We estimate firms' cash flow sensitivity of cash to empirically test how the financial system's structure and activity level influence their financial constraints. For this purpose we merge Almeida, Campello and Weisbach (2004), a pathbreaking new design for evaluating a firm's financial...

We examine the relationship between firm performance and corporate governance in microfinance institutions (MFI) using a self-constructed global dataset on MFIs collected from third-party rating agencies. Using random effects panel data estimations, we study the effects of board and CEO...

Investor confidence in financial markets depends in large part on the existence of an accurate disclosure and reporting regime that provides transparency in the beneficial ownership and control structures of publicly listed companies. Today, a common post-financial crisis regulatory reform theme...

This study examines the effect of transaction costs and information asymmetry on firms' capital-structure decisions in 40 countries. The findings indicate that transaction costs affect both capital-market timing and capital-structure rebalancing. Past market-timing activity has a significantly...

This study examines cash savings from net equity issues, net debt issues and internally generated cash flows. We observe that savings rates depend on the level of cash flows. For negative cash flows, savings rates are very low from cash flows and higher from net equity and net debt issues. For...

We study outsourcing relationships among international asset management firms. We find that in companies that manage both outsourced and inhouse funds, inhouse funds outperform outsourced funds by 0.85% annually (57% of the expense ratio). We attribute this result to preferential treatment of...

This paper explores the relationship between creditor rights and employee rights and capital structure across countries. Using country-level creditor rights index and labor rights index as a proxy for agency costs of creditors and agency costs of employees, respectively, I address the agency...

We study international outsourcing in the asset management industry. We argue that subcontractor management companies use the funds they manage on behalf of third parties to subsidize their own inhouse funds. On average, inhouse funds outperform the outsourced funds by 7.5 basis points per...

Good corporate governance can improve firm performance and help assure long-term firm survival. Most providers of microfinance struggle to become financially self-sufficient and to achieve their social objectives of servicing with quality the poorest clientele possible. The issue of corporate...

Using the framework of trade-off model of capital structure, I incorporate implicit bailout claim in firm value process and show that high sovereign credit risk lowers firm's optimal leverage. Empirical results using firm data in 11 euro area countries show that optimal leverage of big firms is...