Graduation Semester and Year
Summer 2024
Language
English
Document Type
Dissertation
Degree Name
Doctor of Philosophy in Finance
Department
Finance
First Advisor
Grace Qing Hao
Second Advisor
Andrew J. Hansz
Third Advisor
Mahmut Yasar
Fourth Advisor
David R. Rakowski
Fifth Advisor
Ramya R. Aroul
Abstract
My dissertation consists of two essays. In the first essay, I study the impact of local economic policy uncertainty on corporate cash holdings for U.S. firms. While national economic policy uncertainty has been examined extensively, few studies have investigated the impact of local economic policy uncertainty. I use the state-level economic policy uncertainty developed by Baker, Davis, and Levy (2022) to examine the impact of local economic policy uncertainty on firm cash holdings. Using a sample of publicly traded U.S. firms from 1985-2022, I find that firms increase their cash holdings in response to higher local economic policy uncertainty. The increase in cash holdings is more pronounced for firms in less corrupt areas and facing greater product competition.
My second essay quantifies and documents the impact of aggregate negative sentiment toward public health crises. It presents an initial perspective on the relationship between sentiment and real estate investment trust (REIT) returns during an extraordinary historical period. Using COVID-19 as a natural setting, I find that negative health-related sentiment has an inverse relationship with future REIT returns for five trading days. The negative association still holds after I control for firms’ asset-level actual exposure to the pandemic captured by Ling, Wang, and Zhou (2020). The health sentiment affects REIT sectors differently. Lodging and healthcare REITs are the most impacted by the negative sentiment, and multifamily REITs are impacted the least. Small, less liquid, and financially distressed REITs are more vulnerable than their counterparts. Interestingly, the negative predictability of the sentiment was higher before coronavirus vaccines were authorized. In other words, health sentiment captures a learning effect, predicting much lower negative future returns after vaccine authorization.
Keywords
Local economic policy uncertainty, Cash holdings, Corruption, Product market threat, Health sentiment, Public health crisis, REITs, COVID-19, Exogenous shock
Disciplines
Corporate Finance | Real Estate
License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Recommended Citation
Phan, Hanh T. H., "ESSAYS ON CORPORATE FINANCE AND REAL ESTATE" (2024). Finance and Real Estate Dissertations. 45.
https://mavmatrix.uta.edu/financerealestate_dissertations/45