Thesis
Essays on financial constraints : text analysis and social network analysis
- Creator
- Rights statement
- Awarding institution
- University of Strathclyde
- Date of award
- 2024
- Thesis identifier
- T17033
- Person Identifier (Local)
- 201981999
- Qualification Level
- Qualification Name
- Department, School or Faculty
- Abstract
- This thesis delves into the relationship between financial constraints and board characteristics, including board interlocks, board expertise, and CEO overconfidence. Based on assumption that firms disclose information about incapability of raising capital in the financial statement, I adopt an innovative measure of financial constraints using textual analysis of firms’ annual reports, which indeed captures typical characteristics of firms that are conventionally perceived financially constrained. For example, constrained firms pay less dividend, are smaller, showing higher R&D intensity, holding higher cash holding, having higher Tobin’s Q. Chapter 2 focuses on the effect of board interlocks on financial constraints. It is assumed that with more board interlocks, firms tend to have better information environment and thus mitigate information asymmetry, leading to lower financial constraints. Consistent with this assumption, I find that firms with well-connected directors face less risk of financial constraints. Two tests are conducted to mitigate the endogeneity concerns, including instrumental variable approach, and a difference-in-difference test based on propensity score matching process using directors’ death as external shock. Chapter 3 investigates the relationship between board expertise and financial constraints. Although previous literature highlights the merits of board expertise, I find that board experience in the focal industry indeed increases the risk of financial constraints. The proportion and number of independent directors who have industry experience are positively related to financial constraints. The results are robust to fixed effects, inverse causality test, and alternative measures of financial constraints. Chapter 4 deals with the effects of CEO overconfidence on financial constraints. The results indicate that firms run by CEOs having low level of overconfidence faces more risk of financial constraints. However, the effect of high level of overconfidence is insignificant. The results are validated through robustness tests of alternative measure of financial constraints. Additionally, a quasi-experimental test based on propensity score matching also confirms the results.
- Advisor / supervisor
- Tang, Leilei
- Zhang, Hai
- Resource Type
- DOI
- Date Created
- 2023
Las relaciones
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PDF of thesis T17033 | 2024-08-07 | Público | Descargar |