Date of Award

Summer 8-2019

Degree Type


Degree Name


Degree Program

Financial Economics


Economics and Finance

Major Professor

Hassan, M. Kabir

Second Advisor

Brodmann, Jennifer

Third Advisor

Mukherjee, Tarun

Fourth Advisor

Turunen-Red, Arja

Fifth Advisor

Lane, Walter

Sixth Advisor

Davis, James R.


This dissertation examines the effects that intangible capital and diversity reputation have on firm performance. In Chapter 1, entitled “CEO Overconfidence and Intangible Corporate Investments,” we extend the corporate investment and CEO overconfidence literature by examining how CEO overconfidence affects investment-cashflow sensitivity using a new measure of Tobin’s q and cashflow. Specifically, we incorporate intangible capital, which neo-classical investment theory mostly ignores, in the empirical analysis. We develop three overconfidence measures and their interaction with the respective standard and new cashflow settings to capture the investment-cashflow sensitivity effect of CEO overconfidence. We use three investment measures (physical, intangible, and total investments) and find that the effect of managerial overconfidence on investment-cashflow sensitivity is more prominent for corporate intangible investments than physical investments. Moreover, our results show that the standard measure of physical capital weakly explains the intangible investment-cashflow density. Our study offers useful insights in that it explains the reason why investment-cashflow sensitivity has been weaker in recent years. We also show that investment-cashflow sensitivity is stronger when intangible capital is incorporated into the analysis. Chapter 2 is entitled “Diversity Reputation and Firm Performance.” The modern American workplace is a microcosm of modern American society. The increasing diversity of the American workforce has made the increasing diversity of the American workplace a necessity. We explore the impact of diversity reputation on firm performance. We measure a firm’s diversity reputation by its inclusion in DiversityInc’s list of Top 50 Companies for Diversity. We measure firm performance by various accounting measures (return on assets, return on investment, and return on sales) as well as one market-based measure, Tobin’s Q. We find that firms that have a better diversity reputation outperform firms that do not.


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