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The economic value of flexibility when there is disagreement

Boot, Arnoud W. A.; Thakor, Anjan V. - 2002

We develop an economic theory of “flexibility”, which we interpret as the discretion orability to make a decision that …

Persistent link: https://www.econbiz.de/10011332819

Disagreement and flexibility : a theory of optimal security issuance and capital structure

Boot, Arnoud W. A.; Thakor, Anjan V. - 2002

ofthis theory of capital structure evolution is that optimal capital structure is essentiallydynamic, and depends on the firm …’s stock price, implying that firms issue equity when stockprices are high and debt when stock prices are low. The theory … testablepredictions. Moreover, the theory can rationalize the use of debt in the absence of taxes,agency costs or signaling considerations. …

Persistent link: https://www.econbiz.de/10011332820

Competition and entry in banking : implications for stability and capital regulation

Boot, Arnoud W. A.; Marinč, Matej - 2006

We assess the influence of competition and capital regulation on the stability of the banking system. We particularly ask two questions: i) how does capital regulation affect (endogenous) entry; and ii) how do (exogenous) changes in the competitive environment affect bank monitoring choices and...

Persistent link: https://www.econbiz.de/10011348715

Go public or stay private : a theory of entrepreneurial choice

Boot, Arnoud W. A.; Gopalan, Radhakrishnan; Thakor, Anjan V. - 2003

In this paper we analyze an entrepreneur /manager's choice between private and public ownership in a setting in which management needs some elbow room or autonomy to optimally manage the firm. In public capital markets, the corporate governance regime in place exposes the firm to exogenous...

Persistent link: https://www.econbiz.de/10011334339

Evolution of organizational scale and scope

Boot, Arnoud W. A.; Milbourn, Todd; Thakor, Anjan V. - 2002

This paper examines the determinants of organizational scale and scope, with applications to various industries, including financial services. We build a model in which new opportunities arise for firms, but the skills needed to exploit them effectively are unknown. Early investments in these...

Persistent link: https://www.econbiz.de/10011326952

Credit ratings as coordination mechanisms

Boot, Arnoud W. A.; Milbourn, Todd - 2002

In this article, we provide a novel rationale for credit ratings. The rationale that we propose is that credit ratings serve as a coordinating mechanism in situations where multiple equilibria can obtain. We show that credit ratings provide a focal point for firms and their investors, and...

Persistent link: https://www.econbiz.de/10011326954