{"id":{"repo_id":"buffalo","oai_identifier":"oai:ubir.buffalo.edu:10477/86767"},"canonical_url":"https://search.dev.ndltd.org/etd/buffalo/oai:ubir.buffalo.edu:10477/86767","repository":{"repo_id":"buffalo","name":"Buffalo","base_url":"https://ubir.buffalo.edu/oai/request"},"display":{"title":"The Role of Institutional Ownership in Firms' Leverage and Cost of Financing","abstract":"Ph.D.","abstract_html":"Ph.D.","abstract_has_math":false,"creators":["Chiu, Li-Ting"],"institution":"State University of New York at Buffalo","degree_name":null,"degree_level":null,"degree_discipline":null,"degree_department":null,"school":null,"contributors":["Wu, Chunchi","Finance"],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2025,"date_issued":"2025-02-21T21:44:53Z","date_published":"2025-02-21T21:44:53Z","updated_at":"2026-07-27T19:05:37Z","subjects":["finance"],"languages":["eng"],"rights":["Users of works found in University at Buffalo Institutional Repository (UBIR) are responsible for identifying and contacting the copyright owner for permission to reuse. University at Buffalo Libraries do not manage rights for copyright-protected works and cannot assist with permissions.","Copyright retained by author."],"rights_urls":[],"identifier_entries":[]},"links":{"outbound_url":"http://hdl.handle.net/10477/86767","outbound_label":"Handle","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["Wu, Chunchi","Finance"]},{"key":"dc:creator","label":"Author","values":["Chiu, Li-Ting"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date","label":"Dc Date","values":["2025-02-21T21:44:53Z","2020"]},{"key":"dc:publisher","label":"Institution","values":["State University of New York at Buffalo"]},{"key":"dc:type","label":"Dc Type","values":["Text","Dissertation"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["finance"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language","label":"Dc Language","values":["eng"]},{"key":"dc:rights","label":"Dc Rights","values":["Users of works found in University at Buffalo Institutional Repository (UBIR) are responsible for identifying and contacting the copyright owner for permission to reuse. University at Buffalo Libraries do not manage rights for copyright-protected works and cannot assist with permissions.","Copyright retained by author."]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["http://hdl.handle.net/10477/86767"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["Ph.D.","This thesis has three essays, which are empirical studies at the intersection of institutional investors, fixed incomes, and firms' leverage and financing cost. The topic focuses on the incentives and constraints institutional investors face and the impact these investors have on security valuation, asset allocation, and firms' decision-making, such as those pertaining to capital structure or investment decisions. The analysis provides empirical evidence suggesting that institutional investors impact companies' decision making and asset allocation as well as financial market stability by being a source of uncertainty in the supply of capital, reducing agency problems, and generating spillover collateral and counterparty risk. In this dissertation, I describe all of these projects in detail. The first chapter examines how trading behaviors among institutional bond investors affect the cost of debt. Firms with a more significant percentage of long-term investors have lower debt costs. By contrast, high short-term ownership results in the uncertainty of capital supply and high debt cost. These findings are not driven by investors' or bonds' characteristics after using the investors' funding structure as an instrument. The results suggest that short-term investors' capital uncertainty results in fragility problems in the corporate bond market. Conversely, long-term investors play an important role in enhancing corporate governance, thereby lowering the cost of debt. The second chapter studies the role of stockholders and bondholders' renegotiation frictions in influencing firms' financial leverage. The result shows that firms tend to be overleveraged when shareholders have greater strategic advantages, and the problem of over-leverage weakens when institutional bond ownership is more concentrated. The effects of renegotiation frictions are not linear with the leverage ratio. Moreover, these effects are more pronounced when firms are riskier and have weaker governance. Consistent with the prediction of agency theory, renegotiation frictions play a critical role in determining leverage when the risk of managerial fraud is high or shareholder-creditor conflicts are more severe. The third chapter examines the effects of collateral quality, and counterparty risk on repo terms and yield spreads in the secondary MBS market. The paper uses the triparty deal-level repo and time-series aggregate data and finds that collateral and counterparty risks have significant effects on repo spreads and haircuts in the repo market. Importantly, risks in the repo market have a spillover effect on yield spreads of MBS in the cash market. Borrower-lender relationship mitigates the impact during the financial crisis. The Fed's QE policies reduce repo and MBS spreads through counterparty and collateral risk channels by helping attenuate both risks in funding markets.","**To request an accessible version of the file(s) associated with this item, contact library@buffalo.edu. Please include the item's persistent URL [http://hdl.handle.net/. . .] in your request.**"]},{"key":"dc:format","label":"Dc Format","values":["application/pdf"]},{"key":"dc:title","label":"Title","values":["The Role of Institutional Ownership in Firms' Leverage and Cost of Financing"]}]}],"canonical_facts":{"dc:contributor":["Wu, Chunchi","Finance"],"dc:creator":["Chiu, Li-Ting"],"dc:date":["2025-02-21T21:44:53Z","2020"],"dc:description":["Ph.D.","This thesis has three essays, which are empirical studies at the intersection of institutional investors, fixed incomes, and firms' leverage and financing cost. The topic focuses on the incentives and constraints institutional investors face and the impact these investors have on security valuation, asset allocation, and firms' decision-making, such as those pertaining to capital structure or investment decisions. The analysis provides empirical evidence suggesting that institutional investors impact companies' decision making and asset allocation as well as financial market stability by being a source of uncertainty in the supply of capital, reducing agency problems, and generating spillover collateral and counterparty risk. In this dissertation, I describe all of these projects in detail. The first chapter examines how trading behaviors among institutional bond investors affect the cost of debt. Firms with a more significant percentage of long-term investors have lower debt costs. By contrast, high short-term ownership results in the uncertainty of capital supply and high debt cost. These findings are not driven by investors' or bonds' characteristics after using the investors' funding structure as an instrument. The results suggest that short-term investors' capital uncertainty results in fragility problems in the corporate bond market. Conversely, long-term investors play an important role in enhancing corporate governance, thereby lowering the cost of debt. The second chapter studies the role of stockholders and bondholders' renegotiation frictions in influencing firms' financial leverage. The result shows that firms tend to be overleveraged when shareholders have greater strategic advantages, and the problem of over-leverage weakens when institutional bond ownership is more concentrated. The effects of renegotiation frictions are not linear with the leverage ratio. Moreover, these effects are more pronounced when firms are riskier and have weaker governance. Consistent with the prediction of agency theory, renegotiation frictions play a critical role in determining leverage when the risk of managerial fraud is high or shareholder-creditor conflicts are more severe. The third chapter examines the effects of collateral quality, and counterparty risk on repo terms and yield spreads in the secondary MBS market. The paper uses the triparty deal-level repo and time-series aggregate data and finds that collateral and counterparty risks have significant effects on repo spreads and haircuts in the repo market. Importantly, risks in the repo market have a spillover effect on yield spreads of MBS in the cash market. Borrower-lender relationship mitigates the impact during the financial crisis. The Fed's QE policies reduce repo and MBS spreads through counterparty and collateral risk channels by helping attenuate both risks in funding markets.","**To request an accessible version of the file(s) associated with this item, contact library@buffalo.edu. Please include the item's persistent URL [http://hdl.handle.net/. . .] in your request.**"],"dc:format":["application/pdf"],"dc:identifier":["http://hdl.handle.net/10477/86767"],"dc:language":["eng"],"dc:publisher":["State University of New York at Buffalo"],"dc:rights":["Users of works found in University at Buffalo Institutional Repository (UBIR) are responsible for identifying and contacting the copyright owner for permission to reuse. University at Buffalo Libraries do not manage rights for copyright-protected works and cannot assist with permissions.","Copyright retained by author."],"dc:subject":["finance"],"dc:title":["The Role of Institutional Ownership in Firms' Leverage and Cost of Financing"],"dc:type":["Text","Dissertation"]},"updated_at":"2026-07-27T19:05:37Z"}