Electronic Theses and Dissertations

Date

2024

Document Type

Dissertation

Degree Name

Doctor of Philosophy

Department

Business Administration

Committee Chair

Konstantin Sokolov

Committee Member

Jeff Black

Committee Member

Pankaj Jain

Committee Member

Andrew Hussey

Abstract

Chapter 1 sheds light on how vote trading affects voting outcome. Decentralized autonomous organization design implies that stakeholders vote to express their individual opinions. Nonetheless, this design is disrupted by vote trading. We take advantage of the blockchain data transparency and explore how vote trading affects voting outcome. Our findings indicate that vote trading facilitates the decision-making by better informed stakeholders. Specifically, informed stakeholders use purchased votes to signal the quality of their contributions to the platform and thereby attract the non-purchased votes of uninformed stakeholders. Vote buying typically attracts 51% more non-purchased votes, and the reputation of vote buying stakeholders improves over time. Therefore, it is unlikely that vote trading leads to overselling the platform contributions. We conduct an experiment to confirm the robustness of our findings. Finally, an event study reveals that a demand shock in the market for votes encourages voting by those stakeholders who used to abstain from voting before the shock. Our findings lend support to theoretical and experimental research showing the benefits of vote trading in the absence of the majority rule. In chapter 2, we find that elevated economic policy uncertainty (EPU) is associated with reductions in corporate bond dealer inventories and worsening liquidity, suggesting bond dealers react to increased inventory risk by reducing their capital commitments and compensating themselves via increased transaction costs. A one standard deviation increase in EPU is associated with a 2.19% widening in bid-ask spreads, 2.36% increase in Amihud illiquidity, and 3.38% reduction in average inventories. This effect is greater for bonds issued by firms with direct exposure to government policy, and less pronounced in small firms, illiquid bonds, and calmer markets, suggesting that EPU affects bond liquidity more when macroeconomic, but not idiosyncratic, factors are the primary determinant of bond risk. Chapter 3 tests how institutional attention affects liquidity in the corporate bond market. I find that institutional attention improves corporate bond market liquidity. By exploiting the Two-Stage Least Squares (2SLS) method, I show that abnormal institutional attention increases equity return volatility, which in turn results in improved liquidity in the corporate bond market. Further analysis reveals that this association does not vary significantly with the idiosyncratic risk of bonds and firms. This finding holds when controlling for bond liquidity determinants, market volatility, and firm fixed effects, and is robust to alternative measures of liquidity and institutional attention. This suggests that abnormal institutional attention is priced into bond liquidity when a shock in the equity market, due to higher institutional attention, leads to information incorporation in stock prices that flows to the OTC corporate bond market.

Comments

Data is provided by the student.

Library Comment

Dissertation or thesis originally submitted to ProQuest.

Notes

Open Access

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