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Debt maturity, risk, and asymmetric information
Berger, Allen N.; Espinosa-Vega, Marco A.; Frame, W. Scott - 2004
information in determining debt maturity, and we examine the overall importance of informational asymmetries in debt maturity … information in explaining debt maturity. …
Persistent link: https://www.econbiz.de/10010397600
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Systematic risk, debt maturity and the term structure of credit spreads
Chen, Hui; Xu, Yu; Yang, Jun - 2012
We build a dynamic capital structure model to study the link between systematic risk exposure and debt maturity, as … the maturity structure. Relative to short-term debt, long-term debt is less prone to rollover risks, but its illiquidity … favour longer debt maturity, as well as a more stable maturity structure over the business cycle. Pro-cyclical debt maturity …
Persistent link: https://www.econbiz.de/10010319636
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Why do borrowers pledge collateral? New empirical evidence on the role of asymmetric information
Berger, Allen N.; Espinosa-Vega, Marco A.; Frame, W. Scott - 2007
An important theoretical literature motivates collateral as a mechanism that mitigates adverse selection, credit rationing, and other inefficiencies that arise when borrowers hold ex ante private information. There is no clear empirical evidence regarding the central implication of this...
Persistent link: https://www.econbiz.de/10010292292
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Displacement, asymmetric information and heterogeneous human capital
Hu, Luojia; Taber, Christopher - 2008
In a seminal paper Gibbons and Katz (1991; GK) develop and empirically test an asymmetric information model of the labor market. The model predicts that wage losses following displacement should be larger for layouts than for plant closings, which was borne out by data from the Displaced Workers...
Persistent link: https://www.econbiz.de/10010292119
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Two-sided Certification: The market for Rating Agencies
Fasten, Erik R.; Hofmann, Dirk - 2010
Certifiers contribute to the sound functioning of markets by reducing a symmetric information. They, however, have been heavily criticized during the 2008-09 financial crisis. This paper investigates on which side of the market a monopolistic profit-maximizing certifier offers his service. If...
Persistent link: https://www.econbiz.de/10010334122
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Two-sided certification: The market for rating agencies
Fasten, Erik R.; Hofmann, Dirk - 2010
Certifiers contribute to the sound functioning of markets by reducing asymmetric information. They, however, have been heavily criticized during the 2008-09 financial crisis. This paper investigates on which side of the market a monopolistic profit-maximizing certifier offers his service. If the...
Persistent link: https://www.econbiz.de/10010270720
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Are Credit Ratings Valuable Information?
Kraft, Kornelius; Czarnitzki, Dirk - 2004
Credit ratings are commonly used by lenders to assess the default risk, because every credit is connected with a possible loss. If the probability of a default is above a certain threshold, a credit will not be provided. The purpose of this paper is to test whether credit ratings contribute...
Persistent link: https://www.econbiz.de/10010297323
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Measuring the impact of innovation on firm value: a new approach
Kraft, Kornelius; Czarnitzki, Dirk - 2002
Most of the existing empirical literature on the relationship of firm value and knowledge capital is based on the stock market valuation of companies. However, the assets of many firms are not publicly traded, and hence the calculation of market value is limited to a subsample of firms. We...
Persistent link: https://www.econbiz.de/10010297699
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Avoiding the rating bounce: Why rating agencies are slow to react to new information
Löffler, Gunter - 2002
Rating agencies state that they take a rating action only when it is unlikely to be reversed shortly afterwards. Based on a formal representation of the rating process, I show that such a policy provides a good explanation for the empirical evidence: Rating changes occur relatively seldom,...
Persistent link: https://www.econbiz.de/10010316237
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Comparing the accuracy of default predictions in the rating industry: The case of Moody's vs. S&P
Krämer, Walter; Güttler, André - 2003
We consider 1927 borrowers from 54 countries who had a credit rating by both Moody's and S&P as of the end of 1998, and their subsequent default history up to the end of 2002. Viewing bond ratings as predicted probabilities of default, we show that it is unlikely that both agencies are well...
Persistent link: https://www.econbiz.de/10010306287