Pénzgazdálkodási szokások hatása a működőtőkére (The effect of financial management habits on operating capital. The example of the Hungarian Post Office)

A hálózatos iparágakban, ahogy a postai szolgáltatásoknál is, a forgalomban lévő készpénz nagyméretű működőtőkét jelenthet. A Magyar Posta a levél- és csomagkézbesítésen kívül jelentős készpénzforgalmat bonyolít le: nyugdíjakat, segélyeket és készpénz-átutalási megbízásokat továbbít. A forgalom napi ingadozása a vállalat likvideszköz-igényét jelentősen meghatározza. A posta esetében a postahivatalok készpénzgazdálkodása jól működő hüvelykujjszabályokon keresztül történik, ezek a szabályok döntési teret hagynak a hálózat heterogén egyedi szereplőinek. Az egyedi készletezési viselkedést a vállalati működőtőke meghatározásakor figyelembe kell venni. A tanulmány az egyedi készletezési szokások modellezésére új módszertant ajánl, majd a viselkedésmintákat csoportosítva a pénzkészletezésnek, a vállalati működőtőke szintjének és a vállalati likviditási pozíciónak a kapcsolatát elemzi. / === / The cash in circulation within network industries such as post-office services can repre-sent a sizeable quantity of operating capital. The Hungarian Post Office, besides han-dling mail, handles a significant amount of cash turnover, forwarding pensions, welfare benefits, and cash orders. Fluctuation in the daily volume of these is a strong factor in determining the company's liquidity requirements. The management of cash in post of-fices is governed by rules of thumb that operate well; the regulations leave decision-making scope for the diverse individual actors in the network. Attention has to be paid to individual cash holding when determining the corporate operating capital. The study suggests a new methodology for modelling the individual cash-holding habits, and goes on to group the behaviour patterns by analysing the connection between cash holding, level of corporate operating capital, and corporate liquidity position.

A korlátolt felelősségű társaság tagjait megillető individuális és kisebbségi jogok szabályozása és joggyakorlata = Minority and individual rights in Ltd.

A tanulmány a magyar kis- és középvállalkozások társasági formájában a Kft-ben elemzi az individuális és csoportos jogokat. Az optimális társasági jogi szabályozásban két egymással ellentétes elvnek egyszerre kell érvényesülni. Érvényesülni kell annak az elvnek, amely szerint a nagyobb tőkével rendelkező nagyobb kockázatot vállalók nagyobb befolyással rendelkeznek a társaság ügyeiben, de érvényesülni kell annak az elvnek is, hogy a kisebb tőkével rendelkező társasági tagok nem kerülhetnek kiszolgáltatott helyzetbe. A kisebb tulajdonosok megfelelő védelme elősegíti a társaságok tőkevonzó képességét. A tanulmány földolgozza az individuális és kisebbségi jogok bírósági gyakorlatát. ----- The paper examines individual and group rights in small and medium-sized enterprises (Ltds). In case of an optimal business law regulation two contradictory principles should be considered in the same time. The first principle states that members who take more risk by investing more capital should have more influence over the company’s affairs. However, according to the second principle, minority shareholders can not suffer unfair prejudice. Proper protection of minority shareholders may facilitate the company’s capital-attractive ability. The paper reviews court practice routines on individual and minority rights.

Social Capital and International Migration from Latin America

We combine data from the Latin American Migration Project and the Mexican Migration Project to estimate models predicting the likelihood of taking of first and later trips to the United States from five nations: Mexico, the Dominican Republic, Costa Rica, Nicaragua, and Peru. The models test specific hypotheses about the effects of social capital on international migration and how these effects vary with respect to contextual factors. Our findings confirm the ubiquity of migrant networks and the universality of social capital effects throughout Latin America. They also reveal how the sizes of these effects are not uniform across settings. Social capital operates more powerfully on first as opposed to later trips and interacts with the cost of migration. In addition, effects are somewhat different when considering individual social capital (measuring strong ties) and community social capital (measuring weak ties). On first trips, the effect of strong ties in promoting migration increases with distance whereas the effect of weak ties decreases with distance. On later trips, the direction of effects for both individual and community social capital is negative for long distances but positive for short distances.

Social capital, HIV risk behavior and substance use among recent Latino immigrants in South Florida

Social capital, or social cohesion or group connectedness, can influence both HIV risk behavior and substance use. Because recent immigrants undergo a change in environment, one of the consequences can be a change in social capital. There may be an association among changes in social capital, and HIV risk behavior and substance use post immigration. The dissertation focused on the interface of these three variables among recent Latino immigrants (RLIs) in South Florida. The first manuscript is a systematic review of social capital and HIV risk behavior, and served as a partial background for the second and third manuscripts. Twelve papers with a measure of social capital as an independent variable and HIV risk as the dependent variable were included in the analysis. Eleven studies measured social capital at the individual level, and one study measured social capital at the group level. HIV risk was influenced by social capital, but the type of influence was dependent on the type of social capital and on the study population. Cognitive social capital, or levels of collective action, was protective against HIV in both men and women. The role of structural social capital, or levels of civic engagement/group participation, on HIV risk was dependent on the type of structural social capital and varied by gender. Microfinance programs and functional group participation were protective for women, while dysfunctional group participation and peer-level support may have increased HIV risk among men. The second manuscript was an original study assessing changes in social capital and HIV risk behavior pre to post immigration among RLIs in South Florida (n=527). HIV risk behavior was assessed through the frequency of vaginal-penile condom use, and the number of sexual partners. It was a longitudinal study using secondary data analysis to assess changes in social capital and HIV risk behavior pre immigration to two years post immigration, and to determine if there was a relationship between the two variables. There was an 8% decrease in total social capital (p < .05). Reporting of 'Never use' of condoms in the past 90 days increased in all subcategories (p < .05). Single men had a decrease in number of sexual partners (p < .05). Lower social capital measured on the dimension of 'friend and other' was marginally associated with fewer sexual partners. The third manuscript was another original study looking at the association between social capital and substance use among RLIs in South Florida (n=527). Substance use with measured by frequency of hazardous alcoholic drinking, and illicit drug use. It was a longitudinal study of social capital and substance-use from pre to two years post immigration. Post-immigration, social capital, hazardous drinking and illicit drug use decreased (p<.001). After adjusting for time, compared to males, females were less likely to engage in hazardous drinking (OR=.31, p<.001), and less likely to engage in illicit drug use (OR=.67, p=.01). Documentation status was a moderator between social capital and illicit drug use. 'Business' and 'Agency' social capital were associated with changes in illicit drug use for documented immigrants. After adjusting for gender and marital status, on average, documented immigrants with a one-unit increase in 'business' social capital were 1.2 times more likely to engage in illicit drug use (p<.01), and documented immigrants with one-unit increase in 'agency' social capital were 38% less likely to engage in illicit drug use (p<.01). 'Friend and other' social capital was associated with a decrease in illicit drug use among undocumented immigrants. After adjusting for gender and marital status, on average, undocumented immigrants with a one-unit increase in 'friend and other' social capital were 45% less likely to engage in hazardous drinking and 44% less likely to use illicit drugs (p<.01, p<.05). Studying these three domains is relevant because HIV continues to be a public health issue, particularly in Miami-Dade County, which is ranked among other U.S. regions with high rates of HIV/AIDS prevalence. Substance use is associated with HIV risk behavior; in most studies, increased substance use is associated with increased chances of HIV risk behavior. Immigration, which is the hypothesized catalyst for the change in social capital, has an impact on the dynamic of a society. Greater immigration can be burdensome on the host country's societal resources; however immigrants are also potentially a source of additional skilled labor for the workforce. Therefore, successful adaption of immigrants can have a positive influence on receiving communities. With Florida being a major receiver of immigrants to the U.S, this dissertation attempts to address an important public health issue for South Florida and the U.S. at large.

What does board capital really bring to the table? Exploring the effect of directors' human and social capital on effective governance during international expansion

What constitutes effective corporate governance? Which director characteristics render boards effective at positively influencing firm-level performance outcomes? This dissertation examines these questions by taking a multilevel, multidisciplinary approach to corporate governance. I explore the individual-, team-, and firm- level factors that enable directors to serve effectively as strategic resources during international expansion. I argue that directors' international experience improves their ability to serve as effective strategic consultants and resource providers to firms during the complex internationalization process. However, unlike prior research, which tends to assume that directors with the potential to provide important resources uniformly do so, I acknowledge contextual factors (i.e. board cohesiveness, strategic relevance of directors' experience) that affect their propensity to actually influence outcomes. I explore these issues in three essays: one review essay and two empirical essays.^ In the first empirical essay, I integrate resource dependence theory with insights from social-psychological research to explore the influence of board capital on firms' cross-border M&A performance. Using a sample of cross-border M&As completed by S&P 500 firms from 2004-2009, I find evidence that directors' depth of international experience is associated with superior pre-deal outcomes. This suggests that boards' deep, market-specific knowledge is valuable during the target selection phase. I further find that directors' breadth of international experience is associated with superior post-deal performance, suggesting that these directors' global mindset helps firms in the post-M&A integration phase. I also find that these relationships are positively moderated by board cohesiveness, measured by boards' internal social ties.^ In the second empirical essay, I explore the boundary conditions of international board capital by examining how the characteristics of firms' internationalization strategy moderate the relationship between board capital and firm performance. Using a panel of 377 S&P 500 firms observed from 2004-2011, I find that boards' depth of international experience and social capital are more important during early stages of internationalization, when firms tend to lack market knowledge and legitimacy in the host markets. On the other hand, I find that breadth of international experience has a stronger relationship with performance when firms' have higher scope of internationalization, when information-processing demands are higher.^

Internacionalização de empresas e o fechamento do capital : um estudo sobre a deslistagem no mercado brasileiro

This work contributes to the finance literature proposing to analyze the relationship between the degree of internationalization of Brazilian companies and the likelihood of delisting. Therefore, even though the internationalization as a differential, in the formulation of hypotheses and analysis of the relationship between the variables dealt with concepts and theories within the Corporate Governance, which is already established in theory when it comes to delisting. First, with a view to the theory of internalization, which gives competitive advantages to the company due the adoption internationalization strategy and in parallel to the positive effects that this strategy generates on firms performance, it was formulated an hypothesis that the degree of internationalization would be adversely related to the probability of delisting, mainly due to such benefits generated to the organization. In turn, as an alternative hypothesis of the research, it proposed a positive relationship between these variables, based on agency theory, according to which internationalization would contribute to delisting by increasing geographical separation between shareholders and managers and, consequently, agency conflicts and the difficulty of monitoring. For the achievement of objectives, as well as being included economic and financial variables and GC, it was proposed the analysis of periods of crisis, as the events of recent past of the Brazilian economy. Starting from a base model initially developed by Pour and Lasfer (2013), which later, the proxies of internationalization and crisis have been added also contemplating adjustments to the Brazilian context. The data collected include the period from 2006 to 2014 and information on active and inactive companies at Bovespa. As results, it was found negative significance between the degree of internationalization and the delisting decision, confirming the first hypothesis of the research and stating that the benefits generated by internationalization in the company generate it spreads and results that reduce the probability of delisting. By analyzing the results of control variables was still possible to observe that, even internationalization reducing the likelihood of delisting, by particular aspects of corporate governance in Brazil, such as the high ownership concentration, the benefits it generates contribute to delisting. Regarding the analysis in crisis, the consequences of the crisis of the US subprime in general market were more relevant that the occurrence of itself, unlike the Brazilian internal crisis of 2014, which was statistically significant for the analyzed event. For future researches it is suggested the expansion of database and individual treatment of the reasons adopted by a company when delisting decision.

Optimal Capital Requirements in Financial Networks with Fire Sales

I explore and analyze a problem of finding the socially optimal capital requirements for financial institutions considering two distinct channels of contagion: direct exposures among the institutions, as represented by a network and fire sales externalities, which reflect the negative price impact of massive liquidation of assets.These two channels amplify shocks from individual financial institutions to the financial system as a whole and thus increase the risk of joint defaults amongst the interconnected financial institutions; this is often referred to as systemic risk. In the model, there is a trade-off between reducing systemic risk and raising the capital requirements of the financial institutions. The policymaker considers this trade-off and determines the optimal capital requirements for individual financial institutions. I provide a method for finding and analyzing the optimal capital requirements that can be applied to arbitrary network structures and arbitrary distributions of investment returns.

In particular, I first consider a network model consisting only of direct exposures and show that the optimal capital requirements can be found by solving a stochastic linear programming problem. I then extend the analysis to financial networks with default costs and show the optimal capital requirements can be found by solving a stochastic mixed integer programming problem. The computational complexity of this problem poses a challenge, and I develop an iterative algorithm that can be efficiently executed. I show that the iterative algorithm leads to solutions that are nearly optimal by comparing it with lower bounds based on a dual approach. I also show that the iterative algorithm converges to the optimal solution.

Finally, I incorporate fire sales externalities into the model. In particular, I am able to extend the analysis of systemic risk and the optimal capital requirements with a single illiquid asset to a model with multiple illiquid assets. The model with multiple illiquid assets incorporates liquidation rules used by the banks. I provide an optimization formulation whose solution provides the equilibrium payments for a given liquidation rule.

I further show that the socially optimal capital problem using the ``socially optimal liquidation" and prioritized liquidation rules can be formulated as a convex and convex mixed integer problem, respectively. Finally, I illustrate the results of the methodology on numerical examples and

discuss some implications for capital regulation policy and stress testing.

What Does Board Capital Really Bring to the Table? Exploring the Effect of Directors’ Human and Social Capital on Effective Governance During International Expansion

What constitutes effective corporate governance? Which director characteristics render boards effective at positively influencing firm-level performance outcomes? This dissertation examines these questions by taking a multilevel, multidisciplinary approach to corporate governance. I explore the individual-, team-, and firm- level factors that enable directors to serve effectively as strategic resources during international expansion. I argue that directors’ international experience improves their ability to serve as effective strategic consultants and resource providers to firms during the complex internationalization process. However, unlike prior research, which tends to assume that directors with the potential to provide important resources uniformly do so, I acknowledge contextual factors (i.e. board cohesiveness, strategic relevance of directors’ experience) that affect their propensity to actually influence outcomes. I explore these issues in three essays: one review essay and two empirical essays. In the first empirical essay, I integrate resource dependence theory with insights from social-psychological research to explore the influence of board capital on firms’ cross-border M&A performance. Using a sample of cross-border M&As completed by S&P 500 firms from 2004-2009, I find evidence that directors’ depth of international experience is associated with superior pre-deal outcomes. This suggests that boards’ deep, market-specific knowledge is valuable during the target selection phase. I further find that directors’ breadth of international experience is associated with superior post-deal performance, suggesting that these directors’ global mindset helps firms in the post-M&A integration phase. I also find that these relationships are positively moderated by board cohesiveness, measured by boards’ internal social ties. In the second empirical essay, I explore the boundary conditions of international board capital by examining how the characteristics of firms’ internationalization strategy moderate the relationship between board capital and firm performance. Using a panel of 377 S&P 500 firms observed from 2004-2011, I find that boards’ depth of international experience and social capital are more important during early stages of internationalization, when firms tend to lack market knowledge and legitimacy in the host markets. On the other hand, I find that breadth of international experience has a stronger relationship with performance when firms’ have higher scope of internationalization, when information-processing demands are higher.

English Cathedrals: Events and Spiritual Capital

This paper investigates the recent trend for cathedrals in England to develop a wider and more ambitious scope to their event and activity programmes. It sets out to explore the types of events now hosted at cathedrals, to consider barriers to such ambitions and the opportunities presented by event programming to develop new audiences and grow attendances. The research focuses on the 42 Anglican cathedrals of England and has involved a review of recent reports published by church and cathedral organisations, supported by an in-depth review of event activity and objectives at five selected cathedrals in southern England. Despite declining general church attendance in England, cathedrals have enjoyed two decades of attendance growth both as places of worship and as tourist attractions, partly a reflection of a more complex contemporary search for multi-faceted types of spirituality. The paper explores how events can tap into the realm of individual spiritual capital and demonstrates the rich diversity of events now being hosted by cathedrals. The paper offers a new categorisation of ecclesiastical/liturgical events, cultural and community events and openly commercial event activity. Barriers remain but key facilitating factors have been new investment in event expertise and professionalism, encouragement to experiment by key funding bodies such as the Heritage Lottery Fund and the embracing of new forms of spirituality. The diversity of cathedral events reflects a new found growth in the nurturing of “spiritual capital” amongst both worshippers and tourists.

Human capital and the quantity–quality trade-off during the demographic transition

This paper provides an empirical test of the child quantity–quality (QQ) trade-off predicted by unified growth theory. Using individual census returns from the 1911 Irish census, we examine whether children who attended school were from smaller families—as predicted by a standard QQ model. To measure causal effects, we use a selection of models robust to endogeneity concerns which we validate for this application using an Empirical Monte Carlo analysis. Our results show that a child remaining in school between the ages of 14 and 16 caused up to a 27 % reduction in fertility. Our results are robust to alternative estimation techniques with different modeling assumptions, sample selection, and alternative definitions of fertility. These findings highlight the importance of the demographic transition as a mechanism which underpinned the expansion in human capital witnessed in Western economies during the twentieth century.

Three essays on investment in human capital in Canada

Cette thèse examine l’investissement en capital humain au Canada en s’intéressant à la contribution de l’aide financière aux études, aux effets de la fiscalité, à la rentabilité de l’investissement en éducation postsécondaire et à la redistribution des revenus. Elle est subdivisée en cinq chapitres. Le premier chapitre présente une révue chronologique des études microéconomiques sur l’investissement en capital humain. Il présente également une synthèse des études canadiennes sur l’investissement en capital humain en insistant sur les limites portant essentiellement sur la non prise en compte de l’hétérogénéité des systèmes de prêts et bourses et des systèmes fiscaux à travers les provinces canadiennes et la faible analyse de la répartition des coûts et bénéfices de l’investissement en éducation au Canada. Le second chapitre présente la méthodologie de mesure des rendements de l’éducation et des gains issus des investissements en éducation. Il décrit les données utilisées et les résultats des régressions économetriques. Finalement, le chapitre présente SIMAID, un calculateur d’aide financière aux études élaboré pour les objectifs dans cette thèse et qui permet d’estimer le montant de l’aide financière devant être attribuée à chaque étudiant en fonction de ses caractéristiques personnelles et de celles de sa famille. Dans sa première section, le troisième chapitre présente les rendements sociaux, privés et publics de l’éducation et montre que les rendements de l’éducation varient selon les provinces, les filières de formation, le genre et les cohortes d’année de naissance et décroient avec le niveau d’éducation. Dans sa seconde section, le chapitre montre que l’aide financière aux études accroît le rendement des études du baccalauréat de 24.3% et 9.5% respectivement au Québec et en Ontario. Finalement, le chapitre indique qu’un changement du système d’aide financière aux études de Québec par celui de l’Ontario entraîne une baisse de 11.9% du rendement des études au baccalauréat alors qu’un changement du système fiscal québécois par celui ontarien entraine une hausse du rendement du baccalauréat de 4.5%. L’effet combiné du changement des systèmes d’aide financière et fiscal est une baisse du rendement du baccalauréat de 7.4%. Le quatrième chapitre fournit une décomposition comptable détaillée des gains sociaux, privés et publics des investissements en éducation. Le gain social de l’investissement au baccalauréat est de $738 384 au Québec et de $685 437 en Ontario. Ce gain varie selon les filières de formation avec un niveau minimal pour les études humanitaires et un niveau maximal pour les études en ingénierie. Le chapitre montre également que la répartition des bénéfices et des coûts de l’investissement en éducation entre les individus et le gouvernement est plus équitable en Ontario qu’à Québec. En effet, un individu qui investit à Québec supporte 51.6% du coût total et engrange 64.8% des gains alors que le même individu supporterait 62.9% des coûts sociaux et engrangerait 62.2% des gains en Ontario. Finalement, le cinquième chapitre présente et analyse les effets rédistributifs des transferts et des taxes suite à un investissement en éducation. Il examine aussi si l’aide financière aux études est effectivement allouée aux personnes les plus pauvres. L’argument selon lequel l’aide financière est destinée aux plus pauvres est rejeté en analysant la distribution du revenu permanent. En effet, il ressort que 79% des personnes bénéficiant de l’aide financière aux études se trouvent dans le cinquième quintile de la distribution des revenus permanents. Le chapitre montre également que l’investissement en éducation impacte positivement les effets rédistributifs en 2006, 2001 et 1996 et négativement en 1991 et 2011. L’impact est également perceptible sur les composantes de l’effet rédistributif. Toutefois, la sensibilité de l’impact au taux d’actualisation dépend de l’indice utilisé dans l’analyse.

Social Capital in Jordan: Wasta in Employment Selection

Social capital has emerged as a concept of great interest and potential to help understand and explain how social structures and networks impact political, social and business practices at the collective and individual levels. The basic premise is: investment in social relations will yield expected returns. Extant research has largely focused on the West; our knowledge of how social capital plays out in the Middle East is limited. We marry social capital with ‘wasta’, the strong family and tribal based connections secured in networks in the Arab world, and investigate HR managers’ perceptions of wasta in employment selection in Jordan. Often use of wasta in employment selection is related to favouritism and nepotism and the many negative outcomes of not adhering to merit-based selection. Through in-depth interview data we reveal a more nuanced and multifaceted view of wasta in employment selection. When examined through the social capital lens six distinct themes emerge: (i) wasta as an enabler to get jobs, (ii) wasta as social ties/ solidarity, (iii) wasta as a method to transfer/ attain information, (iv) wasta as a guide in decision-making, (v) wasta as an exchange, and (vi) wasta as pressure. Our findings confirm that at times wasta grants individuals unfair access to employment that is beyond their qualifications, skills, knowledge and/ or abilities. However, organisational context is relevant. In banking, not all roles are open to wasta. Where the possible negative impact on the organisation poses too great a risk HR managers feel able to resist even strong wasta. Context also emerges as being of key importance with regards to the background and business model of an organisation. Family businesses tend to operate wasta more frequently and extensively using tribal connections, religious networks and geographical area based networks as a key source in hiring. Despite globalisation and international nature of banking, wasta and tribalism feature strongly in daily business conduct in Jordan. Our paper illuminates the positive effects of wasta, e.g.as a method to transfer information, together with discussion on the dangers of ‘cloning’, a (lack of diversity), and the dangers of an incompetent workforce .

Networking for conservation: social capital and perceptions of organizational success among land trust boards

As an important component in collaborative natural resource management and nonprofit governance, social capital is expected to be related to variations in the performance of land trusts. Land trusts are charitable organizations that work to conserve private land locally, regionally, or nationally. The purpose of this paper is to identify the level of structural and cognitive social capital among local land trusts, and how these two types of social capital relate to the perceived success of land trusts. The analysis integrates data for land trusts operating in the U.S. south-central Appalachian region, which includes western North Carolina, southwest Virginia, and east Tennessee. We use factor analysis to elicit different dimensions of cognitive social capital, including cooperation among board members, shared values, common norms, and communication effectiveness. Measures of structural social capital include the size and diversity of organizational networks of both land trusts and their board members. Finally, a hierarchical linear regression model is employed to estimate how cognitive and structural social capital measures, along with other organizational and individual-level attributes, relate to perceptions of land trust success, defined here as achievement of the land trusts’ mission, conservation, and financial goals. Results show that the diversity of organizational partnerships, cooperation, and shared values among land trust board members are associated with higher levels of perceived success. Organizational capacity, land trust accreditation, volunteerism, and financial support are also important factors influencing perceptions of success among local, nonprofit land trusts.

Understanding stakeholder preferences for flood adaptation alternatives with natural capital implications

Inland flood risks are defined by a range of environmental and social factors, including land use and floodplain management. Shifting patterns of storm intensity and precipitation, attributed to climate change, are exacerbating flood risk in regions across North America. Strategies for adapting to growing flood risks and climate change must account for a community’s specific vulnerabilities, and its local economic, environmental, and social conditions. Through a stakeholder-engaged methodology, we designed an interactive decision exercise to enable stakeholders to evaluate alternatives for addressing specific community flood vulnerabilities. We used a multicriteria framework to understand what drives stakeholder preferences for flood mitigation and adaptation alternatives, including ecosystem-based projects. Results indicated strong preferences for some ecosystem-based projects that utilize natural capital, generated a useful discussion on the role of individual values in driving decisions and a critique of local environmental and hazard planning procedure, and uncovered support for a river management alternative that had previously been considered socially infeasible. We conclude that a multicriteria decision framework may help ensure that the multiple benefit qualities of natural capital projects are considered by decision makers. Application of a utility function can demonstrate the role of individual decision-maker values in decision outcomes and help illustrate why one alternative may be a better choice than another. Although designing an efficient and accurate multicriteria exercise is quite challenging and often data intensive, we imagine that this method is applicable elsewhere. It may be especially suitable to group decisions that involve varying levels of expertise and competing values, as is often the case in planning for the ecological and human impacts of climate change.

Corporate governance and cost of capital: evidence from Pakistani listed firms

This thesis investigates the effectiveness of Corporate Governance (CG) reforms in Pakistan. Using a sample of 160 Pakistani firms from 2003 to 2013 and governance data collected manually from the annual reports, this thesis investigates seven closely related and important corporate issues that are related to the compliance of governance rules. Specifically, it aims to : (i) investigate the degree of CG compliance with 2002 Pakistani Code of CG (PCCG); (ii) determine whether the introduction of 2002 PCCG has improved Pakistani CG practices; (iii) investigate the determinants of CG compliance and disclosure for Pakistani listed firms; (iv) test the nexus between CG compliance with the 2002 PCCG and firms’ cost of capital (COC); (v) investigate the impact of different individual CG mechanisms on listed firms COC; (vi) examine how different ownership structures impact on firms’ COC; and (vii) analyse relationship between CG structures and Cost of Equity (COE) as well as Cost of Debt (COD) for Pakistani listed firms. These empirical investigations report some important results. First, the reported findings suggest that Pakistani firms have responded positively to governance disclosure requirements over the eleven year period from 2003 to 2013. The results also show that the introduction of the PCCG in 2002 has improved CG standards by Pakistani listed firms. Second, the reported results related to the determinants of CG compliance demonstrate that significant and positive association between institutional, government and foreign ownership with CG compliance. However, findings relating to the determinants of CG compliance show a negative and significant association between board size and block ownership with CG compliance and disclosure. The study finds no significant relationship between director ownership, audit firm size and the presence of female board members with the constructed Pakistan Corporate Governance Index (PCGI). Third, the investigation on the relationship between CG and COC report a significantly negative nexus between PCGI and firms’ COC. The investigation on the association between ownership structures and COC report a negative and significant nexus between block ownership with firms’ COC. Further, a number of robustness analyses performed in this study suggest that the empirical results reported in this study are generally robust to the alternative CG variables, alternative COC variables and potential endogeneity problems.