Dissertation: Essays on Debt Financing, Firm Performance and Banking in Emerging Markets
The topic is examined in four individual essays. The first two essays focus on the association between the sources of corporate debt financing and stock market performance of Russian firms.
– The results indicate that public debt financing may have a negative effect on firm’s market valuation. Firms that rely on public debt underperform relative to firms with other sources of debt financing in terms of stock market valuation, Davydov explains.
– Moreover, the results show that the firms which rely entirely on bank debt significantly outperformed the firms with public debt amidst the financial crisis of 2008.
The third essay considers the effect of debt sources on a wider set of firm performance measures in several emerging markets.
– The results show that bank debt may have a positive effect on accounting returns. The findings also suggest that higher levels of bank financing reduce the negative effect of debt on market valuation, tells Davydov.
The fourth essay of the thesis examines the effects of the state ownership of banks on their lending behavior and capitalization.
According Davydov the results show that fully state-owned banks boosted their lending and charged lower interest rates during the financial crisis of 2008–2010 in comparison to privately held banks. Moreover, state-owned banks were better protected against asset default. These findings suggest that state ownership of banks may be particularly valuable during the periods of financial turmoil.
Public examination of M.Sc. (Econ) Denis Davydov’s doctoral dissertation "Essays on Debt Financing, Firm Performance, and Banking in Emerging Markets" will be on Friday 30 May at 12 o’clock in auditorium Kurtén (C203, Tervahovi). Professor Stanley D. Smith from the University of Central Florida will act as an opponent and professor Sami Vähämaa as a custos.