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Quality of institutions, credit markets and bankruptcy
Hainz, Christa - 2004
The number of firm bankruptcies is surprisingly low in economies with poor institutions. We study a model of bank-firm relationship and show that the bank's decision to liquidate bad firms has two opposing effects. First, the bank receives a payoff if a firm is liquidated. Second, it loses the...
Persistent link: https://www.econbiz.de/10010261107
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Creditor passivity: the effects of bank competition and institutions on the strategic use of bankruptcy filings
Hainz, Christa - 2007
Why do banks remain passive? In a model of bank-firm relationship we study the trade-off a bank faces when having defaulting firms declared bankrupt. First, the bank receives a payoff if a firm is liquidated. Second, it provides information about a firm's type to its competitors. Thereby,...
Persistent link: https://www.econbiz.de/10010264275
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Uncertainty and the Cost of Bank vs. Bond Finance
Grimme, Christian - 2019
How does uncertainty affect the costs of raising finance in the bond market and via bank loans? Empirically, this paper finds that heightened uncertainty is accompanied by an increase in corporate bond yields and a decrease in bank lending rates. This finding can be explained with a model that...
Persistent link: https://www.econbiz.de/10012018147
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Do Zombies Rise when Interest Rates Fall? A Relationship Banking Model
Herweg, Fabian; Kähny, Maximilian - 2022
An entrepreneur chooses a relationship bank or market finance. The advantage of bank finance is that the quality of the entrepreneur's project is identified early, allowing to liquidate low-quality projects. The loan contract induces an efficient continuation decision if the entrepreneur has...
Persistent link: https://www.econbiz.de/10013177662
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When Arm's Length Is Too Far. Relationship Banking over the Business Cycle
Beck, Thorsten; Degryse, Hans; de Haas, Ralph; van … - 2014
Using a novel way to identify relationship and transaction banks, we study how banks' lending techniques affect funding to SMEs over the business cycle. For 21 countries we link the lending techniques that banks use in the direct vicinity of firms to these firms' credit constraints at two...
Persistent link: https://www.econbiz.de/10010398626
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How Do Banks Interact with Fintechs? Forms of Alliances and their Impact on Bank Value
Hornuf, Lars; Klus, Milan F.; Lohwasser, Todor S.; … - 2018
The increasing pervasiveness of technology-driven firms that offer banking services has led to a growing pressure on traditional banks to modernize their core business activities. Banks attempt to confront the challenges of digitalization by cooperating with financial technology firms (fintechs)...
Persistent link: https://www.econbiz.de/10011931920
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Immigrant Entrepreneurship
Pekkala, Sari; Kerr, William R. - 2016
We examine immigrant entrepreneurship and the survival and growth of immigrant-founded businesses over time relative to … into the United States, comprehensive data for quantifying immigrant entrepreneurship are difficult to assemble. We combine …
Persistent link: https://www.econbiz.de/10011584896
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Social Networks, Ethnicity, and Entrepreneurship
Kerr, William R.; Mandorff, Martin - 2016
We study the relationship between ethnicity, occupational choice, and entrepreneurship. Immigrant groups in the United … entrepreneurship. Empirical evidence from the United States supports our model’s underlying mechanisms. …
Persistent link: https://www.econbiz.de/10011584910
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Immigration and Entrepreneurship
Fairlie, Robert W.; Lofstrom, Magnus - 2015
attempt to attract immigrant entrepreneurs. Not surprisingly, a large body of research on immigrant entrepreneurship has … fundamental immigrant entrepreneurship issues as well as the empirical methods and data used. The main themes we address are … immigrant entrepreneurs’ contributions to the economy, entrepreneurship differences across groups and group differences in …
Persistent link: https://www.econbiz.de/10010531772
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Creative destruction and productive preemption
Norbäck, Pehr-Johan; Persson, Lars; Svensson, Roger - 2013
We develop a theory of innovation for entry and sale into oligopoly, and show that inventions of higher quality are more likely to be sold (or licensed) to an incumbent due to strategic product market effects on the sales price. Such preemptive acquisitions by incumbents are shown to stimulate...
Persistent link: https://www.econbiz.de/10010291511