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The evidence suggests that relational contracting and legal rules play an important role in credit markets but on the basis of the prevailing field data it is difficult to pin down their causal impact. Here we show experimentally that relational incentives are a powerful causal determinant for...
Persistent link: https://www.econbiz.de/10013157034
Do media slant news in favor of the banks they borrow from? We study how lending connections affect news coverage of … banks earnings reports and of the Eurozone sovereign debt crisis on major newspapers from several European countries. We … find that newspapers cover announcements by their lenders - relative to those of other banks - significantly more when they …
Persistent link: https://www.econbiz.de/10013406443
hypothesis. Even after controlling for other factors, firms affiliated to business associations are more likely to secure bank … domestic and foreign banks, as these new banks attempt to minimize costs of adverse selection. Networking however discriminates … against the small and medium sized firms' access to bank loans in the CEE regions. Results are robust in both single cross …
Persistent link: https://www.econbiz.de/10013124471
We analyze linked databases on all Small Business Administration (SBA) loans, on all SBA lenders, and on all U.S. employers to estimate the effects of financial access on employment growth. Our methods combine regressions with matching on firm age, size, industry, year, and employment history,...
Persistent link: https://www.econbiz.de/10013016226
The paper examines the relationship between leverage and growth in a group of emerging central and eastern European countries, who are at different levels of financial market development. We hypothesize a non-linear relationship in that moderate leverage could boost growth while very high...
Persistent link: https://www.econbiz.de/10013146463
Lenders condition future loans on some index of past performance. Typically, banks condition future loans on repayments …
Persistent link: https://www.econbiz.de/10013149943
We study the macroeconomic effects of rational asset bubbles in an overlapping-generations economy where asset trading requires specialized intermediaries and where agents freely choose between working in the production or in the financial sector. Frictions in the market for deposits create...
Persistent link: https://www.econbiz.de/10013153172
We exploit organizational reforms in a foreign-owned bank in Central-East Europe to study the implementation of modern …
Persistent link: https://www.econbiz.de/10013071738
The pregibit discrete choice model is built on a distribution that allows symmetry or asymmetry and thick tails, thin tails or no tails. Thus the model is much richer than the traditional models that are typically used to study behavior that generates discrete choice outcomes. Pregibit nests...
Persistent link: https://www.econbiz.de/10013110189
The Great Recession, which was preceded by the financial crisis, resulted in higher unemployment and inequality. We propose a simple model where firms producing varieties face labor-market frictions and credit constraints. In the model, tighter credit leads to lower output, lower number of...
Persistent link: https://www.econbiz.de/10012987688