Prior literature and corporate finance theories study decisions on optimal capital structure and appropriate dividend payout mostly under static macroeconomic circumstances. To understand how firms preserve financial flexibility in times of shock, this dissertation analyzes possible contrasts on the impact of classic determinants of corporate policy after the September 11 attack, during the Global Financial Crisis and in the COVID-19 pandemic period, when compared to respective prior stable years. Additionally, it evaluates if predictors have a distinct influence within the three shocks. Based on a sample of 617 firms listed in the New York Stock Exchange that survived through 1999-2001, results show that determinants’ relations with changes in capital structure do not differ during crises. Although these present an identical behavior in the three different periods, details in the outcomes mirror each crisis own characteristics. Profitability and liquidity have a greater impact on leverage during the Global Financial Crisis, while stock market volatility is only significant in times of major uncertainty, such as the September 11 attack and the COVID-19 pandemic. However, profitability, liquidity, and size effects on payout policy are not only conflicting to what dividends’ theory state in steady periods but are also, unlike leverage, distinct across studied periods.
Date of Award | 28 Apr 2022 |
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Original language | English |
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Awarding Institution | - Universidade Católica Portuguesa
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Supervisor | Diana Bonfim (Supervisor) |
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- Capital structure
- Dividend policy
- September 11
- Global financial crisis
- COVID-19
How different are the determinants of corporate decisions in times of shock?: evidence from september 11, Global Financial Crisis, and COVID-19 pandemic
Ferreira, P. R. C. S. R. (Student). 28 Apr 2022
Student thesis: Master's Thesis