This Paper reports a new test of capital structure theories. It uses a filtering technique to identify large investment spikes. We find that the spikes are predominantly financed with debt by large firms and by new equity by small loss-making firms. In the process, firms move significantly away...

We use a unique data set to analyse how UK banks deal with small to medium size distressed firms both inside and outside bankruptcy. The approach to bankruptcy is contract-based, with lenders and borrowers relying on procedures written into the debt contract, and where the courts are largely...

This paper reformulates the well known financial development conjecture (FDC) and supplies some new empirical evidence in its favour. The financial development conjecture, namely, that there exist strong feedback effects between real and financial development, is described in this paper by use...

The literature on financial imperfections and business cycles has focused on propagation mechanisms. In this paper we model a pure reversion mechanism, such that the economy may converge to a two-period equilibrium cycle. This mechanism confirms that financial imperfections may have a dramatic...

Flow of funds data are used to compare methods of financing the corporate sector in five countries over the period 1970-85. Many of the problems associated with previous studies of corporate finance are avoided by defining financing proportions in net terms. The degree of consolidation of...

2,500 acquisitions in the United Kingdom and United States are used to examine means of payment in acquisitions. There has been a substantial increase in the proportion of acquisitions financed with cash in the United States over the period of the study from 1955 to 1985. Mixed bids are more...

Over the last few years, a series of rulings by the European Court of Justice (ECJ) has opened up the European Union to cross-border mobility in incorporation. In this paper we explore how deregulation and the costs of regulation have affected the location decisions of firms. Using a newly...

In a study of the ownership of German corporations, we find a strong relation between board turnover and corporate performance, little association between concentrations of ownership with managerial disciplining and only limited evidence that pyramid structures can be used for control purposes....

Eastern Europe is engaged in a massive programme of financial reform. This paper argues that while this programme has many desirable features, it has failed to address some of the most basic issues. These concern the relationship between the financial system and the enterprise sector, and the...

This paper examines bond and syndicated bank finance in the Euromarkets. It uses a comprehensive data bank on Euromarkets to evaluate alternative theories of financial intermediation. A model is estimated that provides a good description of firms' choice of finance. The paper concludes that...