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Long-term debt and hidden borrowing
Bar-Isaac, Heski; Cuñat, Alejandro - London School of Economics (LSE) - 2005
We consider borrowers with the opportunity to raise funds from a competitive banking sector that shares information, and from an alternative hidden lender. The presence of the hidden lender restricts the contracts that can be obtained from the banking sector. In equilibrium some borrowers obtain...
Persistent link: https://www.econbiz.de/10011071410
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Loan maturity and renegotiation evidence from the lending practices of large and small banks
Albertazzi, Ugo - London School of Economics (LSE) - 2007
addressed by choosing short-term maturities. Theories of debt renegotiation suggest that the credibility of the implicit … regulatory regimes favouring lending relationships and economies of scale in the screening technology) are also shown to be …
Persistent link: https://www.econbiz.de/10010745643
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The dynamics of venture capital contracts
Bienz, Carsten; Hirsch, Julia - London School of Economics (LSE) - 2005
We analyze the degree of contract completeness with respect to staging of venture capital investments using a hand-collected German data set of contract data from 464 rounds into 290 entrepreneurial firms. We distinguish three forms of staging (pure milestone financing, pure round financing and...
Persistent link: https://www.econbiz.de/10010746202
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Moral hazard and renegotiation of multi-signal contracts
Bijapur, Mohan - London School of Economics (LSE) - 2011
renegotiation. The literature to date assumes that contractual simplicity, i.e. the omission of informative contractual …
Persistent link: https://www.econbiz.de/10011126387
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Agency, firm growth, and managerial turnover
Anderson, Ronald W.; Bustamante, Maria Cecilia; … - London School of Economics (LSE) - 2012
We study the relation between firm growth and managerial incentive provision under moral hazard when a long-lived firm is operated by a sequence of managers. In our model, firms replace their managers not only upon poor performance to provide incentives, but also when outside managers are at a...
Persistent link: https://www.econbiz.de/10010745265
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Sorting versus screening: search frictions and competing mechanisms
Eeckhout, Jan; Kircher, Philipp - London School of Economics (LSE) - 2010
In a market where sellers compete by posting trading mechanisms, we allow for a general search technology and show that its features crucially affect the equilibrium mechanism. Price posting prevails when meetings are rival, i.e., when a meeting by one buyer reduces another buyer's meeting...
Persistent link: https://www.econbiz.de/10010745309
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Credit card debt and default over the life-cycle
Lopes, Paula - London School of Economics (LSE) - 2003
utility caused by the social embarrassment of declaring bankruptcy. The model shows that the decisions to borrow and default … models of Carroll (1997), and Deaton (1991), to allow for uncollaterized borrowing and default. In case households choose to … default: (i) their access to credit markets is restricted; (ii) lenders of funds may seize their financial assets above an …
Persistent link: https://www.econbiz.de/10011071178
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A time series analysis of financial fragility in the UK banking system
Goodhart, Charles; Sunirand, Pojanart; Tsomocos, … - London School of Economics (LSE) - 2004
This paper extends the model proposed by Goodhart, Sunirand, and Tsomocos (2003, 2004a, b) to an infinite horizon setting. Thus, we are able to assess how the model conforms with the time series data of the U.K. banking system. We conclude that, since the model performs satisfactorily, it can be...
Persistent link: https://www.econbiz.de/10010744867
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Block-booking and IPO share allocation: the importance of being ignorant
Gondat-Larralde, Celine; James, Kevin R. - London School of Economics (LSE) - 2004
Given the opportunity to buy IPO shares of uncertain value at a fixed price, potentially informed investors have an incentive to refuse to participate in offerings the underwriter happens to overprice. We show that an underwriter can efficiently resolve this problem by entering into a repeat...
Persistent link: https://www.econbiz.de/10010745055
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Loan securitisation: default term structure and asset pricing based on loss prioritisation
Jobst, Andreas A. - London School of Economics (LSE) - 2002
optimal design of loan securitisation from the perspective of credit risk in potential collateral default. We propose a … transactions exhibits a distinctly different default tolerance compared to the remaining tranches. By solving the puzzling question …
Persistent link: https://www.econbiz.de/10010745131