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on Corporate Finance |
| By: | Becker, Bo; Josephson, Jens |
| Abstract: | Many countries' insolvency systems focus on restructuring financial liabilities, and ignore operational liabilities such as leases and long-term supplier contracts. We model insolvency procedures with and without operational restructuring options. Such options avoid excessive liquidation of firms with significant non-financial obligations. Ex-ante, this option should increase debt capacity, especially in industries with inputs supplied under executory contract. We test this hypothesis around the introduction of a new law in Israel which facilitated the rejection of contracts, and by comparing capital structures for industries with high lease obligations between the U.S. and other countries. Empirical results confirm that operating restructuring is a key aspect of insolvency. |
| Keywords: | Insolvency; Bankruptcy; Restructuring |
| JEL: | G30 G32 G33 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19449 |
| By: | Kosekova, Kamelia; Maddaloni, Angela; Papoutsi, Melina; Schivardi, Fabiano |
| Abstract: | We document the structure of firm-bank relationships for the eleven largest euro area countries and present new stylized facts using data from the Eurosystem credit registry - AnaCredit. We look at the number of banking relationships, reliance on the main bank, credit instruments, loan maturity, and interest rates. Firms in Southern Europe borrow from more banks and obtain a lower share of credit from the main bank than those in Northern Europe. They also tend to borrow more on short-term, more expensive instruments and to obtain loans with shorter maturity. This is consistent with the hypothesis that firms in Southern Europe rely less on relationship banking and obtain credit less conducive to firm growth, in line with their smaller average size. Relationship lending does not translate into lower rates, possibly because banks appropriate part of the surplus generated by relationship lending through higher rates. Finally, assortative matching, according to which small banks specialize in supplying credit to small firms, is stronger in Northern European countries. |
| Keywords: | Anacredit; Corporate financing; Bank credit |
| JEL: | G21 G3 G32 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19464 |
| By: | Ambler, Kate; Bakhtiar, M. Mehrab; DeBrauw, Alan; Uddin, Mohammad Riad |
| Abstract: | Credit market failures may reflect voluntary withdrawal by risk-averse borrowers in addition to supply-side constraints. We conduct a randomized trial with 1, 517 Bangladeshi households, offering cattle financing through conventional loans or profit-sharing contracts that spread risk between the farmer and the financial partner. Overall, interest in and take-up of the profit-sharing contracts were modestly higher than the conventional loans. However, conventional loan take-up was much lower among risk-averse farmers, and profit-sharing eliminated the take-up gap between risk-averse and non-risk-averse farmers. We find that it is male risk preferences that are associated with these decisions even when contracts explicitly target women. Livestock investment increases under both contracts with no evidence of moral hazard under profit-sharing. |
| Keywords: | Agricultural Finance, Farm Management |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404341 |
| By: | Gyöngyi Lóránth (University of Vienna & CEPR); Alan D. Morrison (Saïd Business School, University of Oxford, CEPR, & ECGI); Jing Zeng (University of Bonn & CEPR) |
| Abstract: | We study how firms can design their organizational structures to overcome dynamic commitment problems when entering new markets or technologies. A manager must exert costly effort to first develop and subsequently manage an investment opportunity. Ex post, the firm underinvests in projects that generate high management rents. However, the prospect of those rents helps offset the manager’s initial project development cost, making ex ante commitment to invest optimal. Levered subsidiaries mitigate this time-consistency problem by introducing risk-shifting incentives that counteract underinvestment. Subsidiaries are most valuable for projects that are costly to develop, have moderate management costs, and yield returns uncorrelated with existing business. |
| Keywords: | Organizational structure, investment strategy, branch, subsidiary |
| JEL: | G32 G34 L22 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:423 |
| By: | Mohammed Ouargani (ENCG - École Nationale de Commerce et de Gestion d'Agadir - Université Ibn Zohr = Ibn Zohr University [Agadir]); Bouchra Radi (ENCG - École Nationale de Commerce et de Gestion d'Agadir - Université Ibn Zohr = Ibn Zohr University [Agadir]) |
| Abstract: | This study examines the impact of ownership structure on ESG performance among firms listed on the Casablanca Stock Exchange over the period 2019–2024. Using a balanced panel of 40 Moroccan listed companies and Refinitiv ESG scores, the research analyzes the effects of institutional ownership, family ownership, state ownership, and ownership concentration on firms' sustainability performance. The study employs panel data regression models, including pooled OLS, Random Effects, and Fixed Effects estimations. The findings reveal that institutional ownership positively influences ESG performance, while family ownership shows a negative relationship with ESG engagement. In contrast, state ownership and ownership concentration do not exhibit significant effects after controlling for firm-specific heterogeneity. The study contributes to the literature on corporate governance and sustainable finance by providing evidence from an emerging African market characterized by concentrated ownership structures and evolving ESG practices. Keywords: ESG performance; ownership structure; corporate governance; Morocco. |
| Keywords: | African Scientific Journal, Morocco, corporate governance, ownership structure |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05635076 |
| By: | Amore, Mario Daniele; Bennedsen, Morten; Mehrotra, Vikas; Shim, Jungwook; Wiwattanakantang, Yupana |
| Abstract: | This study investigates the unique characteristics of placeholder CEOs in family firms, distinguishing them from professional CEOs. Placeholder CEOs, i.e. non-family executives serving between two family CEOs, play a crucial role in maintaining dynastic control during leadership transitions when family heirs are not ready. Case studies of prominent family firms, such as Bering Bank, Estée Lauder, Ford, H&M, Hermes, Toyota, and Zara, illustrate this succession practice. Our empirical analysis of Japanese family firms from 1949 to 2015 shows that placeholder CEOs constitute about 28% of all non-family CEO appointments. Placeholder CEOs are typically older, better educated, and have longer tenures than conventional professional CEOs. Appointed when patriarchs age and without ready family heirs, placeholder CEOs maintain the performance level of family predecessors, while professional CEOs generally improve firm performance. |
| Keywords: | Ownership; Succession |
| JEL: | G32 L26 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19448 |
| By: | Amberg, Niklas; Becker, Bo |
| Abstract: | Banks’ branch networks are contracting rapidly in many countries. We study the effects of these large-scale branch closures on firms’ access to credit and real economic activity. Our empirical setting is Sweden, where two thirds of all bank branches have closed in the past two decades. Using a shift-share instrument and micro data comprising the near-universe of Swedish firms and bank branches, we document that corporate lending declines rapidly following branch closures, mainly via reduced lending to small, collateral-poor, and risky firms. The reduced credit supply has substantial real effects: local firms experience a decline in employment and sales and an increase in exit risk after branch closures. Our results thus demonstrate that the disappearance of bank branches have far-reaching implications for the economy. |
| Keywords: | Banks; Credit supply; Soft information |
| JEL: | D22 G21 G32 R12 R32 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19450 |
| By: | Lu, Ruichang; Massa, Massimo; Qian, Wenlan; Zhang, Hong |
| Abstract: | The Community Reinvestment Act (CRA) promotes mortgage lending by banks to low- to mid-income borrowers. Could it consequently crowd out corporate lending? Our findings suggest the opposite, as relationship and investment-grade firms receive more loans from CRA-regulated banks. These CRA-induced loans are larger and cheaper ex ante but carry a moderately higher distress risk ex post. Recipient firms repurchase shares instead of making investments. These findings suggest a novel and unintended crowd-in policy implication. Banks subject to bank-level risk constraints may be incentivized to extend credit to high-quality corporate clients to offset the CRA-induced risk from mortgage lending. |
| JEL: | G12 G2 G32 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19396 |