Download or read book Essays on Capital Structure and Public Debt Markets written by Viktoriya Staneva and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Capital Structure and Trade Financing written by Klaus Hammes and published by Department of Economics School of Economics and Commercial Law Go. This book was released on 2003 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Changing Roles of Debt and Equity in Financing U S Capital Formation written by Benjamin M. Friedman and published by University of Chicago Press. This book was released on 2009-05-15 with total page 125 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume, consisting of papers presented at a conference held at Williamsburg, Va., 2-3 April 1981, is a progress report on the National Bureau of Economic Research project, The Changing Roles of Debt and Equity in Financing U.S. Capital Formation. The National Bureau has undertaken this project—including the conference, the research described in this volume, and the publication of the volume itself—with the support of the American Council of Life Insurance.

Download or read book Banking Corporate Capital Structure and the Real Economy written by Yile Jiang and published by . This book was released on 2017-01-26 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation, "Banking, Corporate Capital Structure, and the Real Economy" by Yile, Jiang, 蒋一乐, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: This dissertation consists of two independent essays on banking, corporate capital structure, and the real economy, with evidence from China and the United States. The first essay examines how relationship bank health affects a firm's debt choices. After identifying firms' own relationship banks, we apply logistic regression on rated firms in the US between 1998 and 2013. We find that, when the leverage of a firm's relationship bank decreases, the firm will be more likely to issue public bonds. The leverage of the whole banking sector has a similar impact, which is 1.35 times that of a firm's relationship bank's leverage. As for contract design changes, average loan size slightly decreased, while average bond size significantly increased; the maturity of both loans and bonds significantly shortened; the cost of loans and bonds rocketed to a very high level during the crisis period. Overall, this essay provides evidence of the supply-side effect of corporate debt structure and shows that bank health and leverage have an effect on firms' choices between bank loans and public bonds. This essay adds to the literature by putting forward a new credit supply-side effect, to understand how firms' debt structure varies, a matter which has been much explored with regard to demand-side effect. Apart from that, we use a more general and direct measure to capture bank health and its lending behaviour through the effect of leverage. The second essay examines the cyclicality of equity and liabilities financing of listed firms in China. First we find that simple correlation does not give us robust cyclicality results. We argue that this is largely due to small observations in calculating simple correlations. Next, we perform panel regressions controlling firm characteristics and year and firm fixed effects. We find that equity financing is pro-cyclical for all firm groups, while liabilities financing is pro-cyclical for only mid-large firm groups. To finance asset increment during economic recovery, small firms rely more on equity financing, while large firms rely more on liabilities financing. Lastly, we examine the cyclicality of corporate leverage using the same framework. We find that only some large firms' leverages move counter-cyclically with the real economy. The similar cyclicality of equity finance and liabilities finance cancels each other such that the cyclicality of corporate leverage is affected and differs across different firms. Overall, this essay shows that economic conditions affect equity and liabilities financing of Chinese listed firms. Most firms have similar pro-cyclicality of equity and debt financing. Compared with firms in the US, firms in China rely more on equity markets but less on liabilities markets during economic upturn, especially for small firms. This essay adds to the literature by applying standard methodologies to listed firms in China, to make comparisons with US firms. More importantly, this essay shows that the discrepancy in the results of corporate leverage cyclicality in Chinese literature is understandable and is partly due to the similar cyclicality pattern of equity and liabilities finance. Subjects: Business cycles Corporations - Finance Banks and banking

Download or read book Essays on Corporate Capital Structure written by Boris Albul and published by . This book was released on 2012 with total page 274 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies capital structure decisions of levered and unlevered firms using the modeling framework of Leland (1994). The first chapter, Cash Holdings and Financial Constraints, focuses on optimal management of cash holdings by equity holders of a levered, financially constrained firm. I add financial constraints as a market friction to the traditional model. A financially constrained firm is not able to issue new equity to subsidize net operating losses and is subject to premature, costly default on its straight debt. The more constrained the firm is the less equity it is able to issue and the more likely it is to default. Equity holders mitigate the effects of financial constraints by managing a costly cash account, based on retained net operating profits. In the theoretical section, I show that firms that are more financially constrained optimally hold more cash but remain more likely to default compared to their less constrained counterparts. Hence, firms with higher cash holdings are riskier, and claims on their assets should trade at a premium. In the empirical section, I find evidence of this observation in straight debt and common equity markets. Firms with higher cash holdings are observed with higher yields on debt and higher returns on equity, In the second chapter, Contingent Capital Bonds (CCBs) and Capital Structure Decisions, a joint work with Dwight Jaffee and Alexei Tchistyi, we provide a formal model of CCBs, a new instrument offering potential value as a component of corporate capital structures for all types of firms, as well as being considered for the reform of prudential bank regulation following the financial crisis of 2007-2008. CCBs are debt instruments that automatically convert to equity if and when the issuing firm reaches a specified level of financial distress. We develop closed form solutions for CCB value under three assumptions. First, the firm is allowed a tax deduction on its CCB interest payments as long as the security remains outstanding as a bond. Second, we assume that adding CCBs to a firm's capital structure has no impact on the level of the firm's asset holdings. Third, we require that the CCB conversion to equity occurs at a time prior to any possible default by the firm on its straight debt. The key contribution of our work is that we provide a formal financial model in which the effects of alternative CCB contract provisions can be analytically evaluated. We show that a firm will always gain from including CCB in its capital structure as a result of the tax shield benefit. A firm creating a de novo capital structure, assuming it faces the regulatory constraint that the CCB can only replace a part of what would have been the optimal amount of straight debt, will always issue at least a small amount of CCB. The reduction in expected bankruptcy costs ensures a net gain, even if the tax shield benefits are reduced. We show that a firm will never add CCB to an existing capital structure, assuming that it faces the regulatory constraint that the CCB can only be introduced as part of a swap for a part of the outstanding straight debt. While the swap may increase the firm's value - the value of reduced bankruptcy costs may exceed any loss of tax shield benefits - the gain accrues only to the holders of the existing straight debt. As in a classic debt overhang problem, equity holders will not act to enhance the overall firm value. We show that for a Too-Big-To-Fail firm, for which the straight debt is risk free because the bond holders correctly assume they will protected from any potential insolvency, under a regulatory limitation on the amount of debt such a firm may issue, a CCB for straight debt swap reduces the value of the government subsidy by reducing the expected cost of bondholder bailouts. While this has a taxpayer benefit, the equity holders of such a firm would not voluntarily participate in such a swap. We demonstrate that CCBs create an incentive for market manipulation. CCB holders may have an incentive to manipulate the stock price to a lower value if the amount of equity they receive at conversion is sufficiently high. Equity holders may have an incentive to manipulate the stock price down if the amount of equity they give up at conversion is sufficiently low. We summarize, that the regulatory benefits of CCB issuance with respect to bank safety will generally depend on the CCB contract and issuance terms. Perhaps most importantly, the regulatory benefits vanish if banks simply substitute CCBs for capital, leaving the amount of straight debt unchanged. It is thus essential to require CCB issuance to substitute for straight debt (and not for equity).

Download or read book Two Essays on Corporate Finance written by Joon Ho Kim and published by . This book was released on 2013 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt: My dissertation focuses on the effect of financial market frictions on firm value in the context of corporate mergers, capital structure and growth. The first chapter explores how financing frictions faced by potential buyers of industry specific real assets affect the transaction value of merger targets that consist of such assets. I find that shareholders of target firms with highly specialized assets receive a significantly smaller premium than targets with generic assets when industry peer firms are financially constrained. Further investigation reveals that firms with specialized assets reduce leverage more than other firms when the risk of liquidation loss is high. The second chapter explores how frictions in the financial market affect corporate capital structure and growth. I present evidence that firms that have experienced financing frictions prior to entering the public debt market undergo significant changes in capital structure and investment as they gain access to the new sources of capital. Overall, the findings in this dissertation highlight the importance of financing frictions as key determinants of capital structure and firm value.

Download or read book Global Waves of Debt written by M. Ayhan Kose and published by World Bank Publications. This book was released on 2021-03-03 with total page 403 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.

Download or read book Two Essays on Corporate Finance written by Nan Yang and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation includes two essays on corporate finance. The first essay investigates why bank debt contracts are frequently renegotiated outside default. I test empirical implications from several theories by looking at bondholder wealth effects in a sample of firms with both bank debt and public bonds in their capital structure. Based on a sample of 321 renegotiations, I find that bondholders react positively to renegotiations that result in relaxation of bank debt covenants. The evidence supports the theory that lenders loosen covenants due to new favorable information of firms' credit quality and is inconsistent with the hypothesis that relaxing covenants signals weakened bank monitoring due to low bargaining power of the banks. I also find insignificant bondholder reaction to renegotiated higher bank loan interest rates. This provides little support to the hypothesis that increased loan interest rate conveys unfavorable news that asset substitution cannot be avoided. The second essay, coauthored with Shane Johnson and Jun Zhang, examines the relationship between CEO inside debt and the maturity of new corporate debt. Following recent theories of incentive alignment effect of CEO inside debt, we include both the magnitude and the maturity of CEO inside debt in empirical estimation. We classify firms as having "debt-biased CEOs" when the ratio of CEO's inside debt to equity compensation exceeds the company's leverage ratio, and "equity-biased CEOs" otherwise. Using a sample of corporate debt issuance during 2007-2012, we find that among firms with long-term inside debt, firms with debt-biased CEOs issue debt with longer maturity than do firms with equity-biased CEOs. Among firms with debt-biased CEOs, the maturity of new debt is longer if CEOs have long-term inside debt than if CEOs have short-term inside debt. In contrast, among firms with equity-biased CEOs, the maturity of new debt is shorter if a CEO has long-term inside debt than if a CEO has short-term inside debt. The results provide support for the overall hypothesis that CEO inside debt affects firms debt maturity structure through its ability to ameliorate stockholder-debtholder conflicts. The electronic version of this dissertation is accessible from http://hdl.handle.net/1969.1/155451

Download or read book Sovereign Debt Restructurings 1950 2010 written by Mr.Udaibir S. Das and published by International Monetary Fund. This book was released on 2012-08-01 with total page 128 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides a comprehensive survey of pertinent issues on sovereign debt restructurings, based on a newly constructed database. This is the first complete dataset of sovereign restructuring cases, covering the six decades from 1950–2010; it includes 186 debt exchanges with foreign banks and bondholders, and 447 bilateral debt agreements with the Paris Club. We present new stylized facts on the outcome and process of debt restructurings, including on the size of haircuts, creditor participation, and legal aspects. In addition, the paper summarizes the relevant empirical literature, analyzes recent restructuring episodes, and discusses ongoing debates on crisis resolution mechanisms, credit default swaps, and the role of collective action clauses.

Download or read book Financial Crises Explanations Types and Implications written by Mr.Stijn Claessens and published by International Monetary Fund. This book was released on 2013-01-30 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.

Download or read book Emerging Capital Markets and Globalization written by Augusto de la Torre and published by World Bank Publications. This book was released on 2006-10-20 with total page 232 pages. Available in PDF, EPUB and Kindle. Book excerpt: Back in the early 1990s, economists and policy makers had high expectations about the prospects for domestic capital market development in emerging economies, particularly in Latin America. Unfortunately, they are now faced with disheartening results. Stock and bond markets remain illiquid and segmented. Debt is concentrated at the short end of the maturity spectrum and denominated in foreign currency, exposing countries to maturity and currency risk. Capital markets in Latin America look particularly underdeveloped when considering the many efforts undertaken to improve the macroeconomic environment and to reform the institutions believed to foster capital market development. The disappointing performance has made conventional policy recommendations questionable, at best. 'Emerging Capital Markets and Globalization' analyzes where we stand and where we are heading on capital market development. First, it takes stock of the state and evolution of Latin American capital markets and related reforms over time and relative to other countries. Second, it analyzes the factors related to the development of capital markets, with particular interest on measuring the impact of reforms. And third, in light of this analysis, it discusses the prospects for capital market development in Latin America and emerging economies and the implications for the reform agenda.

Download or read book Company Financing Capital Structure and Ownership written by Sanjiva Prasad and published by . This book was released on 2001 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Public Debt and Growth written by Jaejoon Woo and published by International Monetary Fund. This book was released on 2010-07-01 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores the impact of high public debt on long-run economic growth. The analysis, based on a panel of advanced and emerging economies over almost four decades, takes into account a broad range of determinants of growth as well as various estimation issues including reverse causality and endogeneity. In addition, threshold effects, nonlinearities, and differences between advanced and emerging market economies are examined. The empirical results suggest an inverse relationship between initial debt and subsequent growth, controlling for other determinants of growth: on average, a 10 percentage point increase in the initial debt-to-GDP ratio is associated with a slowdown in annual real per capita GDP growth of around 0.2 percentage points per year, with the impact being somewhat smaller in advanced economies. There is some evidence of nonlinearity with higher levels of initial debt having a proportionately larger negative effect on subsequent growth. Analysis of the components of growth suggests that the adverse effect largely reflects a slowdown in labor productivity growth mainly due to reduced investment and slower growth of capital stock.

Download or read book Empirical Capital Structure written by Christopher Parsons and published by Now Publishers Inc. This book was released on 2009 with total page 107 pages. Available in PDF, EPUB and Kindle. Book excerpt: Empirical Capital Structure reviews the empirical capital structure literature from both the cross-sectional determinants of capital structure as well as time-series changes.

Download or read book The Theory of Money and Financial Institutions written by Martin Shubik and published by MIT Press. This book was released on 1999 with total page 472 pages. Available in PDF, EPUB and Kindle. Book excerpt: This first volume in a three-volume exposition of Shubik's vision of "mathematical institutional economics" explores a one-period approach to economic exchange with money, debt, and bankruptcy. This is the first volume in a three-volume exposition of Martin Shubik's vision of "mathematical institutional economics"--a term he coined in 1959 to describe the theoretical underpinnings needed for the construction of an economic dynamics. The goal is to develop a process-oriented theory of money and financial institutions that reconciles micro- and macroeconomics, using as a prime tool the theory of games in strategic and extensive form. The approach involves a search for minimal financial institutions that appear as a logical, technological, and institutional necessity, as part of the "rules of the game." Money and financial institutions are assumed to be the basic elements of the network that transmits the sociopolitical imperatives to the economy. Volume 1 deals with a one-period approach to economic exchange with money, debt, and bankruptcy. Volume 2 explores the new economic features that arise when we consider multi-period finite and infinite horizon economies. Volume 3 will consider the specific role of financial institutions and government, and formulate the economic financial control problem linking micro- and macroeconomics.

Download or read book Finance and Growth written by Ross Levine and published by . This book was released on 2004 with total page 130 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This paper reviews, appraises, and critiques theoretical and empirical research on the connections between the operation of the financial system and economic growth. While subject to ample qualifications and countervailing views, the preponderance of evidence suggests that both financial intermediaries and markets matter for growth and that reverse causality alone is not driving this relationship. Furthermore, theory and evidence imply that better developed financial systems ease external financing constraints facing firms, which illuminates one mechanism through which financial development influences economic growth. The paper highlights many areas needing additional research"--NBER website

Download or read book Globalization in Historical Perspective written by Michael D. Bordo and published by University of Chicago Press. This book was released on 2007-11-01 with total page 600 pages. Available in PDF, EPUB and Kindle. Book excerpt: As awareness of the process of globalization grows and the study of its effects becomes increasingly important to governments and businesses (as well as to a sizable opposition), the need for historical understanding also increases. Despite the importance of the topic, few attempts have been made to present a long-term economic analysis of the phenomenon, one that frames the issue by examining its place in the long history of international integration. This volume collects eleven papers doing exactly that and more. The first group of essays explores how the process of globalization can be measured in terms of the long-term integration of different markets-from the markets for goods and commodities to those for labor and capital, and from the sixteenth century to the present. The second set of contributions places this knowledge in a wider context, examining some of the trends and questions that have emerged as markets converge and diverge: the roles of technology and geography are both considered, along with the controversial issues of globalization's effects on inequality and social justice and the roles of political institutions in responding to them. The final group of essays addresses the international financial systems that play such a large part in guiding the process of globalization, considering the influence of exchange rate regimes, financial development, financial crises, and the architecture of the international financial system itself. This volume reveals a much larger picture of the process of globalization, one that stretches from the establishment of a global economic system during the nineteenth century through the disruptions of two world wars and the Great Depression into the present day. The keen analysis, insight, and wisdom in this volume will have something to offer a wide range of readers interested in this important issue.