Electronic Theses and Dissertations



Date of Award


Document Type


Degree Name

Doctor of Philosophy

Committee Chair

Pankaj Jain

Committee Member

Bidisha Chakrabarty

Committee Member

Pei Shao

Committee Member

Sabatino Silveri


This dissertation research comprises one essay on market microstructure and two essays on corporate finance and financial institutions. In the first essay, I examine the effects of a speed bump on market quality and exchange competition. After a long period of facilitating faster trading, exchanges are now trying to slow down trading with speed bumps. I study how this market-design innovation affects traders reaction times, the market quality of stocks, and the operators of competing exchanges. Post speed bump, I find slower reaction times to order book events and reduced order detection and back-running. Reduction in quote-to-trade ratio and flickering quotes improves market quality. Exchanges without planned speed bumps lose market share, with reduced return on their share price, enterprise value, and investment in high-speed assets. Their stocks become attractive for short sellers. In the second essay, I investigate the governance role of banks by examining lenders monitoring effect on borrowers tax planning. I posit that lenders monitoring has an impact on borrowers tax planning on the two ends of the continuum of tax planning strategies. I show that firms with a larger portion of loan shares held by lead lenders, with loans led by reputable lenders and with a single-lending relationship have lower effective tax rates and less egregious tax aggressiveness. I also document that borrowers with loan sales that weaken lenders monitoring incentives tend to have higher effective tax rates and more egregious tax aggressiveness. Moreover, our results on tax aggressiveness are stronger for firms with more intense shareholder-debtholder conflict. In the third essay, I use the China setting to study the determinants and impact of equity pledges by large shareholders. I find that the likelihood of equity pledges increases with recent stock returns and firm financial constraints. The market reacts positively to equity pledge announcements, especially when the lender is a securities firm. Moreover, firms whose shares are pledged subsequently improve operating performance and manage earnings less. Collectively, our results are consistent with equity pledges being used as a commitment device by large shareholders not to expropriate from minority shareholders and ultimately benefits outside shareholders.


Data is provided by the student.

Library Comment

Dissertation or thesis originally submitted to ProQuest