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Corporate financing under moral hazard and the default risk of buyers

Csóka, Péter; Havran, Dániel; Szűcs, Nóra - 2013

We extend the theoretical model of external corporate financing to the case when the buyers of the borrowing firm may default during the financing period. In our setup there is an asymmetric information and hence moral hazard between the lender and the borrower concerning the effrts of the...

Persistent link: https://www.econbiz.de/10010494561

The marketability of bank assets and managerial rents: implications for financial stability

Fecht, Falko; Wagner, Wolf - 2007

Ongoing financial innovation and greater information availability increase the tradability of bank assets and reduce … banks' dependence on individual bank managers as private information in the lending process declines. In this paper we argue … bank managers and shareholders becomes less severe. Consequently, banks' capital structure needs to be less concerned with …

Persistent link: https://www.econbiz.de/10010295931

An Analysis of the Effects of the Severance Payment Reform on Credit to Italian SMEs

Calcagno, Riccardo; Kraeussl, Roman; Monticone, Chiara - 2008

bank loans, we also estimate the future outflows of TFR funds due to the reform. …

Persistent link: https://www.econbiz.de/10010325713

On the coexistence of banks and markets

Gersbach, Hans; Uhlig, Harald - 2006

We examine the coexistence of banks and financial markets, studying a credit market where the qualities of investment projects are not observable and the investment decisions of entrepreneurs are not contractible. Standard banks can alleviate moral-hazard problems by securing a portion of a...

Persistent link: https://www.econbiz.de/10010263646

Availability of firms' information and their choice of external credit: Evidence from the data of small firms

Watanabe, Wako - 2004

The main purpose of this paper is to present the empirical findings derived from the data of small firms that the availability of private and public information on the borrowing firm leads to diverse borrowing patterns among firms. Exploring logit models to characterize the firm's choice of a...

Persistent link: https://www.econbiz.de/10010332416

State Aid and Competition in Banking: the Case of China in the Late Nineties

Cheng, Xiaoqiang; Van Cayseele, Patrick - 2009

Many contributions to the literature on competition in banking use the Panzar and Rosse test (1987). This test encompasses a variety of market outcomes assuming firms maximize profits. However, when applied to the banking industry, this assumption may not be always valid as banks sometimes may...

Persistent link: https://www.econbiz.de/10010313280

Are bank shareholders enemies of regulators or a potential source of market discipline?

Park, Sangkyun; Peristiani, Stavros - 2001

In moral hazard models, bank shareholders have incentives to transfer wealth from the deposit insurer - that is … value, and a risk measure, this paper develops a semi-parametric model for estimating the critical level of bank risk at …

Persistent link: https://www.econbiz.de/10010283427

Liquidity shortages in a model with equilibrium shirking

Atolia, Manoj; Marquis, Milton H. - 2011

Persistent link: https://www.econbiz.de/10014306492

Multiple losses, ex-ante moral hazard, and the non-optimality of the standard insurance contract

Breuer, Michael - 2003

Under certain conditions the optimal insurance policy will offer full coverage above a deductible, as Arrow and others have shown long time ago. Interestingly, the same design of insurance policies applies in case of a single loss and ex-ante moral hazard. However, many insurance policies...

Persistent link: https://www.econbiz.de/10010315575

A Continuous Theory of Income Insurance

Lindbeck, Assar; Persson, Mats - 2010

In this paper we treat an individual's health as a continuous variable, in contrast to the traditional literature on income insurance, where it is regularly treated as a binary variable. This is not a minor technical matter; in fact, a continuous treatment of an individual's health sheds new...

Persistent link: https://www.econbiz.de/10010320225