We use a dynamic adjustment model and panel methodology to investigatethe determinants of a time- varying optimal capital structure. Because firmsmay temporarily deviate from their optimal capital structure in the presenceof adjustment costs, we also endogenize the adjustment process. In partic...

Using a panel of 425 European firms over the period from 1990 to 2005, we revisit Welch's (2004) finding that stock returns are the primary determinant of capital structure changes and that corporate motives for net issuing activities are largely a mystery. We document that roughly half of the...

This paper investigates the determinants of Swiss non-financial firms’ cash holdings overthe 1995 to 2004 period. The median Swiss firm holds almost twice as much cash andcash equivalents as the median UK or US firm. Our results indicate that there is a negativerelationship between asset...

The aim of this paper is to put forward a beta convergence model using spatial interaction to evaluate the dynamics of financial ratios. We overcome some of the limitations that come from the traditional partial adjustment model by relating both models. We show that the parameters of the two...

We adopt time-series and cross-section methods to analyse long-term relationships between pairs of crude oil prices and assess how physical and institutional factors affect their speed of reaction to exogenous shocks. Using a methodological approach which does not require identifying specific...

We use a dynamic adjustment model and panel methodology to investigate the determinants of a time-varying optimal capital structure. Because firms may temporarily deviate from their optimal capital structure in the presence of adjustment costs, we also endogenize the adjustment process. In...

Using both regression- and VAR-based estimates, the paper finds that the exchange rate pass-through to import prices for a large number of countries is incomplete and larger than the pass-through to export prices. Previous studies have reported similar results, which give rise to the puzzle that...

This Selected Issues paper on Saudi Arabia assesses Saudi Arabia’s role in the oil market and global economy. Saudi Arabia, the world’s largest producer and exporter of oil, has long played a systemically important role in the global oil market. Short-term fluctuations in Saudi...

Biomass energy has been regarded as an effective instrument in combatting a high oil price. However, the increased production of biomass energy has raised the demand for agricultural products and led to a global grain deficiency and rising grain prices. This paper discusses the influence of...