We develop a general model of lending in the presence of endogenous borrowing constraints. Borrowing constraints arise because borrowers face limited liability and debt repayment cannot be perfectly enforced. In the model, the dynamics of debt are closely linked with the dynamics of borrowing...

This paper shows that investors financing a portfolio of projects may use the depth of their financial pockets to overcome entrepreneurial incentive problems. While competition for scarce informed capital at the refinancing stage increases the investor’s ex post bargaining position, it may...

This Paper investigates how the legal framework not only affects the amount of external financing available, but also firms’ resource allocation among different types of assets. Using a simple model, we show that in a weaker legal environment a firm will get less financing, and thus invest...

In a context of uncertain returns to investment, a firm may face increasing costs of borrowing and uncertain value of its internal finance. Froot, Scharfstein, and Stein (1993) develop a framework where the firm can hedge against the fluctuations of its cash flow, in order to better coordinate...

This paper develops a signalling game in which the decision to raise public equity is a real option of the firm. Firms may use multiple signals to reveal their type: the timing of the IPO, the fraction of shares issued and the underpricing of shares. The model provides a tractable approach for...

This paper investigates the determinants of the maturity structure of Czech corporate debt. A theoretical section provides an overview of contemporary theories on corporate debt maturity structure. An empirical section describes an econometric model that shows that long-term debt increases with...

Does shareholder value orientation lead to shareholder value creation? This article proposes methods to quantify both, shareholder value orientation and shareholder value creation. Through the application of these models it is possible to quantify both dimensions and examine statistically in how...

Bu çalışmada, Türkiye’de faaliyet gösteren 29 bankanın 1990–2005 yılları arasındaki verilerinden faydalanılarak, bankacılık sektöründe kârlılığı etkileyen faktörler panel veri analizi ile belirlenmeye çalışılmıştır. Çalışma dönemi,“Bankacılık Sektörü...

We construct a comprehensive panel data of 92 publicly traded European utilities over the period 1994-2005 in order to study the relationship between capital structure, regulated prices, and firm value, and examine if and how this interaction is affected by ownership structure and regulatory...

Corporations in many countries are run by controlling shareholders whose cash flow rights in the firm are substantially smaller than their control rights. This separation of ownership and control allows the controlling shareholders to pursue private benefits at the cost of minority investors by...