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Risky Investments with Limited Commitment
Cooley, Thomas F; Marimon, Ramon; Quadrini, Vincenzo - C.E.P.R. Discussion Papers - 2013
Over the last three decades there has been a dramatic increase in the size of the financial sector and in the compensation of financial executives. This increase has been associated with greater risk-taking and the use of more complex financial instruments. Parallel to this trend, the...
Persistent link: https://www.econbiz.de/10011083928
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Does Firm Size Matter? Evidence on the Impacts of Liquidity Constraints on Firm Investment Behaviour in Germany
Audretsch, David B; Elston, Julie Ann - C.E.P.R. Discussion Papers - 1994
This paper examines the link between liquidity constraints and investment behaviour on the one hand, and firm size on … have investment functions which are more sensitive to liquidity constraints than do the larger enterprises. These results … finance. Such liquidity constraints are found to exist in Germany only since the mid-1970s, however. Apparently the German …
Persistent link: https://www.econbiz.de/10005123842
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Political Connections and Preferential Access to Finance: The Role of Campaign Contributions
Claessens, Stijn; Feijen, Erik; Laeven, Luc - C.E.P.R. Discussion Papers - 2007
Using novel indicators of political connections constructed from campaign contribution data, we show that Brazilian firms that provided contributions to (elected) federal deputies experienced higher stock returns than firms that don’t around the 1998 and 2002 elections. This suggests...
Persistent link: https://www.econbiz.de/10005666705
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Limits of Arbitrage: The State of the Theory
Gromb, Denis; Vayanos, Dimitri - C.E.P.R. Discussion Papers - 2010
faced by arbitrageurs can prevent them from eliminating mispricings and providing liquidity to other investors. Research in …
Persistent link: https://www.econbiz.de/10008530340
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Modeling default correlation in a US retail loan portfolio
Bams, Dennis; Pisa, Magdalena; Wolff, Christian C - C.E.P.R. Discussion Papers - 2012
This paper generalizes the existing asymptotic single-factor model to address issues related to industry heterogeneity, default clustering and parameter uncertainty of capital requirement in US retail loan portfolios. We argue that the Basel II capital requirement overstates the riskiness of...
Persistent link: https://www.econbiz.de/10011083415
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Incentives to Innovate and the Decision to Go Public or Private
Ferreira, Daniel; Manso, Gustavo; Silva, André C. - C.E.P.R. Discussion Papers - 2010
decision to go public or private, such as liquidity and cost of capital. Our model rationalizes recent evidence linking private …
Persistent link: https://www.econbiz.de/10008468600
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Finance and Development: The Case of Southern Italy
Faini, Riccardo; Giannini, Curzio; Ingrosso, Fulvio - C.E.P.R. Discussion Papers - 1992
earnings are more variable are more likely to be liquidity constrained in their investment decision. …
Persistent link: https://www.econbiz.de/10005123529
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Observing Unobservables: Identifying Information Asymmetries with a Consumer Credit Field Experiment
Karlan, Dean S.; Zinman, Jonathan - C.E.P.R. Discussion Papers - 2007
Information asymmetries are important in theory but difficult to identify in practice. We estimate the presence and importance of adverse selection and moral hazard in a consumer credit market using a new field experiment methodology. We randomized 58,000 direct mail offers issued by a major...
Persistent link: https://www.econbiz.de/10005497798
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The Misfortune of Non-financial Firms in a Financial Crisis: Disentangling Finance and Demand Shocks
Tong, Hui; Wei, Shang-Jin - C.E.P.R. Discussion Papers - 2009
If a non-financial firm does not do well in a financial crisis, it could be due to either a contraction of demand for its output or a contraction of supply of external finance. We propose a framework to assess the relative importance of the two shocks, making use of a measure of a firm's...
Persistent link: https://www.econbiz.de/10005661997
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Option-Based Credit Spreads
Culp, Christopher L.; Nozawa, Yoshio; Veronesi, Pietro - C.E.P.R. Discussion Papers - 2014
Theoretically, corporate debt is economically equivalent to safe debt minus a put option on the firm’s assets. We empirically show that indeed portfolios of long Treasuries and short traded put options ("pseudo bonds") closely match the properties of traded corporate bonds. Pseudo bonds...
Persistent link: https://www.econbiz.de/10011145468