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on Corporate Finance |
| By: | Mohammadhossien Rashidi |
| Abstract: | Exit timing after an IPO is one of the most consequential decisions for venture capital (VC) investors, yet existing research focuses mainly on describing when VCs exit rather than evaluating whether those choices are economically optimal. Meanwhile, large language models (LLMs) have shown promise in synthesizing complex financial data and textual information but have not been applied to post-IPO exit decisions. This study introduces a framework that uses LLMs to estimate the optimal time for VC exit by analyzing monthly post IPO information financial performance, filings, news, and market signals and recommending whether to sell or continue holding. We compare these LLM generated recommendations with the actual exit dates observed for VCs and compute the return differences between the two strategies. By quantifying gains or losses associated with following the LLM, this study provides evidence on whether AI-driven guidance can improve exit timing and complements traditional hazard and real-options models in venture capital research. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.00810 |
| By: | Bianca He; Lauren Mostrom; Amir Sufi |
| Abstract: | Financial Technology (“FinTech”) firms invest significantly more in customer capital relative to traditional financial firms, and such investment builds valuable customer capital. Higher investment by FinTech firms is not accounted for by sectoral focus or differences in firm age. Reasons for higher customer capital investment are explored, including the need to build trust with customers, the focus on downstream segments of the financial marketplace, the operation of platform-based business models, and a heavier reliance on valuable customer data. |
| JEL: | G23 M3 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34710 |
| By: | Anna Burova (Bank of Russia, Russian Federation); Denis Koshelev (Bank of Russia, Russian Federation); Irina Kozlovtceva (Bank of Russia, Russian Federation) |
| Abstract: | Credit lines are an important source of financing for economic activities in different countries, including Russia. It is important to identify the factors affecting the utilisation of contingent loans in order to better understand the tendencies on the financial market and to identify possible risks for all participants in the loan market. We use credit registry data on all the credit on banks’ balance sheets as of the beginning of 2017. We split our study into three parts: credit lines which have reached their limits, credit lines with the full limit still available and credit lines in the middle state. For fully used credit lines, we show that a large share of them appear similar to regular loans (the company immediately uses the entire available limit and repays the funds when the loan matures). For two other groups we identify factors affecting the timing of the first credit line draw-down and the utilisation rate. For several factors we show that their impact coincides with what has been shown in other studies: dummy variable on the credit line issued by the company’s main bank (credit lines obtained from the main bank are used more intensively), the age of credit line (the older the credit line, the less the utilisation rate), etc. Other variables in this study show the opposite effect compared to other papers. For example, the length of relationship with the bank in earlier studies negatively affects the utilisation rate of the credit line, while we can see that this factor has a positive impact in this study. We also show that lines with the fixed interest rate are used more intensively than those with floating rates. In cases of non-revolving credit lines this result is robust across all time sub-samples, both during tightening and easing of credit conditions. These findings may be significant for understanding the credit line utilisation process for the financial market participants as well as for monetary and prudential policies. |
| Keywords: | Corporate credit, credit line utilisation, credit registry, micro-level data, bank lending, Russia |
| JEL: | G21 G32 D22 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:bkr:wpaper:wps158 |
| By: | FUKAO, Kyoji; KIM, YoungGak; KWON, Hyeog Ug |
| Abstract: | This study examines the dynamics of total factor productivity (TFP) by firm size to clarify the recent drivers of productivity growth in the Japanese economy, utilizing firm-level financial data from Teikoku Databank (TDB) spanning the years 1999 to 2020. In particular, we examine Japan’s distinctive “negative exit effect” by differentiating among various types of firm exit, including bankruptcy, closure, dissolution, and mergers. Our analysis shows that while within-firm productivity improvements at large firms played a dominant role in driving productivity growth through the 2000s, reallocation effects have become increasingly important since the 2010s. Notably, a substantial share of high-productivity firms exited the market through mergers, accounting for nearly half of the overall negative exit effect. Furthermore, while TFP among acquiring firms tends to stagnate in the short term after mergers, their labor productivity shows a significant and sustained increase, likely driven by capital deepening. These findings provide new insights into the shifting drivers of productivity growth in Japan—from within-firm productivity growth to market-driven resource reallocation—as well as into firm-size heterogeneity and the role of mergers in shaping productivity dynamics. |
| Keywords: | productivity dynamics, firm size heterogeneity, negative exit effect, mergers and acquisitions, resource reallocation, total factor productivity, SMEs, Japan |
| JEL: | O47 D24 L25 O53 G34 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:hit:tdbcdp:e-2025-03 |
| By: | Daniele Caratelli; Jacob Lockwood; Robert Mann; Kevin Zhao |
| Abstract: | Countercyclical capital constraints allow banks to provide additional credit to consumers during recessions, smoothing consumption volatility (Working Paper no. 26-01). |
| Date: | 2026–01–22 |
| URL: | https://d.repec.org/n?u=RePEc:ofr:wpaper:26-01 |
| By: | Kanwal, Zainab; Audi, Marc; Alam, Mehboob |
| Abstract: | This study quantifies the impact of corporate tax policies on shareholder equity with a particular focus on the role of effective tax planning, potential violations, and the overall value of firm operations. A descriptive–correlational research design was adopted, drawing on the theoretical foundations of agency theory, stakeholder theory, and legitimacy theory. The analysis was conducted on 150 multinational corporations operating in the technology, pharmaceutical, and manufacturing sectors over the period 2018 to 2023. Panel data regression results demonstrate a significant negative association between the effective tax rate and firm value. This finding explains that tax-minimizing strategies contribute positively to firm valuation. However, the study further reveals that the benefits of stratified effective tax rate strategies can only be sustained in the long run under conditions of strong governance structures. Firms with well-developed governance systems, including independent boards of directors and robust audit and control mechanisms, were able to mitigate the reputational and regulatory risks typically associated with aggressive tax minimization. An industry-level analysis highlights that the technology sector, which relies heavily on intangible assets, faces stricter regulatory scrutiny and correspondingly higher risk exposure. The evidence indicates that while tax relocations and planning strategies may enhance short-term shareholder value, unethical practices or deviations from regulatory standards compromise long-term sustainability. The study concludes that there is a pressing need for transparent, stakeholder-oriented, and well-regulated taxation practices. By embedding such practices into corporate governance frameworks, firms can achieve a balance between maximizing shareholder value and ensuring compliance with ethical and legal expectations. That would present a sustainable value creation that is suitable for the managers and policymakers. |
| Keywords: | Corporate Tax Policies, Effective Tax Rate, Shareholder Value, Corporate Governance |
| JEL: | H2 M10 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127563 |