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Debt recovery in firm liquidations : do liquidation trustees matter?

Cepec, Jaka; Grajzl, Peter; Zajc, Katarina - 2016

Insolvency systems play a crucial role in protection of creditor rights, yet micro-level empirical evidence on the functioning of insolvency regimes worldwide is sparse. We investigate whether creditors' recovery of outstanding claims, a measure of ex-post efficiency of an insolvency regime,...

Persistent link: https://www.econbiz.de/10011518156

Flexible prices and leverage

D'Acunto, Francesco; Liu, Ryan; Pflueger, Carolin; … - 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/10011597779

Low inflation : high default risk AND high equity valuations

Bhamra, Harjoat Singh; Dorion, Christian; Jeanneret, … - 2018

We develop an asset-pricing model with endogenous corporate policies that explains how inflation jointly impacts real asset prices and corporate default risk. Our model includes two empirically grounded nominal frictions: fixed nominal coupons and sticky profitability. Taken together, these two...

Persistent link: https://www.econbiz.de/10011941263

All you need is cash : corporate cash holdings and investment after the global financial crisis

Joseph, Andreas; Kneer, Christiane; Horen, Neeltje van - 2021

Cash holdings at the onset of a financial crisis are a key determinant of investment by SMEs not only during the crisis but also during the recovery period. Cash-rich SMEs could maintain their capital stock during the global financial crisis, while cash-poor rivals reduced theirs. This gave...

Persistent link: https://www.econbiz.de/10012509557

Term structure and cyclicity of value-at-risk : consequences for the solvency capital requirement

Bec, Frédérique; Gollier, Christian - 2009

This paper explores empirically the link between French equities returns Value-at-Risk (VaR) and the state of financial markets cycle. The econometric analysis is based on a simple vector autoregression setup. Using quarterly data from 1970Q4 to 2008Q3, it turns out that the k-year VaR of French...

Persistent link: https://www.econbiz.de/10003824669

A Q-theory of banks

Begenau, Juliane; Bigio, Saki; Majerovitz, Jeremy; … - 2021

We propose a dynamic bank theory with a delayed loss recognition mechanism and a regulatory capital constraint at its core. The estimated model matches four facts about banks' Tobin's Q that summarize bank leverage dynamics. (1) Book and market equity values diverge, especially during crises;...

Persistent link: https://www.econbiz.de/10012649212

The debt-to-GDP ratio as a tool for debt management : not good for LICs

Amegashie, J. Atsu - 2023

There have been criticisms of debt sustainability analysis in general, including the IMF's own evaluation of the usefulness of its debt sustainability methodology (e.g., IMF, 2017). This paper's focus is narrow. On the basis of theoretical arguments and empirical evidence, it argues that the...

Persistent link: https://www.econbiz.de/10013542946

Have Capital Market Anomalies Worldwide Attenuated in the Recent Era of High Liquidity and Trading Activity?

Auer, Benjamin R.; Rottmann, Horst - 2018

We revisit and extend the study by Chordia et al. (2014) which documents that, in recent years, increased liquidity has … characterised by positive trends in liquidity, there is no persuasive time-series and cross-sectional evidence for a negative link … between anomalies in market returns and liquidity. Thus, this proxy of arbitrage activity does not appear to be a key factor …

Persistent link: https://www.econbiz.de/10011897589

Illiquidity and under-valuation of firms

Gale, Douglas; Gottardi, Piero - 2009

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/10003923631

The impact of delay : evidence from formal out-of-court restructuring

Srhoj, Stjepan; Kovač, Dejan; Shapiro, Jacob N.; … - 2021

Bankruptcy restructuring procedures are used in most legal systems to decide the fate of businesses facing financial hardship. We study how bargaining failures in such procedures impact the economic performance of participating firms in the context of Croatia, which introduced a "pre-bankruptcy...

Persistent link: https://www.econbiz.de/10012603137

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