Essays in bank dividend signaling, smoothing and risk shifting under information asymmetry and agency conflict

Patra, Sudip (2019) Essays in bank dividend signaling, smoothing and risk shifting under information asymmetry and agency conflict. PhD thesis, University of Glasgow.

Abstract

The current thesis is a collection of essays on costly signaling, smoothing (partial adjustment), and risk shifting through various pay outs by bank holding firms. The thesis is based on three chapters, or sections, which are through econometric investigations on the above mentioned topics. The major findings of the investigations are, one, a detailed firm level information content analysis of costly signaling by banks via different pay out methods, two, that partial adjustment or smoothing via pay outs can also be perceived as costly signals which is based on the information content of allied measures like bank specific speed of adjustments, and half-life periods, three, that rather than dividend pay outs share repurchases play relatively significant role in risk shifting exhibited by banking firms.
Chapter 1 is devoted to the analysis of different types of dividend and other pay out signaling under information asymmetry (between the outsider shareholders of banks and the insider managers), and impact of various bank specific variables on the levels of pay outs/ signaling, thus revealing the information content of such signaling. Both panel data analysis and vector auto regression analysis have been conducted to achieve these findings. Another finding in this section is a comparative analysis between share repurchases and dividend pay outs by bank holding firms.

Chapter2 is devoted to the investigation of bank specific partial adjustments of dividends, a modified partial adjustment model is used which is capable of investigating bank specific speeds of adjustments and half-life periods which may vary over periods. Such a model is an improvement over basic smoothing models in the standard literature which have mainly investigated the industry average speed of adjustment, and hence less efficient in investigating the bank specific information content of such measures.
Chapter 3 provides analysis based on a system of equations model on, one, whether risk shifting has been exhibited by the bank holding firms for a comprehensive period between 1990-2015, and two, which are the specific pay out channels through which such risk shifting or wealth transfers have taken place.

• Item Type: Thesis (PhD)
• Qualification Level: Doctoral
• Keywords: dividend signalling, dividend smoothing, risk shifting, partial adjustment model, GMM, LOGIT, TOBIT.
• Subjects: H Social Sciences > HG Finance
• Colleges/Schools: College of Social Sciences > Adam Smith Business School > Accounting and Finance
• Supervisor's Name: Liu, Dr. Frank Hong and Mario, Professor Cerrato
• Date of Award: 2019
• Depositing User: Mr sudip patra
• Unique ID: glathesis:2019-41017
• Copyright: Copyright of this thesis is held by the author.
• Date Deposited: 19 Feb 2019 11:10
• Last Modified: 05 Mar 2020 21:33
• Thesis DOI: 10.5525/gla.thesis.41017
• URI: https://theses.gla.ac.uk/id/eprint/41017