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on Corporate Finance |
| By: | Li, Shasha; Yang, Biao |
| JEL: | D82 G11 G32 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc24:302416 |
| By: | Axelle Heyert (LaRGE Research Center, Université de Strasbourg); Laurent Weill (LaRGE Research Center, Université de Strasbourg) |
| Abstract: | This study examines how female bank leadership influences firms’ bank debt. We combine bank-level and firm-level data to construct a sample of about 116, 000 firms from eleven European countries. We hypothesize that higher female bank leadership leads to lower firms’ bank debt, consistent with the view of higher risk aversion for women relative to men. We find that female bank leadership reduces firms’ bank debt. This effect varies with the maturity of bank debt, as female bank leadership contributes to lower long-term bank debt but higher short-term bank debt. We also find that female bank leadership exerts a lower detrimental impact on firms’ bank debt for female-led companies. Overall, our results indicate that greater female bank leadership can hamper access to credit of firms. |
| Keywords: | banking, gender, access to credit. |
| JEL: | D22 G21 G41 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:lar:wpaper:2024-08 |
| By: | Jean-Baptiste Marigo (LaRGE Research Center, Université de Strasbourg); Laurent Weill (LaRGE Research Center, Université de Strasbourg) |
| Abstract: | We investigate the effect of folklore on firms’ access to credit. Using firm-level data on a large sample of 38, 000 firms covering 124 countries and 274 cultural societies over the 2005-2022 period, we test the hypothesis that oral traditions linking risk-taking to success or failure influence access to credit. We find that folklore affects access to credit. Oral traditions associated with successful challenges increase access to credit, while those associated with unsuccessful challenges decrease access to credit. We further show that folklore influences access to credit through borrower discouragement and loan approval. |
| Keywords: | culture, folklore, access to credit, borrower discouragement. |
| JEL: | G21 O16 Z10 Z13 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:lar:wpaper:2024-06 |
| By: | William C. Dudley (Princeton University) |
| JEL: | D82 E32 E44 G21 G28 G32 L25 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:pri:cepsud:329 |
| By: | Yasin Kürsat Önder; Jose Villagas (-) |
| Abstract: | We evaluate the impact of Belgium’s 2020 Public Credit Guarantee Scheme (CGS) using administrative data. The CGS applied to all firms, with those employing fewer than 50 workers benefiting from a 25 basis point reduction in interest rates. Leveraging this policy-induced discontinuity, we compare firms around the employment threshold. Firms receiving the lower interest rates experienced increases in employment and investment, along with a reduction in firm exit rates. The scheme helped address the debt overhang problem by easing pricerelated credit constraints: for every €1 of guaranteed debt at a 25 basis points lower rate, non-guaranteed debt decreased by €0.13. |
| Keywords: | Credit guarantees, credit frictions, regression discontinuity design, debt overhang squares, efficiency, robustness |
| JEL: | E32 G21 H81 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:24/1097 |
| By: | Daniel Dejuan-Bitria (BANCO DE ESPAÑA); Wayne R. Landsman (BANCO DE ESPAÑA); Sergio Mayordomo (KENAN-FLAGLER BUSINESS SCHOOL, UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL); Irene Roibás (BANCO DE ESPAÑA) |
| Abstract: | This paper analyses the effect of the expected credit loss model under IFRS 9 on relationship lending in Spain. We document that relationship exclusivity between a bank and a firm has a positive effect on the growth of credit. However, this positive effect is significantly reduced after implementation of IFRS 9. We estimate that in 2018 the negative impact of IFRS 9 on relationship lending led to a reduction in credit to Spanish non-financial firms of 2.8% of their total outstanding credit, suggesting a sizeable effect on the availability of credit. For borrowers with Stage 1 loans, we show that the new regulation has a negative impact on relationship lending at firms with a higher probability of default and whose credit quality has deteriorated. Our findings are consistent with a change in the incentives that underpin relationship lending. |
| Keywords: | relationship lending, IFRS 9, credit, probability of default |
| JEL: | D82 G21 G28 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2437 |
| By: | Massimo Mariani; Paola Amoruso; Antonia Brandonisio; Daniele Arcidiacono |
| Abstract: | The study aims to investigate the role of firms’ financial structure as a determinants of M&A transactions for real estate companies. The paper analyses how M&A transactions are influenced by particular aspects related to the choice of a specific financial structure, thus verifying leverage effects and the forms of financing. An interesting consideration could be made regarding the type of debt, i.e. whether it concerns bank debt or other forms of structured financing to develop M&A operations. Other noteworthy considerations are related to the volatility of the reference market, the characteristics of particular assets and specific macroeconomic conditions, which have unavoidable repercussions within the business environment.Ultimately, the paper can provide an in-depth perspective on optimizing the financial structure, thus enabling real estate companies to maximize benefits from M&A transactions.The present study could be particularly interesting in order to understand financial dynamics of real estate sector, offering practical insights for the stakeholders involved in extraordinary finance transactions. |
| Keywords: | financial structure; M&A; Market; real estate |
| JEL: | R3 |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2024-132 |
| By: | Cimini, Francesco; Kalantzis, Fotios |
| Abstract: | This study examines the impact of green and digital investments on the investment inefficiency level of European firms. We define investment inefficiency as the deviation from the optimal investment level, which depends on both the net present value (NPV) of the projects and the marginal benefit and cost of investment. Leveraging matched data from the European Investment Survey (EIBIS) and ORBIS, which results in a sample of 4, 892 firmyear observations from 27 European countries surveyed over the period 2021-2023, we employed a panel data regression model to estimate the effect of green and digital investments on investment inefficiency. Our analysis shows that both types of investments reduce investment inefficiency, particularly for under-investing firms. We also find evidence of a statistically significant interaction effect between green and digital investments for over-investing firms, suggesting that digital technologies can enhance the efficiency gains from green investments. Our results have important implications for policy makers and business managers who aim to foster the twin digital and green transition in Europe and improve their investment efficiency and competitiveness. |
| Keywords: | European Investment Bank Investment Survey, Investment Inefficiency, Green investment, Digital investment, Twin transition |
| JEL: | M41 G31 Q53 O33 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:eibwps:304395 |
| By: | Bonthala, Ram; Purohit, Advaith; Haile, Dagim; Munipalle, Pravith; Krishnan, Pranav |
| Abstract: | This paper explores the evolution of private equity (PE), tracing its origins to early investment models and analyzing its modern developments. The focus is on understanding the dynamics of PE performance during downturns, the role of dry powder, and the challenges of regulation and transparency. Additionally, insights from interviews with local private equity professionals shed light on decision-making, risk management, and valuation methods in the private equity industry today. |
| Date: | 2024–10–08 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:8t7rx |
| By: | Véronique Bessière (UM - Université de Montpellier, MRM - Montpellier Research in Management - UPVD - Université de Perpignan Via Domitia - UM - Université de Montpellier); Christian Goglin |
| Abstract: | his work analyzes the importance of personal values in equity crowdfunding investment choice. Employing a theoretical framework borrowing theories from the fields of finance, marketing, and psychology, our model proposes several antecedents for investment choice and focuses on the congruence between the investor's personal values and the values promoted by the startup during its fundraising campaign. The results of our laboratory experiment, based on real-life campaign material, suggest that the investor's personal values and interest in the project are more important than the perceived signal quality of the project in explaining the decision to invest. Furthermore, two opposed values emerge from the study-"Universalism" and "Power"-in line with the typical two-way classification of SRI investors into value-based and value-seeking investor groups. |
| Keywords: | Equity crowdfunding investment choice personal values value congruence affective reactions ethics II, Equity crowdfunding, investment choice, personal values, value congruence, affective reactions, Ethics |
| Date: | 2024–12–23 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04692721 |
| By: | Ritij Saini; Aditya Deora; Kirtesh Gadiya |
| Abstract: | The real estate sector is one of the key drivers of India's national economy, contributing about 7.3\% to the GDP. As the market evolves, more players enter, and government policies become more stringent, Indian real estate companies face increasing competition. Improving financial competitiveness is crucial for the survival and growth of these companies. This paper presents a financial competitiveness evaluation index system for Indian-listed real estate companies, covering profitability, solvency, and operational capacity. Using key financial ratios and a scoring system, the financial competitiveness of various companies was evaluated, revealing that companies with high scores have strong profitability and operational capacity. In contrast, those with lower scores struggle with solvency and working capital. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.06772 |
| By: | Jorge Abad (BANCO DE ESPAÑA); David Martínez-Miera (UC3M AND CEPR); Javier Suárez (CEMFI AND CEPR) |
| Abstract: | We study banks’ systemic risk-taking decisions in a dynamic general equilibrium model, highlighting the macroprudential role of bank capital requirements. Banks decide on their unobservable exposure to systemic shocks by balancing risk-shifting gains against the value of preserving their capital after such shocks. Capital requirements reduce systemic risk taking, but at the cost of reducing credit and output in calm times, generating welfare trade-offs. We find that systemic risk taking is maximal after long periods of calm and may worsen if capital requirements are countercyclically adjusted. Removing deposit insurance introduces market discipline but increases the bank capital necessary to support credit, implies lower (though far from zero) optimal capital requirements and has nuanced social welfare effects. |
| Keywords: | capital requirements, risk shifting, deposit insurance, systemic risk, financial crises, macroprudential policies |
| JEL: | G01 G21 G28 E44 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2441 |
| By: | Axelle Heyert (LaRGE Research Center, Université de Strasbourg); Laurent Weill (LaRGE Research Center, Université de Strasbourg) |
| Abstract: | This paper investigates whether financial inclusion affects life satisfaction. We perform regressions at the individual level on a large dataset of 59, 209 individuals from 29 countries. We find evidence that financial inclusion improves life satisfaction. We further establish that the beneficial effect of financial inclusion takes place through a better health, education and to a lesser extent through the launch of a business. We observe that the positive impact of financial inclusion on life satisfaction is greater in countries with higher income per capita, and lower in countries recently struck by a financial crisis. Our results indicate that promoting financial inclusion can enhance happiness. |
| Keywords: | financial inclusion, life satisfaction, banking. |
| JEL: | G21 I31 O16 P46 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:lar:wpaper:2024-07 |
| By: | Alair MacLean; Piotr Paradowski |
| Abstract: | This paper develops a model of financial success that draws on theories of financial capability, as well as those of cumulative advantage and the racial sedimentation of wealth. It uses data from the Survey of Consumer Finances accessed through the Luxembourg Wealth Study to estimate structural equation models that predict participation in a range of financial outcomes as well the value of the assets. It finds that those who have higher financial literacy, financial confidence, and consult with financial advisors are more likely to hold all types of assets, and have a greater dollar amount saved or invested. Net of these individual characteristics, people with fewer socioeconomic advantages have less financial capability, as well as lower financial success. In addition, there remain direct pathways between race/ethnicity and wealth. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:lis:lwswps:44 |
| By: | Julien Albertini; Xavier Fairise; Anthony Terriau |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:tep:teppwp:wp24-08 |
| By: | Koura Abdelghani (USMS - Université Sultan Moulay Slimane); Boudhar Abdeslam; Mohamed Koura Oudgou |
| Abstract: | This study provides a comprehensive contextual analysis of the Moroccan SME financing landscape, with a particular focus on addressing the undercapitalization issue as a significant barrier to their growth and sustainability. The research fills a gap in understanding how the structural limitations and unique characteristics of Moroccan SMEs hinder their ability to access and effectively utilize financial resources, particularly within the traditional banking system. The primary goal of the study is to critically evaluate the predominant reliance on bank credit for SME financing, identifying the challenges posed by risk perceptions, information asymmetries, and the constraints imposed by monetary policy and banks' regulation. The study utilizes a rigorous evaluation of both traditional and alternative financing mechanisms, such as participatory banks, the stock market, and private equity. It also includes an overview of the increasing role of public actors and the forms and intensity of government support provided to Moroccan SMEs. The findings offer actionable policy recommendations aimed at enhancing the effectiveness of the SME financing ecosystem. Our study emphasizes the need for targeted government interventions and institutional reforms while proposing future research directions to build on the insights gained from this analysis. |
| Keywords: | SMEs financing, Bank credit, Alternative financing, Public support, Subsidies and direct aids, Public guarantee schemes |
| Date: | 2024–08–28 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04681802 |
| By: | Daniel Huerta; Shelton Weeks; Jesse Wright |
| Abstract: | The COVID-19 pandemic was an unprecedented market disruption that had significant global economic consequences. In the face of uncertainty, the U.S. and virtually all other markets around the world halted economic activity and governments found innovative ways to support individuals, families, and companies during the time of crisis. The crisis crippled all corners of the market and forced a generalized shutdown. The U.S. REIT sector was not an exemption, the industry experienced a significant temporary shock to revenue and to the supply of capital which is crucial for operations and growth. In this paper, we examine the impact of the COVID-19 pandemic crisis on REIT dividend policy and capital raising. For our analyses, we employ accounting and dividend data from S&P Global Market Intelligence (Formerly SNL Financial), and debt and equity offerings from the National Association of Real Estate Investment Trusts (NAREIT). We seek to determine the severity of the COVID-19 pandemic crisis on the halt or partial disruption in REIT dividend payments and uncover the ways REIT managers coped with the short-term market shocks. In addition, we will determine whether the capital markets provided REITs with capital during these uncertain times. |
| Keywords: | Covid-19 pandemic; REIT capital raising; REIT dividend policy; REIT equity and debt offerings |
| JEL: | R3 |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2024-115 |
| By: | Tristan Jourde; Arthur Stalla-Bourdillon |
| Abstract: | This paper examines the dynamic nature of pro-environmental preferences through an analysis of sector valuations in global equity markets from 2018 to 2023. We classify companies into three groups based on their business activities: green (e.g., renewables), neutral, and brown (e.g., fossil energy). We then run panel regressions to test whether being in the green or brown sectoral category affects stock valuations. We find that investors value sector affiliation, positively for green and negatively for brown, even after controlling for other firm-level financial and extra-financial characteristics. The effect is sizeable, as we report a 24% overvaluation of companies in green sectors and a 12% undervaluation of companies in brown sectors on average compared to the rest of the market. In addition, companies in green sectors have come under increased investor scrutiny since 2018 and appear increasingly overvalued relative to the rest of the market. These results suggest that, for seemingly non-financial motives, investors have developed a strong preference for stocks in green sectors over time. |
| Keywords: | Environmental Preferences, Green Bubble, Stock Market, Stranded Assets, Valuation Ratios |
| JEL: | G10 G32 Q54 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:964 |