• The Effects of Organizational Forms of Mutual Fund Management Company on Mutual Fund Performance

      Han, Xiaoxiao; Faculty of Business Programs
      The organizational form of a company indicates whether it is publicly-traded or privately-held. The effects of the organizational forms on a company’s operations and performances have been well documented. However, because the organizational form of companies in the finance industry is so different from those in other industries, the effect on performance is quite different. There has been little research done to determine how the organizational form of mutual fund management companies affect the performance of their mutual funds. This thesis examines the impact of mutual fund management companies on the performance of their managed funds using data that cover the period 2007 to 2016 on 782 different firms. The results showed that the performance of mutual funds managed by publicly-traded mutual fund management companies was significantly compared to those managed by privately-held companies. Based on the sample data, the hypothesis of this thesis is that publicly-traded and privately-held fund management companies have different incentives and interests that impact mutual fund performance. The thesis also addresses the issues of discontinuous returns and endogenous organizational form variables. The test results examined in this thesis support the notion that mutual funds managed by publicly-traded companies underperform compared to industry benchmarks. In addition, funds managed by publicly-traded management companies perform poorer in general compared to funds managed by privately-held companies.
    • The Effects of Perceived Product-Association Incongruity on Consumption Experiences

      Clemente, Sarah; Faculty of Business Programs (Brock University, 2013-04-01)
    • Enjoyment vs. Utility: Drivers and Consequences of Consumer M-Commerce Motivations

      Lapa, Luciano; Faculty of Business Programs
      Mobile commerce (m-commerce) has grown over the years and today represents a promising channel for marketers. Nevertheless, it has not yet lived up to its full potential. Past research has mainly treated m-commerce as a predominantly utilitarian (i.e. functional and practical) way of shopping. Moving away from this uniquely utilitarian view of m-retailing, this study explores whether hedonic motivations (i.e. experience and enjoyment related) also play an important role in driving consumer m-commerce behaviour. We conceptualize consumers’ motivations as conditions that are a consequence of their regulatory orientations. The study proposes and empirically validates that prevention-oriented consumers (i.e. vigilant and conservative) are more likely to activate utilitarian motivations to use m-commerce, whereas promotion-oriented consumers (i.e. eager and risk-takers) are more likely to activate hedonic motivations to use m-commerce. The interplay between regulatory orientations and related motivations have direct consequences on consumers’ perceptions of value and trust toward m-commerce. More specifically, we show that hedonic motivations lead to higher value and trust for promotion-oriented individuals, and that utilitarian motivations lead to higher value and trust for prevention-oriented individuals. Moreover, both hedonic and utilitarian motivations are important determinants of trust and value for moderately prevention- and promotion-oriented individuals. Equipped with this knowledge, marketers can more efficiently cater to consumers’ motivations.
    • Examining Competitive Intensity and Social Enterprise Performance

      Wood, Patrick; Faculty of Business Programs
      This thesis explores how Social Enterprises’(SE) manage their economically-driven activities with their mission-related activity and how these impact their relative economic and social performance. Given the little research that has been done on external factors within SEs, competitive intensity and its impact on the performance of hybrid SEs was also examined in terms of how it might influence the above trade-offs. The authors looked at longstanding, social enterprises within the second-hand textile industry as a suitable model for SEs participating in a competitive environment. What the authors found was that while economically-driven activities appeared to have a negative impact on social performance, counter-intuitively, mission-driven activity had a positive effect on both social and financial performance. Furthermore, while competitive intensity has a positive buffering effect between mission-driven activity and both economic and social performance, the opposite is true of economic-driven activity, where competition seems to have a negative buffering impact. These findings demonstrate the need for further research into the role competition plays within hybrid organizations and from a practical position, may inform the strategic decisions of managers who might expect a linear relationship between the type of activity engaged and outcomes.
    • Explaining voice behaviour: The roles of personal resources, social interdependence, and supervisor leadership style

      Li, Ran; Faculty of Business Programs
      This study contributes to current research on voice behaviour by investigating several under-explored drivers that motivate employees’ expression of constructive ideas about work-related issues. It draws from the concept of psychological climate to examine how voice behaviour is influenced by employees’ (1) personal resources (tenacity and passion for work), (2) perceptions of social interdependence (task and outcome interdependence), and (3) supervisor leadership style (transformational and transactional). Using a multi-source research design, surveys were administered to 226 employees and to 24 supervisors at a Canadian-based not-for-profit organization. The hypotheses are tested with hierarchical regression analysis. The results indicate that employees are more likely to engage in voice behaviour to the extent that they exhibit higher levels of passion for work. Further, their voice behaviour is lower to the extent that their supervisor adopts a transformational leadership style characterized by high performance expectations or a transactional leadership style based on contingent rewards and contingent punishment behaviours. The study reveals that there are no significant effects of tenacity, social interdependence, and behaviour-focused transformational leadership on voice. The findings have significant implications for organizations that seek to encourage employee behaviours that help improve current work practices or undo harmful situations.
    • Exploring the Effect of Tourism Type on Green Consumption Intentions in the Hotel Industry: The Moderating Roles of Benefit Type and Benefit Time

      JIA, YIDAN; Faculty of Business Programs
      Green consumption behaviour has been widely investigated. Scholars have suggested that a luxury tourism product type can be a negative predictor of environmentally friendly consumption intentions. However, conditions under which green practices can be most effective still need to be discovered, particularly in the tourism industry. Therefore, the objective of this present research is to explore the moderation effect of benefit type (self versus other) and benefit timing (now versus future) in the relationship between tourism product type and environmentally friendly consumption intentions, respectively. Specifically, this thesis hypothesizes that a self-benefit appeal will lessen the negative relationship between luxury product type and consumers’ green consumption intentions. In addition, a now-time benefit appeal will strengthen the weak relationship between non-luxury product type and consumers’ green consumption intentions. The hypotheses are tested using two experimental studies in the hotel industry. By understanding the moderating roles benefit type and benefit timing play in the relationship between tourism product type and consumers’ green consumption intentions, the current research advances our understanding in how different types of incentives motivate green consumption behaviours, and provides managerial implications for promoting environmentally friendly practices and programs to tourists more effectively.
    • False Discoveries in the Performance of Canadian Equity Mutual Funds

      Tran, Nhan; Faculty of Business Programs
      This thesis assesses the performance of Canadian equity mutual funds over the period 1991-2016 using the False Discovery Rate (FDR) methodolody. We find that around 85% of the sampled funds are genuinely zero-alpha, and the majority of skilled funds lies in the extreme right tail. Overall, false positive rates in the studied population are found to be approximately 20% for gross returns, and 55% for net returns, and respectively 6% and 22% in the case of false negative rates across all factor models. Contrast to negative FDRs, positive FDRs exhibit abnormality among funds from before 2008, and greatly vary across fund groups. In addition, different bootstrap methods confirm the existence of manager stock-picking skill among the fund sample.
    • Forecasting the Yield Curve of Government Bonds: A Comparative Study

      He, Chao; Faculty of Business Programs (Brock University, 2013-11-21)
      For the past 20 years, researchers have applied the Kalman filter to the modeling and forecasting the term structure of interest rates. Despite its impressive performance in in-sample fitting yield curves, little research has focused on the out-of-sample forecast of yield curves using the Kalman filter. The goal of this thesis is to develop a unified dynamic model based on Diebold and Li (2006) and Nelson and Siegel’s (1987) three-factor model, and estimate this dynamic model using the Kalman filter. We compare both in-sample and out-of-sample performance of our dynamic methods with various other models in the literature. We find that our dynamic model dominates existing models in medium- and long-horizon yield curve predictions. However, the dynamic model should be used with caution when forecasting short maturity yields
    • History and Theorizing: The Case of Winemaking in the Ontario Wine Industry

      Hills, Shilo; Faculty of Business Programs (Brock University, 2012-05-17)
      Despite the fact that theorization has been established as an important social mechanism in a variety of contexts, little research has explicated how this process works. I argue that theorization entails strategic constructions of history, or rhetorical history, in order to persuade audiences of legitimacy. I examine the role that history plays in actors’ theorizations of the Ontario wine industry as world class. By conducting a rhetorical analysis of the newsletters and websites of Ontario wineries, I find that various themes of history are routinely employed to re-theorize the industry as one that produces world class wines. In general, the findings suggest that the narratives of Ontario wineries tap into global repertoires of fine wine to portray the continuity of current practices with those of Old World winemaking. In addition, wineries sometimes tap into local histories to convey a sense of uniqueness, but they also obscure the history of poor winemaking in the region.
    • Idiosyncratic Momentum and Option Markets

      Guo, Songchan; Faculty of Business Programs
      This study examines whether the idiosyncratic momentum strategy can generate excess returns following the emergence of traded options. Portfolios are formed based on past residuals of the Fama-French three factor model in idiosyncratic momentum, while those are formed based on past total returns in traditional momentum. We find that the idiosyncratic momentum profits show attenuation since options started trading in 1996. Our results show that momentum returns for stocks with options in idiosyncratic momentum are positive and significant for three, six, and twelve months following the formation date, while those for stocks with options in traditional momentum are insignificant or even turn to negative. We also find strong evidence that the enhanced information efficiency led by allowing short selling has more impact on traditional momentum returns than on idiosyncratic momentum returns. Overall, our results show that the idiosyncratic momentum strategy demonstrates an even bigger challenge to the conventional asset pricing literature.
    • The Impact of a Corporate Name Change on Stock Price and Trading Volume of Canadian Companies

      Durrani, Farooq; Faculty of Business Programs (Brock University, 2013-07-26)
      This thesis examines the impact of a corporate name change on stock price and trading volume of Canadian companies around the announcement date, the approval date, and the adoption date over the time period from 1997 to 2011. Name changes are classified into six categories: major and minor, structural and pure, diversified and focused, accompanied with a change in ticker symbol and without a change in ticker symbol, “Gold” name addition and deletion, and different reasons for name changes (e.g., merger and acquisition, change of structure, change of strategy, and better image). The thesis uses the standard event study methodology to perform abnormal return and trading volume analyses. In addition, regression analysis is employed to examine which type of a name change has the largest impact on cumulative abnormal returns. Sample stocks exhibit a significant positive abnormal return one-day prior to the approval day and one day after the adoption date. Around the approval date we observe significant abnormal returns for stocks with a structural name change. On the day after the adoption date we document abnormal returns for stocks with major, minor, structural, pure, focused, and ticker symbol name changes. If a merger or acquisition is the reason for a name change, companies tend to experience a significant positive abnormal return one-day before the approval date and on the adoption date. If a change of structure is the reason for a name change, companies exhibit a significant positive abnormal return on the approval date and a significant negative abnormal return on the adoption date. In case of a change of strategy as the reason for a name change, companies show a significant negative abnormal return around the approval date and a significant positive abnormal return around the adoption date.
    • Impacts of Executive Compensation on Employee Wages

      Zhu, Baoqi; Faculty of Business Programs
      We study the impact of CEO equity-based compensation (EBC) on employee wages. Using pay-performance sensitivity (PPS) as a measure for CEO equity-based compensation, we find that CEOs with higher EBC tend to pay their employees lower wages. We also examine the impact of EBC on average employee wage in different industries and find that such an impact is more evident in non-technology firms than in technology firms. Finally, we find that CEOs with higher pay-performance sensitivities are more likely to depress employee wages when the business cycle shows downturn. While the literature of CEO compensation suggests that EBC can mitigate agency conflicts between managers and shareholders, we find that the high level of EBC can create another aspect of agency conflicts between managers and shareholders, contributing to income inequality even within corporations.
    • Impacts of Top Five Executives’ Compensation on Employee Wages

      Li, Qianqian; Faculty of Business Programs
      This paper studies the impacts of incentive compensation to the top five executives on employee wages. We employ pay-performance sensitivity (PPS) to measure executive incentive compensation. Using data for firms from Wharton Research Data Services over 1992 to 2017 period, we find that there exists a negative relation between executive incentive compensation and employee wages. In addition, we examine the impacts of executive incentive compensation on employee wages in different industries and find that the impacts are more severe in non-technology firms than in technology firms. Finally, we show that the executives with higher incentive compensation are more likely to suppress employee wages in financially distressed firms. Since the impacts of incentive compensation to top five executives on employee wages are similar to those to CEO, top executives appear to work together as a team, which supports executive compensation as team perspective. Furthermore, firm performance may not be promoted by granting high incentive compensation to executives.
    • Improving Performance of Open Access Clinics

      Xia, Tian; Faculty of Business Programs (Brock University, 2014-08-21)
      Open Access Scheduling has shown great promise in allowing health care practices to provide same-day access, and to match patients with their regular physicians. However, similarly to traditional clinics where appointments are pre-booked, open access clinics are also frustrated with long waits, long idle time and long overtime due to uncertainties such as patient no-shows, variable service time and variable daily demand. These aspects have not been studied previously in an open access setting. This study investigates different management options to improve clinical performance in terms of patient waiting time, doctor idle time and clinic overtime. Other factors studied with a simulation model include client load and placement of pre-booked slots. Results show that a proper panel size is critical to obtain good performance for open access clinics, and that good choices for management options depend on the client load.
    • The influence of derivatives usage on firm value

      Lu, Zhangwei; Faculty of Business Programs
      In contemporary business management, an increasing number of firms use derivative instruments to hedge financial risks, including interest rate, foreign exchange rate and commodity price risk. Such hedging activities add to firm value by alleviating market imperfections, the presence of which provides an incentive to hedge. However, derivative instruments can also be used for speculation as well as hedging, magnifying risk and potentially reducing firm value. An awareness of the effectiveness of derivatives usage during various economic periods or in various industries, is also of value and can ultimately result in better hedging and even speculation strategies. In this thesis, we investigate non-financial firms in seven developed countries from 2007 to 2016, and apply fixed effects regression analysis, propensity score matching and difference-in-difference models to examine the relationship between derivatives usage and firm value. The impact of different categories of derivatives usage on firm value is found to differ by country. In particular, although the use of interest derivatives is found to damage firm value worldwide, currency derivative usage appears to increase firm value except in the US and Germany, while the use of commodity derivatives is shown to add to firm value firm only in Germany and Australia.
    • Information Asymmetry and Accounting Conservatism under IFRS Adoption

      Lu, Xiaoting (Christy); Faculty of Business Programs (Brock University, 2012-05-17)
      LaFond and Watts (2008) provide evidence that information asymmetry might be a determinant of accounting conservatism. One implication of their paper is that regulators trying to reduce information asymmetry by lowering the level of accounting conservatism might be wrong. However, there is a trend in moving away from conservative accounting. The typical example is IFRS adoption. Therefore, this paper studies information asymmetry and accounting conservatism under IFRS adoption. The results show that the level of accounting conservatism decreases after mandatory IFRS adoption, but the adoption of IFRS is likely to weaken the relationship between information asymmetry and accounting conservatism. Moreover, this paper investigates how the change of accounting conservatism under IFRS is related to the change in information environment. The finding shows that accounting conservatism increases information environment, supporting the idea that, by providing comparatively credible information, conservative accounting is beneficial to the information environment.
    • The information content of Canadian implied volatility indexes

      Wang, Chunrong; Faculty of Business Programs (Brock University, 2012-04-03)
      For predicting future volatility, empirical studies find mixed results regarding two issues: (1) whether model free implied volatility has more information content than Black-Scholes model-based implied volatility; (2) whether implied volatility outperforms historical volatilities. In this thesis, we address these two issues using the Canadian financial data. First, we examine the information content and forecasting power between VIXC - a model free implied volatility, and MVX - a model-based implied volatility. The GARCH in-sample test indicates that VIXC subsumes all information that is reflected in MVX. The out-of-sample examination indicates that VIXC is superior to MVX for predicting the next 1-, 5-, 10-, and 22-trading days' realized volatility. Second, we investigate the predictive power between VIXC and alternative volatility forecasts derived from historical index prices. We find that for time horizons lesser than 10-trading days, VIXC provides more accurate forecasts. However, for longer time horizons, the historical volatilities, particularly the random walk, provide better forecasts. We conclude that VIXC cannot incorporate all information contained in historical index prices for predicting future volatility.
    • The Informational Value of Corporate Credit Ratings

      Densmore, Mike; Faculty of Business Programs (Brock University, 2013-01-14)
      This thesis examines the quality of credit ratings issued by the three major credit rating agencies - Moody’s, Standard and Poor’s and Fitch. If credit ratings are informative, then prices of underlying credit instruments such as fixed-income securities and credit default insurance should change to reflect the new credit risk information. Using data on 246 different major fixed income securities issuers and spanning January 2000 to December 2011, we find that credit default swaps (CDS) spreads do not react to changes in credit ratings. Hence credit ratings for all three agencies are not price informative. CDS prices are mostly determined by historical CDS prices while ratings are mostly determined by historical ratings. We find that credit ratings are marginally more sensitive to CDS than CDS are sensitive to ratings.

      Juma, Guliziba; Faculty of Business Programs
      The purpose of this thesis is to explore the relationship between a firm’s innovation and Chapter 11 bankruptcy outcome. Innovation is measured as R&D expenditure, the number of patents and the number of citations to capture both input and output of a firm’s innovative activity. We find no significant relationship between innovation and bankruptcy outcome when we relate recent innovation to bankruptcy outcome. However, the relationship between innovation and bankruptcy outcome becomes significant when we consider the entire accumulated innovation prior to the bankruptcy, indicating older patents matter more in bankruptcy. We demonstrate that firms investing more in R&D expenditure and generating a higher number of patents before bankruptcy are more likely to reorganize than be liquidated or acquired. On the other hand, bankrupt firms with highly cited patents are more likely to be acquired than reorganize. Similar to other studies, our empirical results show that larger, more levered and liquid firms are positively associated with successful reorganizations. Finally, firms that file for prepackaged Chapter 11 bankruptcy and receive debtor-in-possession (DIP) financing during bankruptcy are more likely to reorganize than liquidate or be acquired. Firms file for bankruptcy during the 2008 economic crisis are prone to liquidation. Industry factor only matters for firms in the manufacturing industry, where firms with more innovation are more likely to reorganize than liquidated.
    • Institutionalizing People: Professional Identity Development of Postdoctoral Scientists

      Pyo, Sonya Sunyoung; Faculty of Business Programs
      Professional identity development has been traditionally studied from a cognitive and discursive perspective that has overlooked how emotional, fragile and unstable identification can potentially be. Building on recent theorizations on emotions and ethos, the institution’s highest ideals, that enrich our understanding of professional identity, I explore the interlevel mechanisms of ongoing management of professional identification in this qualitative study on postdoctoral scientists. Postdocs represent the “in-between” professional, having completed their education but not yet independent scientists, who are continuously revising, expanding and negotiating their identity. Results show that while ethos becomes deeply embedded in identity, it also becomes decoupled from experience. Postdocs manage ongoing identification by resolving this tension between ideals and experience, however, failure to resolve such tensions can lead to disillusionment and exit. This work contributes to the literature by centralizing professional identity around values and emotions and also theorizes on the role of significant others for professional identity and the synergy between the institutions of family and profession.