City Research Online

Essays in empirical corporate finance

Tian, Siyang (2018). Essays in empirical corporate finance. (Unpublished Doctoral thesis, City, University of London)


This thesis explores three topics in empirical corporate finance. The first chapter examines the cross-border private equity buyout performance. The second chapter investigates social ties and venture capital investment. The final chapter looks into the internal capital market of the conglomerate and examines the investment efficiency by taking the equity carve-out as the restructuring event. The first chapter examines the question of a country’s institutional quality as a determinant of the cross-border buyout performance. Using a sample of 2,665 cross-border buyout investments from 1998 to 2007 in 40 countries and regions, I find that institution quality of the portfolio company nation, as measured by the ranking in the composite index of political, economic and financial risk, is important to cross-border buyout performance in terms of exit success. In a high institution quality country, the probability of a successful exit via Initial Public Offerings (IPO) or Mergers and Acquisitions (M&A) is higher. Institutional distance between portfolio company country and private equity (PE) firm country lowers the exit success. PE firms’ international experience, industrial experience, and reputation based on deal experience help to improve buyout exit success and their industrial experience could mitigate the adverse influence of institutional distance. The second chapter investigates how social ties between VC partners and start-up founders influence the venture capital investment. We find that if the VC partners have social ties, obtained from previous education, past employment or ethnic minority community, with the start-up founders, the collaboration between the VC firm and the start-up is more likely to happen. Also, this homophily improves the post investment outcome and we observe higher probability of next round financing, higher hazard rate of next round financing and shorter expected duration, larger amounts of fund-raising in the next round, and higher probability of the VC firm taking the start-up to Initial Public Offerings (IPO) or Mergers and Acquisitions (M&A). Using the estimate of a two-stage Heckman selection model and addressing the selection effect, we find that post-investment monitoring effect still accounts for the performance patterns. In the third chapter, we examine whether equity carve-outs (ECOs) lead to improvements in the functioning of the internal capital markets (ICM) of diversified firms. Divestments, including spin-offs, sell-offs, and ECOs, can be employed by firms to improve allocative efficiency. Equity carve-outs, unlike spin offs and sell-offs, leave the parent’s ICM intact but provide the opportunity to enhance internal and external corporate governance mechanisms. Using a U.S. sample of 354 ECOs completed between 1980 and 2013, we find that the allocative efficiency of parents is augmented significantly following ECOs. This increase in investment efficiency is related to the improvements in the internal and external governance characteristics of parent companies.

Publication Type: Thesis (Doctoral)
Additional Information: Chapter 2 is co-authored with Dr. Jianhua Shao and Chapter 3 is co-authored with Professor Sudi Sudarsanam and Dr. Valeriya Vitkova.
Subjects: H Social Sciences > HG Finance
Departments: Bayes Business School
Bayes Business School > Finance
Bayes Business School > Bayes Business School Doctoral Theses
[thumbnail of Tian, Siyang.pdf]
Text - Accepted Version
Download (1MB) | Preview


Add to AnyAdd to TwitterAdd to FacebookAdd to LinkedinAdd to PinterestAdd to Email


Downloads per month over past year

View more statistics

Actions (login required)

Admin Login Admin Login