Showing 1 - 7 of 7
Limited liability debt financing of irreversible investments can affect investment timing through an entrepreneur's option value, even after compensating a lender for expected default losses. This non-neutrality of debt arises from an entrepreneur's unique investment opportunity, and it is shown...
Persistent link: https://www.econbiz.de/10005076954
In competitive economies with private firm ownership, incomplete markets, and firm shareholders changing over time, several firm objectives have been proposed. Some are useful to understand efficiency of equilibria, and others are explicitly consistent with majority shareholder control or...
Persistent link: https://www.econbiz.de/10005125633
A new measure of constrained efficiency for application in economies with incomplete markets is presented. This measure --- termed Allais- Malinvaud efficiency --- can be viewed as adjusting for market incompleteness not fully captured in previous work. It is shown that equilibrium allocations...
Persistent link: https://www.econbiz.de/10005125664
In recent years, one area of growing concern in corporate governance is the accounting and transfer of risk using special purpose entities (or trusts). Such entities are used widely in issuing asset-backed securities. This paper provides an overview of the asset-backed securities market, and...
Persistent link: https://www.econbiz.de/10005134710
This paper studies models where the correspondences (or functions) under consideration are never increasing (or weakly decreasing) in endogenous variables, and weakly increasing in exogenous parameters. Such models include games of strategic substitutes, and include cases where additionally,...
Persistent link: https://www.econbiz.de/10005407559
This paper uses novel data on the performance of pools underlying asset- backed securities to estimate a competing risks model of default and prepayment on subprime automobile loans. We find that prepayment rates increase rapidly with loan age but are not affected by prevailing market interest...
Persistent link: https://www.econbiz.de/10005413208
One explanation provided for the relatively high and increasingly stable spreads for moderate-sized IPOs ($20-$80 million) documented in Chen and Ritter (2000) is that issuing firms focus less on price and more on a combination of investment bank-differentiating factors (such as underwriter...
Persistent link: https://www.econbiz.de/10005561648