Essays in corporate finance

2009 2009

Other formats: Order a copy

Abstract (summary)

This dissertation consists of three essays in empirical corporate finance. The first two essays focus on the impact of securitization on the corporate loan market. The third essay studies the role of equity blockholders in corporate governance.

The first essay, written jointly with Efraim Benmelech, examines the credit rating process for collateralized loan obligations. CLOs were one of the largest segments of the structured finance market from 2003-2007, fueling a boom in syndicated loans and leveraged buyouts. Investors in CLOs rely heavily on credit ratings provided by rating agencies, yet little is known about their rating practices. This paper attempts to fill that gap. Using novel hand-collected data on 3,912 tranches of collateralized loan obligations we document the rating practices of CLOs and analyze their structures.

The second essay, written jointly with Efraim Benmelech and Victoria Ivashina, examines agency problems in securitization. We investigate whether securitization was associated with risky lending in the corporate loan market by examining the performance of individual loans held by CLOs. Our results indicate that adverse selection problems in corporate loan securitizations may be less widespread than commonly believed. Controlling for firm characteristics, we find that securitized loans perform no worse, and under some criteria better, than unsecuritized loans of comparable quality. Furthermore, we find that banks that participate on both sides of the market, arranging loans and underwriting CLOs, may use private information gained in the lending process to direct loans with more stable credit quality towards their own CLOs.

The third essay, written jointly with Rüdiger Fahlenbrach, Paul Gompers, and Andrew Metrick, contributes to the empirical corporate governance literature. Large blocks of stock play an important role in many finance studies, yet there is no standardized data set that tracks them. Further, the best available data source has many mistakes and biases. We document these mistakes, show how to fix them, and demonstrate the impact in a regression framework. For researchers who need to work outside of this sample, we test the efficacy of alternative fixes and fmd that truncating or winsorizing can reduce about half of the bias in our representative application.

Indexing (details)

0508: Finance
Identifier / keyword
Social sciences; Blockholders; Collateralized loan obligations; Corporate finance; Corporate governance; Securitization; Syndicated loans
Essays in corporate finance
Dlugosz, Jennifer L.
Number of pages
Publication year
Degree date
School code
DAI-A 70/07, Dissertation Abstracts International
Place of publication
Ann Arbor
Country of publication
United States
Benmelech, Efraim; Stein, Jeremy; Gompers, Paul; Ivashina, Victoria
Harvard University
University location
United States -- Massachusetts
Source type
Dissertations & Theses
Document type
Dissertation/thesis number
ProQuest document ID
Database copyright ProQuest LLC; ProQuest does not claim copyright in the individual underlying works.
Document URL
Access the complete full text

You can get the full text of this document if it is part of your institution's ProQuest subscription.

Try one of the following:

  • Connect to ProQuest through your library network and search for the document from there.
  • Request the document from your library.
  • Go to the ProQuest login page and enter a ProQuest or My Research username / password.