Smith School of Business Graduate Theses
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Item Essays on Stakeholder Activism and Firm Practices(2024-08-01) Shaheen, Hadi; Business; Litrico, Jean-BaptisteIn my dissertation, I study the emergence and evolution of novel forms of social activism, including those coming from organizational members, such as employees and shareholders. The first study of my dissertation takes the context of bottom-up activism and explores how activists' employees influence corporate behaviour. I construct a proprietary dataset of employee activism campaigns and use Fuzzy-set Qualitative Comparative analysis to identify and explain the interaction among movement tactics and organizational factors. The findings highlight the different configurations of successful and failed employee activism campaigns and add to the research on insider activism by highlighting the interaction between tactics and opportunity structures to explain movement outcomes. The second study explores the dynamics within the same stakeholder activists’ group, such as shareholders, and how it might influence the effectiveness of their social proposals when firms face competing requests for change. Results suggest that social-oriented proposals reduce social performance because they can increase the presence of wealth-oriented proposals, which together can have a negative impact on the positive individual effect of social-oriented proposals on social performance. The third study investigates the indirect effect of shareholder activism by borrowing the bandwagon effect. The results suggest that non-targeted firms imitate rivals' social and competitive actions when observing successful shareholder activism. The evidence also indicates that visibility for non-targeted firms can influence the strength of the relationship.Item Incentives, Information, and Investments in Chapter 11 Bankruptcies(2024-06-19) Yang, Yan; Business; Wang, WeiAs business cycles generate ebb and flow in economic activities, the recurring corporate failures have highlighted how critical bankruptcy regimes are in reviving and stabilizing the economy. The Chapter 11 bankruptcy protection offers a court-supervised venue for defaulting companies to shed debt burdens, reallocate resources to potentially more productive uses, and obtain new capital. Bankruptcy affects not only distressed firms but also healthy firms. The rules of bankruptcy influence the capital structure and investment activities of firms distant from financial distress ex-ante. Therefore, it is crucial to understand the evolution of bankruptcy regimes and their implications for financial market participants. Exploring rich institutional details in Chapter 11 bankruptcies, this dissertation consists of three essays that investigate incentives, information, and investments within this context. The first essay is related to ”incentives”. It examines why managers of bankrupt companies retain top-tier investment banks as financial advisors during Chapter 11 bankruptcies. While these advisors facilitate faster resolutions, they also support incumbent management’s control. The second essay is about ”information”. It analyzes the stock trading activities of hedge funds serving on the Unsecured Creditors’ Committee (UCC) of a bankrupt firm. It shows that these hedge funds have higher portfolio turnover and make large trades in the few quarters after accessing material nonpublic information from the UCCs. The third essay, focusing on ”investments”, examines the performance of equity issued by public companies that emerged from Chapter 11 bankruptcy, namely, post-reorg equity. Although there was significant initial outperformance, it has diminished in recent years due to market expectation corrections and increased participation of institutional investors. Collectively, these essays offer a comprehensive understanding of the dynamics in Chapter 11 bankruptcies, shedding light on their broader implications for financial markets and economic recovery strategies.Item Aligning Strategically as Firms Innovate Digitally(2024-05-14) Ghawe, Ali S.; Business; Chan, Yolande E.; Denford, James S.This thesis examined two intersecting organizational phenomena often studied separately: digital innovation and strategic alignment processes. We adopted a mixed-method approach and collected data using interviews, online questionnaires, and an examination of the participating organizations’ websites. Our dataset incorporates 60 small and medium-sized North American digitally enabled firms. We adopted the abductive analysis technique, incorporated the system-process perspective, and performed a fuzzy set qualitative comparative analysis. We theorized and confirmed that digital innovation and strategic alignment processes span three corporate levels: macro, meso, and micro. We contributed to multi-level information systems research by adopting and validating a three-level process-based model. We uncovered the microfoundations of digital innovation and strategic alignment. Rather than finding some elements associated with each variable (event), we explicated categories of constituents and identified comprehensive sets of their associated elements. We showed that both phenomena share the same microfoundations but exhibit subtle differences. Therefore, our thesis advances the microfoundations perspective in information systems research. Our research illustrated that causality flows from the macro to the micro through the meso-level and from the micro to the macro through the meso-level—each variable is an integral part of the causal process. In the past, scholars used verbal descriptions of causal mechanisms and often stayed at an abstract level. In contrast, our research uncovered specific details of the causal mechanisms encountered in social and organizational sciences: situational, action-formation, and transformational. We uncovered these mechanisms' constituents and explained how they produce the expected results to move digital innovation and strategic alignment processes along their paths. Consequently, our thesis advances causal mechanisms theorization. Our configurational analysis offers another theoretical contribution and advances theories of digital innovation and strategic alignment processes. We discovered distinct configurations linked to two levels (low and high) of digital innovation and strategic alignment outcomes. Thus, we offer helpful guidelines to practitioners interested in optimizing innovation and aligning processes toward desired outcomes. Finally, we identified paradoxical tensions associated with the interaction between digital innovation and strategic alignment initiatives. Hence, we extend paradox theory and offer leaders yet another set of tools to increase the success of their organizational endeavors.Item Three Essays on Sustainable Finance: Canadian Physical Costs of Climate Change, Global Carbon Prices and the Costs of Climate Change, and, Environmental and Disclosure Performance: A Study of CA 100+ Companies(2024-03-01) Willcott, Neal; Business; Cleary, SeanSustainable finance has been increasingly gaining prominence in mainstream financial studies. The consideration of sustainability concerns within the sphere of finance has significant economic implications for society, investors, and beyond. In the past decade, the severity of climate change and its associated costs has spurred conversations about how to safeguard our prosperity in the face of this growing concern. These questions form the fundamental motivation for the study of how global climate change influences economic outcomes and firm performance and cost of equity. Specifically, this thesis is motivated by areas within sustainable finance that demand further research. The results from the first essay provide insight into the economic costs to Canada across several temperature outcomes leading into 2100. Using the Dynamic Integrated Climate and Economic (DICE) model, we project that climate change mitigation efforts that lead to a 2oC outcome more than pay for themselves in avoided climate costs from physical damages. The second essay investigates the climate change outcomes under varying global average carbon prices. We find that a global carbon price, while playing a critical role, will not be sufficient to meet our Paris Climate Agreement goals of limiting our global temperature increase to 1.5-2oC above pre-industrial levels by 2100. We also project significant differences in global physical costs, highlighting the urgency of taking action to mitigate global warming. The third essay investigates how environmental and disclosure performance influences firm’s return performance and cost of equity. We examine CA 100+ and find that they outperform other world indices in returns at a lower standard deviation, indicating stochastic dominance performance. We further find that the 2022 cost of equity (CoE) estimates for CA 100+ firms are in line with expectations after adjusting for country and industry impacts. We also find that, among CA 100+ firms, those that performed the worst environmentally and regarding disclosures had a lower CoE, contrary to expectations.Item Professional Identity and Culture: A Review on Auditors' Professional Identities Through the Ranks and a Study on Auditors' Identities Away from Centers of Power(2024-01-30) Stack, Ryan; Business; Malsch, BertrandIn my thesis, I examine the behaviours that constitute proper professional conduct within professional service firms (PSFs). In the first study, I explore prior studies relating to professional socialization of auditors. Drawing on 22 qualitative field studies, I synthesize socialization through the ranks of PSFs. The levels of the journey range from students in prestigious Canadian business school learning how to present themselves to elite accounting firms, to partners who emphasize the increasing need to build the business at the expense of technical expertise. Critically, this work recognizes the historic overfocus on a specific type of firm – Big 4 offices in metropolitan locations, and the need to build a more complete perspective by cultivating new research by examining historically neglected firms, locations, and individuals. My second study is based on 22 semi-structured interviews conducted with partners and senior managers at PSFs on the island of Newfoundland, where I was born and lived before moving to Ontario to attend Queen’s. I investigate the key attributes and skills that are needed to thrive in a PSF in Newfoundland. Newfoundland is a place far from centers of power, possessed of a unique culture and an economy starkly different from many prior sites of study. At the theoretical level, my study employs Bourdieu’s triad of Field, Capital, and Habitus to examine interviewees’ responses. I find that, contrary to prior studies of Western power-central locales, Newfoundland’s practitioners show an emphasis on client retention, on maintaining good relationships with other professionals, and on serving the community. Many of the forms of capital valued in other settings, such as displays of wealth or associations with elite educational institutions, are devalued in the Newfoundland setting. Likewise, interviewees often distanced themselves from traditional audit and assurance roles, deriding them as ‘non-value-added work’, while showing a preference for the trusted business advisor milieu. Overall, my dissertation contributes to our understanding of the linkage between local culture and the behaviour that is appropriate or required of accounting professionals. Newfoundland provides one example of a site ripe for further study, though other such sites abound. As my first paper asserts and my second further contends, a complete picture of the accounting profession can only be formed by recognizing the field beyond the metropole.