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on Corporate Finance |
| By: | Gonzalo Basante Pereira; Ina Simonovska |
| Abstract: | We develop a framework to measure the severity of financial constraints for young firms across countries. Using ORBIS balance-sheet data for 23 economies, we show that short-term leverage rises while long-term leverage falls early in firms' life cycles, with this pattern persisting longer where contract enforcement is weaker. We build a model of optimal financing under limited enforcement with endogenous debt maturity and blueprint capacity that matches these patterns and enables structural measurement of financial constraints. The framework decomposes the funding gap into within-firm borrowing constraints that ease with repayment history and a scale distortion identifiable through cross-country comparisons. |
| Keywords: | contract enforcement, capital structure, debt maturity, young firms, cross-country financial frictions |
| JEL: | F34 F36 O16 E22 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12596 |
| By: | Fei, Yue; Hege, Ulrich; Jia, Xiao |
| Abstract: | We study how IPO reforms transmit to venture capital (VC) markets using the introduction of China’s entrepreneurial boards, ChiNext and the registration-based STAR. We document that both boards attract younger, higher-growth firms with weaker fundamentals in levels, but postIPO growth persists for ChiNext firms while decelerating sharply for STAR firms. VC backing plays different roles across regimes: on ChiNext it aligns with valuation premia and long-run outperformance, whereas on STAR it mainly predicts higher first-day returns. To identify causal effects on VC allocation, we construct novel text-based regulatory exposure measures from listing documents using keyword matching and Sentence-BERT semantic similarity, and show that VC financing reallocates toward firms more aligned with "supported" activities. |
| Keywords: | IPO Reforms; IPO Listing Requirements; Venture Capital; Business Description; BERT; China |
| JEL: | G24 G28 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:131666 |
| By: | Cortez, Michael Angelo A.; Rivera, John Paolo R. |
| Abstract: | This study investigates the relationship between Environmental, Social, and Governance (ESG) performance and corporate financial performance (CFP) among publicly listed firms in the Philippines from 2015 to 2024. Using Bloomberg's ESG scores, a triangulated econometric framework was employed that combines contemporaneous estimation via Feasible Generalized Least Squares and dynamic panel modeling via the Panel Generalized Method of Moments. The analysis incorporated both aggregated ESG scores and disaggregated pillars—Environmental (E), Social (S), and Governance (G)—and examined their respective impacts across a comprehensive set of CFP indicators, including profitability, liquidity, solvency, efficiency, growth, and market valuation. Results revealed that Governance performance emerged as the most consistently significant predictor, demonstrating positive associations with firm growth and market-based metrics. Governance scores also exerted robust contemporaneous effects, particularly on asset growth and market capitalization. However, social performance exhibited delayed financial implications, with lagged effects primarily influencing profitability indicators in the dynamic panel model. Environmental scores showed limited and less consistent impact, reflecting the underweighting of environmental strategies in firm-level financial outcomes during the period. Meanwhile, macroeconomic variables such as gross domestic product (GDP) growth and the weighted average cost of capital (WACC) were included as moderators. While GDP growth had minimal influence, WACC remained a binding constraint in specific governance-CFP pathways, indicating the persistent role of capital cost management in sustainability-aligned financial decisions. These findings provide actionable insights for corporate managers, investors, and policymakers by highlighting the financial relevance of governance-driven ESG strategies, the time-sensitive value of social investments, and the need to manage capital costs prudently to promote ESG-aligned performance. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph. |
| Keywords: | ESG performance, corporate financial performance, governance and firm value, dynamic panel data, Philippine publicly listed firms |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:phd:dpaper:dp_2026-06 |
| By: | Rogantini Picco, Anna; Amberg, Niklas; Jacobson, Tor; Quadrini, Vincenzo |
| Abstract: | We use a comprehensive Swedish credit register to document that firms across the size distribution have access to substantial borrowing capacity via credit lines. However, most firms choose not to use all available credit, even though interest rates are low compared to their return on equity. The low utilization of credit is consistent with a theoretical model in which utilization rates decrease with both real and financial uncertainty. We estimate the model structurally at the firm level and find that financial uncertainty driven by liquidity shocks is much more important than real uncertainty driven by cash flow shocks for explaining the low utilization of credit. JEL Classification: D22, E44, G21, G32 |
| Keywords: | banks, credit constraints, credit lines, precautionary behavior, uncertainty |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263216 |
| By: | Nobuyoshi YAMORI |
| Abstract: | Using the 2023 RIETI Survey of Branch Managers at Regional Financial Institutions, this paper examines changes in the relationship between credit guarantee schemes and unsecured lending after the COVID-19 pandemic and analyzes how screening behavior and personnel evaluation systems influence how credit guarantees are used. The results confirm that the expansion of fully guaranteed pandemic loans temporarily weakened the risk sharing between private financial institutions and public guarantees which was an underlying principle of previous reforms. The results also show that reliance on guaranteed lending is strongly affected by internal organizational factors, including sales targets emphasizing loan volume and engagement in business-based assessments. Furthermore, institutions that actively promote human resource development and business evaluation maintain high standards of screening and firm support while continuing to utilize credit guarantees. These findings suggest that policy design and operation of credit guarantee schemes should consider internal organizational behavior and evaluation systems within financial institutions. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:eti:rdpsjp:26023 |