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on Corporate Finance |
| By: | Bernardo Guimaraes |
| Abstract: | This paper analyses whether sovereign default episodes can be seen as contingencies ofoptimal international lending contracts. The model considers a small open economy withcapital accumulation and without commitment to repay debt. Taking first orderapproximations of Bellman equations, I derive analytical expressions for the equilibriumlevel of debt and the optimal debt contract. In this environment, debt relief generated byreasonable fluctuations in productivity is an order of magnitude below that generated byshocks to world interest rates. Debt relief prescribed by the model following the interest ratehikes of 1980-81 accounts for a substantial part of the debt forgiveness obtained by the mainLatin American countries through the Brady agreements. |
| Keywords: | sovereign debt, default, capital flows, optimal contract, world interest rates |
| JEL: | F3 F4 G1 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0847&r=cfn |
| By: | Andreas Heinrich; Aleksandra Lis; Heiko Pleines |
| Abstract: | In explaining the corporate governance performance of post-socialist companies, this article identifies four factors of influence: (1) pressure from majority shareholders, (2) pressure from outside minority shareholders, (3) pressure resulting from internationalization/ globalization and (4) pressure exerted by the state in the form of legal regulation. If all four factors have an impact on corporate governance performance, their interaction has to be explained. On the basis of research conducted thus far, this article suggests an analytical framework for the examination of corporate governance performance of postsocialist companies. Case studies of oil and gas firms from Central and Eastern Europe illustrate how the above factors influence a company’s corporate governance performance. |
| Keywords: | corporate governance, Russia, Central Eastern Europe, oil and gas industry |
| JEL: | G34 L71 M14 P21 P31 |
| Date: | 2007–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2007-896&r=cfn |
| By: | Overesch, Michael; Voeller, Dennis |
| Abstract: | This paper empirically analyses whether both personal and corporate taxation have an impact on companies' capital structure decisions. We investigate the effect of the difference in taxation of debt and equity financing on capital structures. Our empirical results, based on a comprehensive panel of European firm-level data, suggest that a higher tax benefit of debt has the expected significant positive impact on a company's financial leverage. Particularly, we find evidence that the capital structures of smaller companies respond more heavily to changes in the tax benefit of debt. Additional analysis confirms that not only corporate taxes are relevant for corporate financial planning, but variation in capital income tax rates at the shareholder level implicates significant capital structure adjustments as well. Moreover, we find substitutive relationships between non-debt tax shields and the effect of the corporate tax rate on capital structures. |
| Keywords: | Capital Structure, Corporate Income Tax, Personal Income Tax, Firm-Level Data |
| JEL: | G30 G32 H24 H25 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7229&r=cfn |
| By: | Mangatchev, Ivan |
| Abstract: | The aim in this article is to compare the effect of the financial collateral arrangements under Directive 2002/47 EC. The starting point is the definitions of these contracts provided by the FCD. The financial collateral arrangements have his historical roots in Roman law. Their effect introduces new legal framework in EU secured transaction legislation. For appropriate understanding of their legal nature a comparative examination between two secured transactions is needed. The conclusions of the article summarize the ideas which may useful in future amendments of the Directive 2002/47 EC. |
| Keywords: | financial collateral arrangements; secured transactions; netting |
| JEL: | K0 K12 N2 K11 N40 K22 G15 F36 G21 |
| Date: | 2008–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8902&r=cfn |
| By: | Bandyopadhyay, Arindam; Saha, Asish |
| Abstract: | Through RAROC and EVA tools, Banks can establish a good risk management culture that can create competitive advantage and improve shareholder value |
| Keywords: | RAROC; EVA; Integrated Risk Management; Banking |
| JEL: | L25 G31 G21 M21 |
| Date: | 2007–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8920&r=cfn |
| By: | Angelo Baglioni (DISCE, Università Cattolica) |
| Abstract: | This work provides an empirical investigation of shareholders’ agreements signed in Italy over the last decade. The focus is on the impact of agreements on the voting power (Shapley value) of participants. The evidence shows that agreements produce a remarkable reshuffling of voting power. Two views are confronted. First: agreements allow the largest shareholder to increase his power beyond his own voting rights, exploiting a leverage effect. Second: agreements are a way to share control among a coalition of large shareholders, thus limiting the ability of the first one to extract private benefits of control. The leverage effect seems to prevail at lower levels of ownership concentration, while the shared control view works better at higher levels of ownership concentration. Supermajority rules – a tool to reach a more balanced distribution of power – are more likely to be adopted when the first owner has a larger equity stake. |
| Keywords: | Corporate governance; shareholders’ agreements; large shareholder; voting power; one-share-one-vote. |
| JEL: | G3 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie3:ief0081&r=cfn |
| By: | Rodrigo Canales (MIT Sloan School of Management); Ramana Nanda (Harvard Business School, Entrepreneurial Management Unit) |
| Abstract: | Using loan-level data from Mexico, we study the relationship between the organizational structure of banks and the terms of lending to small businesses. We find that banks with decentralized lending structures - where branch managers have autonomy over the terms of lending - give larger loans to small firms and those with more "soft information" - particularly in states with weak legal enforcement of financial contracts. However, decentralized banks are also more responsive to the competitive environment when setting loan terms. They are more likely to restrict credit and to charge higher interests rates when they have market power, more so to smaller firms that have fewer outside options for external finance. These findings highlight a 'darker side' to decentralized banks and suggest that the relative benefit of a decentralized bank structure for small business lending depends critically on the nature of the competitive environment in which banks are located. |
| Keywords: | Banks, Institutions, Entrepreneurship |
| JEL: | F22 L14 L26 L86 O17 O19 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:08-101&r=cfn |