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Profit Shifting and Investment Effects : The Implications of Zero-Taxable Profits
Koethenbuerger, Marko - 2018
profit. Setting up a model that allows for profitable and loss-making affiliates of multinationals, we show that profit … equilibrium, affiliates might over-invest and the bunching-related investment effects generate a tendency for too high profit …
Persistent link: https://www.econbiz.de/10012921411
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The Information Content of Dividends : Safer Profits, Not Higher Profits
Michaely, Roni - 2018
Contrary to the central prediction of signaling models, changes in profits do not empirically follow changes in dividends. We show both theoretically and empirically that dividends signal safer, rather than higher, future profits. Using the Campbell (1991) decomposition, we are able to estimate...
Persistent link: https://www.econbiz.de/10012930075
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Flexible Prices and Leverage
D'Acunto, Francesco - 2017
The frequency with which firms adjust output prices helps explain persistent differences in capital structure across firms. Unconditionally, the most exible-price firms have a 19% higher long-term leverage ratio than the most sticky-price firms, controlling for known determinants of capital...
Persistent link: https://www.econbiz.de/10012962123
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Illiquidity and Under-Valuation of Firms
Gale, Douglas M. - 2012
We study a competitive model in which market incompleteness implies that debt-financed firms may default in some states of nature and default may lead to the sale of the firms' assets at fire sale prices when markets are illiquid. This incompleteness is the only friction in the model and the...
Persistent link: https://www.econbiz.de/10013116475
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Credit Derivates and the Default Risk of Large Complex Financial Institutions
Calice, Giovanni - 2013
This paper addresses the impact of developments in the credit risk transfer market on the viability of a group of systemically important financial institutions. We propose a bank default risk model, in the vein of the classic Merton-type, which utilizes a multi-equation framework to model...
Persistent link: https://www.econbiz.de/10013092380
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Creditor Passivity : The Effects of Bank Competition and Institutions on the Strategic Use of Bankruptcy Filings
Hainz, Christa - 2021
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/10013316824
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Preemption, Start-Up Decisions and the Firms' Capital Structure
Moretto, Michele; Panteghini, Paolo M. - 2021
In this article, we analyse the interactions between financial and start-up decisions in an oligopolistic framework, where firms compete to enter a new market. We show that preemption can substantially reduce the negative effects of credit rationing on start-up investment decisions
Persistent link: https://www.econbiz.de/10013317029
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Mergers and Partial Ownership
Foros, Øystein - 2010
In this paper we compare the profitability of a merger to the profitability of a partial ownership arrangement and find … profit in the two firms controlled by the cross-majority shareholder then increases, such that both the cross …
Persistent link: https://www.econbiz.de/10013148773
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VAT Notches
Liu, Li - 2015
We develop a conceptual framework which captures the effect of the VAT system on profit by two effective taxes. This … taxable income to an indirect tax setting. We bring the theory to the data, using linked administrative VAT and corporation … tax records in the UK from 2004-2009. Consistently with the theory, voluntary registration is positively related to the …
Persistent link: https://www.econbiz.de/10013021432
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Innovation, Trade, and Finance
Egger, Peter H. - 2013
This paper proposes a model where heterogeneous firms choose whether to undertake R&D or not. Innovative firms are more productive, have larger investment opportunities and lower own funds for necessary tangible continuation investments than non-innovating firms. As a result, they are...
Persistent link: https://www.econbiz.de/10013092604