Three Essays on Corporate Finance, Household Finance, and Climate Change

Doctoral Candidate Name: 
Chen Shen
Business Administration: Finance

Police departments located in states allowing payday lending report 14.34% more property crimes than the police departments located in states not allowing payday lending. I also find that the police departments located in counties bordering with states allowing payday lending report more property crimes. Those results are driven by the financial pressure induced by payday loans. Furthermore, the impact of payday lending concentrates in areas with a higher proportion of the minority population.

Using a large sample over the period 1986 to 2017, we show that companies with higher exposure to climate change risk induced by sea-level rise (SLR) tend to acquire firms that are unlikely to be directly affected by SLR. We find that acquirers with higher SLR exposure experience significantly higher announcement-period abnormal stock returns. Post-merger, analyst forecasts become more accurate and environmental-related as well as overall ESG scores improve.

In this paper, we examine the impact of shareholder-creditor conflict on firm hedging behavior. We use mergers between corporate shareholders and creditors as exogenous shocks and find a positive causal relationship between reduced shareholder-creditor conflicts and corporate hedging behavior. Specifically, we find that treated firms that experience shareholder and creditor consolidation are not only more likely to hedge using financial instruments, but also hedge more in terms of the notional value of the hedge contract. In a cross-sectional test, we find that the results are stronger for firms in financial distress.

Defense Date and Time: 
Thursday, May 12, 2022 - 11:00am
Defense Location: 
Committee Chair's Name: 
Yongqiang Chu, Tao-Hsien Dolly King
Committee Members: 
Yongqiang Chu, Tao-Hsien Dolly King, David Mauer, Victor Zitian Chen