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Informed Lending and Security Design
Inderst, Roman; Mueller, Holger M - C.E.P.R. Discussion Papers - 2005
aggressive', in which case they accept negative-NPV projects. In the first case, the uniquely optimal security is debt. In the … second case, it is levered equity. Debt maximizes lenders’ payoffs from financing low-NPV projects, i.e., projects that have … that are relatively likely to break even are financed with debt, while less profitable projects are financed with equity …
Persistent link: https://www.econbiz.de/10005666447
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Corporate Governance, Product Market Competition, and Equity Prices
Giroud, Xavier; Mueller, Holger M - C.E.P.R. Discussion Papers - 2008
This paper examines the hypothesis that firms in competitive industries should benefit relatively less from good governance, while firms in non-competitive industries--where lack of competitive pressure fails to enforce discipline on managers--should benefit relatively more. Whether we look at...
Persistent link: https://www.econbiz.de/10005792308
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Does Corporate Governance Matter in Competitive Industries?
Giroud, Xavier; Mueller, Holger M - C.E.P.R. Discussion Papers - 2007
By reducing the fear of a hostile takeover, business combination (BC) laws weaken corporate governance and create more opportunity for managerial slack. Using the passage of BC laws as a source of identifying variation, we examine if such laws have a different effect on firms in competitive and...
Persistent link: https://www.econbiz.de/10005067660