We use a unique sample of self-employed and corporate clients provided by a universal bank in Germany to investigate how recall risk of recallable bank lines of credit impact cash holdings and line usage. While the bank does not require an upfront fee for providing a line of credit, which may...

This paper analyzes the role of corporate culture in the financial industry. Theoretical literature emphasizes the role of corporate culture in the sorting process of workers into firms. We take this argument to the empirics and analyze whether banks that differ in their corporate culture use...

In this paper, we analyse whether bank owners or bank managers were the driving force behind the risks incurred in the wake of the financial crisis of 2007/2008. We show that owner controlled banks had higher profits in the years before the crisis, and incurred larger losses and were more likely...

We investigate the trade-off between financial stability and competition policy by focusing on the merger of ABN AMRO and Fortis Bank NL in the Dutch retail banking market. The financial crisis delayed the completion of the merger giving rise to anti-competitive behavior in the transitory...

We contribute to the empirical literature on the relationship between corporate taxes and investment. We exploit the introduction of the so-called ACE corporate tax reform in Belgium that came into effect in January 2006 to evaluate this relationship in a quasiexperimental setting based on...

We study the simultaneous choice of investment, debt financing and liquidity for a large sample of US corporates between 1980 and 2014. We partition the sample according to the firms' financial constraints and their needs to hedge against future shortfalls in operating income. In contrast to...

We propose a model of firm expansion and contraction choices which integrates approaches from the industrial organization and corporate finance literature within one unified setting. Firms respond to shocks to their marginal costs by expanding or contracting output via internal or external...

We analyze the life-cycle patterns of a firm's financing decisions and their interaction with future growth and development decisions. The framework derives three different financing sequences (debt-debt, equity-debt, equity-equity financing) which we link to existing empirical research....

We study own and rival risk in a dynamic duopoly with a homogeneous output good. A competitor's options to adjust capacity reduce own-firm risk through a simple hedging channel. For example, if a rival possesses a growth option, an increase in industry demand directly enhances current profits...

The elasticity of business capital to changes in its user cost is central to the economic analysis of fiscal policies. As a major component, the user cost of capital includes a firm's marginal tax rate. Due to the asymmetric treatment of tax losses and profits, the marginal tax rate can depart...