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on Corporate Finance |
| By: | Artashes Karapetyan (Norges Bank (Central Bank of Norway)); Bogdan Stacescu (Norweian School of Business) |
| Abstract: | We examine the conditions required for the existence of private credit bureaus, their ownership and coverage. Our model implies that bank consortia will most likely be preferred by banks, but that they will lead to restricted coverage. Independent credit bureaus have higher coverage, but they require good institutions. This implies an important role for public credit registers in developing countries with weak institutions. Our empirical findings largely support the implications of our model. |
| Keywords: | Information sharing, Credit markets, Default, Adverse selection |
| JEL: | G20 D82 L12 |
| Date: | 2012–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:bno:worpap:2011_23&r=cfn |
| By: | Flavia Barsotti (Dipartimento di Matematica per le Decisioni, Universita' degli Studi di Firenze); Maria Elvira Mancino (Dipartimento di Matematica per le Decisioni, Universita' degli Studi di Firenze); Monique Pontier (Institut Mathem. de Toulouse (IMT), University of Toulouse, France) |
| Abstract: | This paper analyzes a structural model of corporate debt in the spirit of Leland (1994) model within a more realistic general context where payouts and asymmetric tax-code provisions are introduced. We analytically derive the value of the tax benefit claim in this context and study the joint effect of tax asymmetry and payouts on optimal corporate financing decisions. Results show a quantitatively significant impact on both optimal debt issuance and leverage ratios, thus providing a way to explain differences in observed leverage across firms. |
| Keywords: | structural model, corporate debt, endogenous bankruptcy, optimal stopping, tax benefits of debt |
| JEL: | G32 G33 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:flo:wpaper:2011-10&r=cfn |
| By: | M. KNOCKAERT; T. VANACKER |
| Abstract: | Building upon self-efficacy and collective effort theories, we study the association between the selection behavior of venture capitalists and their involvement in value adding activities. We argue that investors, who prioritize different characteristics of a business proposal during selection, will be more or less confident of their own abilities and the abilities of entrepreneurial teams to effectively add value to portfolio companies and hence will be more or less involved in providing value adding activities. In order to test this claim, we use a stratified sample comprising 68 European early stage high tech venture capitalists. Results show that venture capitalists, who focus on entrepreneurial team characteristics or financial criteria during selection are less involved in value adding activities compared to their peers, who focus on technological criteria. We discuss these findings from a theoretical and practical perspective. |
| Keywords: | venture capital, value adding behavior, selection behavior, self-efficacy theory,collective effort theory |
| JEL: | G24 L26 O32 D81 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:11/741&r=cfn |
| By: | Anna Menozzi; Fabrizio Erbetta; Giovanni Fraquelli; Davide Vannoni |
| Abstract: | This paper investigates the determinants of board compensation for a sample of Italian State Owned Enterprises (SOEs). To that purpose, we use a newly collected panel data of 106 local public utilities observed form 1994 through 2004, which includes detailed information on the boards of directors. During this period, the deregulation process inspired institutional interventions that forced utilities, traditionally owned by local municipalities, to change their juridical form and ownership structure, thereby facilitating the entrance of private investors. The corporate governance literature shows that such changes may exacerbate the agency conflicts between shareholders, top executives and the board. However, board compensation could reduce the agency costs by aligning the incentives of managers with the interests of shareholders. This paper addresses this issue by investigating the impact that board composition, firm characteristics and performance have on board compensation. We find that the average board pay is negatively related to board size and positively related to firm dimension. The public or private nature of the major shareholder does not influence board compensation but the juridical form does. Finally, while the proportion of politically connected directors is found to negatively influence the level of per capita compensation, the impact of firm performance is uncertain. |
| Keywords: | board compensation, board composition, politicians, local public utilities |
| JEL: | G34 J33 L97 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:231&r=cfn |