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Philippon, Thomas - 2009

conditions implementation on sufficient bank participation. Preferred stock plus warrants reduces opportunistic participation by … aggregate credit risk exceed the cost of implicit transfers to bank debt holders …

Persistent link: https://www.econbiz.de/10013160157

Insolvency Resolution and the Missing High Yield Bond Markets

Becker, Bo - 2013

borrowers will use bank loans anywhere, but also bonds when bankruptcy is efficient. The model matches empirical debt mix …-country and using insolvency reforms as natural experiments. Our empirical estimates suggest that a one …-standard-deviation increase in the efficiency of bankruptcy is associated with an increase in the stock of corporate bonds equal to 5% of firm …

Persistent link: https://www.econbiz.de/10013076562

Cash Holdings and Credit Risk

Acharya, Viral V. - 2011

Intuition suggests that firms with higher cash holdings are safer and should have lower credit spreads. Yet empirically, the correlation between cash and spreads is robustly positive and higher for lower credit ratings. This puzzling finding can be explained by the precautionary motive for...

Persistent link: https://www.econbiz.de/10013125920

An Empirical Study of the Credit Market with Unobserved Consumer Typers

Gan, Li - 2008

This paper proposes an econometric model to identify unobserved consumer types in the credit market. Consumers choose different amounts of loan because of differences in their time or risk preferences (types). Thus, the unconditional probability of default is modeled using a mixture density...

Persistent link: https://www.econbiz.de/10012772371

Designed to Fail : Effects of the Default Option and Information Complexity on Student Loan Repayment

Cox, James C. - 2018

We ask why so few student loan borrowers enroll in Income Driven Repayment when the majority would benefit from doing so. To do so we run an incentivized laboratory experiment using a facsimile of the government's Student Loan Exit Counseling website. We test the role information complexity,...

Persistent link: https://www.econbiz.de/10012907768

Default and Renegotiation : A Dynamic Model of Debt

Hart, Oliver; Moore, John - 2021

We analyze the role of debt in persuading an entrepreneur to pay out cash flows, rather than to divert them. In the first part of the paper we study the optimal debt contract -- specifically, the trade-off between the size of the loan and the repayment -- under the assumption that some debt...

Persistent link: https://www.econbiz.de/10013215359

Rollover Risk and Market Freezes

Acharya, Viral V. - 2010

The crisis of 2007-09 has been characterized by a sudden freeze in the market for short-term, secured borrowing. We present a model that can explain a sudden collapse in the amount that can be borrowed against finitely-lived assets with little credit risk. The borrowing in this model takes the...

Persistent link: https://www.econbiz.de/10013148660

Rollover Risk and Credit Risk

He, Zhiguo - 2010

This paper models a firm's rollover risk generated by conflict of interest between debt and equity holders. When the firm faces losses in rolling over its maturing debt, its equity holders are willing to absorb the losses only if the option value of keeping the firm alive justifies the cost of...

Persistent link: https://www.econbiz.de/10013148863

Individuals and Organizations as Sources of State Effectiveness

Best, Michael - 2017

How important are bureaucrats for the productivity of the state? And to what extent do the tradeoffs between different policies depend on the implementing bureaucrats' effectiveness? Using data on 16million public procurement purchases in Russia during 2011–2016, we show that over 40 percent...

Persistent link: https://www.econbiz.de/10012957383

Fuzzy Frontiers of Production : Evidence of Persistent Inefficiency in Safety Expenditures

Ichniowski, Casey - 2021

This study documents a strong inverse relationship between accident rates and production in a sample of eleven firms in the same narrowly defined industry classification. Given the detailed set of input controls and controls for plant-specific and time-specific factors used in the analysis, the...

Persistent link: https://www.econbiz.de/10013236836

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