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Does Campaign Finance imply Political Favors?

Claessens, Stijn; Feijen, Erik; Laeven, Luc - 2006

future firm-specific political favors,including preferential access to external financing. Using a novel dataset, we find …

Persistent link: https://www.econbiz.de/10010325391

The Political Economy of Corporate Control

Perotti, Enrico; von Thadden, Ernst-Ludwig - 2005

In a democracy, a political majority can influence both the corporategovernance structure and the return to human and … financial capital.We argue that when financial wealth is sufficiently diffused, thereis political support for a strong … governance role for dispersed equitymarket investors, and low labor rents. When financial wealth is concentrated,a political …

Persistent link: https://www.econbiz.de/10010325412

Public Initiatives to Support Entrepreneurs: Credit Guarantees versus Co-Funding

Arping, Stefan; Lóránth, Gyöngyi; Morrison, Alan - 2009

We analyze financial support for the entrepreneurial sector. State support can raise welfare by relaxing financial constraints, but it can also reduce lending standards if entrepreneurs substitute public sources of collateral for their own assets, if it encourages excessive entrepreneurial...

Persistent link: https://www.econbiz.de/10010326007

Capital Regulation and Tail Risk

Perotti, Enrico; Ratnovski, Lev; Vlahu, Razvan - 2011

The paper studies risk mitigation associated with capital regulation, in a context when banks may choose tail risk assets. We show that this undermines the traditional result that higher capital reduces excess risk-taking driven by limited liability. When capital raising is costly, poorly...

Persistent link: https://www.econbiz.de/10010326052

Proprietary Trading and the Real Economy

Arping, Stefan - 2013

We embed proprietary trading into a model of bank lending. Opportunities to engage in purely speculative trading can harm the real economy. This is because banks, when devoting cheap but scarce deposits to lending rather than to gambling, must be compensated for giving up gambling rents. This...

Persistent link: https://www.econbiz.de/10010326165

Banking Competition and Soft Budget Constraints: How Market Power can threaten Discipline in Lending

Arping, Stefan - 2012

In imperfectly competitive credit markets, banks can face a tradeoff between exploiting their market power and enforcing hard budget constraints. As market power rises, banks eventually find it too costly to discipline underperforming borrowers by stopping their projects. Lending relationships...

Persistent link: https://www.econbiz.de/10010326445

Credit Protection and Lending Relationships

Arping, Stefan - 2012

We examine the impact CDS protection on lending relationships and efficiency. CDS insulate lenders against losses from forcing borrowers into default and liquidation. This improves the credibility of foreclosure threats, which can have positive implications for borrower incentives and credit...

Persistent link: https://www.econbiz.de/10010326531

Does Competition make Banks more Risk-seeking?

Arping, Stefan - 2014

This article presents a model in which, contrary to conventional wisdom, competi- tion can make banks more reluctant to take excessive risks: As competition intensifies and margins decline, banks face more-binding threats of failure, to which they may respond by reducing their risk-taking. Yet,...

Persistent link: https://www.econbiz.de/10010377241

Public Initiatives to Support Entrepreneurs : Credit Guarantees versus Co-Funding

Arping, Stefan - 2012

Persistent link: https://www.econbiz.de/10012712433

Did the Sarbanes-Oxley Act of 2002 make Firms less Opaque? Evidence from Analyst Earnings Forecasts

Arping, Stefan; Sautner, Zacharias - 2010

We study whether the Sarbanes-Oxley Act (SOX) of 2002 made firms less opaque. For identification, we use a difference-in-differences estimation approach and compare EU firms that are cross-listed in the US—and therefore subject to SOX—with comparable EU firms that are not cross-listed. We...

Persistent link: https://www.econbiz.de/10010325984