Essays in financial economics

Thesis

This thesis consists of three essays in financial economics.

The first essay studies interlocking directorates among firms competing in the same product market. Using an exogenous shock that increased the litigation risk associated with interlocking directorates, I find that firms exposed to the shock experienced a significant decline in market value. I also find that the level of product market competition is negatively correlated with post-event stock returns. These findings support the theory that firms collaborate with competitors in product markets through shared board members.

The second essay investigates single-stock ETFs. I propose and provide evidence for the theory that these innovative products are primarily traded by attention-driven retail investors to circumvent leverage and short-selling constraints. I further show that single-stock ETFs lead to an increase in the idiosyncratic volatility of the underlying stocks.

The third essay studies the mutual fund industry. I propose a dynamic principalagent model with private managerial skill and time-varying managerial effort. Consistent with the model’s predictions, I provide empirical evidence that fund returns are not persistent and that fund size is an increasing but concave function of past returns.

Authors: Huang, Z

• DOI: 10.5287/ora-o1wpavmax
• Type of award: DPhil
• Level of award: Doctoral
• Awarding institution: University of Oxford
• Language: English
• Subjects: Exchange traded funds; Corporate governance; Mutual funds