Skilled Labor Mobility and Firm Value: Evidence from a Natural Experiment

Skilled workers are important sources of human capital who are often in short supply and costly to replace. In this paper, I assess how skilled labor mobility affects corporate valuation in a policy-relevant setting of foreign skilled workers’ mobility constraints during the U.S. green card application process. Based on a detailed employee-level dataset, I exploit exogenous variations in labor mobility due to Department of State’s imprecise estimates of green card availability, including a mistake that inadvertently allocated green cards to a large group of foreign workers. Using multiple test settings, I find that skilled labor mobility has a negative impact on firm value. This effect is stronger for firms with higher labor adjustment costs. Additionally, the wages of skilled workers increase when immigration policy relaxes mobility constraints. Further analysis suggests that reduction in long-term investment is another potential channel through which labor mobility adversely impacts firm value

The Impact of Initial Public Offerings on the External Growth Strategies of Entrepreneurial Firms

The goal of this paper is to examine the impact of Initial Public Offerings (IPO) on the investment strategies of young entrepreneurial firms. Hypotheses are developed from the finance, strategy and top management team literature. These are then tested using multivariate methods in order to study post-IPO investment behavior of a global sample of young Internet firms

Pre-IPO financial performance and aftermarket survival

Many commentators have portrayed the tech boom of the late 1990s as an era of unprecedented deterioration in the quality of firms undertaking initial public offerings. But as far back as the early 1980s, firms seeking to go public were displaying signs of financial weakness, and the failure rate of issuers was on the rise. An analysis of the likelihood of failure among IPO firms in 1980-2000 suggests that pre-issue profitability is a good predictor of aftermarket survival.Corporate profits ; Corporations - Finance ; Stock market ; Venture capital

Two Essays on the Board\u27s Uncertainty About the Contracting Environment and CEO Compensation Contracts

Essay 1: To delegate or not to delegate to stock markets: The case of boards with related industry expertise Abstract: I examine the extent to which boards with expertise in related product markets, i.e., downstream (customer) or upstream (supplier) industries, delegate their monitoring and advisory functions to stock markets. Directors from related industries (DRIs) are argued to have greater access to information about the input and output product markets of the firm. This, in turn, is predicted to reduce the reliance on stock-based compensation, a costly mechanism, particularly for firms that depend more on information about product markets and whose stock prices are not very informative about product markets. The evidence documented in this paper is largely consistent with these predictions. A number of additional tests suggest that this evidence is not likely to be explained by the potential conflict of interests between the firm’s stockholders and DRIs. Hence, I conclude that boards with related industry expertise delegate to stock markets to an optimally lesser extent due to their informational advantages. Essay 2: Stock-based CEO compensation following conglomerate acquisitions Abstract: I examine how stock-based incentive compensation for the CEO is designed following corporate acquisitions conditional on the economic nature of the acquisition. Large acquisitions represent significant changes in the economic environment of the firm. Furthermore, these changes are more likely to occur with conglomerate acquisitions. Accordingly, implications of the two mainstream theories of incentive compensation, i.e., efficient contracting theory and agency theory, are tested separately for conglomerate acquisitions. The empirical tests generally show that stock-based compensation is employed more intensely after conglomerate acquisitions than otherwise. Overall, the results documented in this paper seem consistent with the notion that greater economic uncertainties that are likely to follow conglomerate acquisitions induce the board to rely more heavily on stock-based incentives, an external monitoring mechanism

How private companies go IPO on the Hong Kong stock market?.

by Lu Shanshan, Yu Xiang.Thesis (M.B.A.)--Chinese University of Hong Kong, 2005.Includes bibliographical references (leaves 45-48).ABSTRACT --- p.iiTABLE OF CONTENTS --- p.iiiLIST OF ILLUSTRATIONS --- p.vLIST OF TABLES --- p.viACKNOWLEDGEMENTS --- p.viiChapter CHAPTER 1: --- INTRODUCTION --- p.1Chapter CHAPTER 2: --- GENERAL DESCRIPTION OF IPO PROCESS --- p.3REASONS FOR LISTING --- p.3SELECTION OF CAPITAL MARKET --- p.7GEM OR MAINBOARD --- p.14H SHARE OR RED CHIP OR ELSE --- p.18BASIC LISTING PROCEDURE --- p.20CONSIDERATIONS OF RESTRUCTURING --- p.24ROLE OF FINANCIAL ADVISORS --- p.26Chapter CHAPTER 3: --- DATA AND METHODOLOGY --- p.27RESEARCH PERIOD AND SOURCE --- p.27MEASURES AND FORMULAS --- p.27Chapter CHAPTER 4: --- UNDERPRICING ANALYSIS --- p.28LITERATURE REVIEW --- p.28MEASURES OF UNDERPRICING --- p.30RESULTS AND DISCUSSIONS --- p.31CONCLUSION --- p.36Chapter CHAPTER 5: --- POST-IPO PERFORMANCE ANALYSIS --- p.37LITERATURE REVIEW --- p.37MEASURES OF POST-IPO PERFORMANCE --- p.39RESULTS AND DISCUSSIONS --- p.40CONSTRAINTS OF RESEARCH --- p.43APPENDIX --- p.44BIBLIOGRAPHY --- p.4

Financing Entrepreneurial Firms in Europe: Facts, Issues, and Research Agenda

During the latter part of the 1990s the introduction of the euro, the dramatic increase in the supply of venture capital in most EU countries, and the creation of several ‘new’ equity markets targeted at innovative firms have dramatically transformed the financing prospects of European entrepreneurial firms. In this study we contribute to a deeper understanding of their actual relevance by (i) gathering new evidence on European venture capital and on Europe’s ‘new’ stock markets, (ii) providing a rigorous econometric analysis of their impact on corporate growth, and (iii) elaborating on our findings to devise a research agenda.venture capital, initial public offerings (IPOs), entrepreneurship, going public, accounting standards

ANALISIS PERBEDAAN SOLVABILITAS, LIKUIDITAS, PROFITABILITAS PERUSAHAAN SEBELUM DAN SESUDAH INITIAL PUBLIC OFFERING (IPO) (Studi Kasus Pada Perusahaan Non Keuangan yang melakukan Initial Public Offering dan terdaftar di Bursa Efek Indonesia Pada Tahun 2015-2016)

ABSTRAK Intan Uswatun Hasanah (1600650), Analisis Perbedaan Solvabilitas, Likuiditas, Profitabilitas Perusahaan Sebelum Dan Sesudah Initial Public Offering (IPO) (Studi Kasus Pada Perusahaan Non Keuangan yang melakukan Initial Public Offering dan terdaftar di Bursa Efek Indonesia Pada Tahun 2015-2016). Di bawah bimbingan Budhi Pamungkas G. SE. M.Si dan Netti Siska Nurhayati, S.E.,MM. Tujuan dari penelitian ini untuk mengetahui bagaimana gambaran kinerja keuangan sebelum dan sesudah melakukan aksi korporasi Initial Public Offering (IPO) pada perusahaan non keuangan yang terdaftar di Bursa Efek Indonesia (BEI) pada tahun 2015-2016 yang dapat dilihat dari solvabilitas diukur dengan Debt to Equity Ratio (DER), likuiditas diukur dengan Current Ratio (CR) dan profitabilitas yang diukur dengan Return On Assets (ROA), serta mengetahui apakah terdapat perbedaan saat sebelum dan sesudah Initial Public Offering (IPO) dengan periode penelitian dua tahun sebelum dan sesudah Initial Public Offering (IPO). Metode penelitian yang digunakan adalah deskriptif dan verifikatif. Data yang digunakan dalam penelitian ini yaitu data sekunder yang bersumber dari laporan keuangan perusahaan. Populasi penelitian berjumlah 21 perusahaan non keuangan yang melakukan aksi korporasi Initial Public Offering (IPO) dan terdaftar di Bursa Efek Indonesia (BEI) tahun 2015 dan 2016. Sampel yang diambil berjumlah 17 perusahan, dengan teknik purposive sampling.Teknis analisis data yang digunakan adalah statistik deskriptif dan uji hipotesis. Uji hipotesis yang digunakan yaitu uji Wilcoxon Signed Rank Test, hasil uji hipotesi dengan menggunakan uji Wilcoxon Signed Rank Test menunjukan bahwa terdapat perbedaan yang signifikan pada kinerja keuangan perusahaan sebelum dan sesudah Initial Public Offering (IPO) pada rasio Debt to Equity Ratio (DER), Current Ratio (CR) dan Return On Assets (ROA). Hal ini dapat dilihat dari hasil uji statistik yang menunjukan bahwa nilai sig lebih kecil dari level of signification. Kata Kunci : Aksi Korporasi, Initial Public Offering (IPO), Debt to Equity Ratio, Current Ratio, Return On Assets. ABSTRACT Intan Uswatun Hasanah (1600650), Analysis of Differences in Solvency, Liquidity, Profitability of Companies Before And After Initial Public Offering (IPO) (Case Study of Non-Financial Companies conducting Initial Public Offering and listed on the Indonesia Stock Exchange in 2015-2016). Under the guidance of Budhi Pamungkas G. SE. M.Si and Netti Siska Nurhayati, S.E., MM. The purpose of this study is to find out the description of financial performance before and after carrying out corporate actions Initial Public Offering (IPO) on non-financial companies listed on the Indonesia Stock Exchange (BEI) in 2015-2016 which can be seen from the solvency measured by Debt to Equity Ratio (DER), liquidity is measured by Current Ratio (CR) and profitability is measured by Return On Assets (ROA), as well as knowing whether there are differences before and after the Initial Public Offering (IPO) with the research period two years before and after the Initial Public Offering (IPO). The research method used is descriptive and verification. The data used in this study are secondary data sourced from the company's financial statements. The population in this study is amounted to 21 which is non-financial companies that carried out Initial Public Offering (IPO) corporate actions and were listed on the Indonesia Stock Exchange (IDX) in 2015 and 2016. Samples taken amounted to 17 companies, with a purposive sampling technique. The data analysis technique used was statistical descriptive and hypothesis testing. The hypothesis test used is the Wilcoxon Signed Rank Test, the results of the hypotheses test using the Wilcoxon Signed Rank Test show that there are significant differences in the company's financial performance before and after the Initial Public Offering (IPO) on the Debt to Equity Ratio (DER) ratio, Current Ratio (CR) and Return On Assets (ROA). This can be seen from the results of statistical tests that show that the sig value is smaller than the level of signification. Keywords: Corporate Action, Initial Public Offering (IPO), Debt to Equity Ratio, Current Ratio, Return On Assets

Managerial Incentives and Takeover Wealth Gains

ABSTRACT MANAGERIAL INCENTIVES AND TAKEOVER WEALTH GAINS By EBRU REIS DECEMBER 5, 2006 Committee Chair: Dr. Jayant R. Kale Major Department: Finance This study examines the relationship between managerial equity incentives and takeover wealth gains both for target and acquirer firms. Although there is some research about the effect of acquirer managers’ incentives on acquirer wealth gains, this paper is one of the first to investigate the effect of target managers’ incentives on the wealth effects of target firms in corporate takeovers. In addition, prior research has focused on the alignment effect of equity incentives in takeovers. However, takeovers provide an opportunity to liquidate personal equity portfolio for managers who hold an undiversified portfolio of their firms’ stock. In this study, I identify two hypotheses that potentially explain the effect of target managers’ incentives on wealth gains. While incentive alignment hypothesis predicts a positive relationship, diversification driven-liquidity hypothesis predicts a negative relationship between target managerial incentives and target wealth gains. I use a sample of 656 successful and 104 failed acquisitions over the period 1994-2003 to test these competing hypotheses. I find that for targets that are less (more) diversified, equity incentives are negatively (positively) related to wealth effects. I also find that the target managerial incentives increase the success probability of a takeover bid and this positive effect is less pronounced for diversified target managers. Based on these results, I conclude that incentive alignment argument is dominated by liquidity argument in less diversified target firms, however, holds in diversified firms. For acquirer managers, I do not find any evidence that supports incentive alignment or diversification arguments

Vertical Firm Boundaries: Supplier-Customer Contracts and Vertical Integration

I empirically examine the choice of a firm’s vertical boundaries—specifically, the decision to use supplier-customer contracts instead of either using markets or vertical integration. I examine the determinants of supplier-customer contracts using data on a customer’s contractual purchase obligations with its suppliers. Contracting propensity is positively related to supplier relationship-specific investments (RSI), the supplier’s relative bargaining power, and vertical integration costs, and negatively related to contracting costs, alternative sources of information about the customer, and the percentage of a customer’s input traded on financial markets. I also find that customer firms which have product market contracts with their suppliers have better relative performance. These performance effects are enhanced by relationship-specific investments and are robust to corrections for endogeneity. Additionally, I examine the choice between vertical integration versus supplier-customer contracts and find that the choice is predicted by the type of RSI. Consistent with theory, RSI measured using tangible (intangible) assets are positively related to integration (contracts). Further, positive (negative) shocks to industry-level intangible investment are related to increases in a firm’s contracting activity and decreases (increases) in the level of vertical integration, while positive (negative) shocks to industry-level tangible investment are related to decreases in contracting activity and increases (decreases) in the level of vertical integration. My results suggest that market frictions play an important role in shaping supplier-customer contracting activity and firm boundaries