The aim of this paper is to ascertain corporate investment reaction in bank-dependent companies in times of crisis. Our investigation covers the differences in corporate investment reaction due to the global financial crisis (GFC) of 2007-2009 and the COVID-19 crisis of 2020–2021. We utilized...

This paper presents principles that could guide the design of more targeted policy support and facilitate the restructuring of firms adversely impacted by the COVID-19 pandemic. To this end, the paper takes stock of vulnerabilities and risks in the enterprise sector and assesses countries'...

High-yield debt, including leveraged loans, is characterized by incurrence financial covenants, or "cov-lite" provisions. Unlike, traditional, maintenance covenants, incurrence covenants preserve equity control rights but trigger pre-specified restrictions on the borrower's actions once the...

This paper examines whether investors react to consumption taxes. Despite the near global adoption of VAT policies, relatively little is known regarding the investor response to VAT changes. In an event-study setup, using a new dataset of daily equity returns and precise dates of tax policy...

We study the impact of the COVID-19 recession on capital structure of publicly listed U.S. firms. Our estimates suggest leverage (Net Debt/Asset) decreased by 5.3 percentage points from the pre-shock mean of 19.6 percent, while debt maturity increased moderately. This de-leveraging effect is...

We investigate equilibrium debt dynamics for a firm that cannot commit to a future debt policy and is subject to a fixed restructuring cost. We formally characterize equilibria when the firm is not required to repurchase outstanding debt prior to issuing additional debt. For realistic values of...

This study investigates the impact of corporate bonds issued by Greek listed firms on employment. Even though external financing and the effects on employment has been studied in the literature, we extend the existing literature by focusing for the first time on the specific role of corporate...

With business leverage at record levels, the effects of corporate debt overhang on growth and investment have become a prominent concern. In this paper, we study the effects of corporate debt overhang based on long-run cross-country data covering the near-universe of modern business cycles. We...

With business leverage at record levels, the effects of corporate debt overhang on growth and investment have become a prominent concern. In this paper, we study the effects of corporate debt overhang based on long-run cross-country data covering the nearuniverse of modern business cycles. We...

This paper studies the evolution of non-financial corporate debt among publicly listed companies in major advanced economies between 2010 and 2017. Since 2010, firms have started to rely more on corporate bond markets and have used part of their debt to increase their holdings of cash. In our...

This paper examines whether investors react to consumption taxes. Despite the near global adoption of VAT policies, relatively little is known regarding the investor response to VAT changes. In an event-study setup, using a new dataset of daily equity returns and precise dates of tax policy...

This paper investigates whether and how economic policy uncertainty affects corporate debt maturity. Using a large firm-level dataset for four European countries, we find that an increase in economic policy uncertainty is significantly associated with a shortened debt maturity. Moreover, the...

Private firm financing, given the far-reaching importance of non-publicly traded companies for global output and employment, is still a relatively underexplored area. Since the seminal work of Petersen and Rajan (1994), only a small branch of research into private firms' cost of debt has been...

This paper explores the effect of oil price fluctuations on the stock returns of U.S. oil firms using a strategy of identification through heteroskedasticity exploiting the 2020 oil crash. Results are twofold. First, we find that a decline in oil prices statistically significantly reduces stock...

Die Arbeit untersucht die Wiederherstellung der privaten deutschen Kreditwürdigkeit nach dem Zweiten Weltkrieg anhand eines Konstitutionsprozesses von Vertrauen im Zuge der Londoner Schuldenkonferenz. Im Mittelpunkt steht die These, dass die Bedeutung der deutschen Auslandsschuldenregelung...

This study investigates the effect of sharia firms on the cost of debt in the Indonesian market. We use OLS regression to examine the relationship by applying 1870 data observations of nonfinancial companies registered on the Indonesia Sharia Stock Index (ISSI) during 2012-2018. We found that...

This paper explores the effect of oil price fluctuations on the stock returns of U.S. oil firms using an identification strategy through heteroskedasticity, exploiting the 2020 oil price crash. The results are twofold. First, a decline in oil prices significantly reduces oil firms' stock...

This paper analyses the implications of corporate indebtedness for investment following large economic shocks. The empirical analysis is based on a large Orbis-iBACH firm-level data set for euro area countries from 2005 to 2018. Our results suggest that investment of high-debt firms is...

The article analyzes the impact of debt maturity structure and other factors on investment decisions of enterprises listed on the Vietnam’s stock market from 2010 to 2019. Data used in this study are acquired from the financial statements of 558 enterprises listed on both the Ho Chi Minh and...

In 1825, France conditioned its grant of recognition to the new nation of Haiti on the payment of 150 million francs plus trade benefits. The payments were, at least in part, compensation for the losses that French plantation owners suffered, a key part of which was the loss of enslaved...

Implicit government guarantees in the Chinese bond market, which shaped investors’ belief in rigid payment, have been withdrawn after the first bond default, causing spillover effects on non-defaulted bonds. This study investigates the intra-regional spillover effects of the staggered first...

In dynamic capital structure models with an investor break-even condition, the firm's Bellman equation may not generate a contraction mapping, so the standard existence and uniqueness conditions do not apply. First, we provide an example showing the problem in a classical trade-off model. The...

This paper investigates the cost of debt of parent and subsidiary firms on the US corporate bond market. Debt issued by subsidiary firms is economically relevant, as it represents 13% of the total US bond debt. I find that the bonds issued by non-financial subsidiary firms are related, both...

This paper examines ways to summarize the maturity structure of public debts using a small number of parameters. We compile a novel dataset of all promised future payments for US and UK government debt from every month since 1869, and more recently for Peru, Poland, Egypt, and Nigeria. We show...

We apply multiple machine learning (ML) methods to model loss given default (LGD) for corporate debt using a common dataset that is cross-sectional but collected over different time periods and shows much variation over time. We investigate the efficacy of three cross-validation (CV) schemes for...

This paper proposes a macro-banking model with corporate debt choice and investigates the impacts of bank capital regulation. Compared to non-banks, banks provide restructurable debt that resolves firm liquidations. Capital regulation corrects deposit insurance distortions but reduces bank debt...