The main idea of this paper is to provide empirical evidence of firm vulnerability in Indonesia around the 1997 financial crisis. For capturing the effect of crisis on firm vulnerability, this paper includes country, industrial sector and firm specific factors influencing capital structure...

This paper examines the extent to which investment financing and market-timing explanations motivate public equity offers. We consider a sample of 16,958 initial public offerings and 12,373 seasoned equity offerings from 38 countries between 1990 and 2003. We provide estimates of the change in...

Currency mismatches in corporate balance sheets have been singled out as an important factor underlying the severity of recent financial crises. We propose several structural models for measuring default risk for firms with currency mismatches in their asset/liability structure. The proposed...

The corporate hedging literature has grown rapidly over the last decade, motivated firstly by the development of a theoretical framework and secondly by the availability of public data. Much of the early research in this area sourced data on hedging practices by surveying corporate risk...

Bank liquidity stress testing, which has become de rigueur following the costly lessons of the global financial crisis, remains underdeveloped compared to solvency stress testing. The ability to adequately identify, model and assess the impact of liquidity shocks, which are infrequent but can...

This paper shows that under perfect market assumptions hedging is not value maximising. However, the theories of hedging question the validity of the perfect market assumptions and show how their refutation leads to arguments in support of hedging. The theories of hedging argue that an...

We use a multitude of tax reforms across OECD countries as natural experiments to estimate the market value of the tax benefits of debt financing. We report time-series evidence that tax reforms are followed by large changes in the value of corporate equity. However, the impact of tax reforms is...

Since the seminal work by Modigliani and Miller in (1958) and the subsequent revision of their initial position (1963), several studies have shown that capital structure influences performance of corporate entities. Although the empirical evidence remains mixed and contestable, microfinance...

This paper provides a comprehensive investigation of the determinants of US dollar-denominated long-term debt issuance by European banks. The database used allows the drivers of foreign-currency issuance identified in the literature, including variables at the individual firm (e.g. bank) level,...

This paper examines the impact of currency derivatives on firm value using a broad sample of firms from thirty-nine countries with significant exchange-rate exposure. Derivatives can be used for managers' self-interest, for hedging or for speculative purposes. We hypothesize that investors can...