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About MacSphere

MacSphere is McMaster University's Institutional Repository (IR). The purpose of an IR is to bring together all of a University's research under one umbrella, with an aim to preserve and provide access to that research. The research and scholarly output included in MacSphere has been selected and deposited by the individual university departments and centres on campus.

To contribute to McMaster's Institutional Repository, please sign on to MacSphere with your MAC ID.

If you have any questions, please contact the MacSphere Support Team.

Students wishing to deposit their PhD or Masters thesis, please follow the instructions outlined by the School of Graduate Studies.

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Recent Submissions

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    Approved Minutes: December 2025 Graduate Council
    (2025) School of Graduate Studies
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    Meeting Package: January 2026 Graduate Council
    (2026) School of Graduate Studies
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    Low-carbon governmental policies and cost of debt: evidence from China
    (2025-12) Zhao, Gang; Zhang, Jianhao; Jin, Justin; Nainar, Khalid; Michael Lee-Chin & Family Institute for Strategic Business Studies
    This paper uses the staggered difference-in-differences design to investigate the effects of the low-carbon city pilot (LCCP) policy on the cost and underlying mechanisms of debt financing for enterprises. Our findings show that the LCCP significantly decreases the debt cost of enterprises through enhancements in Environmental, Social, and Governance (ESG) performance and the reduction of information asymmetry. Additional analysis indicates that the LCCP’s ability to reduce the cost of debt is particularly pronounced for firms with higher agency costs and those located in China’s eastern regions. This study offers evidence for assessing the effectiveness of low-carbon policies and suggests recommendations to policymakers seeking to enhance the design and implementation of LCCP, thereby contributing to the green development of enterprises and regions. Valuation Insight: A company’s impact on the environment is an important element in the value that it delivers. In China certain local governments introduced policies to facilitate the enterprise transition to low-carbon practices, standardizing reporting on greenhouse gas emissions and requiring the undertaking of green technological transformation. The paper finds that companies in these localities experienced significant decreases in debt costs through enhancements in ESG performance and the reduction of information asymmetry.
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    Corporate biodiversity exposure and the market response to earnings announcements
    (2025-12) Akbari, Amir; Ng, Lilian; Wang, Tracy; Zhu, Nathan; Michael Lee-Chin & Family Institute for Strategic Business Studies
    Biodiversity loss is increasingly recognized as a material financial risk to firms, yet little is known about how biodiversity-related exposure affects the way capital markets process earnings disclosures.We examine whether corporate biodiversity exposure (CBE), defined as the extent to which a firm’s polluting facilities are located near conservation-priority areas, shapes investors’ responses to earnings announcements. Drawing on the disclosure-processing-cost framework, we argue that CBE raises disclosure-processing costs at the integration stage by introducing spatially localized ecological and regulatory complexity, which makes it more difficult for investors to integrate reported earnings into valuation-relevant expectations of future cash flows. Consistent with this prediction, firms with higher CBE exhibit weaker earnings response coefficients, indicating attenuated market responsiveness to earnings announcements. These effects are amplified under greater ecological and regulatory uncertainty and attenuated in stronger information environments and under greater external monitoring. Exploiting staggered protected-area expansions in a stacked difference-in-differences design, we provide causal evidence that newly exposed firms experience a decline in earnings–return sensitivity. Overall, our findings identify biodiversity exposure as a place-based disclosure-processing friction and highlight how disclosure and governance shape the pricing of earnings announcements in the presence of ecological complexity. Valuation Insight: Exposure to potential biodiversity loss affects corporate value. The paper shows that, when a firm’s polluting activities are close to conservation priority areas, it becomes more difficult for investors to identify how relevant reported earnings are for future cash flows. Market response to earnings surprises decreases markedly. Biodiversity risk is not only an ecological or regulatory concern, but also a factor that can impair price discovery in capital markets.
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    Optimal portfolio with options
    (2025-11) Jeon, Yoontae; Kan, Raymond; Li, Gang; Michael Lee-Chin & Family Institute for Strategic Business Studies
    We propose a parsimonious framework to analyze the optimal asset allocation problem for a mean–variance investor who incorporates options into the portfolio. Building on the key insight that risk-neutral volatility often differs from physical volatility, we derive closed-form expressions for the optimal portfolio weights with options. The resulting economic gains are substantial and remain robust even when solvency constraints and transaction costs are considered. We then take the model to the data and show that the framework delivers superior out-of-sample performance for an investor trading the S&P 500 index and its options. Our approach underscores the importance of accounting for differences between physical and risk-neutral volatilities when constructing an optimal portfolio that includes options. Valuation Insight: A firm’s issue of options, other than benefiting the firm’s financial position, adds value by providing investors with an investment alternative that is not duplicated by holding the firm’s stock. The additional investment value from options occurs when basic assumptions leading to Black-Scholes options pricing are violated causing variability implied by the model to differ from actual volatility. The paper shows, in this realistic scenario, that investors may benefit substantially from adding options to their stock portfolio.