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We present a DSGE model where firms optimally choose among alternative instruments of external finance. The model is used to explain the evolving composition of corporate debt during the financial crisis of 2008-09, namely the observed shift from bank finance to bond finance, at a time when the...
Persistent link: https://www.econbiz.de/10012457936
We show how firms scheduled to roll over debt in a crisis strategically reduce operations, regardless of their liquidity constraints. Our research design utilizes contractual features of commercial mortgages that generate as-good-as-random variation in whether debt is scheduled to mature during...
Persistent link: https://www.econbiz.de/10014421189
heterogeneity in financial contracting at the onset of the crisis by exploring ex-ante variation in long-term debt maturity. Our … credit supply shocks on corporate policies. For example, in the absence of a credit shock ("normal times"), the maturity … composition of long-term debt has no effect on investment outcomes. Likewise, maturity composition has no impact on investment …
Persistent link: https://www.econbiz.de/10012463659
We argue that time-series variation in the maturity of aggregate corporate debt issues arises because firms behave as … macro liquidity providers, absorbing the large supply shocks associated with changes in the maturity structure of government …
Persistent link: https://www.econbiz.de/10012464558
The study is divided into four broad parts, beginning with an exploratory analysis of the data on expost returns on corporate equities and bonds for the 1926-80 period. In Part 2, we estimate the relationships between one-month expost returns on corporate bonds and equities andvariations in...
Persistent link: https://www.econbiz.de/10012477959
We explore the consequences of global capital market segmentation by currency for the optimal currency composition of borrowing by firms. Global bond portfolios are driven by the currency of denomination of assets as investors prefer to lend in their home currency or the international currency,...
Persistent link: https://www.econbiz.de/10014437022
This paper begins by examining the ways in which pension liabilities are and are not like corporate bonds. Some conceptual issues involved in valuing future pension obligations are then discussed. The second section considers the advantage to firms of fully funding their pension obligations and...
Persistent link: https://www.econbiz.de/10012478415
With business leverage at record levels, the effects of corporate debt overhang on growth and investment have become a prominent concern. In this paper, we study the effects of corporate debt overhang based on long-run cross-country data covering the near- universe of modern business cycles. We...
Persistent link: https://www.econbiz.de/10012482416
the roles played by volatility, illiquidity and debt maturity in driving debt runs, as well as on firms' capital adequacy …
Persistent link: https://www.econbiz.de/10012463167
Publicly-traded debt securities differ on a number of dimensions, including quality, maturity, seniority, security, and …, growth opportunities and cash holdings are related with the convertibility, maturity and security structure of issued bonds … the types of securities that are issued. Consistent with commonly stated 'maturity-matching' arguments, long …
Persistent link: https://www.econbiz.de/10012464940