We examine financial constraints and forms of finance used for investment, byanalysing survey data on 157 large privatised companies in Hungary and Poland for theperiod 1998 – 2000. The Bayesian analysis using Gibbs sampling is carried out toobtain inferences about the sample companies’...

Building on the ‘law and economics’ literature, this paper analyses corporategovernance implications of debt financing in an environment where a dominant owner isable to extract ex ante ‘private benefits of control’. Ownership concentration may result inlower efficiency, measured as a...

This paper examines the effects of capital gains taxation on firms’ investmentand financing decisions. We develop a real options model in which the timing ofinvestment, the decision to default, and the firm’s capital structure are endogenouslyand jointly determined. Our analysis demonstrates...

This paper examines the effects of capital gains taxation on firms’ investmentand financing decisions. We develop a real options model in which the timing ofinvestment, the decision to default, and the firm’s capital structure are endogenouslyand jointly determined. Our analysis demonstrates...

In this paper I analyze how debt structure and the strategic interaction betweenshareholders and creditors in the event of default a¤ect expected stock returns. By en-dogenizing shareholders decision to default, the model generates new predictions linking…rm characteristics to expected stock...

We test the hypotheses that, in presence of financial constraints, a low leverage policy directed at maintaining financial flexibility can affect company investment. Low leverage is defined according to deviations from target which are estimated via GMS-SYS. Our analysis reveals that, following...

Our study provides evidence on the share price reactions to the announcement of equity issues inGermany, where capital market is characterized by institutional features distinct from the U.S. market.German seasoned equity issues yield a positive market reaction which contrasts to the significant...

This is the first large-scale examination of initial public offerings in the German market segment Neuer Markt. As such, it represents a powerful sample to examine the pricing process and long-run performance of the 325 initial public offerings take place between 1997 and 2001 at the Neuer...

This paper tests two competing hypotheses about the influence of financial institutions as large shareholders on the performance of their industrial portfolio firms: the superior monitoring hypothesis versus the rent extraction hypothesis. The methodology of this study exploits the abolishment...

The trading of securities on multiple markets raises the question of each market’s sharein the discovery of the informationally efficient price. We exploit salient distributionalfeatures of multivariate financial price processes to uniquely determine these contributions.Thereby we resolve the...