Papers by Thomas O'Connor
Journal of Financial Regulation and Compliance, 2019
PurposeThis paper aims to argue that the accounting standards’ requirements for the valuation of ... more PurposeThis paper aims to argue that the accounting standards’ requirements for the valuation of defined benefit pension schemes in the financial statements of scheme sponsoring companies potentially produce an artificial result which is at odds with the “faithful representation” and “relevance” objectives of these standards.Design/methodology/approachThe approach is a theoretical analysis of the relevant reporting standards with the use of a practical example to demonstrate the impact where trustees adopt a hedged approach to portfolio investment.FindingsWhere a pension fund engages in asset liability matching and invests in “risk-free” assets, the term, quantity and duration/maturity of which is intended to match some or all of its scheme liabilities, the required accounting treatment potentially results in the sponsoring company’s financial statements reporting fluctuating surpluses or deficits each year which are potentially ill informed and misleading.Originality/valuePension s...
Journal of Multinational Financial Management, 2017
We study how creditor rights and culture interact with one another to influence corporate dividen... more We study how creditor rights and culture interact with one another to influence corporate dividend payout policy. Where creditor rights are strong, creditors accept the status quo, which are large dividends in individualist and small dividends in collectivist traditions, respectively. Culture influences dividend payout where creditor rights are weak. In collectivist countries where group cohesion among corporate stakeholders results in perceived lower agency costs of debt and equity, creditors place few if any restrictions on dividend payout given weak creditor rights. In contrast, in individualist traditions, creditors continue to restrict dividend payouts under weak creditor rights. Our findings emphasize the importance of accounting for the interactions between creditor rights and culture in determining dividend policy.
Emerging Markets Review, 2010
We examine if the sequence of stock market liberalization events matters for corporate financing ... more We examine if the sequence of stock market liberalization events matters for corporate financing choices. We contrast firms who attain 'investable' status through domestic reforms with those who do so by issuing American Depository Receipt programs. We find that the first liberalization event prompts similar corporate responses regardless of the path followed. However, we find differential effects between firms who issue ADRs after realizing financial liberalization and those who use ADR initiations to achieve this status. Here, the sequence matters and the capital structure choices of the two groups are very different.
Managerial Finance, 2015
Purpose– The purpose of this paper is to explore the relationship between corporate governance an... more Purpose– The purpose of this paper is to explore the relationship between corporate governance and firm value at different stages of the corporate life-cycle.Design/methodology/approach– The authors use two measures, commonly employed in the literature, to differentiate between “immature” and “mature” firms, and estimate separate governance-value regressions for each set of firms.Findings– The findings suggest that it is differences in the resource/strategic governance functions, which manifest in young firms which result in differences in value across firms, all else equal. The authors find no relationship between governance and firm value for older firms. Hence, differences in the monitoring aspect of governance between mature firms are not rewarded with a value premium.Research limitations/implications– The findings imply that the strategic and resource roles of governance are “must haves” for firms since firms that score highly on these fronts are valued more highly. In contrast...
SSRN Electronic Journal, 2020
We investigate the systemic importance of U.S. industrial firms and analyse the firm-specific cha... more We investigate the systemic importance of U.S. industrial firms and analyse the firm-specific characteristics that identify systemically important industrials. We compute two firm-specific measures of systemic risk for 367 non-financial corporations and confirm that industrial firms are both vulnerable to systemic shocks and contribute to system-wide risk. Systemic risk measures exhibit substantial variation across firms and over time. Debt and trade credit are related to both dimensions of systemic risk, while a range of other firm characteristics are associated with systemic risk in at least one direction. The differences between the dimensions of risk and their associated characteristics underline the importance of analysing both measures of risk. Finally, we report some striking differences vis-à-vis the extant literature on banks and non-bank financials.
In this paper, I examine the valuation effects of trading in the U.S. as non-exchange issues i.e.... more In this paper, I examine the valuation effects of trading in the U.S. as non-exchange issues i.e. Level 1 and 144 firms for non-U.S. firms. The study is motivated by two facts; first, while the number of new Level 2/3 issues has fallen 2001, Level 1 issues have remained an attractive listing option for non-U.S. firms. Second, while on theoretical grounds, firms from low-disclosure regimes have most to gain from exchange listing; these firms tend to list in the U.S. as non-exchange issues. Here, I examine whether the continuing attractiveness of, and the tendency of firms to choose a Level l/144a listing is value enhancing. My results suggest that the tendency on the part of firms from low-disclosure regimes to choose non-exchange issues is justified. Relative to their high-disclosure peers, these firms tend to gain most from trading in the U.S. However, for Rule 144a issues, the valuation gains are short-lived.
International Review of Finance
We analyze the impact of firm-specific stock market liberalization events on the capital structur... more We analyze the impact of firm-specific stock market liberalization events on the capital structure and debt maturity decisions of firms from emerging market economies. We differentiate between firms based on their ownership structures at the time of liberalization and analyze their post-liberalization behavior regarding corporate financing decisions. Our empirical results show that single–class-share firms (typically with stronger corporate governance and better information environments) respond differently to their dual–class-share counterparts. Liberalization results in lower debt reliance for the former group while the latter lengthen the maturity of their debt portfolios.
International Review of Finance, 2013
We analyze the impact of firm-specific stock market liberalization events on the capital structur... more We analyze the impact of firm-specific stock market liberalization events on the capital structure and debt maturity decisions of firms from emerging market economies. We differentiate between firms based on their ownership structures at the time of liberalization and analyze their post-liberalization behavior regarding corporate financing decisions. Our empirical results show that single-class-share firms (typically with stronger corporate governance and better information environments) respond differently to their dualclass-share counterparts. Liberalization results in lower debt reliance for the former group while the latter lengthen the maturity of their debt portfolios. Jel Classification: F30; G15; G32.
Emerging Markets Review, 2010
We examine the impact of stock market liberalization events on corporate financing choices. We an... more We examine the impact of stock market liberalization events on corporate financing choices. We analyze differences between 'investable' firms and those who cross-list on international markets and show that an initial act of liberalization evokes similar responses across all firms. Furthermore, we examine the importance of the order in which these events occur. We find evidence of different behavior depending on the sequence of events and across categories of listing. Level 3 ADRs confer greatest equity raising post-listing, suggesting that US lists still have benefits over and above London.
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Papers by Thomas O'Connor