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Campello, Murillo Campello, Murillo Almeida, Heitor Weisbenner, Scott Bengtsson, Ola Laranjeira, Bruno d. 2011-05-25T14:39:03Z 2011-05-25T14:39:03Z 2013-05-26T10:00:25Z 2011-05-25T14:39:03Z 2011-05 This thesis presents two essays in Corporate Finance. In the first essay, I use the August 2007 crisis episode to gauge the effect of financial contracting on real firm behavior. I identify heterogeneity in financial contracting at the onset of the crisis by exploiting ex-ante variation in long-term debt maturity structure. Using a difference-in-differences matching estimator approach, I find that firms whose long-term debt was largely maturing right after the third quarter of 2007 cut their investment-to-capital ratio by 2.5 percentage points more (on a quarterly basis) than otherwise similar firms whose debt was scheduled to mature after 2008. This drop in investment is statistically and economically significant, representing one-third of pre-crisis investment levels. A number of falsification and placebo tests suggest that my inferences are not confounded with other factors. For example, in the absence of a credit contraction, the maturity composition of long-term debt has no effect on investment. Moreover, long-term debt maturity composition had no impact on investment during the crisis for firms for which long-term debt was not a major source of funding. Our analysis highlights the importance of debt maturity for corporate financial policy. More than showing a general association between credit markets and real activity, my analysis shows how the credit channel operates through a specific feature of financial contracting. In the second essay, I analyze how institutional investors choose which Initial Public Offering to invest. Using a sample of IPOs from 1980 to 2004, I show that the reputation of the lead underwriter is the most significant variable in this decision process. Using Carter-Manaster rankings of underwriter reputation, I report that a one point increase in the reputation ranking leads to a 2\% increase in institutional investors` holding. Moreover, I test hypotheses about what kind of certification the underwriter is providing. I provide evidence that underwriters certify un-measurable characteristics, in contrast to measurable characteristics, such as those provided in the financial statements of the issuer. Item withdrawn by Rebecca Bryant (rabryant@illinois.edu) on 2011-04-20T22:36:10Z Item was in collections: University of Illinois Theses & Dissertations (ID: 1) No. of bitstreams: 1 Laranjeira_Bruno.pdf: 1791834 bytes, checksum: 4bdac1b97d5e1fb8285f0f355083d8a6 (MD5) Made available in DSpace on 2011-05-25T14:39:03Z (GMT). No. of bitstreams: 2 Laranjeira_Bruno.pdf: 1791834 bytes, checksum: 4bdac1b97d5e1fb8285f0f355083d8a6 (MD5) license.txt: 4066 bytes, checksum: 49293c99f9176ef185edd0943c8f6ee3 (MD5) Item marked as restricted to the 'UIUC Users [automated]' Group (id=2) by William Ingram (wingram2@illinois.edu) on 2011-05-25T14:42:05Z Item is restricted until 2013-05-25T14:41:28Z Item reinstated by Sarah Shreeves (sshreeve@illinois.edu) on 2013-05-26T10:00:25Z Item was in collections: Dissertations and Theses - Finance (ID: 775) University of Illinois Dissertations and Theses (ID: 204) No. of bitstreams: 3 Laranjeira_Bruno.pdf.txt: 172304 bytes, checksum: 6bf1de7c8e489e950abc84db180c5873 (MD5) Laranjeira_Bruno.pdf: 1791834 bytes, checksum: 4bdac1b97d5e1fb8285f0f355083d8a6 (MD5) license.txt: 4066 bytes, checksum: 49293c99f9176ef185edd0943c8f6ee3 (MD5) Item released from any restrictions by Sarah Shreeves (sshreeve@illinois.edu) on 2013-05-26T10:00:25Z http://hdl.handle.net/2142/24413 en Copyright 2011 Bruno de Almeida Laranjeira Corporate Finance Debt Maturity Initial Public Offering Institutional Investors Essays in corporate finance Finance 1260 Finance 0075 University of Illinois at Urbana-Champaign Dissertation Ph.D. PHD:Finance -UIUC 10KS0075PHD