This paper documents that the bond investments of insurance companies transmit shocks from insurance markets to the real economy. Liquidity windfalls from household insurance purchases increase insurers' demand for corporate bonds. Exploiting the fact that insurers persistently invest in a small...

This article builds on Froot and Stein in developing a framework for analyzing the risk allocation, capital budgeting, and capital structure decisions facing insurers and reinsurers. The model incorporates three key features: (i) value-maximizing insurers and reinsurers face product-market as...

The researchers aim to examine the firm-specific variables that impact the financial performance of general insurance firms in India. The study's scope is limited to India's insurance industries from 2010-2011 to 2019-2020. The research considers 21 insurance firms in India out of 35 general...

When firms approach distress, whether they engage in asset substitution (risk shifting) or rebuild equity (risk management) may depend on their access to capital markets. The property-casualty insurance industry has two features that make it ideal for testing this hypothesis: (1) the main losses...

The purpose of the paper is to provide some support to the thesis that insurance may reduce the cost of capital in a company by influencing both the cost of capital components and the need for rising capital. The problem is here perceived from two perspectives the classical concept related to...

This paper reviews the state of the banking sector in Europe. At the aggregate level, the empirical data suggest that the Baltics, Cyprus, Greece and Ireland, in particular, are hit by a strong decline in lending in the wake of the financial crisis. This deleveraging is mainly caused by a...

Prior literature provides support both for the existence of target capital structures and internal capital markets (ICM). The issue of whether firms use internal capital to reduce deviations from target capital structures, however, has yet to be examined. We provide the first empirical evidence...

Traditional variable annuities build retirement income for annuitants through investments in stocks and bonds. These annuities are variable because their performance depends upon the performance of uncertain financial markets. The risk of poor performance lies solely upon annuitants, rather than...

This paper examines the impact of Australian firms. warranty policies on their capital structures. The sample consists of 261 firms and 937 firm-years for Australian public firms for the period 2007-2010. The results suggest that warranty policies impact on Australian firms. capital structures....