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Collateral, Renegotiation and the Value of Diffusely Held Debt

Hege, U.; Mella-Barral, P. - Tilburg University, Center for Economic Research - 1999

Debt with many creditors is analyzed in a continuous-time pricing model of the levered firm. We specifically allow for debtor opportunism vis-a-vis a non-coordinated group of creditors, in form of repeated strategic renegotiation offers and default threats. We show that the creditors' initial...

Persistent link: https://www.econbiz.de/10011092877

Of Religion and Redemption : Evidence from Default on Islamic Loans (Replaces CentER DP 2010-136)

Baele, Lieven; Farooq, M.; Ongena, S. - Tilburg University, Center for Economic Research - 2012

Abstract: We compare default rates on conventional and Islamic loans using a comprehensive monthly dataset from Pakistan that follows more than 150,000 loans over the period 2006:04 to 2008:12. We find robust evidence that the default rate on Islamic loans is less than half the default rate on...

Persistent link: https://www.econbiz.de/10011090645

How Does Personal Bankruptcy Law Affect Start-ups?

Penas, María Fabiana; Cerqueiro, G.M. - Tilburg University, Center for Economic Research - 2011

We analyze the effect of changes in U.S. state personal exemptions on the financing structure and performance of a …

Persistent link: https://www.econbiz.de/10011090786

Credit Ratings and Bank Monitoring Ability

Nakamura, L.I.; Roszbach, K. - Tilburg University, Center for Economic Research - 2010

In this paper we use credit rating data from two Swedish banks to elicit evidence on these banks’ loan monitoring ability. We do so by comparing the ability of bank ratings to predict loan defaults relative to that of public ratings from the Swedish credit bureau. We test the banks’...

Persistent link: https://www.econbiz.de/10011091685

Reorganization Law and Dilution Threats in Different Financial Systems

Hege, U.; Mella-Barral, P. - Tilburg University, Center for Economic Research - 2000

In a market-based financial system, credit is held by dispersed creditors, and out-of-court renegotiation of debt is more likely to fail because of hold-out problems; in a bank-based system, out-of-court renegotiation stands good chances to succeed. Since out-of-court renegotiation is a...

Persistent link: https://www.econbiz.de/10011091952

Capital Structure and Managerial Compensation : The Effects of Renumeration Seniority

Renneboog, Luc; Calcagno, R. - Tilburg University, Center for Economic Research - 2004

We show that the relative seniority of debt and managerial compensation has important implications on the design of remuneration contracts.Whereas the traditional literature assumes that debt is senior to remuneration, we show that this is frequently not the case according to bankruptcy...

Persistent link: https://www.econbiz.de/10011092094

Liquidation Values, Risk and Capital Structure

Rosellon Cifuentes, M.A. - Tilburg University, Center for Economic Research - 1999

This paper investigate the interaction between financial structure, liquidation values and product market equilibrium. Liquidation values depend on how many firms are liquidated, and therefore on the industry equilibrium of capital structures and of technology choices. We show that firms using a...

Persistent link: https://www.econbiz.de/10011092400

Impact of the Financial Crisis

Vriesendorp, R.D.; Gramatikov, M.A. - Tilburg University, Center for Economic Research - 2010

Persistent link: https://www.econbiz.de/10011092458

Is Investment-Cash flow Sensitivity a Good Measure of Financing Constraints? New Evidence from Indian Business Group Firms

George, R.; Kabir, M.R.; Qian, J. - Tilburg University, Center for Economic Research - 2005

Several studies use the investment - cash flow sensitivity as a measure of financing constraints while some others … subject to less financing constraints relative to independent firms.Our results show strong investment - cash flow … evidence demonstrating the inability of investment cash flow sensitivity to be a good measure of a firm's financing constraint. …

Persistent link: https://www.econbiz.de/10011091092

Is Investment-Cash Flow Sensitivity Caused by the Agency Costs or Asymmetric Information? Evidence from the UK

Renneboog, Luc; Pawlina, G. - Tilburg University, Center for Economic Research - 2005

We investigate the investment-cash flow sensitivity of a large sample of the UK listed firms and confirm that investment is strongly cash flow-sensitive.Is this suboptimal investment policy the result of agency problems when managers with high discretion overinvest, or of asymmetric information...

Persistent link: https://www.econbiz.de/10011091381

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