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A discrete choice model for large heterogeneous panels with interactive fixed effects with an application to the determinants of corporate bond issuance
Boneva, Lena; Linton, Oliver - 2017
What is the effect of funding costs on the conditional probability of issuing a corporate bond? We study this question in a novel dataset covering 5610 issuances by US firms over the period from 1990 to 2014. Identification of this effect is complicated because of unobserved, common shocks such...
Persistent link: https://www.econbiz.de/10011581544
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An Application of the Two-Stage Bivariate Probit-Tobit Model to Corporate Financing Decisions
Cotei, Carmen - 2009
size of issue support the predictions of trade-off theory. The pecking order's prediction that, if external funding is …
Persistent link: https://www.econbiz.de/10013156063
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Creditor rights and debt allocation within multinationals
Akbel, Basak; Schnitzer, Monika - 2009
We analyze the optimal debt structure of multinational corporations choosing between centralized or decentralized borrowing. We identify how this choice is affected by creditor rights and bankruptcy costs, taking into account managerial incentives and coinsurance considerations. We find that...
Persistent link: https://www.econbiz.de/10003935683
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Disagreement and flexibility : a theory of optimal security issuance and capital structure
Boot, Arnoud W. A.; Thakor, Anjan V. - 2002
ofthis theory of capital structure evolution is that optimal capital structure is essentiallydynamic, and depends on the firm …’s stock price, implying that firms issue equity when stockprices are high and debt when stock prices are low. The theory … testablepredictions. Moreover, the theory can rationalize the use of debt in the absence of taxes,agency costs or signaling considerations. …
Persistent link: https://www.econbiz.de/10011332820
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Leaning against the wind : debt financing in the face of adversity
Brennan, Michael J.; Kraft, Holger - 2015
We offer evidence of a new stylized feature of corporate financing decisions: the tendency of managers to rely more on debt financing when earnings prospects are poor. We term this 'leaning against the wind' and consider three possible explanations: market timing, precautionary financing, and...
Persistent link: https://www.econbiz.de/10011434790
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The cost of capital of the financial sector
Adrian, Tobias; Friedman, Evan; Muir, Tyler - 2015
Standard factor pricing models do not capture well the common time-series or cross-sectional variation in average returns of financial stocks. We propose a five-factor asset pricing model that complements the standard Fama and French (1993) three-factor model with a financial sector ROE factor...
Persistent link: https://www.econbiz.de/10011410520
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Bank capital, liquid reserves, and insolvency risk
Hugonnier, Julien; Morellec, Erwan - 2015
We develop a dynamic model of banking to assess the effects of liquidity and leverage requirements on banks' insolvency risk. In this model, banks face taxation, flotation costs of securities, and default costs and maximize shareholder value by making their financing, liquid asset holdings, and...
Persistent link: https://www.econbiz.de/10011293576
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Operating Leverage, Profitability and Capital Structure
Chen, Zhiyao - 2017
negative relation between profitability and financial leverage that is thought to be inconsistent with the trade-off theory …
Persistent link: https://www.econbiz.de/10012974654
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Asymmetric Information, Debt Capacity, and Capital Structure
Lemmon, Michael L. - 2016
A theory of capital structure in which costs associated with asymmetric information are the sole friction is used to … present a new perspective on the standard pecking order theory. In the model, both the amount of debt and the restrictiveness …
Persistent link: https://www.econbiz.de/10013007928
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Asymmetric Information, Debt Capacity, and Capital Structure
Lemmon, Michael L. - 2016
We present a tradeoff theory of capital structure in which costs associated with asymmetric information are the sole …
Persistent link: https://www.econbiz.de/10013008199