Date of Award

5-31-2022

Document Type

Campus Access Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Business Administration

First Advisor

Lucia Silva-Gao

Second Advisor

Xiaolu Xu

Third Advisor

Atreya Chakraborty

Abstract

The three related essays in my dissertation focus on analyzing how corporations react to expected and unexpected shocks within their operating environment.

The first research paper investigates the relationship between business interruption and analyst forecasts and actions during the Covid-19 outbreak. The essay finds that businesses with a greater Covid-19 work exposure, referred as industries with a bigger percentage of the workforce unable to work remotely, have a higher analyst prediction error and poorer forecast relative accuracy at both the forecast and firm-level. For these industries, analyst forecast dispersion is greater. The essay also shows that analysts are more prone to make heuristic judgments when it comes to herding closer to consensus predictions, reissuing earlier outstanding forecasts, and issuing rounded estimates for companies with higher Covid-19 work exposure. Further analyses suggest that the negative impact of Covid-19 on analyst forecast quality is attenuated in critical industries and for “high-ability” analysts.

The second study uses gender quota law on corporate boards in France as an exogenous policy shock and shows that increasing the number of women on corporate boards has a detrimental impact on financial performance. Furthermore, once the quota was established, the demographic, social capital, and human capital fit of women on boards in France dropped. Additionally, I show that following the gender quota, the fit of women on boards has a negative differential effect on financial performance in France when compared to the United States. Overall, these findings imply that the reduction in the fit of women on boards in France as a result of the gender quota law led to a negative effect of women on boards on financial performance.

The third essay assesses the impact of California gender quota law on CEO and board dynamics. Exploiting the cross-state, cross-time variation in the timing of the regulation, the study finds that the reform has an heterogeneous effect on the existing CEO-Board dynamics. Furthermore, the analysis suggests that this diverse effect is largely driven by the quality of board members. Specifically, boards that add high-quality women directors, measured by the Bloomberg measure—board score, improve their overall bargaining power.

Comments

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