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Strategic Liquidity Supply and Security Design

Biais, Bruno; Mariotti, Thomas - Suntory and Toyota International Centres for Economics … - 2003

imperfections on liquidity. Asset owners seek to obtain liquidity by selling their claims on future cash-flows, on which they have … private information. Our analysis encompasses both the cases of competitive and monopolistic liquidity supply. In the optimal … a monopolistic liquidity supplier to exclude them from trade in order to better extract rents from issuers with low cash-flows. …

Persistent link: https://www.econbiz.de/10005310248

How Entrepreneurs Mitigate the Investor's Adverse Selection Problem : New Evidence from Private Firm Sales

Hayes, Rachel M. - 2018

Tests of Leland and Pyle's (1977) signaling model in the public setting face a number of empirical challenges. We revisit the implications of their model with new evidence from a setting in which entrepreneurs sell their firms in private transactions. In this setting, it is common for sellers to...

Persistent link: https://www.econbiz.de/10012913654

Dynamic Adverse Selection and Debt

Chemla, Gilles; Faure-Grimaud, Antoine - 1997

This paper argues that the strategic use of debt favours the revelation of information in dynamic adverse selection problems. Our argument is based on the idea that debt is a credible commitment to end long term relationships. Consequently, debt encourages a privately informed party to disclose...

Persistent link: https://www.econbiz.de/10014123133

The Effects of Industry-Level Uncertainty on Cash Holdings: The Case of Germany

Baum, Christopher F.; Schäfer, Dorothea; Talavera, … - 2006

increases the firm will increase its optimal level of liquidity. We test this hypothesis using a panel of German firms drawn …

Persistent link: https://www.econbiz.de/10010260994

Insolvency of Significant Non-Financial Enterprises : Lessons from Bank Failures and Bank Resolution

Kokorin, Ilya - 2020

In the aftermath of the global financial crisis the EU bank resolution regime went through fundamental changes that seek to preserve financial stability and ensure continuity of critical functions. The same cannot be said of insolvency rules applicable to non-financial enterprises. Unlike bank...

Persistent link: https://www.econbiz.de/10012833155

The Economic Costs of Financial Distress

Custodio, Claudia - 2020

We estimate the economic costs of financial distress by exploiting cross-supplier variation in real estate assets and leverage, and the timing of real estate shocks. We show that for the same client buying from different suppliers, its purchases from distressed suppliers decline by an additional...

Persistent link: https://www.econbiz.de/10012850487

Default Contagion and Systemic Risk with Cross-Ownership of Equities, Debts, and Financial Derivatives

Nishide, Katsumasa - 2020

We consider a situation in which general financial products such as options, CDS, and other derivatives, are traded to investigate the effect of cross-ownerships on market stability. We prove the existence and uniqueness of a clearing payment vector under the assumption of the fictitious default...

Persistent link: https://www.econbiz.de/10012855070

Managing Liquidity in Production Networks : The Role of Central Firms

Gao, Janet - 2020

within the network. This study examines the liquidity management of firms centrally connected in the network. I show that …

Persistent link: https://www.econbiz.de/10012856562

The Effects of Industry-Level Uncertainty on Cash Holdings: The Case of Germany

Baum, Christopher F.; Schäfer, Dorothea; Talavera, … - DIW Berlin (Deutsches Institut für Wirtschaftsforschung) - 2006

increases the firm will increase its optimal level of liquidity. We test this hypothesis using a panel of German firms drawn …

Persistent link: https://www.econbiz.de/10005068997

When Redistribution Leads to Regressive Taxation

Hariton, Cyril; Piaser, Gwenäel; Piaser, Gwenaël - Dipartimento di Economia, Università Ca' Foscari Venezia - 2006

We introduce labor contracts, in a framework of optimal redistribution: firms have some local market power and try to discriminate among heterogeneous workers. In this setting we show that if the firms have perfect information, i.e, they perfectly discriminate against workers and take all the...

Persistent link: https://www.econbiz.de/10005057188

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