In this paper, we conduct a simulation analysis of the Fama and MacBeth (1973) two-pass procedure, as well as maximum likelihood (ML) and generalized method of moments estimators of cross-sectional expected return models. We also provide some new analytical results on computational issues, the...

This paper explores the relation between capital and risk in the life insurance industry in the period after the adoption of life risk-based capital (RBC) regulation. To examine this issue, we use a simultaneous-equation partial-adjustment model. Three equations express the interrelations among...

This research examines the efficiency of shipping companies to create profit from the equity used in the investment. Financial statement analysis is a judgmental procedure, which tries to identify the underlying reasons that affect the company performance. Financial ratios provide further...

Outliers represent a fundamental challenge in empirical finance research. We investigate whether the routine techniques used in finance research to identify and treat outliers are appropriate for the data structures we observe in practice. Specifically, we propose a multivariate identification...

Building on the biological concept of a life cycle, the paper analyzes the issue of the strategic financing choice of firms through the lens of the life cycle framework. Using data for the 1994-2003 period, from a sample of Iberian firms the paper investigates 379 start-ups (789 firm year...

A large body of the corporate finance literature is devoted to capital structure. This literature examines whether firms have a target capital structure, and whether they actively rebalance their capital structure towards a target. Conversion of a convertible bond causes a drop in leverage,...

Purpose: This paper aims to investigate whether firm ownership can explain the ERM adoption. In particular, we examine the relationships between the presence of large controlling shareholders, multiple blockholders and a dual-class share mechanism, and ERM. ERM best practices are regarded as...

The article studies how takeover defenses influence managerial incentives with respect to long term investments, excess liquidity and the amount of debt relative to equity. The article conducts a cross sectional regression based on a sample of Danish listed firms, dealing explictly with the...

In this paper we examine the pricing of arbitrary credit derivatives within the Libor Market Model with Default Risk. We show, how to set up the Monte Carlo-Simulation efficiently and investigate the accuracy of closed-form solutions for Credit Default Swaps, Credit Default Swaptions and...

This paper analyzes the relationship between corporate taxation, firm age and debt. We adapt a standard model of capital structure choice under corporate taxation, focusing on the financing and investment decisions a firm is typically faced with. Our model suggests that the debt ratio is...