This paper examines the risk-shifting and delayed equity explanations for Japanese firms using convertible securities in their financing mix. The popularity of equity-linked debt instruments in Japan where institutional arrangements mitigate the incentives to transfer wealth from bondholders to...

This paper investigates the effect of price limits on strategically informed trading and market performances. We show that a price limit will increase the costs of liquidity traders and volatility spillover by its ex ante effects on strategically informed trading. Our study differs from prior...