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Where do institutional investors seek shelter when disaster strikes? : evidence from COVID-19

Glossner, Simon; Matos, Pedro; Ramelli, Stefano; … - 2020

During the COVID-19 market crash, U.S. stocks with higher institutional ownership -- in particular, those held more by active, short-term, and more exposed institutions -- performed worse. Portfolio changes through the first quarter of 2020 reveal that institutional investors prioritized...

Persistent link: https://www.econbiz.de/10012271074

How valuable is financial flexibility when revenue stops? : evidence from the COVID-19 crisis

Fahlenbrach, Rüdiger; Rageth, Kevin; Stulz, René M. - 2020 - Revised May 17, 2020

leverage effect …

Persistent link: https://www.econbiz.de/10012216704

Levered returns and capital structure imbalances

Ippolito, Filippo; Steri, Roberto; Tebaldi, Claudio - 2017

We revisit the relation between equity returns and financial leverage through the lens of a trade-off model with costly … returns depend on whether a firm's leverage is above or below its target leverage. The data support the model predictions …. Controlling for leverage, overlevered (underlevered) firms earn higher (lower) returns. Controlling for target leverage the …

Persistent link: https://www.econbiz.de/10011899835

Financing asset sales and business cycles

Arnold, Marc; Hackbarth, Dirk; Puhan, Tatjana Xenia - 2014

Using a dynamic model of financing, investment, and macroeconomic risk, we investigate when firms sell assets to fund investments (financing asset sales) across the business cycle. Equity financed investment transfers wealth from equity to debt because asset volatility declines and earnings...

Persistent link: https://www.econbiz.de/10010337958

Financing investment: the choice between bonds and bank loans

Morellec, Erwan; Valta, Philip; Zhdanov, Alexei - 2014

We build a model of investment and financing decisions to study the choice between bonds and bank loans in a firm's marginal financing decision and its effects on corporate investment. We show that firms with more growth options, higher bargaining power in default, operating in more competitive...

Persistent link: https://www.econbiz.de/10010258730

Bank capital, liquid reserves, and insolvency risk

Hugonnier, Julien; Morellec, Erwan - 2015

We develop a dynamic model of banking to assess the effects of liquidity and leverage requirements on banks' insolvency … requirements with leverage requirements reduces drastically both the likelihood of default and the magnitude of bank losses in …

Persistent link: https://www.econbiz.de/10011293576

Banks vs. markets: are banks more effective in facilitating sustainability?

Newton, David P.; Ongena, Steven; Xie, Ru; Zhao, Binru - 2022

Is bank- versus market-based financing different in its attitudes towards Environmental, Social, and Governance (ESG) risk? Using a novel sample covering 3,783 U.S. public firms from 2007 to 2020, we study how firm-level ESG risk affects its financing outcomes. We find that companies with higher...

Persistent link: https://www.econbiz.de/10013169151

Relationship capital and financing decisions

Geelen, Thomas; Morellec, Erwan; Rostova, Natalia - 2021

formed and how they impact leverage and debt maturity choices. In the model, lending relationships evolve through repeated … interactions between firms and debt investors. Stronger lending relationships lead firms to adopt higher leverage ratios, issue …

Persistent link: https://www.econbiz.de/10012612803

Product market strategy and corporate policies

Hajda, Jakub; Nikolov, Boris - 2020

How does product life cycle affect investment and financing? To answer this question, we structurally estimate a dynamic model where the firm chooses product portfolio characteristics that influence cash flow dynamics and shape corporate policies. In the model, the firm trades off higher...

Persistent link: https://www.econbiz.de/10012421456

News about zero-leverage firms

Geelen, Thomas A. - 2016

reduce adverse selection and improve the pricing of newly issued debt. Over time, the benefits of learning decrease and zero-leverage …

Persistent link: https://www.econbiz.de/10011626255

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