This study advances the understanding of cleantech commercialisation by adopting a market validation approach to analyse equity capital’s role in navigating the ‘Valley of Death’. Focusing on the three core financial milestones – revenue generation, profitability and retained earnings...

To what extent can private firms' external equity substitute for debt financing in a banking crisis? To answer this question, I use firm-level data and firm-bank linkages to estimate the causal effect of an imported lending cut from a large German bank on firms' capital structure and real...

Conventional measures of bank solvency fail to account for the unique liquidity risks posed by deposits. Using public regulatory data, we develop a novel measure, economic capital, that jointly quantifies the impact of credit, liquidity, and market risk on bank solvency. We validate that...

This paper finds that an additional percentage point in the ratio of Common Equity Tier 1 (CET1) capital to risk-weighted assets is associated with an increase in the Weighted Average Cost of Capital (WACC) of Chilean banks by a maximum of only 11.7 basis points. This result is found by...

Recent academic research exhibits considerable disagreement among ESG ratings from different agency providers. The consequences of this disagreement on the market are still under-explored; thus, we investigate whether this disagreement impacts the cost of equity capital. Using a sample of 23,201...

Our research explores the determinants of capital buffers in Indonesian Islamic banking, which is ranked 10th in the world. The explanatory variables consist of competition, profit loss sharing (PLS) financing, and bank-specific variables such as bank size, stability, total financing, efficiency...

In this paper, we analyse the appropriate capital adequacy ratio for banks from a socio-economic perspective. More equity capital in banks can contribute to financial stability by reducing the risk of costly banking crises, but lending may become more expensive if banks are required finance...

The main objective of this study is to examine the impact of equity financing on the financial performance of Jordanian industrial companies. The study population comprised 393 board directors from 55 Jordanian industrial companies. Purposive sampling was employed to select 346 board directors...

This study investigates the relationship between economic policy uncertainty (EPU) and the cost of equity capital (CoEC). It also reveals the moderating role of managerial ability (MA) in the relationship between EPU and CoEC in Saudi Arabia. The study sample consists of listed non-financial...

In einer panel-ökonometrischen Studie von 6 international operierenden Banken über 37 Quartale untersuchen wir vier verschiedene Digitalisierungsmaßnahmen hinsichtlich ihres Effekts auf den Return on Equity. Ein Fixed-Effects-Modell mit einem R² von 36% zeigt auf, dass der RoE bei Vorliegen...

This research investigates how investor base affects the cost of equity capital (COE) in Indian companies, particularly in market conditions with weak investor protection and increased ownership concentration by promoters and families. Using ordinary least squares (OLS), panel fixed effects, and...

Using granular data from the European corporate credit register, we examine how increases in macroprudential capital buffer requirements since the pandemic have affected bank lending behaviour in the euro area. Our findings reveal that, for the average bank, the buffer requirement increases did...

Purpose - This research investigates the effect of audit report lag on the cost of equity capital. We argue that an extended audit report lag reduces the value of information and raises concerns for investors, resulting in an increased cost of equity capital. Design/methodology/approach - We...

There are concerns that while stringent capital policy may enhance banks' resilience, it may also have other unintended economic repercussions. This study contributes to this debate by investigating whether regulatory bank capital induces a trade-off between bank stability and economic growth...

This paper evaluates the impact of the March 2020 European Central Bank recommendation that banks do not pay dividends or buy back shares on their market values. It documents a causal negative impact on bank share prices of around 7% during the two weeks following its announcement. The...

This paper contains a brief discussion of shareholders' equity in the company. Equity is the owner's right to the company's assets after all obligations are paid. The equity of a company can be calculated by subtracting the company's liabilities from the company's total assets. In other words,...

This article investigates the relationship between two types of bank liabilities, equity capital and deposits. Our primary finding is that rising deposit costs increase insolvency risk, so financial institutions issue equity capital to protect shareholder value. We construct a structural model...

We examine whether and how the exercising of rights by the regulatory minority shareholder impacts firms' cost of equity. Using a hand-collected sample from the CSISC, a novel regulatory investor protection institution controlled by the China Securities Regulatory Commission, we find that the...

Many firms often face a shortage of R&D funds and have to raise capital by selling ownership shares to their competitors, which affects the R&D models of competing firms. We utilize a stylized game theoretic model to study the equilibrium R&D strategy and investigate the impacts of cooperative...

This paper analyses banks' ability to use capital buffers in the euro area, taking into account overlapping capital requirements between the risk-based capital framework and the leverage ratio capital framework from 2016 to 2022. This analysis is the first to quantify buffer usability in...

The current study aims to examine the determinants of the capital adequacy ratio (CAR) in the context of Jordanian banks through a literature review and analysis of empirical evidence. The aggregate data were obtained from Globaleconomy.com, the Financial Soundness Indicators, the Central Bank...