Two essays on the impact of automation on firms' operating performance and M&A decisions, and one essay on a comparative analysis in external financing between U.S. and Japan

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dc.contributor.authorPhan, Quoc
dc.contributor.examiningcommitteeGao, Ya (Accounting & Finance)
dc.contributor.examiningcommitteeYang, Po (Statistics)
dc.contributor.examiningcommitteeZhou, Xiaozhou (University of Quebec - Montreal)
dc.contributor.supervisorZheng, Steven
dc.date.accessioned2024-08-26T20:41:33Z
dc.date.available2024-08-26T20:41:33Z
dc.date.issued2024-08-24
dc.date.submitted2024-08-26T19:27:11Zen_US
dc.degree.disciplineManagement
dc.degree.levelDoctor of Philosophy (Ph.D.)
dc.description.abstractThis thesis includes three topics on corporate finance: (1) Automation Exposure and Operating Performance, (2) Corporate Cash Shortfalls and External Financing: US vs Japan, and (3) Automation Exposure and M&A. The first essay, "Automation Exposure and Operating Performance," finds empirical evidence that firms with increased automation exposure experience deteriorating operating performance in subsequent years. Further analysis shows that financially unconstrained firms are better positioned to mitigate this negative impact on their operating performance compared to financially constrained firms. However, unconstrained firms are drawn into an automation arms race, escalating their investments in capital, tangible assets, and R&D. This race, while aimed at maintaining a competitive edge, paradoxically leads to a greater deterioration in their financial health compared to their financially constrained counterparts. In the second essay, "Corporate Cash Shortfalls and External Financing: US vs Japan," I find supporting evidence for the funding-horizon theory on external financing in both the US and Japan. I also find that repurchase and subnormal cash holding are important motives for debt issuance, while debt reduction is an important motive for equity issuance. Japanese firms are much less likely to issue debt and equity compared to US firms. The results suggest that this difference is due to the lower leverage used by Japanese firms and the fact that Japanese firms tend to be mature with fewer cash needs for growth. In the third essay, “Automation Exposure and M&A,” I find evidence that firms with high automation exposure are more likely to be involved in M&A transactions. High automation exposure firms with high R&D, profitability, cash holding, market value, and low leverage tend to be acquirers, while firms with the reverse characteristics tend to be targets. I further find that automation facilitates M&A transactions when product similarity is high. Consistent with the findings from my first essay on the automation arms race, acquisitions for automation purposes result in a "winner's curse," where the acquiring firms face greater financial constraints and lower operating profits in the following period.
dc.description.noteOctober 2024
dc.identifier.urihttp://hdl.handle.net/1993/38429
dc.language.isoeng
dc.rightsopen accessen_US
dc.subjectautomation
dc.subjectautomation exposure
dc.subjectfinancial constraint
dc.subjectMerge and Acquisition
dc.subjectM&A
dc.subjectoperating performance
dc.subjectautomation arms race
dc.subjectarms race
dc.subjectUS
dc.subjectJapan
dc.subjectJP
dc.subjectcash shortfalls
dc.subjectexternal financing
dc.subjectequity financing
dc.subjectdebt financing
dc.subjectequity issuance
dc.subjectdebt issuance
dc.subjectcash subnormal
dc.subjectcapital restructure
dc.subjectcash deficit
dc.titleTwo essays on the impact of automation on firms' operating performance and M&A decisions, and one essay on a comparative analysis in external financing between U.S. and Japan
dc.typedoctoral thesisen_US
local.subject.manitobano
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