We provide novel evidence linking the level of creditor protection provided by law to the degree of usage of technologically older, vintage capital in the airline industry. Using a panel of aircraft-level data around the world, we find that better creditor rights are associated with both...

We extend our prior work on how both supply (including the emergence of OTC equity derivatives and growth in share lending) and demand (including the growth of hedge funds) factors now facilitate the large-scale, low-cost decoupling of shareholder voting rights from shareholder economic...

The long-term transition from defined benefit (DB) to defined contribution occupational pensions has been the subject of academic and industry research. Even so, there remains considerable debate about the causes and consequences of this transformation including whether the DB institution is in...

The objective of this research is to determine the optimal rating philosophy for the rating of SMEs, and to describe the consequences of the chosen philosophy on several related aspects. As to our knowledge, this is the first paper that studies the considerations of financial institutions on...

This paper investigates some common determinants of default probability changes of individual firms using Standard amp; Poor's ratings database. We analyze and quantify the responses of hazard rates to changes in various economic variables, namely financial markets, business cycle and credit...

This study assesses the validity of widespread criticisms of the large, nationally recognized credit rating agencies (CRAs). The criticisms focus on these CRAs' (1) disclosure practices (such as related to the assumptions underlying their ratings decisions); (2) potential conflicts of interest;...

Since the inception of the first permanent American bankruptcy law in 1898, the intellectual and political understanding of consumer bankruptcy has been anchored in a model that views bankruptcies as resulting from household financial distress. For much of the Twentieth Century, this traditional...

The Securities and Exchange Commission has recently attempted to establish a new form of insider trading: the use of nonpublic information about mutual fund portfolio holdings to engage in fund arbitrage. In a series of settled cases, the SEC has alleged that fund managers violated rules...

We analyze how optimal contracting between an entrepreneur and a financial institution depends on the cash flow characteristics of the entrepreneur's firm. Because the entrepreneur prefers continuing the firm over liquidating it, and aggressive continuation strategies over conservative...

This paper assesses the quality of agency ratings from the perspective of their users. Specifically, I examine whether ratings or an alternative measure of default risk, expected default frequencies (EDFs), are more suitable for formulating governance rules. Such rules, which consist of buy and...