Date of Award

Spring 2013

Document Type


Degree Name

Doctor of Philosophy (PhD)


Business Administration-Finance

Committee Director

John Doukas

Committee Director

Michael Seiler

Committee Member

Mohammad Najand

Committee Member

David Selover


The first essay examines why firms with access to lines of credit (LOC) have different drawdowns and their implications for asset pricing, investment and profitability. Utilizing a hand-collected LOC dataset that extends the sample of Sufi (2009) to 2010, our principal finding is that firms with greater LOC usage are more financially constrained than firms with lower LOC usage. We also document that high users of credit lines have higher risk-adjusted returns, less investment in capital expenditures and employment, and lower profitability than low LOC users. An interesting implication of our evidence is that high LOC drawdowns could serve as an alternative financial constraint measure.

The second essay shows that firms are unable to utilize credit lines to prevent decreases in investment during the 2008 financial crisis. Theory predicts that credit lines provide liquidity insurance that allows firms to invest during periods of limited credit availability; however, we do not find evidence in support of the theoretical predictions. To the contrary, we find strong evidence that credit lines do not enable firms to maintain investment during the crisis. With a unique dataset that includes bank line of credit drawdowns and hedging data, we study the relationship between credit line usage and corporate investment. Our results suggest that credit lines may be unable to provide adequate liquidity insurance to allow firms to continue investment during tough economic environments.

In the third essay, we examine linkages between the real estate and stock markets before and after the delisting of Lehman Brothers to determine if the 2008 financial crisis had an effect on the degree of integration between these two markets. Using several different models, we find that real estate returns subsequently influence stock market returns, a unique result when compared to past financial crises, but consistent with recent findings of increased systematic risk in REITs. These tests were made possible through the employment of a new daily transaction-based commercial real estate return series.