| This dissertation studies two recent phenomena in corporate finance. The first is that a number of non-U.S. firms list their shares in the U.S. stock markets, and the second is that equity-based compensation schemes such as employee stock options are widely used in many U.S. corporations.; The first essay builds on existing empirical evidence showing that foreign firms experience a positive abnormal stock return when they announce they will list in the U.S. This essay shows that the announcement return is largely unrelated to the degree of integration between the local stock market and the U.S. stock market and that the announcement of cross-listing in the U.S. is associated with negative abnormal returns for competitors of the announcing firm. Further, competitors with higher agency costs of controlling shareholders are more negatively affected. These results suggest that foreign firms list in the U.S. to improve their ability to take advantage of growth opportunities and not to reduce the equity risk premium.; The second essay examines whether management, when its personal wealth associated with its stock options is at stake, takes opportunistic actions by manipulating the stock price. Using a unique experimental setting created by an accounting rule, this essay provides some evidence supportive of the manipulation hypothesis. Further, it seems that this manipulation is costly to shareholders as some shareholders have to trade while the deviation remains uncorrected. |
