Two essays on corporate finance

This thesis consists of two essays. Both essays study corporate decisionmaking but through two different perspectives. The first one investigates the impact of option trading on firms’ debt structure, from the aspect that trading in financial markets is more than simply a sideshow with no real economic consequences. The second one, from the spillover effect of say-on-pay regulation, studies a firm’s motive to adjust its compensation benchmarking group using external investments.In the first essay, we find that firms with traded options and, in particular, firms with more actively traded options rely less on bank financing and are more likely to shift towards public debt issuance. Our results support the argument that options trading activity can affect firm debt structure decisions by stimulating informed trading that improves the informational environment in which firms raise debt capital. We also show the shift from bank financing reflects reduced demand for the special role that banks play in ex-ante information collection and ex-post monitoring for firms with greater information asymmetry. Instrumental variable tests support a causal interpretation of our findings.The second essay examines the spillover effect of say-on-pay voting on firms’ investment policy. When the shareholders of a focal firm’s compensation peers vote against their executive compensation (i.e., weak-vote peers), the focal firm has the incentive to change their compensation benchmark groups via mergers and acquisitions. After acquisitions, the focal firm can justify its executive pay through benchmarking with a new group of larger peers. Using the regression discontinuity design approach, we find that the presence of weak-vote peers increases the likelihood of M&As in the focal firm, suggesting an important spillover effect transmitted through the compensation peer group. We further find that the focal firm tends to add larger and higher-pay peers and drop smaller, lower-pay, and weak-vote peers after M&As. Finally, the opportunistic behavior documented above is less pronounced in well-monitored firms and in the firms whose CEOs have more outside options.本論文由兩篇文章構成。這兩篇文章分別從兩個不同的方面研究公司的經營決策。第一篇文章從衍生品市場交易的角度出發，研究期權交易對公司債務結構的影響，第二個從薪酬法案的溢出效應出發，研究公司使用外部投資調整薪酬基準組的動機。在第一篇文章中，我們發現具有期權交易的公司，尤其是擁有較活躍期權交易的公司，對銀行融資的依賴較少，並且更有可能轉向發行公共債券。我們的結果支持這樣的論點，即期權交易活動可以改善公司籌集債務的信息環境，從而影響公司債務結構。我們還發現，公司對銀行融資的依賴減少反映出具有信息不對稱的公司在對銀行在事前債務發行前的信息收集和債務發行後的監控的需求減少。工具變量的計量方法幫助我們解決內生性問題，支持我們的發現。第二篇文章探討了薪酬建議權投票對公司投資政策的溢出效應。當一家中心公司的薪酬基準組公司的股東投票反對其高管薪酬（這家薪酬基準組公司被稱為弱票薪酬基準組公司）時，這家中心公司就有動力通過合併和收購來改變其薪酬基準組。通過收購，中心公司可以與一組較大的新基準組公司進行比較來證明其高管薪酬的合理性，避免降低高管薪酬。我們使用斷點回歸，發現弱票薪酬基準組公司的存在增加了中心公司參與並購的可能性，這表明薪酬基準組公司的群體溢出效應。我們還發現，在並購之後，中心公司傾向於添加規模更大、薪酬更高的公司為其新的薪酬基準組，而剔除規模較小、薪酬較低的原薪酬基準組公司，或者弱票薪酬基準組公司。Xu, Jie.Ph.D. Chinese University of Hong Kong 2021.Includes bibliographical references (leaves ).Abstracts also in Chinese.Title from PDF title page (viewed on …)