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Firming up the capital base of the Austrian business sector : consolidating Austria's business sector strengths and its social role in the face of new challenges

Dlugosch, Dennis; Gönenç, Rauf; Kim, Eun Jung; … - 2020

performance levels. The capital structure of Austrian SMEs are biased towards debt-financing and stronger equity, growth and … shortages, in particular in advanced digital technologies, should be overcome. As around one third of all SMEs are up for … dynamism. Meeting these challenges would also help to lift constraints on upscaling that many SMEs face and would provide the …

Persistent link: https://www.econbiz.de/10012203255

The effect of solvency regulations and accounting standards on long-term investing : implications for insurers and pension funds

Severinson, Clara; Yermo, Juan - 2012

This report reviews recent as well as planned changes to accounting and solvency regulations affecting insurers and pension funds and how they may impact long-term investing by these institutions. The review of existing evidence focuses mainly on the impact of risk-based solvency requirements,...

Persistent link: https://www.econbiz.de/10009684014

The variance risk premium and capital structure

Lotfaliei, Babak - 2018

This paper investigates how the asset-return variance risk premium changes leverage. I find that the premium lowers leverage by increasing risk-neutral bankruptcy probability and costs in a model where asset returns have stochastic variance with risk premium. Empirically, the model calibrations...

Persistent link: https://www.econbiz.de/10011848389

Equity versus bail-in debt in banking : an agency perspective

Mendicino, Caterina; Nikolov, Kalin; Suárez, Javier - 2017

We examine the optimal size and composition of banks' total loss absorbing capacity (TLAC). Optimal size is driven by the trade-off between providing liquidity services through deposits and minimizing deadweight default costs. Optimal composition (equity vs. bail-in debt) is driven by the...

Persistent link: https://www.econbiz.de/10011978192

Two big distortions : bank incentives for debt financing

Groenewegen, Jesse; Wierts, Peter - 2017

Systemically important banks are subject to at least two departures from the neutrality of debt versus equity financing: the tax deductibility of interest payments and implicit funding subsidies. This paper fills a gap in the literature by comparing their mechanism and interaction within a...

Persistent link: https://www.econbiz.de/10011978317

The corporate equity puzzle

Brutscher, Philipp-Bastian; Hols, Christopher - 2018

Why don't non-financial companies in Europe issue more equity? Using experimental data on firms from Europe, this paper analyses how firms trade-off between debt and external equity financing. It finds that firms are willing to pay a substantial premium on debt when presented with an equity...

Persistent link: https://www.econbiz.de/10011820863

The dividends received deduction in the corporate income tax and cost of capital

Rumpf, Dominik - 2011

This paper provides a model-based analysis of special tax rules for corporations that invest in stocks of other corporations. To avoid double taxation the returns from such stock investments (dividends and capital gains) are usually tax-exempted or taxed at a reduced tax rate. This allows for...

Persistent link: https://www.econbiz.de/10009751367

The state of the banking sector in Europe

Schoenmaker, Dirk; Peek, Toon - 2013

This paper reviews the state of the banking sector in Europe. At the aggregate level, the empirical data suggest that the Baltics, Cyprus, Greece and Ireland, in particular, are hit by a strong decline in lending in the wake of the financial crisis. This deleveraging is mainly caused by a...

Persistent link: https://www.econbiz.de/10010231412

Investment vs debt trade-offs in the post-COVID-19 European economy

Maurin, Laurent; Pál, Rozália - 2020

We use firm-level financial data to illustrate the impact of the COVID-19 crisis under several scenarios. We estimate COVID-19 induced cumulative net revenue losses for EU companies in the range of 5.4 to 10.0% of total assets, depending on the strength of the policy support and length of the...

Persistent link: https://www.econbiz.de/10012312927

Banks, debt and risk : assessing the spillovers of corporate taxes

Fatica, Serena; Heynderickx, Wouter; Pagano, Andrea - 2018

Using bank balance sheet data, we find evidence that leverage and asset risk of European multinational banks in the crisis and post-crisis period is affected by corporate taxes in their host country as well as by the tax rates in all the jurisdictions where the banking group operates. Then, we...

Persistent link: https://www.econbiz.de/10012054996

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