Date of Award

Summer 2012

Document Type


Degree Name

Doctor of Philosophy (PhD)


Business Administration-Finance

Committee Director

Mohammad Najand

Committee Member

Michael Seiler

Committee Member

David Selover


This dissertation examines two topics that have attracted significant attention in the financial media, but have received little academic study.

The first essay examines the characteristics and performance of foreign firms that acquire U.S. exchange listings through a reverse merger (RM). Specifically, this study focuses on Chinese companies which have accounted for over 40% of all RMs taking place on U.S. exchanges. Examination of these firms' characteristics and daily returns from 2004-2010 reveals Chinese firms that engage in RMs are private firms not listed in China, motivated by the ability to offer equity-based compensation (which has been illegal in China), seek quick infusions of capital, grow assets in the U.S. very quickly relative to other RMs, and experience significantly better short and long term performance (particularly when using private investment in public equity (PIPES)) compared to benchmarks that include cross-listed Chinese firms (a modified Halter USX CHINA index), the Russell 2000 and reverse mergers that take place between two U.S. firms.

The second essay is a study of the factors that influence Bond ETF premiums/discounts and the ETF Authorized Participant's ability and/or inclination to arbitrage Bond ETF mispricing. Using daily data for every U.S. Bond ETF from their inception dates through 2010, this study examines each Bond ETF's pricing relative to the net asset value (NAV) of their underlying securities, evaluating the arbitrage system in place to keep the market price close to their NAV and analyzing the factors that drive the premium/discount. Results find transaction costs, liquidity, fund flows, momentum, market volatility and market sentiment to be statistically significant factors driving pricing. However, there are significant unexplained average premiums for all Bond ETF fund sectors other than U.S. Treasuries for the period 2002 through 2010.


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