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on Corporate Finance |
| By: | Lukas Menkhoff (University of Hannover, Germany); Doris Neuberger (University of Rostock, Germany); Chodechai Suwanaporn (Chulalongkorn University, Thailand) |
| Abstract: | This paper examines the role and determinants of collateral in emerging markets compared to mature ones. Analyzing a data set of 560 credit files of Thai commercial banks, we find that both the incidence and degree of collateralization are higher there than in developed markets. Thai banks use collateral primarily to reduce the higher credit risks of small and relatively young firms. Long credit relationships do not reduce collateral requirements by lowering information asymmetry. Market imperfections result from housebanks demanding higher collateral than non-housebanks, suggesting a lock-in effect for their borrowers, and from larger banks realizing higher collateral claims. |
| Keywords: | Bank lending, collateral, credit risk, relationship lending, emerging economies |
| JEL: | G O |
| Date: | 2005–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpfi:0501008&r=cfn |
| By: | stanley c. w. salvary (Canisius College) |
| Abstract: | This paper addresses a very profound question concerning financial accounting. Is financial accounting measurement. as represented by diverse valuation rules. hodgepodge or is it logically developed? Salvary [1985. p.28. Chap. IV] advances and provides a theoretical development of the concept of 'recoverable cost' as the measurement property observed in (underlying) financial accounting measurement. Sa/vary [1989, pp.50-51] maintains that 'recoverable cost' is the center of 'economic gravity' and demonstrates that this valuation is derivable from axioms advanced. This paper provides a rigorous proof that 'recoverable cost' is the observed measurement property underlying financial accounting measurement. This analysis draws upon: (a) the concept of recovery underlying the investment decision and (b) the distinction between decision theory and measurement theory. It establishes recoverable cost as the measurement property in financial accounting and leads to the conclusion that financial accounting measurement is logically developed. |
| Keywords: | measurement rules, capital budgeting, realizable value, lower of cost and market, capitalization, depreciation, decision theory, market simulation, asset specificity. |
| JEL: | A |
| Date: | 2005–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpgt:0501004&r=cfn |
| By: | Edgar L. Feige (University of Wisconsin-Madison) |
| Abstract: | One of the more intractable problems in the area of monetary economics is the measurement of cash payments. Whereas the stock of currency in circulation [C] is well defined and readily measured, the transactions velocity of currency [Vc] (the average number of times currency turns over in any given period) is difficult to measure. This paper examines alternative methods for estimating the average velocity of currency and the denomination specific velocity of cash employing data for the Netherlands. Estimates of the volume of cash payments are necessary to meaningfully measure the volume of total payments [MV] in an economy and hence, the total volume of transactions [PT]. Once the volume of cash payments is known, it is possible to employ Fisher’s equation of exchange [MV=PT] as a more general conceptual and empirical alternative to Keynes’ more limited income-expenditure [Y= C+I+G] identity. |
| Keywords: | Cash payments, Velocity of currency, Equation of exchange, total transactions, underground economy. |
| JEL: | E1 E4 E5 B4 |
| Date: | 2005–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpma:0501025&r=cfn |