Essays on corporate finance and governance

This thesis investigates how capital structure, macroeconomic conditions, and governance networks jointly shape asset prices, financing decisions, and borrowing costs. Positioned at the intersection of corporate finance, macro-finance, and corporate governance, the analysis provides new empirical evidence on how firm heterogeneity and relational ties affect market outcomes in environments characterized by informational frictions.

The first chapter examines stock price responses to monetary policy shocks under varying degrees of financial leverage and asset tangibility. Using a large international firm-level panel and a panel vector autoregression (PVAR) framework, the analysis shows that the conventional inverse relationship between interest rates and equity prices is not universal. During periods of financial distress, low-leverage firms may experience positive stock price reactions to interest rate increases, while highly leveraged firms face negative and more persistent effects. An extension employing Markov-switching GARCH models further demonstrates that the traditional leverage effect intensifies primarily during high-volatility regimes, highlighting the conditional nature of return-volatility dynamics.

The second chapter focuses on credit governance by studying the effects of creditor affiliation within corporate boards. Combining fixed effects, matching techniques, and threshold regressions, the results indicate that the presence of an affiliated creditor can stabilize financially distressed firms, albeit at the cost of higher borrowing rates. These findings underscore the economic value-and price-of informational advantages embedded in governance networks.

The third chapter explores the role of social capital in corporate finance, analyzing how personal connections between managers and lenders influence credit agreements and capital structure choices. Difference-in-differences estimates reveal that while relational ties can mitigate information asymmetries, they may also generate agency costs and strategic behavior once arm's-length discipline is weakened.

Overall, the thesis demonstrates that asset prices and corporate financial policies emerge from the interaction between balance-sheet fundamentals and social relationships, challenging strong-form interpretations of market efficiency and emphasizing the importance of heterogeneity and governance in financial decision-making.