This paper analyzes financial institutions' capital allocation decisions when their required equity capital depends on the risk of their projects chosen. We discuss the relevance of strict position limits against discretionary trading through the use of an optimal compensation function. We show...

This paper solves for a firm's optimal cash holding policy within a continuous time, contingent claims framework that has been extended to incorporate most of the significant contracting frictions that have been identified in the corporate finance literature. Under the optimal policy the firm...

Does targeted financial development favor small firms or large ones? And how do resulting changes in the distribution of firm size affect aggregate outcomes? We assess the macroeconomic implications of known stylized facts from the finance literature regarding firm size and financial frictions...

We investigate the relation between share prices and the proportion of equity held by institutional investors for a sample of 52 companies quoted on the Athens Stock Exchange over the period from 1991 to 1996. We differ from earlier studies in as much as use is made of a) an explicit share...

This paper proposes a Stochastic Programming (SP) approach for the calculation of the liquidity-adjusted Value-at-Risk (LVaR). The model presented in this paper offers an alternative to Almgren and Chriss’s mean-variance approach (1999 and 2000). In this research, a two-stage stochastic...

In the electricity sector, most of the trades are still done in the OTC market without direct mitigation of credit risk. Newer discussions fuelled by the European Commission (EUCOM 2009a,b) show that there is a political will to enforce a stronger collateralization policy on all European...

In this paper, to analyze the similarities and differences between the regional finance of Japan and South Korea (hereinafter, “Korea”), we compared questionnaires to small to midsize companies located in Korea’s Daegu/Gyeongbuk region with questionnaires to small to midsize companies...

This paper employs an incremental approach to explore the determinants of corporate debt financing strategies such as the factors of the issuing costs, information asymmetry, growth opportunity, credit quality and managerial ownership. Addition to univariate analysis model, we use multiple logit...

We present a microeconometric study of the impact of financial constraints on investment decisions of 755 quoted and unquoted West German firms over the period 1989 to 1994. The underlying theoretical model is based upon rational expectations and convex adjustment costs. The panel data estimates...

We have two main objectives in this work. Firstly, to link product market structure with the inventory policy followed by firms. Secondly, to study the effect of different financila contracts in firm's policy, in particular in its inventory policy. This will allow to define for a given economic...