With transaction costs for trading goods, the nominal exchange rate moves within a band around the nominal purchasing power parity (PPP) value. The authors model the behavior of the band and of the exchange rate within the band. The model explains why there are below-unity slope coefficients in...

Two major ways of acquiring corporate control are by public take-over bid or a minority buyout of a large block holder of shares. Although the latter is less visible, Cynthia Van Hulle and Piet Sercu explore the relative benefits of a private block trade in conditions both with and without a...

The authors argue that it is bargaining, not competition, which determines the way gains are distributed in take-over bids. Focusing on 'unfriendly' take-overs, where the target company's current management leaves, they show how bargaining and bidding interact to generate the take-over price and...

The rising globalization of the past decades has been pushing firms to expand their activities internationally in order to remain competitive. Serving foreign markets offers various opportunities, but also exposes firms to additional risks affecting their capital structure. Theoretically the...

In contrast to the popular assumption of independence made in the classic corporate finance literature, many companies around the world are linked through common ownership to form business groups. This paper reviews the growing literature on the consequences of business group membership. The...

In contrast to the popular assumption of independence made in the classic corporate finance literature, many companies around the world are linked through common ownership to form business groups. This paper reviews the growing literature on the consequences of business group membership. The...