This paper theoretically investigates whether compensating a credit rating agency (CRA) with an upfront fee, rather than a rating contingent fee, can improve rating quality. I show that an upfront fee delivers the same rating quality as the rating contingent fee if the CRA sets its rating policy...

During the recent credit crisis credit rating agencies (CRAs) became increasingly lax in their rating of structured products, yet increasingly stringent in their rating of corporate bonds. We examine a model in which a CRA operates in both the market for structured products and for corporate...

Weak productivity in Egypt is rooted in deep-seated structural causes that impede market competition and prevent a more efficient resource allocation. This implies a number of challenges for economic policy to meet the objectives for long-term sustainable growth as set out in the National...

This paper studies the effects that heterogeneous multiple bank financing has on a firm's risk and information policy when the firm tries to maximize credit renegotiation efficiency. We find that a significant, yet limited, degree of relationship lending enables firms with high asset specificity...

It is not surprising that the financing of early-stage creative projects and ventures is typically geographically localized since these types of funding decisions are usually predicated on personal relationships and due diligence requiring face-to-face interactions in response to high levels of...

The composition and functioning of corporate boards is at the core of the academic and policy debate on optimal corporate governance. But does board composition matter for corporate decisions? In this paper, we analyze the role of financial experts on boards. In a novel panel data set on board...

This paper develops a general equilibrium model to examine the role of information technology when intermediaries facilitate the origination and distribution of assets given information asymmetry. Information technology measures the informativeness of asset-quality signals received by...

This paper analyzes the implications of the regulatory benefits that the investors derive from holding highly rated securities for a credit rating agency's (CRA) rating policy. The CRA's endogenous rating fee is shown to be decreasing in the accuracy of the rating. The CRA provides a rating only...

This study examines how various aspects of underwriter peer network affect IPOs. We use different network measures to capture underwriter centrality in the global network, cohesion and diversity within network, and prior industry experience of network partners. Our results show that IPOs...

The use of debt to finance risky entrepreneurial-firm projects is rife with informational and contracting problems. Nonetheless, we document widespread lending to startups in three innovation-intensive sectors and in early stages of development. At odds with claims that the secondary patent...