Download or read book Three Essays on Credit Contracts written by Sung-Guan Yun and published by . This book was released on 2010 with total page 342 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Financial Relationships in Credit Markets with Adverse Selection written by Charl Kengchon and published by . This book was released on 1989 with total page 334 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays in Accounting Regulation and Debt Contract Characteristics written by Bryan S. Graden and published by . This book was released on 2015 with total page 112 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is comprised of three essays relating to accounting regulation and debt contracting. The first essay is designed to draw inferences about lenders' demand for lease accounting rules in light of proposed lease accounting standard changes. I study changes in lease-related debt covenants surrounding the adoption of Statement of Financial Accounting Standards 13: Accounting for Leases in 1976. I find that lenders are significantly less likely to inhibit leasing activity via lease restrictions after SFAS 13 adoption and that lenders are significantly more likely to modify debt covenants to capitalize operating leases across time in the post-SFAS 13-adoption period. The findings suggest that lenders adapt debt covenant definitions to changes in accounting standards. Further, the findings indicate that lenders adapt debt covenant definitions to changes in borrowers' financial reporting incentives. The second essay investigates whether lenders capitalize operating leases uniformly when defining debt covenants. I argue that bankruptcy treatment of leases affects lenders' incentives to incorporate operating leases into debt covenants leading to differential treatment of operating leases as opposed to a "one-size-fits-all" contracting treatment of operating leases. Using a hand-collected sample of lending agreements from firms that use operating leases extensively, I find a positive association between the probability of lenders capitalizing operating leases into debt covenants and the duration of borrowers' lease contracts. The results indicate that lenders discriminate among operating leases when designing debt covenants and suggest that operating leases vary in their effect on credit risk. The third essay examines the relation between contract-specified accounting standards and private lender country of domicile. Prior studies provide evidence suggesting that equity investors' information gathering and processing costs are related to differences in reported accounting standards. While lenders have access to private information about prospective borrowers, I document that US lenders are more likely to contract on US accounting standards that match their home country. These findings generalize to Canadian, UK, and IFRS-country lenders and suggest that lenders exhibit a preference for home-country GAAP. In additional tests, I examine whether the degree of difference between borrower- and lender-country accounting standards affects the likelihood that a debt contract from a US lender specifies US GAAP and whether contracting on similar GAAP affects other loan terms. I find no significant effect on the probability of contracting on US GAAP when accounting differences are larger. Similarly, I find no significant evidence that lenders modify loan spread, maturity, and financial covenant use for loans from US lenders that specify US accounting standards.

Download or read book Three Essays on Household Finance written by Alexander Calen Aberlin Kaufman and published by . This book was released on 2010 with total page 312 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation presents three essays on household finance. All three focus on contemporary U.S. consumer credit markets, with particular attention paid to how market organization and firm incentives mediate the way firms interact with customers and the types of contracts they offer. The first essay examines the question of whether securitization was responsible for poor underwriting standards during the recent mortgage crisis. The second essay attempts to quantify the effect of Fannie Mae and Freddie Mac's intervention in the conforming mortgage market on equilibrium outcomes such as price and contract structure. The third essay investigates how mutual ownership of a firm by its customers can limit that firm's incentive to offer contracts meant to take advantage of customers' behavioral biases.

Download or read book Essays on Credit Contracts written by Fernando Chau and published by . This book was released on 1988 with total page 154 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Credit Markets written by Artashes Karapetyan and published by . This book was released on 2009 with total page 119 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Credit Contracts written by Karel Janda and published by . This book was released on 2003 with total page 272 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Credit Market Relationships written by Stephen Adam Karolyi and published by . This book was released on 2014 with total page 296 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Credit Markets written by Xiang Gao and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Empirical Aspects of Credit Markets written by Boris Hofmann and published by . This book was released on 2001 with total page 137 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Credit Risk written by Jin Liu and published by . This book was released on 2004 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Trade Credit Theory and Empirical Evidence from Agro food Firms in Africa and United States written by Stanley Kojo Dary and published by . This book was released on 2017 with total page 150 pages. Available in PDF, EPUB and Kindle. Book excerpt: In a quest to understand the motives for use of trade credit in inter-firm trade, many theories have been put forward. The empirical literature on trade credit are largely focused on understanding firms' motives for use of trade credit, by testing these theories with micro- and macro-level data. Against the background that the extent and motives for use of trade credit in the agro-food industry is less understood, this dissertation extends the frontiers of knowledge on trade credit use by examining trade credit theories and empirical evidence from agro-food firms in Africa and the United States. The dissertation consists of three essays. The first essay examines trade credit contracts, trade credit theories and empirical evidence in support of or otherwise of the theories via review and analysis of the theoretical and empirical trade credit literature. The second essay examines the motives for trade credit supply in the African agro-food manufacturing industry, employing survey data from eight African countries - Burundi, Malawi, Mauritania, Namibia, Nigeria, Senegal, South Sudan and Sudan. Premised on the fact that there are benefits and costs of investing in trade credit, the third essay examines investment in trade credit and firm profitability, using a panel of listed agro-food firms in the United States for the period 2001-2014. The review in essay one revealed a high use of trade credit in inter-firm trade, with variations across countries and industries. It is revealed that trade credit contracts are simple in nature and factors such as the shortness of credit periods, frequency of transactions, close proximity and interaction between suppliers and customers, and effective informal enforcement mechanisms may account for the simplified nature of trade credit contracts. However, the use of trade credit is a multidimensional phenomenon, driven by varied yet interconnected motives, thus making it complex to put forward a single theory to explain the use of trade credit in interfirm trade. Contrary to a long-held notion that trade credit is expensive relative to bank credit, evidence from the empirical literature suggests the opposite. In general, there is more empirical support for the theories of trade credit. The empirical results show a high participation of agro-food firms in trade credit activity in African countries and the United States. While within-industry variability in trade credit activity is not statistically significant in the African agro-food industry, there is significant within-industry variability in the United States. However, there is statistically significant variability in trade credit activity across agro-food firms in the African countries studied. The empirical results from essay two show that the level of trade credit supply increases with manager experience, degree of product diversification, overdraft availability from banks, trade credit from input suppliers and location in capital city. The results provide evidence in support of financing (particularly liquidity and redistribution) and commercial (particularly marketing and quality guarantee) theories of trade credit. Essay three found evidence of a non-linear (inverted U) relationship between trade credit investment and firm profitability, reflecting benefits and costs of trade credit investment. This finding suggest that agro-food firms should be guided by benefit-costs off in their trade credit investment decisions. The study found the threshold of trade credit investment beyond which the relationship between trade credit investment and firm profitability transition from positive to negative. In general, the empirical results show that trade credit is an important source of short-term financing for agro-food firms in African countries and the United States, and should be facilitated through policy.

Download or read book Three Essays on Leverage and Debt Contracts written by Hugh Marble and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: ABSTRACT: My studies considered three things: (1) the choice between non-recourse secured debt and recourse debt (unsecured debt or secured debt with recourse) by firms that are sequentially acquiring assets and then making investment choices once those assets have been acquired, (2) how secured debt financing impacts both the asset substitution and underinvestment problems, and (3) the frequency with which credit rating changes result from changes in the firm's operating environment versus changes in capital structure controlled by management. First, non-recourse secured debt is shown to be optimal for firms engaged in the acquisition of assets which have little need for non-contractible ongoing investment. Unsecured debt provides superior post-acquisition incentives for owners of assets that require ongoing investment or that can be easily modified. Empirical tests using Real Estate Investment Trusts provide evidence supporting the model and consistent with previous work. Second, the underinvestment problem does not depend on the proportion of the original debt that is secured and the asset substitution problem decreases in the proportion of the original debt that is secured. Debt capacity increases with the proportion of debt that is secured as the asset substitution problem is lower for a given level of debt. An analysis of a large sample of firms with COMPUSTAT data supports the model predictions. Third, I found that management action plays a significant role in credit rating changes. Twenty-four percent of downgrades and 41% of upgrades have a substantial management influence. The frequency of management impact on credit ratings shows the limitations of credit risk modeling using structural models that assume constant capital structure.

Download or read book Three Essays on Trade Credit written by Fatih Altunok and published by . This book was released on 2012 with total page 218 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays in International Finance written by Byong-Ju Lee and published by Stanford University. This book was released on 2011 with total page 132 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis consists of three essays on international finance. The first essay is "Exchange rates and Fundamentals". A new open interest rate parity condition that takes account of economic fundamentals is developed from stochastic discount factors (SDFs) of two countries. Through this parity condition, business cycles or fundamentals are linked to exchange rates. Key empirical findings from this parity condition are as follows. First, this model beats the random walk hypothesis: economic fundamentals explain exchange rate movements for high interest rate currencies. Exchange rates of low interest rate currencies act like a random walk because they are less correlated with fundamentals owing to their low risk. For example, U.S. business cycles explain the direction of changes in exchange rates against the dollar. The same thing is true for Japan. Second, this model resolves the forward premium puzzle: the forward premium puzzle is not a general characteristic as regarded in previous studies. It happens when the risk awareness of investors is low, during economic expansions and for low risk currencies. The second essay is "Carry Trade and Global Financial Instability". Carry trade, an opportunistic investment strategy that takes advantage of interest rate differential across countries, is identified the cause of the large-scale depreciations of peripheral currencies in the later half of 2008. A simultaneous equations model, which is derived from a conceptual partial equilibrium model for a local foreign exchange market, is estimated from a cross-sectional sample. The results suggest that the larger appreciation of the yen than the dollar was brought about by a lack of the local supply of the yen rather than a more severe crunch of yen credits. The third essay is "The Economic Origin of Letters of Credit". This essay discusses the economic origin of letters of credit, an instrument widely used in international trade. A game theoretical analysis shows that letters of credit improve efficiency in trade settlements, increasing returns in trade. A few notable facts on letters of credit are discussed. First, the new institution is adopted by merchant banks to maximize their profits and in the process, an improvement in efficiency of international transactions is obtained. Second, the organization established by the legacy institution, bills of exchange, played a critical role in adopting the new institution. Third, the legal enforcement is not essential in this economic institution. Finally, two drivers are identified that improve efficiency of transactions: concentration and projection.

Download or read book Three Essays on the Times and Work of Tom s de Mercado written by Francisco Gómez Camacho and published by Ediciones Universidad de Salamanca. This book was released on 2017-11-01 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this edition is to provide an English translation of three essays about Tomás de Mercado’s book, Deals and Contracts of Merchants and Traders. This translation has been made from the 1569 edition of the book published in Salamanca. The book was later the object of new editions and it was expanded by two more chapters, with an Italian translation appearing in 1571. However, an English edition had never been made before. The 1569 edition is composed of four Books: the first dedicated to merchants and their contracts, the second to currency and loans, the third to usury and the fourth to the question of the obligation of restitution when a reprehensible action is committed.

Download or read book Three Essays on Consumer Finance written by Manisha Padi and published by . This book was released on 2017 with total page 128 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis consists of three chapters on consumer financial contracts. Particularly, this thesis focuses on the regulation and design of markets for financial contracts, and their impact on household financial health. The first chapter studies the role of consumer protection law in the function of mortgage markets in the United States. Consumer protection laws are intended to improve consumer outcomes and are becoming more common, particularly in mortgage markets after the 2008 recession. Little empirical evidence exists about the benefits of these laws to consumer outcomes, relative to the potential compliance costs. This chapter studies the effect of two common types of consumer protection laws: seller standards of conduct, enforced through ex post lawsuits by prosecutors and consumers, and mandated disclosures, which require sellers to provide consumers with information to help them make better decisions. Using a natural experiment in Ohio, which introduced the Homebuyer's Protection Act in 2007, 1 study the impact of both seller standards of conduct and mandated disclosures on the performance of loans owned by Fannie Mae or Freddie Mac between 2002 and 2012. I find that imposing standards of conduct on lenders increases borrower defaults in the short term, and is correlated with a drop in foreclosures and fewer mortgage originations. Mandated disclosures decrease mortgage defaults in the short term, and the effect is correlated with smaller transactions, lower interest rates, and higher borrower credit scores. I introduce a simple model of strategic default showing that standards of conduct targeting lenders can provide incentives to lenders to be lenient towards all borrowers, increase borrower default, while mandated disclosure can induce behaviorally biased consumers to default less often. Taken together, the evidence suggests that seller standards of conduct result in lender lenience towards borrowers but operate by shifting the cost of dropping house prices from borrowers onto lenders. On the other hand, carefully designed disclosures can encourage consumers to be more responsible in repayment of loans and can decrease the overall impact of unexpected drops in house prices. The second chapter studies the impact of defined benefit pensions on retirees' consumption patterns. It is authored jointly with Professor Jerry Hausman. Retirees discontinuously decrease their consumption spending upon retirement, a phenomenon described as the retirement consumption puzzle. This chapter studies the impact of defined benefit pensions on the retirement consumption puzzle. Data from the Health and Retirement Survey shows that households with defined benefit pensions experience a significantly smaller drop in consumption spending at retirement. The difference in consumption patterns between households with defined benefit and defined contribution pensions is consistent with a drop in price of home production after retirement. Defined benefit pensions allow households to exert less effort in home production, as well as decreasing the need for precautionary savings, meaning their value is understated if home production is not accounted for. Using HRS data, we estimate the utility value of defined benefit pensions, incorporating both home production and precautionary savings. The results imply that current methods of valuing retirement income products, such as employer provided pensions and private annuities, are biased downward. The third chapter studies the purchase of annuities by retirees in Chile's privatized social security system. It is authored jointly with Gaston Illanes, of Northwestern University Department of Economics. Chile has one of the highest voluntary annuitization rates in the world, with more than 60% of retirees purchasing a private annuity. In contrast, less than 5% of US retirees purchase annuities, despite theoretical predictions that annuity value is high. Annuities in Chile are sold through a unique government-run exchange which decrease search costs and intensifies competition without imposing costs on firms. Chile also has a privatized social security system in which retirees that do not buy an annuity must take a "programmed withdrawal" of their mandated retirement savings that exposes them to more stock market risk than Social Security would. Using novel individual level administrative data and theoretical calibrations, we provide evidence that the high annuitization rate is driven by Chile's unique regulatory regime, rather than by the risk of programmed withdrawal in a privatized system. We document several features of the annuity exchange in Chile. First, annuity prices are low compared to the worldwide average. Second, annuity providers have significant market power. Third, selection exists in the market, both into purchase of annuities, and into searching for better prices. Based on these facts, we calibrate a insurance value of full annuitization compared to the privatized alternative offered by the Chilean government and compare to the value of full annuitization compared to public Social Security, such as that found in the US. The calibration suggests that privatization of social security alone cannot explain the high level of annuitization in Chile. Regulations limiting search costs can cause low prices, lower levels of adverse selection, and high brand preferences that together can explain the high annuitization rate.