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set of sovereign defaults and find that default events on local and foreign currency bonds are equally likely. However …, governments default under different economic and financial conditions depending on the currency in which bonds are issued. The … explained variation in default probability rises from 43% to 62% when we account for differences in currency denomination. We …
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We examine whether performance-sensitive debt (PSD) is used to reduce hold-up problems in long-term lending relationships. We find that the use of PSD is more common in the presence of a long-term lending relationship and if the borrower has fewer financing alternatives available. In syndicated...
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