We develop a simple model of investment in business groups subject to moral hazard. Our model suggests that productivity and pledgeable income are the drivers of resources in the internal capital markets of these groups. This prediction can be use to explain on the grounds of efficiency some...

This paper investigates the determinants of capital structure for a sample of 13,070 small medium sized enterprises (SMEs) and 67,449 firm-year observations from Eastern European countries over the period 1994-2004. The use of a sample of SMEs in our analysis rather than large listed firms...

This paper examines spillover effects caused when market participants trade different financial instruments in a single operation. We develop and test an extended model for cross-correlation in the trading processes of different assets on the European bond market. We find a significant...

This paper introduces an approach designed for personal credit risk. We define a structural model related to the financial balance of an individual, allowing for cashflow seasonality and deterministic trends in the process. This formulation is best suited for short-term loans. Using this model,...

This paper examines the determinants of cross-platform arbitrage profits. We develop a structural model that enables us to decompose the likelihood of an arbitrage opportunity into three distinct factors: the fixed cost to trade the opportunity, the level at which one of the platforms delays a...