We analyze in a dynamic model how debt priority rules influence firms' initial capital structure choice, investment timing, and subsequent debt issues. We quantify deviations from first-best investment behavior that arise from different debt priority rules, and document surprisingly large...

Accurate rating systems are of key importance for banks to price and manage their loan portfolios. In this paper we analyze the choice of the rating technology in an oligopolistic banking sector. In our model the rating system estimates the probabilities of default for the individual borrowers...

Rivalry restraint has received a lot of attention as a theory of profits in recent research on business strategy. Its economic rationale is explained as the consequences of either exogenous or endogenous anticompetitive forces present in different industries. In this paper, we use a dynamic...

Credit risk has become an important factor driving government bond returns. We therefore introduce an asset pricing model which exploits information contained in both forward interest rates and forward CDS spreads. Our empirical analysis covers euro-zone countries with German government bonds as...

Credit risk has become an important factor driving government bond returns. We therefore introduce an asset pricing model which exploits information contained in both forward interest rates and forward CDS spreads. Our empirical analysis covers euro-zone countries with German government bonds as...

Credit risk has become an important factor driving government bond returns. We therefore introduce an asset pricing model which exploits information contained in both forward interest rates and forward CDS spreads. Our empirical analysis covers euro-zone countries with German government bonds as...