Date of Award
1-1-2025
Document Type
Dissertation
Degree Name
Ph.D. in Business Administration
First Advisor
Kathleen Fuller
Second Advisor
Robert Van Ness
Third Advisor
Lixiong Guo
School
University of Mississippi
Relational Format
dissertation/thesis
Abstract
In the first essay, we investigate how corporate culture relates to firm performance, focusing specifically on market share growth following an increase in competition in the product market. Using industry-level import tariff cuts in the United States as an exogenous shock, we find that firms with strong cultures tend to experience higher market share growth after a reduction in import tariffs. We also identify two distinct cultural values – the strong-people focus and the strong-technology focus – and find that only firms with a strong-people focus are likely to experience market share growth when faced with intensified competition. In addition, firms with a strong corporate culture demonstrate enhanced operating performance after tariff cuts, and this cultural strength contributes to an improvement in firm value. Our study provides new insights into how corporate culture can, as an intangible asset, help companies adapt to unexpected events.
In the second essay, we use the setting provided by the Tax Cuts and Jobs Act (TCJA) of 2017 to re-examine the relation between non-debt tax shield (NDTS) and firms’ debt financing decisions. The TCJA brought significant changes to the corporate tax system, including reduced corporate tax rates and limited interest deductions and capital expensing, which reduced the tax benefits of debt. We hypothesize that firms with low marginal benefits of debt, especially those impacted by the interest deductibility limitation, will demonstrate a higher substitution effect between NDTS and debt financing. Employing a regression discontinuity design, we find that affected firms significantly reduce their reliance on debt financing when there is an increase in depreciation deduction, a proxy for NDTS. Furthermore, this effect is more pronounced for firms with lower effective tax rates.
The third essay examines how corporate culture influences financial reporting quality and ethical decision-making, focusing on the property and casualty insurance industry in the U.S. Drawing on existing literature, we use loss reserve error as a proxy for managerial bias and document a significant negative association between corporate culture and loss-reserve errors. The results indicate that a strong cultural focus correlates with reduced managerial discretion. We further observe that this relationship is more pronounced for smaller firms. Our study provides new insights into how corporate culture can promote ethical decision-making within organizations.
Recommended Citation
Bhattarai, Keshav Raj, "Essays on Corporate Finance" (2025). Electronic Theses and Dissertations. 3245.
https://egrove.olemiss.edu/etd/3245