We test whether firms with a single bank are better shielded from loss of credit and investment cutsin periods of adverse cash flow shocks than firms with multiple bank relationships. Our estimatesof the cash flow sensitivity of investment show that both types of firms are equally subject...

The Small Business Service (SBS) commissioned York Consulting Limited(YCL) to carry out an early assessment of the Company Rescue Schemepilots.Concerns have been expressed that a large number of small firms capable ofbeing turned around are being wound up unnecessarily due to a lack...

In this paper we empirically examine the impact of competition between Microfinance Institutions(MFIs) on the efficacy of loan contracts when the MFIs make use of joint liability loan contracts. Morespecifically, we aim to find out whether competition will reduce the power of the self-selection...

The classical approach to testing for structural change employs retrospective tests using a historical data set of a given length. Here we consider a wide array of fluctuation-type tests in a monitoring situation - given a history period for which a regression relationship is known to be stable,...

In capital budgeting problems future cash flows are discounted using the expected one period returns of the investment ...

This paper considers the effects of strategic substitutabilities on performanceand incentives in venture capital financing. The analysis points to a subtlelink between two pivotal roles of venture capitalists: (i) monitoring venturesand setting performance incentives...

We investigate whether a bank’s performance during the 1998 crisis, which was viewed at the timeas the most dramatic crisis since the Great Depression, predicts its performance during the recentfinancial crisis. One hypothesis is that a bank that has an especially poor experience in a...

We investigate the interdependence of debt financing and R&D activities of young firms.Using micro-level data of the KfW/ZEW Start-up Panel, our estimation results show that firmcharacteristics are more important than personal characteristics of the founders for explainingyoung firms’...