Essays in Financial and Theoretical Economics

In Chapter 1, we analyse a model in which a biased Institutional Investor may offer a share price to acquire voting rights over a corporate motion. The selling and voting decisions of each initial shareholder (with imperfect, private information about the firm’s value of the motion) depend on the private information held, but the selling decision also depends on the Institutional Investor’s price offer. The voting decision of the Institutional Investor depends on the bias and updated beliefs about the motion value (which depend on the quantity of acquired shares). We find that (i) if the magnitude of the bias is large enough, then, relative to the absence of the Institutional Investor, shareholder welfare increases (decreases) if the bias is against (for) the motion and (ii) the Institutional Investor is less willing to exert control as the quality of the private information increases. In Chapter 2, we use the ex-vote date of shareholder meetings to measure the value of corporate shareholder voting rights. We find that the value of voting rights is affected by the quantity and type of shareholder proposed motions and that the interaction between shareholder and management proposed motions negatively affects the value of voting. Our results suggest that the mean value of voting rights is about 1.01% of firm value. The measured drop in the ex-ante expected share price on the ex-vote date is analogous to the drop in share value after a price offer in the modelin Chapter 1. In Chapter 3, we analyse an intertemporal model of network formation. Individuals possess a quality variable whose evolution depends on the number and quality of the individual’s links. We introduce a definition of positive assortative networks and provide conditions for which our model of network formation supports positive assortative networks.

Department dc:contributor.department

Economics

Year dc:date.issued

2023

Author dc:creator

• Chippin, Daniel

Advisor dc:contributor.advisor

• Mondria, Jordi

Handle dc:identifier.uri

http://hdl.handle.net/1807/127922

OAI identifier oai:identifier

oai:utoronto.scholaris.ca:1807/127922