Essays in Corporate Finance

This dissertation comprises two essays in financial economics. They study how firms finance and invest in innovative and intangible assets. The first essay examines the impact of technology spillovers on corporate financing decisions for innovative firms. I find that greater technology spillovers lead to higher leverage in innovative firms. Furthermore, in firms with greater technology spillovers, equity is more costly relative to debt. I find that these financing effects are generated by at least three related mechanisms: information asymmetry, asset redeployability, and equity undervaluation. All three mechanisms lead firms to substitute away from equity and toward debt. The results are robust to exploiting variation in RandD tax credits to identify the causal effect of technology spillovers. The second essay is coauthored with Ambrus Kecskés at York University and Sattar Mansi at Virginia Tech. My coauthors and I enter the long-lived debate about whether stakeholder capital investment increases shareholder value. We argue that long-term investors are natural monitors that can ensure that managers choose stakeholder capital investment to maximize shareholder value. We find that long-term investors increase the value to shareholders of stakeholder capital investment, not as a result of higher cash flow but rather of lower cash flow risk. Also following prior work, we use indexing by investors and the staggered adoption of state laws on stakeholder orientation for identification. Our findings suggest that firms can create value for shareholders by investing in stakeholder capital as long as managers are properly monitored by long-term investors.

Name thesis:degree_name

Ph. D.

Level thesis:degree_level

doctoral

Discipline thesis:degree_discipline

Business, Finance

Department dc:contributor.department

Finance, Insurance and Business Law

Grantor dc:publisher

Virginia Tech

Year dc:date.issued

2015

Author dc:creator

• Nguyen, Anh Ha Phuong

Chair dc:contributor.committeechair

• Mansi, Sattar A.

Committee members dc:contributor.committeemember

• Easterwood, John C.
• Xu, Jin
• Derrien, Francois

• Technology spillovers
• Leverage
• Investor horizons
• Stakeholders
• Corporate social responsibility

Statement dc:rights

• In Copyright

Licence dc:rights.uri

• http://rightsstatements.org/vocab/InC/1.0/

Dc Identifier Other

vt_gsexam:6474

OAI identifier oai:identifier

oai:vtechworks.lib.vt.edu:10919/56977