Date of Award
Economics and Finance
M. Kabir Hassan
This dissertation examines the impact of regulation and public policies on firm performance. Chapter 1, entitled “Political Contributions, Insider Trading, and CEO Compensation”, determines why CEOs from politically-connected firms receive higher pay compared to their non-politically connected peers. We investigate whether insider trading can explain high CEO pay. Using hand-collected firm-level lobbying data, we examine whether politically-connected CEOs engage in insider trading after sponsored bills are introduced and passed in the U.S. legislative bodies. Our results show that politically-connected CEOs commit insider trading, which yields higher compensation packages. In addition, we also find that lobbying benefits firm performance. Politically-connected firms receive more government contracts, which increases firm value. Overall, political contributions benefit both CEOs and shareholders. Chapter 2, entitled “The Impact of Incarceration on Firm Performance” conducts analyses on the impact of incarceration on firms based in the United States. Through time series Granger Causality Vector Autoregression (VAR) tests by state, we find that incarceration can influence labor markets measured by the state’s unemployment rate. We find that firms based in states with high incarceration underperform compared to firms based in states with low incarceration. This also holds true when examining prison reform data from the Pew Charitable Trust. Through differences in differences tests, we find that firms based in states with prison reform outperform firms based in states without prison reform. When controlling for firm and state macroeconomic factors, we find that increases in incarceration rates have a negative effect on firm performance.
Brodmann, Jennifer L., "Regulatory Repercussions in Finance" (2018). University of New Orleans Theses and Dissertations. 2444.