@article{THESIS,
      recid = {3942},
      author = {Ahmed, Ahmed Mohamed Abdelrahman},
      title = {Essays on Institutional Investors },
      publisher = {University of Chicago},
      school = {Ph.D.},
      address = {2022-06},
      number = {THESIS},
      pages = {159},
      abstract = {Foreign Institutional Investors, Monetary Policy, and  Reaching for Yield with (withBoris Hofmann and Martin  Schmitz)

This paper uses a unique security-level data set  to demonstrate that foreign institutional investors shift  their U.S. corporate bond portfolios toward bonds with  higher credit spreads when U.S. monetary policy tightens,  which reflects institutional factors related to nominal  return targets and foreign exchange hedging. Foreign  institutional investors in low-yielding jurisdictions are  unable to meet their return target by only investing in  their home bond market. To close this return gap, they  increase their exposure to the higher yielding  USD-denominated bonds. However, due to regulatory  requirements and internal risk management, they hedge  against the foreign exchange risk. To take advantage of the  yield differential, they invest in long-term USD bonds  while hedging the foreign exchange risk through short-term  swaps on rolling basis. This makes the shape of the USD  yield curve the key factor for the hedged return on their  USD-denominated bonds, especially given the persistent  premium to access the USD in the swap market since 2008.  When U.S. monetary policy tightens, the USD yield curve  flattens, erasing all the yield differential once the cost  of hedging is applied. As a result, to improve returns on  USD-denominated bonds, foreign institutional investors need  to take more credit risk. This behavior has meaningful  effects on corporate bond prices and issuances.

Fiscal  Stimulus and Pension Contributions: Evidence from the TCJA  (with Anna Zabai)

We evaluate the impact of the 2017 Tax  Cut & Jobs Act (TCJA) pension tax break on sponsor  contributions to defined-benefit retirement plans. We  exploit cross-sectional variation in ex-ante exposure to  the tax break. We find that the tax break induced an extra  $2.8 billion of sponsor contributions to medium- and  large-scale plans in 2017. However, we find strong evidence  of reversal, both in terms of sponsor contributions and  plan funding ratios by 2018. Our contributions model  indicates that this reversal is consistent with more  binding financial constraints in 2018 relative to 2019. Our  results suggest that the TCJA did not have a long-lasting  impact on corporate defined benefit pension funds.},
      url = {http://knowledge.uchicago.edu/record/3942},
      doi = {https://doi.org/10.6082/uchicago.3942},
}