nep-cfn New Economics Papers
on Corporate Finance
Issue of 2022‒10‒03
seven papers chosen by
Zelia Serrasqueiro
Universidade da Beira Interior

  1. Board of Director Characteristics and Firm Performance for firms listed on Iraq Stock Exchange By Star, Miran
  2. The role and rights of debtholders in corporate governance By Caio de Oliveira; Carl Magnus Magnusson; Tugba Mulazimoglu
  3. Participation in Global Value Chains and M&A flows By Ciani, Andrea; Gregori, Wildmer Daniel
  4. How binding is supervisory guidance? Evidence from the European calendar provisioning By Franco Fiordelisi; Gabriele Lattanzio; Davide S. Mare
  5. A Model of Intangible Capital By Nicolas Crouzet; Janice C. Eberly; Andrea L. Eisfeldt; Dimitris Papanikolaou
  6. Firm liquidity and the transmission of monetary policy By Margherita Bottero; Stefano schiaffi
  7. Startup Support of Regional Financial Institutions and Regional Startup (Japanese) By YAMORI Nobuyoshi; NAGATA Kunikazu; KONDO Kazumine; OKUDA Masayuki

  1. By: Star, Miran
    Abstract: In this project, we evaluate the firm performance and the board, and what make the board and performance, relations in the stock firms, which is owned by more than owner, and we make our research based on Iraq, and we took the firm performance, of the Iraq firms, which are in, Iraq stock exchange, which we took the 2019, for the measuring the firms, performances, and for the board of director, we make three variables, which each having effect on the board, which were the first the size of the board, the second one is the CEO duality in the board, and the third one is the gender diversity, which is focus on the female ratio, and the board make the decision, which the result be the performance of the firm, which the board decision make impact on the performance, in a way which if the performance, doesn’t go well, the board will responsible for it. For that we try to find the relation between the effective factor of the board, and their effect on the performance.
    Keywords: board size, CEO duality, female member, firm performance
    JEL: G34 M41
    Date: 2022
  2. By: Caio de Oliveira (OECD); Carl Magnus Magnusson (OECD); Tugba Mulazimoglu (OECD)
    Abstract: This paper provides an overview of developments in non-financial corporate bond markets over the past two decades with respect to their size and credit quality, as well as trends related to insolvency and restructuring. It then explores the role of bondholders in corporate governance, both in normal times and in times of financial distress, and the governance implications of longstanding increases in bond financing by the non-financial sector. In particular, challenges related to bondholder rights, corporate disclosure, the responsibilities of corporate boards, institutional investors and insolvency are discussed.
    Date: 2022–09–15
  3. By: Ciani, Andrea (European Commission); Gregori, Wildmer Daniel (European Commission)
    Abstract: This study investigates to which extent firms operating in sectors more integrated into Global Value Chains (GVC) are more likely to be involved in cross-border Mergers and Acquisitions (M&A) flows. We focus on firms acquired in the EU27 during the period 2008-2020 employing a gravity model. Results show that cross-border investments are indeed associated with sectoral GVC participation, in particular the dependence on intermediate products supplied by other countries (i.e. backward GVC participation) of the target country-sector is positively correlated with M&A flows. This evidence is confirmed when the acquired firm operates in manufacturing or high-tech sectors, and when the investor originates from OECD countries. In addition, results show that companies from countries suppling inputs to other countries are more likely to pursue a cross-border acquisition.
    Keywords: Global Value Chains, Mergers and Acquisitions, Global Economy, Gravity model, EU firms
    JEL: F21 F23 G34
    Date: 2022–08
  4. By: Franco Fiordelisi (Universita' Roma 3 and University of Essex); Gabriele Lattanzio (Nazarbayev University, Graduate School of Business); Davide S. Mare (The World Bank and Edinburgh Business School)
    Abstract: We examine whether banks respond differently to the adoption of a supervisory guidance as compared to a similar regulatory action. By exploiting the staggered and distinct supervisory and regulatory implementation of the European Calendar Provision, we indeed document that while this reform achieved the intended overall goal of reducing European banks' nonperforming loans ratios, its effect materialized during the initial release of the ECB supervisory guidance, rather than following its adoption as a Pillar 1 regulation. That is, the subsequent formalization of this supervisory initiative within a regulatory framework achieved limited economic results, while eliminating any residual flexibility for the regulatory authority concerning the degree to which the calendar provisioning should be enforced.
    Keywords: Bank regulation, Cross-border financial institutions, Financial stability, non-performing loans
    JEL: G21 G28 G32
    Date: 2022–05
  5. By: Nicolas Crouzet; Janice C. Eberly; Andrea L. Eisfeldt; Dimitris Papanikolaou
    Abstract: We propose a model that starts from the premise that intangible capital needs to be stored on some medium --- software, patents, essential employees --- before it can be utilized in production. Storage implies that intangible capital may be partially non-rival within the firm, leading to scale economies. However, storage can also compromise the ability of the firm to fully appropriate the returns generated by intangibles. We explore the implications of these two mechanisms for firm scale, scope, and investment decisions, and we outline their connection to recent macroeconomic and financial trends in the US.
    JEL: E01 E22 G11 G31 O34
    Date: 2022–08
  6. By: Margherita Bottero (Bank of Italy); Stefano schiaffi (Bank of Italy; Bank of Italy)
    Abstract: We study how firms’ cash balances affect the supply of bank credit and the transmission of monetary policy via the bank-lending channel in Italy using bank- and firm-level data. From a theoretical perspective, there is no agreement on whether, for a given level of credit demand, cash-rich companies enjoy better access to credit, as an abundance of cash may reveal both positive and negative information about the firm. According to our analysis, based on a sample of 430,000 Italian non-financial corporations over the period 2006-2018, banks view firm liquidity favourably since it is associated, on average, with cheaper bank funding and with a credit composition tilted towards term loans, at all maturities and non-collateralized. We also show that firms reallocate their liquidity in and out of their deposits following changes in the slope of the yield curve, which proxies the opportunity cost of cash. For this reason, changes in monetary policy that alter the slope of the term structure impact the cost of credit not only via the traditional channels but also indirectly, as they prompt a reallocation of firm liquidity that banks anticipate and price into the credit contracts they offer.
    Keywords: firm liquidity, bank financing, monetary policy transmission
    JEL: E51 E52
    Date: 2022–07
  7. By: YAMORI Nobuyoshi; NAGATA Kunikazu; KONDO Kazumine; OKUDA Masayuki
    Abstract: This paper examines whether the startup support provided by regional financial institutions contribute to startups in the region and which initiatives of regional financial institutions are effective in supporting startups, using the questionnaire information from two surveys. The analysis based on the 2020 startup firm questionnaire indicates that in the prefectures where firms have high opinions of regional financial institutions' support, more startup firms are founded, and the startup rate increases. Banks that are more highly motivated to support startups also have higher firms’ ratings for their capacity for lending without collateral or guarantees and evaluating business potential. The analysis comparing the 2020 startup firm questionnaire with the 2017 RIETI branch manager questionnaire shows that in prefectures where banks rely too heavily on collateral and guarantees, the assessments of banks’ loans and non-financing capacity decrease. Banks that are highly motivated to support startups make lending decisions based more on the management’s qualifications and motivations, and the evolution of business potential is vital in supporting startups.
    Date: 2022–09

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