Date of Award

Fall 12-18-2014

Degree Type


Degree Name


Degree Program

Financial Economics


Economics and Finance

Major Professor

Dr. Wei, Peihwang Philip

Second Advisor

Dr. Abdel-Rahman, Hesham

Third Advisor

Dr. Mukherjee, Tarun

Fourth Advisor

Dr. Naka, Anaka

Fifth Advisor

Dr. Zirek, Duygu


Chapter 1 of this study investigates the link between a firm’s capital structure and their industry competitive behavior. Given the competitive behavior in certain markets, Cournot or Bertrand, we investigate if there are any inborn characteristics of these markets’ competitive behavior that would create an incentive for Cournot firms to have a different strategic debt level than Bertrand firms. Related theories argue that any industry’s competitive behavior, whether it is Bertrand or Cournot would typically consist of a certain type of debt and pursue a certain type of competitive strategy, based on its classification. In this study, we investigate the debt level of a sample of firms classified into either Cournot or Bertrand competition, i.e. explore competitive behavior as a characteristic of firms that tend to be associated with different debt ratios and determine if the competitive market type does in fact lead to a varying debt ratio target. We used two different measures to categorize competition type, the CSM and the SI measure. Our findings indicate that there is no significant difference between differentiated debt levels between Bertrand and Cournot firms.

Chapter 2 of the study examines various factors that may affect American Depository Receipts’ trading volume distribution between their home and US markets. These include factors not previously considered in the extant literature. One such factor is the trading motive (hedging or speculative) of investors. Other factors examined include price impact, relative volatility, market to book ratio, as well as a cultural dimension factor: individualism. Controlling for time-specific effects, we find that the relative motive measure of cross-listed firms has a positive relationship on the trading volume distribution. In addition, when looking at a small sample of firms with different motive factors, we find that hedging motive in the home country leads to an increased proportion of trading in the host country relative to the home country, while speculative motive leads to a decrease in the volume share of the host country relative to the home country. A positive and significant relationship is also observed between volatility and the log of trading volume share. The relationship is negative for liquidity and visibility in relation to the trading volume distribution of cross-listed firm’s stocks. Culture difference at home relative to host is found to positively impact trading volume distribution of cross-listed stocks.


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