Yangru (internal member), Weaver, Daniel (internal member), PENG, LIN (outside member), Rutgers University, Graduate School - Newark,
Degree Date2012-10
Date Created2012
SubjectManagement,
Bondholders,
Business enterprises--Finance,
Liquidity (Economics)
DescriptionEssay I: Institutional Bond Ownership and Financial Misconduct The first essay examines the role of institutional bondholders in reduction of the likelihood of financial misconduct. After controlling for a wide range of firm characteristics, we find firms that have greater institutional bond ownership reduce the likelihood of financial misreporting that eventually leads to class action litigation. In addition, relatively higher ownership by insurance companies decreases the likelihood of financial misconduct. We document consistent results using SEC enforcement actions as our second proxy for financial misrepresentation. The results suggest the potential and undocumented monitoring role of institutional bond investors. Essay II: Firm Visibility and Corporate Bond Liquidity The second essay examines the impact of firm visibility on bond liquidity. Using a range of visibility measures such as firm size, advertising expenses, breadth of stock and bond ownerships, and analyst coverage, we find strong evidence that visibility positively impacts bond liquidity. Our result is robust to alternative measures of liquidity and different estimation methodologies, and holds for bonds in all rating categories. To further prove the direct link between firm visibility and bond liquidity, we examine liquidity changes in bonds upon their issuing firms being added to the S&P 500 index, an exogenous visibility increasing event. We find a significant increase in bond liquidity relative to a control group after the index inclusion.
NotePh. D.
NoteIncludes bibliographical references
NoteIncludes vita
Noteby Keh-Chian Chang
Genretheses
Persistent URLhttp://hdl.rutgers.edu/1782.1/rucore10002600001.ETD.000066537
Languageeng
CollectionGraduate School - Newark Electronic Theses and Dissertations
Organization NameRutgers, The State University of New Jersey
RightsThe author owns the copyright to this work.