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Using unique detailed data, we describe the role of internal capital markets in Italian business groups before and after the financial crisis, an exogenous event which provides an ideal setting to assess whether the working of internal capital markets helps group-affiliated firms to mitigate...
Persistent link: https://www.econbiz.de/10012926826
The recent systemic crisis that has affected the financial markets and real economies of major industrialized countries has had significant effects on the corporate governance and key organizational choices of large firms. In this context, the present study aims to verify whether the...
Persistent link: https://www.econbiz.de/10013059222
This paper analyses the evolution of debt of Italian firms from 2010 to 2020 with special focus on the first year of the Covid-19 pandemic. By means of quantile regressions, our approach investigates several heterogeneities to assess the vulnerabilities of the most fragile firms. We find that,...
Persistent link: https://www.econbiz.de/10014257660
In firms with multiple blockholders governance via exit is affected by how blockholders react to each others' exit. Institutional investors, who hold the majority of equity blocks, are heterogeneous in their incentives. How do these incentives affect the manner in which institutional...
Persistent link: https://www.econbiz.de/10012860611
We construct a new systemic risk measure that quantifies vulnerability to fire-sale spillovers using detailed regulatory balance sheet data for U.S. commercial banks and repo market data for broker-dealers. Even for moderate shocks in normal times, fire-sale externalities can be substantial. For...
Persistent link: https://www.econbiz.de/10010202672
Financial institutions constitute an increasingly important cornerstone of capital markets, yet research at the intersection of asset management contracts and asset pricing remains sparse. In this paper, I study how externalities of managerial contracts affect asset prices in the context of...
Persistent link: https://www.econbiz.de/10012834756
Central banks increasingly act as market-makers-of-last-resort, yet the impact and exit of such interventions remain poorly understood. Using euro-area data, we analyze the cycle of market freeze, intervention, and exit in short-term debt markets. A run on money market funds (MMFs) triggered a...
Persistent link: https://www.econbiz.de/10015415763
In the light of the recent financial crisis, the discussion on the nature of runs and on the stabilizing role of liquidity holdings has intensified. This paper explores the cash management conducted by German open-end equity funds for the period between 2005 and 2010. Since ownership structures...
Persistent link: https://www.econbiz.de/10010202775
We contribute to the literature on “market timing” by exploring periods of simultaneous equity issues and debt retirements (a leverage decreasing recapitalization, LDR). We hypothesize and show that such LDRs are driven by measures of creditor control but are not predicted by capital...
Persistent link: https://www.econbiz.de/10012854505
Previous studies argue that takeover targets’ CEOs can use high leverage as a signal for commitment to undertaking value-enhancing projects, thus deterring the takeover attempts since the bankruptcy risk associated with high leverage can serve as an effective governance mechanism. This paper...
Persistent link: https://www.econbiz.de/10014253969