We build a model of investment and financing decisions to study the choice between bonds and bank loans in a firm's marginal financing decision and its effects on corporate investment. We show that firms with more growth options, higher bargaining power in default, operating in more competitive...

Standard factor pricing models do not capture well the common time-series or cross-sectional variation in average returns of financial stocks. We propose a five-factor asset pricing model that complements the standard Fama and French (1993) three-factor model with a financial sector ROE factor...

The goal of this study is to identify empirically how country-level development, taking into account the financial and macroeconomic environment, affect the risk profiles of the banking sector in Europe. Through a dataset that covers 3,399 European banks spanning the period 1996-2011, and the...

This paper investigates the determinants of liability maturity choice in transition markets. We formulate a model of firm value maximization that describes managers' choice of optimal debt structure. The theoretical predictions are tested using a unique panel of 4,300 Ukrainian firms during the...

We study the impact of the concentration and complexity of the banking sector on firms' financing and investment behavior over the business cycle. We find that, after the late 1990s, while debt issuance remained procyclical for US firms of all sizes, equity issuance and liquidity accumulation...

We investigate the leverage of hedge funds using both time-series and cross-sectional analysis. Hedge fund leverage is counter-cyclical to the leverage of listed financial intermediaries and decreases prior to the start of the financial crisis in mid-2007. Hedge fund leverage is lowest in early...

We test whether a country's level of financial development or institutional quality (or both) have a first order effect on corporate debt maturity decisions on a sample of 359 non-financial firms from five South American countries over a 12 year period. We find that there is a substantial...

This paper examines the relative importance of six factors in the capital structure decisions of publicly traded Indian firms. Existing empirical research on capital structure has been largely confined to developed countries. The papers related to emerging economies usually group several...

This article tests the role the Slovenian capital market plays in determining corporate capital structure. It concludes that even though private corporations exhibit higher relative debt levels than their public counterparts, their dynamics are governed in similar ways. One potential reason for...