Date of Award

8-2022

Degree Type

Dissertation

Degree Name

Ph.D.

Degree Program

Financial Economics

Department

Economics and Finance

Major Professor

Mukherjee, Tarun

Second Advisor

Naka, Atsuyuki

Third Advisor

Krishnaswami, Sudha

Fourth Advisor

D'Mello, Ranjan

Abstract

The dissertation consists of two essays. In the first essay, we investigate the dynamics of analyst forecast errors relative to economic policy uncertainty (EPU) and find a significantly positive relation between EPU and analyst forecast errors. A doubling of EPU increases earnings forecast errors by 4.29 percentage points, and the volatility and dispersion in forecast errors are positively related to the EPU. This effect of EPU on forecast errors persists for 13 months with a gradually declining effect that is aligned with Oi–Hartman–Abel effect, a channel through which uncertainty can affect firms' financial activities, performance, and growth. Forecast errors are higher for firms with higher sensitivity to the EPU, and the uncertainty factor retains its significance when compared to other risk factors. Additionally, firms with higher idiosyncratic risks show a higher sensitivity to the economic policy uncertainty.

In the second essay, we investigate why a majority of unlevered firms do not pay dividends. Using a behavioral framework, we answer the puzzling but overlooked question: why so many zero-debt firms abstain from paying dividends. In this paper, we present how family ownership is linked to non-dividend-paying behavior of unlevered firms.

Rights

The University of New Orleans and its agents retain the non-exclusive license to archive and make accessible this dissertation or thesis in whole or in part in all forms of media, now or hereafter known. The author retains all other ownership rights to the copyright of the thesis or dissertation.

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