Distortions introduced by limited liability towards higher volatility and kurtosis, increased liability skewness, reduced asset skewness and an incentive to decorrelate assets from liabilities are demonstrated in the context of a stylized model. The concept of acceptable risks operationalized by...

Previous research documents that risk-arbitrageurs earn positive abnormal returns. However, this research treats the sum of two risks, deal risk and liquidity risk, as a measure of deal risk alone. We employ a forward looking measure of liquidity risk – the VIX – and we show that...

In most developing countries non-irrigation status often dominates adoption of traditional and modern irrigation technology. In this paper, we study the effect of production risk on irrigation technology choice among small-scale farmers in Chile, applying sample selection and discrete choice...