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We study a general equilibrium model in which firms choose their capital structure optimally, trading off the tax advantages of debt against the risk of costly default. The costs of default are endogenous: bankrupt firms are forced to liquidate their assets, resulting in a fire sale if there is...
Persistent link: https://www.econbiz.de/10011163502
Private equity funds pay particular attention to capital structure when executing leveraged buyouts, creating an interesting setting for examining capital structure theories. Using a large, detailed, international sample of buyouts from 1980-2008, we find that buyout leverage is unrelated to the...
Persistent link: https://www.econbiz.de/10011071252
We study a dynamic general equilibrium model in which firms choose their investment level and their capital structure, trading off the tax advantages of debt against the risk of costly default. The costs of bankruptcy are endogenously determined, as bankrupt firms are forced to liquidate their...
Persistent link: https://www.econbiz.de/10011170093
We examine the effect of taxation on financing policy using the corporate tax reform in 2001 in Croatia as a natural experiment. Since the extant literature on tax effects on capital structure studies listed firms in developed countries, it is worth investigating whether the same results apply...
Persistent link: https://www.econbiz.de/10005797595
In a panel data model with fixed effects, possible cross-sectional dependence is investigated in a spatial …
Persistent link: https://www.econbiz.de/10011268329
Nonparametric regression is developed for data with both a temporal and a cross-sectional dimension. The model includes additive, unknown, individual-specific components and allows also for cross-sectional and temporal dependence and conditional heteroscedasticity. A simple nonparametric...
Persistent link: https://www.econbiz.de/10011268330
autoregressive spatial lag panel data model with spatially correlated disturbances. In the spirit of Arellano and Bond (1991) and …
Persistent link: https://www.econbiz.de/10011125930
A dynamic panel data model is considered that contains possibly stochastic individual components and a common …
Persistent link: https://www.econbiz.de/10011126139
initial distribution. This paper contributes to the identification of adaptive expectations by using ten years of panel data … from the British Household Panel Survey to study the process of adaptation based on the individual’s own previous …
Persistent link: https://www.econbiz.de/10011126358
We consider the incidental parameters problem in this paper, i.e. the estimation for a small number of parameters of interest in the presence of a large number of nuisance parameters. By assuming that the observations are taken from a multiple strictly stationary process, the two estimation...
Persistent link: https://www.econbiz.de/10011126404