, evident in data from both the U.S. and Europe. Firms with medium leverage avoid risk to preserve the option of issuing safe … by debt-holders due to future risk-taking incentives. Our model offers new insights on the interaction between companies …' debt financing and their risk profiles. …

-up the manager of the representative firm should always make production-investment decisions that conform to the risk … aversion of stockholders and then use financing decisions to offset any effect of a change in operating risk on the market …

conversion on the risk-taking behaviour of the issuing bank. We also test for regulatory arbitrage: do banks try to maintain risk … sample selection bias, we show that CoCo bonds issuance has a strong positive e↵ect on risk-taking behaviour, particularly … amplifies the impact of CoCo bonds on risk-taking. …

-levering procedure is around for the case of risk-free debt. The procedure for risky debt is much less clear even under very simplifying …

We investigate the link between firm size and risk-taking among financial institutions during the period of 1998 …-2008 and make three contributions. First, size is positively correlated with risk-taking measures even when controlling for … other observable firm characteristics. This is consistent with the notion that “too-big-to-fail” policies distort the risk …

We study risk-shifting behavior in a laboratory experiment, a setup that overcomes methodological hurdles faced by … empiricists in the past. The participants are high-level managers. We observe risk shifting in a simple setup, but less in a setup … with a continuation value. Reputation effects also reduce risk shifting. When combined, a continuation value and reputation …

risk. In this model, banks face taxation, flotation costs of securities, and default costs and maximize shareholder value …

risk to managers and encouraging risk-substitution; that is, managers with relatively undiversified personal portfolios … tend to pass up profitable projects with high idiosyncratic (firm-specific) risk in favor of less-profitable projects that … have greater aggregate (market) risk. Using parametric and semi-parametric estimation methods, we examine how managerial …