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Rollover Risk and Credit Risk
He, Zhiguo - 2010
This paper models a firm's rollover risk generated by conflict of interest between debt and equity holders. When the …
Persistent link: https://www.econbiz.de/10012462997
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Entrepreneurial Finance and Non-diversifiable Risk
Chen, Hui - 2009
. More risk-averse entrepreneurs default earlier, but also choose higher leverage, even though leverage makes his equity more … risky. Non-diversified entrepreneurs demand both systematic and idiosyncratic risk premium. Cash-out option and external … equity further improve diversification and raise the entrepreneur's valuation of the firm. Finally, entrepreneurial risk …
Persistent link: https://www.econbiz.de/10012463800
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Internal Finance and Firm Investment
Hubbard, R. Glenn - 1993
We examine the neoclassical investment model using a panel of U.S. manufacturing firms. The standard model with no financing constraints cannot be rejected for firms with high (pre-sample) dividend payouts. However, it is decisively rejected for firms with low (pre-sample) payouts (firms we...
Persistent link: https://www.econbiz.de/10012474561
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Corporate Taxes and Internal Borrowing within Multinational Firms
Egger, Peter - 2012
This paper develops a theoretical model of multinational firms with an internal capital market. Main reasons for the emergence of such a market are tax avoidance through debt shifting and the existence of institutional weaknesses and financial frictions across host countries. The model serves to...
Persistent link: https://www.econbiz.de/10012460245
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Why do firms hold so much cash? A tax-based explanation
Foley, C. Fritz - 2006
U.S. corporations hold significant amounts of cash on their balance sheets, and these cash holdings have been justified in the existing empirical literature by transaction costs and precautionary motives. An additional explanation, considered in this study, is that U.S. multinational firms hold...
Persistent link: https://www.econbiz.de/10012466012
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Multinationals and the High Cash Holdings Puzzle
Pinkowitz, Lee - 2012
Defining as normal cash holdings the holdings a firm with the same characteristics would have had in the late 1990s, we find that the abnormal cash holdings of U.S. firms after the crisis represent on average 1.86% of assets. While U.S. firms held less cash than comparable foreign firms in the...
Persistent link: https://www.econbiz.de/10012460539
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Tracing the International Transmission of a Crisis Through Multinational Firms
Biermann, Marcus; Huber, Kilian - National Bureau of Economic Research - 2023
We show that multinational firms transmit shocks across countries through their internal capital markets. We study a credit supply shock to parent firms in Germany. International affiliates outside Germany supported their parents through internal lending, became financially constrained...
Persistent link: https://www.econbiz.de/10014247983
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Why Do Foreign Firms Have Less Idiosyncratic Risk than U.S. Firms?
Bartram, Söhnke M. - 2009
idiosyncratic risk than a comparable U.S. firm. Country characteristics help explain variation in the level of idiosyncratic risk …, but less so than firm characteristics. Idiosyncratic risk falls as government stability and respect for the rule of law … improve. Idiosyncratic risk is positively related to stock market development but negatively related to bond market …
Persistent link: https://www.econbiz.de/10012463717
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Exchange Rate Variability and the Riskiness of U.S. Multinational Firms : Evidence from the Breakdown of the Bretton Woods System
Bartov, Eli - 1995
components of systematic and diversifiable risk. Focusing on two periods around the 1973 switch from fixed to floating exchange … increase in total volatility led to a significant increase in market risk (beta) for the multinational firms relative to the …
Persistent link: https://www.econbiz.de/10012473547
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Taxation, Corporate Financial Policy and the Cost of Capital
Auerbach, Alan J. - 1982
The cost of capital plays an important role in the allocation of resources among competing uses in a decentralized market system. The purpose of this paper is to organize and present what is known and what is hypothesized about the effects of taxation on the incentive to invest, via the cost of...
Persistent link: https://www.econbiz.de/10012478079