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The last twenty years or so have seen a sharp decline in public equity. I present a framework that explains the forces that cause the listing propensity of firms to change over time. This framework highlights the benefits and costs of a public listing compared to the benefits and costs of...
Persistent link: https://www.econbiz.de/10012168883
Persistent link: https://www.econbiz.de/10013480739
Until about twenty years ago, the consensus view on the cause of financial-system distress was fairly simple: a run on one bank could easily turn to a panic involving runs on all banks, destroying some and disrupting the financial system. Since then, however, a series of events—such as...
Persistent link: https://www.econbiz.de/10014488290
We investigate whether bank performance during the credit crisis of 2008 is related to CEOincentives and share ownership before the crisis and whether CEOs reduced their equity stakes intheir banks in anticipation of the crisis. There is no evidence that banks with CEOs whoseincentives were...
Persistent link: https://www.econbiz.de/10009305118
Using theories from the behavioral finance literature to predict that investors are attracted to industries with more salient outcomes and that therefore firms in such industries have higher valuations, we find that firms in industries that have high industry-level dispersion of profitability...
Persistent link: https://www.econbiz.de/10011133503
Much attention has been paid to the large decreases in value of non-agency residential mortgage-backed securities (RMBS) during the financial crisis. Many observers have argued that the fall in prices was partly driven by decreased liquidity and fire sales. We investigate whether capital...
Persistent link: https://www.econbiz.de/10010950851
institution in taking advantage of opportunities that increase firm value. Limitations of risk measurement and the decentralized …
Persistent link: https://www.econbiz.de/10010950919
Liquidity production is a central role of banks. We show that, under idealized conditions, high leverage is optimal for banks when there is a market premium for (socially valuable) liquid financial claims and no deviations from Modigliani and Miller (1958) due to agency problems, deposit...
Persistent link: https://www.econbiz.de/10010951419
We investigate whether bank performance during the credit crisis of 2008 is related to CEO incentives and share ownership before the crisis and whether CEOs reduced their equity stakes in their banks in anticipation of the crisis. There is no evidence that banks with CEOs whose incentives were...
Persistent link: https://www.econbiz.de/10005033488
Using a large panel of firms across the world from 1991-2006, we show that the median foreign firm has lower idiosyncratic risk than a comparable U.S. firm. Country characteristics help explain variation in the level of idiosyncratic risk, but less so than firm characteristics. Idiosyncratic...
Persistent link: https://www.econbiz.de/10005000621