The objective of this paper is to develop a theoretical analysis of “mandatory convertibles,” which are securities that automatically (“mandatorily”) convert to common stock on a pre-specified date. We consider a firm facing a financial market characterized by asymmetric information and...

En este estudio se obtienen los factores determinantes del uso del crédito comercial para una muestra de empresas canarias durante el período 1990-1996. Utilizando la metodología de datos de panel, los resultados señalan que el crédito comercial permite reducir tanto las asimetrías...

The paper analyses the existence and efficiency of discretionary industrial assistance schemes under asymmetric information between an uninformed government and a uniform distribution of firms with differing productivities. Discretionary assistance allows the government to scrutinise projects in...

We provide empirical evidence on the determinants of the number of bank lenders using a sample of more than 3000 loans to firms from 24 European countries. Our testable hypotheses are built upon different theoretical frameworks drawn from the existing literature, referring to firm...

We investigate the impact of bank competition on the use of collateral in loan contracts. We develop a theoretical model incorporating information asymmetries in a spatial competition framework where banks choose between screening the borrower and asking for collateral. We show that the presence...

We study the implications of conformism among analysts in a CARA Gaussian model of the market for a risky asset, where a trader's in- formation is a message sent by an analyst. Conformism increases the weight of the public information in the messages, decreasing their in- formativeness. More...

We introduce a two-period general equilibrium model with uncertainty and incomplete financial markets, where default is allowed and agents face in case they do default an utility penalty, which is their own private information. In this setting, if agents have heterogeneous characteristics they...

After controlling a variety of feeder cattle characteristics and market and sale conditions in Iowa feeder auctions, the price premiums for preconditioning claims (vaccinations and minimum 30 days of weaning) with and without third-party certification (TPC) are estimated as $6.12/cwt and...

This paper shows that monitoring too much a partner in the initial phase of a relationship may not be optimal if the goal is to determine his loyalty to the match and if the cost of ending the relationship increases over time. The intuition is simple: by monitoring too much we learn less on how...

This paper analyses the effect of bank relationships on the interest rate and personaland real guarantees borne by a sample of small and medium-sized enterprises in theirindebtedness. The results of this paper indicate that the SMEs that work with fewer financialintermediaries obtain debt at a...