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Financial Dependence and Innovation : The Case of Public Versus Private Firms

Acharya, Viral V. - 2014

This paper examines the relationship between innovation and firms' dependence on external capital by analyzing the … innovation activities of privately-held and publicly-traded firms. We find that public firms in external finance dependent … in internal finance dependent industries do not have a significantly better innovation profile than matched private firms …

Persistent link: https://www.econbiz.de/10013061816

Borrow Cheap, Buy High? The Determinants of Leverage and Pricing in Buyouts

Axelson, Ulf - 2010

This paper provides an empirical analysis of the financial structure of large buyouts. We collect detailed information on the financing of 1157 worldwide private equity deals from 1980 to 2008. Buyout leverage is cross-sectionally unrelated to the leverage of matched public firms, and is largely...

Persistent link: https://www.econbiz.de/10013144159

Corporate Taxes and Internal Borrowing within Multinational Firms

Egger, Peter H. - 2012

This paper develops a theoretical model of multinational firms with an internal capital market. Main reasons for the emergence of such a market are tax avoidance through debt shifting and the existence of institutional weaknesses and financial frictions across host countries. The model serves to...

Persistent link: https://www.econbiz.de/10013100410

As Certain as Debt and Taxes : Estimating the Tax Sensitivity of Leverage from Exogenous State Tax Changes

Heider, Florian - 2013

We use a natural experiment in the form of 121 staggered changes in corporate income tax rates across U.S. states to show that tax considerations are a first-order determinant of firms' capital structure choices. Over the period 1990-2011, firms increase long-term leverage by 104 basis points on...

Persistent link: https://www.econbiz.de/10013090550

Capital Budgeting vs. Market Timing : An Evaluation Using Demographics

DellaVigna, Stefano - 2010

An ongoing debate sets capital budgeting against market timing. The primary difficulty in evaluating these theories is finding distinct exogenous proxies for investment opportunities and mispricing. We use demand shifts induced by demographics to address this problem, and hence, provide a more...

Persistent link: https://www.econbiz.de/10013152090

Dynamic Debt Runs

He, Zhiguo - 2009

We develop a dynamic model of debt runs on a firm, which invests in an illiquid asset by rolling over staggered short-term debt contracts. We derive a unique threshold equilibrium, in which creditors coordinate their asynchronous rollover decisions based on the firm's publicly observable and...

Persistent link: https://www.econbiz.de/10013155020

Collateral Pricing

Benmelech, Efraim - 2008

We examine how collateral affects the cost of debt capital. Theories based on borrower moral hazard and limited pledgeable income predict that collateral increases the availability of credit and reduces its price. Testing these theories is complicated by the very selection problem which they...

Persistent link: https://www.econbiz.de/10012772363

Corporate Misreporting and Bank Loan Contracting

Graham, John R. - 2008

This paper is the first to study the effect of financial restatement on bank loan contracting. Compared with loans initiated before restatement, loans initiated after restatement have significantly higher spreads, shorter maturities, higher likelihood of being secured, and more covenant...

Persistent link: https://www.econbiz.de/10012773124

What Determines the Structure of Corporate Debt Issues?

Julio, Brandon - 2008

Publicly-traded debt securities differ on a number of dimensions, including quality, maturity, seniority, security, and convertibility. Finance research has provided a number of theories as to why firms should issue debt with different features; yet, there is very little empirical work testing...

Persistent link: https://www.econbiz.de/10012773126

Asset Sales and Debt Capacity

Shleifer, Andrei - 2008

In this paper, we explore the link between asset sales end debt capacity. Asset sales are a common way far firms to raise cash, and so present an alternative to security issues for firms near financial distress. We argue that liquid assets -- those that can be resold at attractive terms -- are...

Persistent link: https://www.econbiz.de/10012774581

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