title: Four essays on capital structure dynamics: special reference to level of leverage, state ownership, corporate governance and climate risk

authors: Nguyen Huu, Thao

subjects: Capital structure

abstract: My thesis consists of four essays that investigate the issues regarding speed of adjustment of capital structure (SOA). Since any deviation in the observed leverage from the optimal level will reduce a firm’s value, the questions pertaining to the existence of target capital structure and how fast firms adjust their leverage draw the attention of researchers and practitioners. To this end, two major approaches have been adopted to address the SOA issues. While some researchers discuss the best method to estimate the speed of leverage adjustment, others explore the determinants of SOA. In contrast to prior studies which focus on developed markets, we explore both a developed market (United States) and a developing market (Vietnam). Two of the four essays here focus on the U.S. market when examining the method of calculating SOA and the new determinant (drought) of SOA. The remaining two essays concentrate on Vietnam, an emerging market and a transitional economy. Nguyen, Locke, and Reddy (2015), after considering the relationship between corporate governance and firm performance in Vietnam, reveal that the legal system, the rule of law, and investor protection in developing countries are not as effective as in developed countries. As such, corporate governance in developing countries plays a more important role in mitigating the agency problem and severe information asymmetry. Hence, the impact of corporate governance on SOA in developing countries can be different from developed countries (Buvanendra, Sridharan, & Thiyagarajan, 2017). Additionally, the role of state ownership is essential in transitional countries where the economy moves from a centrally-planned system to a market-oriented one. Hence, it is important to understand the impact of state ownership on SOA in transitional economies. 
The first essay introduces a new approach to estimate SOA and investigates the relationship between the level of leverage and SOA of capital structure. Instead of applying a blanket total leverage measurement, we consider three leverage settings: total leverage, long-term leverage, and short-term leverage to review other sources of debt. The drawbacks of different approaches, such as a sub-sampling model, applying optimal leverage as a criterion to measure the degree of leverage, or penalized quantile regression, are disclosed. Moreover, we prove that our framework, of employing the quantile regression model and excluding zero-leverage firms, is the best way to investigate the influences of the level of leverage on SOA. For the total and long-term leverage setting, our findings support Leary and Roberts (2005) who contend that the high- and low-levered firms are likely to make leverage adjustments quicker than mid-levered firms. Moreover, we extend the literature to reveal the asymmetry dynamics derived from low-versus high-levered firms. That is, the low-levered firms have a higher SOA than highly levered firms. While the existence of optimal short-term debt and the ways in which firms adjust their short-term debt are sources of controversy among researchers, our findings show that SOA becomes smaller and changes from positive to negative to positive across quantile levels, indicating that the existence of optimal short-term leverage is for firms with low short-term debt. 
The second essay discusses the impact of state ownership on SOA by using a quantile regression approach in Vietnam – a transitional economy. This relationship has been only recently explored in China, and Vietnam, as an important transitional emerging market in Asia, warrants attention. Since privatisation is still ongoing, state-owned enterprises, which contribute 29% to the country’s GDP, play a crucial role in the Vietnamese economy. The linkage between state ownership and SOA in the literature has produced mixed results thus far and we obtain new evidence that the effect of state ownership on SOA is conditional on the level of leverage. Specifically, the effect is significant where there are extreme leverage values, both very high and very low, but it is not significant in the central area of leverage distribution. This effect is adverse for low-leveraged firms but positive for high-leveraged firms. Moreover, the magnitude of adverse effects on SOA is greater than those of favourable effects, implying an average negative effect of state ownership on SOA.
The third study investigates the impact of corporate governance in Vietnam. First, we disclose the effect of fundamental corporate governance mechanisms, namely gender diversity, foreign ownership and managerial ownership on SOA, which are left unexplored by the literature. Second, we are the first attempt to demonstrate the linkage between corporate governance and SOA in Vietnam. While most studies on capital structure dynamics and corporate governance concentrate on the United States (Chang, Chou, & Huang, 2015, 2014), minimal attention has been paid to the relationship between corporate governance and SOA in a developing country. The corporate governance system in Vietnam is in its initial stage of development and remains underdeveloped. Applying the GMM (Generalized Method of Moment) two step framework, we find the significant impact on SOA of six corporate governance mechanisms: board size, board independence, CEO duality, gender diversity, managerial ownership and foreign ownership. Our evidence indicates that board size, board independence, gender diversity, and managerial ownership positively affect SOA while CEO duality and foreign ownership have adverse influences. These findings have important policy implications for firms and Vietnamese authorities.
The fourth study demonstrates how firm respond, in terms of SOA of capital structure, to climate-change risk, namely, drought. Using a fractional dependent estimator (DPF) approach and 130,511 U.S. firm-year observations over the period 1970-2015, we document an adverse and significant influence of drought on capital structure and the speed of leverage adjustment. Our study makes four significant contributions to the extant literature in climate finance. First, while there is virtually no disagreement among researchers that climate change poses substantial costs to the economy (e.g., Burke, Hsiang, & Miguel, 2015; Dietz, Bowen, Dixon, & Gradwell, 2016; Lesk et al., 2016), the impact of climate change in the form of drought on individual firms has yet to be well researched. Second, while the extant literature documents the impact of drought, mostly in food and agriculture industries (Blackhurst, Hendrickson, & Sels, 2010; Hong et al., 2019; Lesk et al., 2016), we report evidence of the spill over effect of drought on nonfood industry firms. Third, our firm–level examination takes advantage of the heterogeneity in corporate policies and allows us to draw implications for managers as to how firms can palpably address climate risks in general and drought risk in particular. Last, we find that the role of cash flow and financial unconstrained factors are effective in mitigating the negative impact of drought on capital structure and the speed of leverage adjustment.

text: Four essays on capital structure dynamics: special reference to level of leverage, state ownership, corporate governance and climate risk My thesis consists of four essays that investigate the issues regarding speed of adjustment of capital structure (SOA). Since any deviation in the observed leverage from the optimal level will reduce a firm’s value, the questions pertaining to the existence of target capital structure and how fast firms adjust their leverage draw the attention of researchers and practitioners. To this end, two major approaches have been adopted to address the SOA issues. While some researchers discuss the best method to estimate the speed of leverage adjustment, others explore the determinants of SOA. In contrast to prior studies which focus on developed markets, we explore both a developed market (United States) and a developing market (Vietnam). Two of the four essays here focus on the U.S. market when examining the method of calculating SOA and the new determinant (drought) of SOA. The remaining two essays concentrate on Vietnam, an emerging market and a transitional economy. Nguyen, Locke, and Reddy (2015), after considering the relationship between corporate governance and firm performance in Vietnam, reveal that the legal system, the rule of law, and investor protection in developing countries are not as effective as in developed countries. As such, corporate governance in developing countries plays a more important role in mitigating the agency problem and severe information asymmetry. Hence, the impact of corporate governance on SOA in developing countries can be different from developed countries (Buvanendra, Sridharan, & Thiyagarajan, 2017). Additionally, the role of state ownership is essential in transitional countries where the economy moves from a centrally-planned system to a market-oriented one. Hence, it is important to understand the impact of state ownership on SOA in transitional economies. 
The first essay introduces a new approach to estimate SOA and investigates the relationship between the level of leverage and SOA of capital structure. Instead of applying a blanket total leverage measurement, we consider three leverage settings: total leverage, long-term leverage, and short-term leverage to review other sources of debt. The drawbacks of different approaches, such as a sub-sampling model, applying optimal leverage as a criterion to measure the degree of leverage, or penalized quantile regression, are disclosed. Moreover, we prove that our framework, of employing the quantile regression model and excluding zero-leverage firms, is the best way to investigate the influences of the level of leverage on SOA. For the total and long-term leverage setting, our findings support Leary and Roberts (2005) who contend that the high- and low-levered firms are likely to make leverage adjustments quicker than mid-levered firms. Moreover, we extend the literature to reveal the asymmetry dynamics derived from low-versus high-levered firms. That is, the low-levered firms have a higher SOA than highly levered firms. While the existence of optimal short-term debt and the ways in which firms adjust their short-term debt are sources of controversy among researchers, our findings show that SOA becomes smaller and changes from positive to negative to positive across quantile levels, indicating that the existence of optimal short-term leverage is for firms with low short-term debt. 
The second essay discusses the impact of state ownership on SOA by using a quantile regression approach in Vietnam – a transitional economy. This relationship has been only recently explored in China, and Vietnam, as an important transitional emerging market in Asia, warrants attention. Since privatisation is still ongoing, state-owned enterprises, which contribute 29% to the country’s GDP, play a crucial role in the Vietnamese economy. The linkage between state ownership and SOA in the literature has produced mixed results thus far and we obtain new evidence that the effect of state ownership on SOA is conditional on the level of leverage. Specifically, the effect is significant where there are extreme leverage values, both very high and very low, but it is not significant in the central area of leverage distribution. This effect is adverse for low-leveraged firms but positive for high-leveraged firms. Moreover, the magnitude of adverse effects on SOA is greater than those of favourable effects, implying an average negative effect of state ownership on SOA.
The third study investigates the impact of corporate governance in Vietnam. First, we disclose the effect of fundamental corporate governance mechanisms, namely gender diversity, foreign ownership and managerial ownership on SOA, which are left unexplored by the literature. Second, we are the first attempt to demonstrate the linkage between corporate governance and SOA in Vietnam. While most studies on capital structure dynamics and corporate governance concentrate on the United States (Chang, Chou, & Huang, 2015, 2014), minimal attention has been paid to the relationship between corporate governance and SOA in a developing country. The corporate governance system in Vietnam is in its initial stage of development and remains underdeveloped. Applying the GMM (Generalized Method of Moment) two step framework, we find the significant impact on SOA of six corporate governance mechanisms: board size, board independence, CEO duality, gender diversity, managerial ownership and foreign ownership. Our evidence indicates that board size, board independence, gender diversity, and managerial ownership positively affect SOA while CEO duality and foreign ownership have adverse influences. These findings have important policy implications for firms and Vietnamese authorities.
The fourth study demonstrates how firm respond, in terms of SOA of capital structure, to climate-change risk, namely, drought. Using a fractional dependent estimator (DPF) approach and 130,511 U.S. firm-year observations over the period 1970-2015, we document an adverse and significant influence of drought on capital structure and the speed of leverage adjustment. Our study makes four significant contributions to the extant literature in climate finance. First, while there is virtually no disagreement among researchers that climate change poses substantial costs to the economy (e.g., Burke, Hsiang, & Miguel, 2015; Dietz, Bowen, Dixon, & Gradwell, 2016; Lesk et al., 2016), the impact of climate change in the form of drought on individual firms has yet to be well researched. Second, while the extant literature documents the impact of drought, mostly in food and agriculture industries (Blackhurst, Hendrickson, & Sels, 2010; Hong et al., 2019; Lesk et al., 2016), we report evidence of the spill over effect of drought on nonfood industry firms. Third, our firm–level examination takes advantage of the heterogeneity in corporate policies and allows us to draw implications for managers as to how firms can palpably address climate risks in general and drought risk in particular. Last, we find that the role of cash flow and financial unconstrained factors are effective in mitigating the negative impact of drought on capital structure and the speed of leverage adjustment.

year: 2020

title: Grotesque Inversions On Stage, In Film: Horrid Yet Curious, Fascinating Yet Alarming

authors: Dellow, Delwyn Rae

subjects: Grotesque Theatre

abstract: Grotesque theatre is not a genre but a style of theatre made up of many strands which has been employed over many centuries beginning in Ancient Greece, particularly with Aristophanes and moving through time to the present.  François Rabelais recognised the grotesque in Church Feasts, Festivals, Guild performances, sotties and farces.  This thesis investigates through theatre and film the seven strands Bakhtin identifies:  grotesque image, abusive language, grotesque madness, scatalogical humour, light, reversals and the lower bodily stratum (1984, pp. 24-41).  In particular the thesis traces inversions in both theatre and film.  These two mediums have been selected to compare and contrast the use of the grotesque in each, as they share two strong commonalities in acting and the requirement of scripts.  

	Each chapter of this thesis deals with a script, and the last two chapters  incorporate the use of a movie for contrast.  The Introduction introduces the grotesque, offering an explanation of the styles of the grotesque as defined by Mikhail Bakhtin and Philip Thomson.  Examples are shown in pictures.  Chapter one explores two plays written by Eugene Ionesco:   Amedée or How to Get Rid of It, and Rhinoceros.  Chapter two moves back through time to Aristophanes' Lysistrata and explores the power women's bodies might have when men are in need.  The third chapter investigates The Roaring Girl, written by Middleton and Dekker.  This delves into the life of the character Moll Cutpurse and shows why Moll chose to dress as a man.  Chapters four and five deal with the fantasy and the gothic elements in Frankenstein and Dracula respectively:  focusing on bodily transformations; as well as the treatment of the monster and Dracula by society,  and their treatment in turn of society.  

	The grotesque is an intriguing style of theatre because it deals essentially with human nature and the human body in its imperfect and ever-changing form.  The grotesque therefore lends itself to horror, comedy and exaggeration making it a style which does not have to be limited by strict parameters.  The grotesque can be successfully woven into other genres such as the gothic or the absurd giving it even greater dimensions in storytelling, staging and special effects.  Human beings are often torn between the gory or visually disturbing whilst needing the safety of the normal and acceptable.  The grotesque offers both, which can make a scintillating piece of entertainment by fulfilling our needs at both ends of the emotional spectrum.  Grotesque theatre therefore by its very nature is a style which will continue to exist so long as it keeps its patrons in suspense.

text: Grotesque Inversions On Stage, In Film: Horrid Yet Curious, Fascinating Yet Alarming Grotesque theatre is not a genre but a style of theatre made up of many strands which has been employed over many centuries beginning in Ancient Greece, particularly with Aristophanes and moving through time to the present.  François Rabelais recognised the grotesque in Church Feasts, Festivals, Guild performances, sotties and farces.  This thesis investigates through theatre and film the seven strands Bakhtin identifies:  grotesque image, abusive language, grotesque madness, scatalogical humour, light, reversals and the lower bodily stratum (1984, pp. 24-41).  In particular the thesis traces inversions in both theatre and film.  These two mediums have been selected to compare and contrast the use of the grotesque in each, as they share two strong commonalities in acting and the requirement of scripts.  

	Each chapter of this thesis deals with a script, and the last two chapters  incorporate the use of a movie for contrast.  The Introduction introduces the grotesque, offering an explanation of the styles of the grotesque as defined by Mikhail Bakhtin and Philip Thomson.  Examples are shown in pictures.  Chapter one explores two plays written by Eugene Ionesco:   Amedée or How to Get Rid of It, and Rhinoceros.  Chapter two moves back through time to Aristophanes' Lysistrata and explores the power women's bodies might have when men are in need.  The third chapter investigates The Roaring Girl, written by Middleton and Dekker.  This delves into the life of the character Moll Cutpurse and shows why Moll chose to dress as a man.  Chapters four and five deal with the fantasy and the gothic elements in Frankenstein and Dracula respectively:  focusing on bodily transformations; as well as the treatment of the monster and Dracula by society,  and their treatment in turn of society.  

	The grotesque is an intriguing style of theatre because it deals essentially with human nature and the human body in its imperfect and ever-changing form.  The grotesque therefore lends itself to horror, comedy and exaggeration making it a style which does not have to be limited by strict parameters.  The grotesque can be successfully woven into other genres such as the gothic or the absurd giving it even greater dimensions in storytelling, staging and special effects.  Human beings are often torn between the gory or visually disturbing whilst needing the safety of the normal and acceptable.  The grotesque offers both, which can make a scintillating piece of entertainment by fulfilling our needs at both ends of the emotional spectrum.  Grotesque theatre therefore by its very nature is a style which will continue to exist so long as it keeps its patrons in suspense.

year: 2012

title: What is the difference? What factors contribute to the variation of achievement for Year 7 and 8 Māori students in high decile, full primary schools?

authors: McLocklan, Sue

subjects: Maori student achievement

abstract: The educational disparity between indigenous Māori students and those of the majority continue to be a major issue in New Zealand. Attempting to bridge the gap for Māori students has generated focus on Māori student engagement in the classroom, the actions and understanding of the teacher and the relationship and interactions between the teacher and students in their learning environment. Elements of culturally responsive pedagogy have been identified as positive contributing factors to accelerating academic achievement for secondary Māori mainstream students. 
This small-scale cross-cultural exploratory qualitative research project seeks to identify the factors that contribute to student achievement variation for Year 7 and 8 students in high decile full primary schools and the integration of teacher’s cultural competencies in high quality learning opportunities. Within a kaupapa Māori research process, this study uses empirical data collected from a purposive sample through a semi-structured individual interview and a for self-assessment. Voluntary research participants were twelve students and six teachers in three schools in the Bay of Plenty, Waikato and Wellington regions. This research examines the engagement of student and teacher in pedagogical practice, learning variables, cultural knowledge and practices attributable to positive academic achievement for Māori. 
The findings reveal that when teachers place themselves in an agentic position; adopt a professional commitment and willingness to engage in effective relations, interactions and reciprocal practices to support Māori learners, high levels of relational trust and expectations prevail through mutual respect and interdependence to attain successful educational outcomes.
Further teacher professional learning is essential to enlighten and deepen teachers' understanding of culturally responsive pedagogy to enable Māori learners to reach their potential to participate and contribute in their world of choice.

text: What is the difference? What factors contribute to the variation of achievement for Year 7 and 8 Māori students in high decile, full primary schools? The educational disparity between indigenous Māori students and those of the majority continue to be a major issue in New Zealand. Attempting to bridge the gap for Māori students has generated focus on Māori student engagement in the classroom, the actions and understanding of the teacher and the relationship and interactions between the teacher and students in their learning environment. Elements of culturally responsive pedagogy have been identified as positive contributing factors to accelerating academic achievement for secondary Māori mainstream students. 
This small-scale cross-cultural exploratory qualitative research project seeks to identify the factors that contribute to student achievement variation for Year 7 and 8 students in high decile full primary schools and the integration of teacher’s cultural competencies in high quality learning opportunities. Within a kaupapa Māori research process, this study uses empirical data collected from a purposive sample through a semi-structured individual interview and a for self-assessment. Voluntary research participants were twelve students and six teachers in three schools in the Bay of Plenty, Waikato and Wellington regions. This research examines the engagement of student and teacher in pedagogical practice, learning variables, cultural knowledge and practices attributable to positive academic achievement for Māori. 
The findings reveal that when teachers place themselves in an agentic position; adopt a professional commitment and willingness to engage in effective relations, interactions and reciprocal practices to support Māori learners, high levels of relational trust and expectations prevail through mutual respect and interdependence to attain successful educational outcomes.
Further teacher professional learning is essential to enlighten and deepen teachers' understanding of culturally responsive pedagogy to enable Māori learners to reach their potential to participate and contribute in their world of choice.

year: 2013