Matching Items (2)
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- All Subjects: Honors
- All Subjects: Political Uncertainty
- Creators: Hillman, Amy
Description
In this study, I test whether firms reduce the information asymmetry stemming from the political process by investing in political connections. I expect that connected firms enjoy differential access to relevant political information, and use this information to mitigate the negative consequences of political uncertainty. I investigate this construct in the context of firm-specific investment, where prior literature has documented a negative relation between investment and uncertainty. Specifically, I regress firm investment levels on the interaction of time-varying political uncertainty and the degree of a firm's political connectedness, controlling for determinants of investment, political participation, general macroeconomic conditions, and firm and time-period fixed effects. Consistent with prior work, I first document that firm-specific investment levels are significantly lower during periods of increased uncertainty, defined as the year leading up to a national election. I then assess the extent that political connections offset the negative effect of political uncertainty. Consistent with my hypothesis, I document the mitigating effect of political connections on the negative relation between investment levels and political uncertainty. These findings are robust to controls for alternative explanations related to the pre-electoral manipulation hypothesis and industry-level political participation. These findings are also robust to alternative specifications designed to address the possibility that time-invariant firm characteristics are driving the observed results. I also examine whether investors consider time-varying political uncertainty and the mitigating effect of political connections when capitalizing current earnings news. I find support that the earnings-response coefficient is lower during periods of increased uncertainty. However, I do not find evidence that investors incorporate the value relevant information in political connections as a mitigating factor.
ContributorsWellman, Laura (Author) / Dhaliwal, Dan (Thesis advisor) / Hillegeist, Stephen (Thesis advisor) / Walther, Beverly (Committee member) / Mikhail, Mike (Committee member) / Hillman, Amy (Committee member) / Brown, Jenny (Committee member) / Arizona State University (Publisher)
Created2014
Description
This project seeks to investigate the ways in which the W.P. Carey School of Business, at Arizona State University, can improve student retention and engagement efforts. The analysis is being completed through an audit of the business school's current efforts towards student engagement, an examination of the internal and external environments of business schools across the nation, and a review of scholarly data/research on student retention risk factors and methods for improving engagement. The study highlights what exactly contributes to the success of the W.P. Carey School of Business, concluding with recommendations for how its engagement and retention efforts can be further improved to continue to serve students at a nationally ranked level.
ContributorsStinger, Rio W. (Author) / Hillman, Amy (Thesis director) / Mader, Michael (Committee member) / Division of Teacher Preparation (Contributor) / Department of Management (Contributor) / W. P. Carey School of Business (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05