09/04/2024
By Yadi Wang
Date: Friday, September 20, 2024
Time: 9:15 – 10:45 a.m.
Location: Pulichino Tong Building 462
Thesis/Dissertation Title: Three Essays on Asset Management and Corporate Financing
Committee Members:
1) Huimin (Amy) Chen, Ph.D., Department of Accounting, Manning School of Business, UMass Lowell
2) William Johnson, Ph.D., Department of Finance, Manning School of Business, UMass Lowell
3) Tunde Kovacs (Co-chair), Ph.D., Department of Finance, Manning School of Business, UMass Lowell
4) Saira Latif (Co-chair), Ph.D., Department of Finance, Manning School of Business, UMass Lowell
Abstract:
This dissertation explores how companies strategically address / are impacted by these challenges across different dimensions—tangible and intangible asset management, stakeholder relations, and heightened public scrutiny on key economic issues. By examining these aspects through the lenses of patent collateral, asset redeployability, and the impact of public attention generated by debt ceiling debates, this research offers a multifaceted perspective on how firms optimize their financial strategies amid varying internal and external influences.
The first paper challenges the traditional view that suppliers inherently possess superior knowledge about a firm’s financial health compared to other external stakeholders. It focuses on intangible assets, specifically patents used as collateral, and how these assets influence the relationship between firms and suppliers. The study reveals that suppliers learn crucial information about the liquidation value of intangible assets not independently, but by observing the actions of banks that accept patents as collateral. This external validation by banks prompts suppliers to adjust the trade credit they extend to the firm, indicating that suppliers rely on these signals to assess the firm’s financial stability. This finding shows the importance of intangible assets in corporate financing strategies and highlights the role of external stakeholders in shaping trade credit policies.
Building on the theme of asset management, the second paper examines asset redeployability, incorporating both tangible and intangible assets, investigates how the heterogeneity of a firm’s asset structure influences its treatment of employees. The research demonstrates that firms with less redeployable assets tend to invest more in their employees, leading to better employee treatment and, consequently, enhanced innovation outcomes. This paper provides insights into how the physical asset structure of a firm influences its human capital management, suggesting that the flexibility or rigidity of tangible assets plays a crucial role in determining a firm’s internal strategies and overall innovation capacity.
The third paper extends the analysis to the broader economic environment by examining how public attention during debt ceiling debates impacts corporate bond markets. The study reveals that during periods of heightened scrutiny over the U.S. debt ceiling, yields on non-investment grade, short-maturity corporate bonds tend to increase. This rise in yields is driven by investors' association bias, where concerns about the potential consequences of the debt ceiling debate spill over to lower-quality issuers, resulting in higher financing costs for firms with immediate liquidity needs. Unlike the first two papers, which focus on asset characteristics and strategic responses, this paper highlights how external economic events and public perception can influence corporate financing conditions, even without direct strategic actions by the firms themselves.
Together, these three papers provide a cohesive exploration of how firms strategically manage their assets, engage with stakeholders, and are impacted by external pressures of political and economic significance. By integrating insights from these interconnected areas, this dissertation offers a nuanced understanding of the complex decision-making processes that underpin corporate financial strategies and the ways in which firms maintain stability and drive performance in response to both internal challenges and external developments.
All interested students and faculty members are invited to attend.