This paper finds that an additional percentage point in the ratio of Common Equity Tier 1 (CET1) capital to risk-weighted assets is associated with an increase in the Weighted Average Cost of Capital (WACC) of Chilean banks by a maximum of only 11.7 basis points. This result is found by...

Household debt is a critical component of family financial management, especially considering the prevalence of credit constraints. This study investigates the determinants of Chinese household debt structure, focusing on the choice between formal and informal borrowing and the proportion of...

This study investigates the relationship between capital structure and financial performance in South African firms, focusing on the potential non-linear, inverse U-shaped effect of leverage on profitability. Drawing on data from 1548 firm-year observations covering 183 publicly listed South...

The article examines the financial management of companies in the context of the COVID-19 pandemic, in particular, the relationship between their capital structure and risk changes during the pandemic. The study aims to determine how companies' total, systematic and idiosyncratic risks changed...

Understanding how firms finance their activities is crucial for fostering economic growth. The financial life cycle is a critical framework for understanding how firms' financing needs and strategies evolve over time. This paper examines the capital structure choices of Italian SMEs focusing on...

The paper investigates the influence of creditor rights reforms on leverage. Based on a partial equilibrium agency cost model, we propose a novel channel running from the owner/manager's private bankruptcy costs to leverage. Such costs mitigate the firms' agency problem toward creditors, thereby...

This research explores the impact of ownership structure on the financial performance of Leveraged Buyout (LBO) transactions in the MENA region, a key emerging market region. Drawing on agency theory by Jensen & Meckling and the capital structure theory of Modigliani and Miller, the study...

This study defines tax aggressiveness as the extent to which a firm uses interest expense to shield income from tax. Focusing on the period surrounding the debt-to-equity cap reform that restricts the debt tax benefit, we investigate two primary hypotheses: (1) whether thin capitalization,...

Producers can leverage their bargaining power vis-'a-vis consumers by entering bargaining with debt. We discover novel general-equilibrium effects of such strategic debt by developing a money-search framework featuring heterogeneous consumers. Debt distorts trade along two margins: it destroys...

This research indicates that accounting is essential for assessing South Asian airline companies via financial ratio analysis from 2011 to 2022. The accounting measurements delineate informing and facilitating strategic decision-making from 2011 to 2022. The analysis utilizing GARCH and PARCH...

Several studies have investigated the determinants of firms' capital structure choices. Though an intercorporate loan is an essential source of corporate debt, there are no studies that examine the determinants of firms' preference to use the intercorporate loan as a source of debt. This study...

Purpose This paper studies the determinants of the debt maturity of Mexican-listed companies by analysing the effects on the extensive (issuing or liquidating debt) and the intensive (debt maturity renegotiation) margins. Design/methodology/approach This study, using a Tobit model for panel data...

This paper proposes an alternative solution to the problem related to the risk that banks incur in the protection of deposits. This solution lies in the use by banks of contingent convertible leasing contracts to face financial distress situations by solidifying their own funds and thus...

We extend Trade-Off Theory (TOT) by assuming that EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), rather than EBIT (Earnings Before Interest and Taxes), follows a Geometric Brownian Motion (GBM), and we thus consider the role of tax depreciation allowances (TDA) in...

This study examines the real effects of earnings stripping rules introduced in the European Union in 2019, which tie interest deductibility to contemporaneous profitability. Exploiting a quasi-natural experiment created by the EU's harmonized implementation under the Anti-Tax Avoidance Directive...

Institutional investors increasingly value alternative assets in strategic asset allocation, with private debt emerging as a key asset class. However, its shortage of market history has hindered the development of standardized proxy benchmarks. For that, many institutional investors still do not...

This paper studies the role of collateral using the euro area corporate credit registry, Ana-Credit. We document key facts about the importance, distribution, and composition of collateral, including its presence, types, and values. On average, 70 % of credit amounts are collateralized. Real...

This study examines young fast growing technology startup companies in Baltic region. Employing unique datasets of startups financial accounting data from Lithuania, Latvia and Estonia comparative and correlation analysis between growth, profitability and financial leverage indicators reflects...