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on Corporate Finance |
| By: | Torben Klarl (University of Bremen, Indiana University Bloomington); Alexander S. Kritikos (DIW Berlin, University of Potsdam, GLO Essen, CEPA); Knarik Poghosyan (DIW Berlin) |
| Abstract: | While Equity Crowdfunding (ECF) platforms are a virtual space for raising funds, geography remains relevant. To determine how location matters for entrepreneurs using equity crowdfunding (ECF), we analyze the spatial distribution of successful ECF campaigns and the spatial relationship between ECF campaigns and traditional investors, such as banks and venture capitalists (VCs). Using data from the two leading German platforms – Companisto and Seedmacht – we employ spatial eigenvalue filtering and negative binomial estimations. In addition, we introduce an event study based on the implementation of the Small Investor Protection Act in Germany allowing us to obtain causal evidence. Our combined analysis reveals a significant geographic concentration of successful ECF campaigns in some, but not all, dense areas. ECF campaigns tend to cluster in dense areas with VC activity, while they are less prevalent in dense areas with high banking activity, and are rarely found in rural areas. Thus, rather than closing the so-called regional funding gap, our results suggest that, from a spatial perspective, ECF fills the gap when firms in dense areas seek external financing below the minimum equity threshold offered by VCs and when there are few banks offering loans. |
| Keywords: | Crowdfunding, Finance Geography, Entrepreneurial Finance, Venture Capital (VC) Proximity |
| JEL: | G30 L26 M13 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:pot:cepadp:91 |
| By: | Mehdi Beyhaghi |
| Abstract: | Using a comprehensive dataset collected by the Federal Reserve, I find that over one-third of corporate loans issued by US banks are fully guaranteed by legal entities separate from borrowing firms. Using an empirical strategy that accounts for time-varying firm and lender effects, I find that the existence of a third-party credit guarantee is negatively related to loan risk, loan rate, and loan delinquency. Third party credit guarantees alleviate the effect of collateral constraints in credit market. Firms (particularly smaller firms) that experience a negative shock to their asset values are less likely to use collateral and more likely to use credit guarantees in new borrowings. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.12616 |
| By: | Katharina Lewellen; Gordon M. Phillips; Giorgo Sertsios |
| Abstract: | We provide a comprehensive analysis of the governance structures of nonprofit hospitals and hospital systems. We study both the internal governance mechanisms (boards of directors, incentive contracts) and external mechanisms (market for corporate control, government oversight), with particular focus on the latter. Nonprofit boards are unusually large, include employee directors, exhibit less industry expertise among outside directors, and face weak external oversight. CEO pay and turnover are largely unresponsive to non-financial metrics such as quality or charity provision. The disciplinary role of the market for corporate control is also weaker in the nonprofit sector: nonprofits with poor financial performance are half as likely to be acquired or closed as for-profits, and weak performance on non-financial metrics has no effect on acquisitions or closures. Using time-series and cross-sectional variation in state oversight of nonprofits, we find that oversight strength explains a substantial portion of the gap in takeover rates between for-profits and nonprofits. We conclude that nonprofit governance structures lack the attributes traditionally associated with “good governance.” |
| JEL: | G3 G30 G31 G34 G38 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34132 |
| By: | Billington, Stephen D. (Ulster University Business School, Ulster University); Colvin, Christopher L. (Queen’s Business School, Queen’s University Belfast); Coyle, Christopher (Queen’s Business School, Queen’s University Belfast) |
| Abstract: | We examine how the design of the patent system shapes firms’ access to finance. We exploit a UK reform that introduced substantive examination into the patent application process, improving the quality of information available to investors about the value of firms’ innovation. Using a newly compiled dataset of officially listed corporations, we find that firms with examined patents increased their borrowing, reflecting improved access to capital markets, which translated into firm growth. Our results highlight how patent examination can function as a screening mechanism that reduces information asymmetry, strengthens the signalling value of patents, and mitigates financial barriers to innovation. |
| Keywords: | firm finance, debt, innovation, patents, patent examination, signalling. JEL Classification: G32, N23, N43, O16, O31, O34 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:767 |
| By: | Manabu Furuta (Graduate School of Economics, Kobe University) |
| Abstract: | This study evaluates the effectiveness of government financial support for small and medium-sized enterprises (SMEs) in Japan during the COVID-19 pandemic. The Japanese government implemented various programs to support SMEs facing financial distress, leading to a notable decline in bankruptcies. We find that SMEs with strong ties to main banks and exporters were more likely to receive support, while subsidiaries or affiliates of large corporations were less likely to benefit. Although prior studies suggest that such policies may encourage "zombie" firms, our analysis shows that in the manufacturing sector, financial assistance fostered investment. JEL Classification: D22; D25; L52 |
| Keywords: | SMEs; COVID-19; Financial Support; PSM-DID |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:koe:wpaper:2518 |
| By: | Mauricio Calani; Paula Margaretic; David Moreno |
| Abstract: | This paper exploits the exogenous changes of destination/origin-specific trade uncertainty (TU) to investigate the direct and spillover effects of TU on firms' foreign-trade operations and credit outcomes. Using transaction-level data of Chilean firms and banks, we first show that increasing TU dampens export growth through a deterioration of firms' working capital. This is especially true when exports are mainly financed by cash-in-advance, a payment mode that entails shorter and less permanent relationships between firms. Second, we find that increases in TU induce a bank-firm portfolio redistribution away from small firms toward large importers and firms involved in the global value chain (GVC). Our results are consistent with a risk-mitigating channel from banks that grant larger loans to firms that are perceived as relatively less risky during periods of high trade tensions. This way, TU shocks spill over to other firms not initially affected by TU through the bank credit market. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:chb:bcchwp:1027 |
| By: | Qing Hu (Kansai University); Ryo Masuyama (Kushiro Public University of Economics); Tomomichi Mizuno (Kobe University) |
| Abstract: | It is well known that common ownership lessens competition, which tends to decrease consumer and total surpluses. This study challenges this well known result by introducing downstream firms' voluntary investment. We consider a vertical market with one upstream firm and two downstream firms, where the downstream firms engage in voluntary investment that can reduce the upstream firm's marginal cost. We show that common ownership may increase the consumer and total surpluses if the upstream marginal cost without investment is sufficiently high and the investment is sufficiently efficient. We also find our results are robust even in the market with two supply chains. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:koe:wpaper:2520 |
| By: | Pulak Ghosh; Boris Vallee; Yao Zeng |
| Abstract: | Borrowers’ use of cashless payments improves their access to capital from FinTech lenders and predicts a lower probability of default. These relationships are stronger for cashless technologies providing more precise information, and for outflows. Cashless payment usage complements other signals of borrower quality. We rationalize these empirical findings using a framework in which borrowers signal their lower likelihood of diverting cash flows through payment technology choice, and screening accuracy is further strengthened by informational complementarities. The informational synergy we uncover provides a rationale for the joint rise of cashless payments and FinTech lending, as well as for open banking. |
| JEL: | E42 G21 G23 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34148 |