The Experts below are selected from a list of 20442 Experts worldwide ranked by ideXlab platform
Matteo P Arena - One of the best experts on this subject based on the ideXlab platform.
-
the corporate choice between Public debt bank loans traditional private debt placements and 144a debt issues
Review of Quantitative Finance and Accounting, 2011Co-Authors: Matteo P ArenaAbstract:The main purpose of this study is to examine the determinants of the corporate choice between different forms of debt financing. By analyzing the most comprehensive sample of US corporate debt issues to date, I find that firms that issue 144A debt have significantly lower credit quality and higher information asymmetry than firms that issue traditional non-bank private debt. Further, the study shows that traditional private placements, rather than bank loans, are the favorite private debt source for firms with good credit quality. I also show that the firm characteristics of traditional private debt issuers have significantly changed after 1990 through to 2003. My results suggest the following pecking order of debt choices which is conditional on credit quality. In other words, high credit quality firms prefer Public Bond offerings and small firms, with good credit quality, are more likely to issue traditional private debt. A large group of firms characterized by moderate credit quality make extensive use of bank loans and poor credit quality firms preferentially issue 144A debt.
-
the corporate choice between Public debt bank loans traditional private debt placements and 144a debt issues
Social Science Research Network, 2010Co-Authors: Matteo P ArenaAbstract:The main purpose of this study is to examine the determinants of the corporate choice between different forms of debt financing. By analyzing the most comprehensive sample of U.S. corporate debt issues to date, I find that firms that issue 144A debt have significantly lower credit quality and higher information asymmetry than firms that issue traditional non-bank private debt. Further, the study shows that traditional private placements, rather than bank loans, are the favorite private debt source for firms with good credit quality. I also show that the firm characteristics of traditional private debt issuers have significantly changed after 1990 through to 2003. My results suggest the following pecking order of debt choices which is conditional on credit quality. High credit quality firms prefer Public Bond offerings and small firms, with good credit quality, are more likely to issue traditional private debt. A large group of firms characterized by moderate credit quality make extensive use of bank loans and poor credit quality firms preferentially issue 144A debt.
Dimitris Papanikolaou - One of the best experts on this subject based on the ideXlab platform.
-
financial frictions and employment during the great depression
Journal of Financial Economics, 2019Co-Authors: Carola Frydman, Dimitris Papanikolaou, Efraim BenmelechAbstract:We provide new evidence that a disruption in credit supply played a quantitatively significant role in the unprecedented contraction of employment during the Great Depression. To analyze the role of financing frictions in firms' employment decisions, we use a novel, hand-collected dataset of large industrial firms. Our identification strategy exploits preexisting variation in the need to raise external funds at a time when Public Bond markets essentially froze. Local bank failures inhibited firms' ability to substitute Public debt for private debt, which exacerbated financial constraints. We estimate a large and negative causal effect of financing frictions on firm employment. Interpreting the estimated elasticities through the lens of a simple structural model, we find that the lack of access to credit may have accounted for 10% to 33% of the aggregate decline in employment of large firms between 1928 and 1933.
-
financial frictions and employment during the great depression
Journal of Financial Economics, 2019Co-Authors: Carola Frydman, Dimitris Papanikolaou, Efraim BenmelechAbstract:Abstract We provide new evidence that a disruption in credit supply played a quantitatively significant role in the unprecedented contraction of employment during the Great Depression using a novel, hand-collected dataset of large industrial firms. Our identification strategy exploits preexisting variation in the need to raise external funds at a time when Public Bond markets essentially froze. Local bank failures inhibited firms’ ability to substitute Public debt for private debt, which exacerbated financial constraints. We estimate a large and negative causal effect of financing frictions on firm employment. We find that the lack of access to credit likely accounted for a substantial fraction of the aggregate decline in employment of large firms between 1928 and 1933.
Joao A C Santos - One of the best experts on this subject based on the ideXlab platform.
-
the decision to first enter the Public Bond market the role of firm reputation funding choices and bank relationships
Journal of Banking and Finance, 2008Co-Authors: Galina Hale, Joao A C SantosAbstract:This paper uses duration analysis to investigate the timing of firms' decision to first access the Public Bond market. We find that, consistent with Diamond's (1991) model, reputation has a non-monotonic effect on the timing of firms' first Public Bond issue: firms with the highest and lowest reputation enter the Public Bond market earlier than firms with intermediate reputation. We also find that, controlling for reputation, issuing a private Bond or taking out a syndicated loan speeds up firms' entry to the Public Bond market. Among the firms that issue private Bonds, those that select as an underwriter for their first Public Bond issue a bank that bought their prior private placements are able to access the Public Bond market faster than those which do not capitalize on these relationships. In contrast, the relationships that firms develop with banks when they borrow in the syndicated loan market do not affect the timing of their access to the Public Bond market. Finally, our results show that entry in the Public Bond market is important in that it lowers the cost of raising external funding subsequently in both the private Bond market and the syndicated loan market.
-
the decision to first enter the Public Bond market the role of firm reputation funding choices and bank relationships
Journal of Banking and Finance, 2008Co-Authors: Galina Hale, Joao A C SantosAbstract:Abstract This paper uses survival analysis to investigate the timing of a firm’s decision to issue for the first time in the Public Bond market. We find that firms that are more creditworthy and have higher demand for external funds issue their first Public Bond earlier. We also find that issuing private Bonds or taking out syndicated loans is associated with a faster entry to the Public Bond market. According to our results, the relationships that firms develop with investment banks in connection with their private Bond issues and syndicated loans further speed up their entry to the Public Bond market. Finally, we find that a firm’s reputation has a “U-shaped” effect on the timing of a firm’s Bond IPO. Consistent with Diamond’s reputational theory, firms that establish a track record of high creditworthiness as well as those that establish a track record of low creditworthiness enter the Public Bond market earlier than firms with intermediate reputation.
-
do banks price their informational monopoly
Journal of Financial Economics, 2008Co-Authors: Galina Hale, Joao A C SantosAbstract:Theory suggests that banks' private information lets them hold up borrowers for higher interest rates. Since new information about a firm is revealed at the time of its Bond IPO, it follows that banks will be forced to adjust their loan interest rates downwards after firms undertake their Bond IPO. We test this hypothesis and find that firms are able to borrow at lower interest rates after their Bond IPO. Importantly, firms that get their first credit rating at the time of their Bond IPO benefit from larger interest rate savings than those that already had a credit rating. These findings provide support for the hypothesis that banks price their informational monopoly. We also find that it is costly for firms to enter the Public Bond market.
-
the decision to first enter the Public Bond market the role of firm reputation funding choices bank relationships
Social Science Research Network, 2004Co-Authors: Galina Hale, Joao A C SantosAbstract:This paper uses duration analysis to investigate the timing of firms' decision to first access the Public Bond market. We find that, consistent with Diamond's (1991) model, reputation has a non-monotonic effect on the timing of firms' first Public Bond issue: firms with the highest and lowest reputation enter the Public Bond market earlier than firms with intermediate reputation. We also find that, controlling for reputation, issuing a private Bond or taking out a syndicated loan speeds up firms' entry to the Public Bond market. Among the firms that issue private Bonds, those that select as an underwriter for their first Public Bond issue a bank that bought their prior private placements are able to access the Public Bond market faster than those which do not capitalize on these relationships. In contrast, the relationships that firms develop with banks when they borrow in the syndicated loan market do not affect the timing of their access to the Public Bond market. Finally, our results show that entry in the Public Bond market is important in that it lowers the cost of raising external funding subsequently in both the private Bond market and the syndicated loan market.
Christopher D Williams - One of the best experts on this subject based on the ideXlab platform.
-
the effect of bank monitoring on Public Bond terms
Journal of Financial Economics, 2019Co-Authors: Derrald Stice, Christopher D WilliamsAbstract:Abstract This study examines the effect of bank loan monitoring on Public Bond contract design. We find that Bond yield spreads are lower and that Bond issuance amounts are larger when a borrower has recently obtained a private loan, consistent with Bond issuers benefiting from the screening and ongoing monitoring of banks. We find that these Bonds include more covenants than Bonds issued without the cross-monitoring of banks, consistent with Bondholders wanting to protect themselves from private lenders. This effect is larger for firms with high information asymmetry and larger potential conflicts between different lender types. Our results are robust to a battery of sensitivity tests. Overall, our empirical results suggest that borrowers that precede their Public Bond issuances with private loan agreements receive more favorable Bond terms. Meanwhile, these benefits are associated with the cost of increased monitoring by Public Bonds.
-
the effect of bank monitoring on Public Bond terms
Social Science Research Network, 2018Co-Authors: Derrald Stice, Christopher D WilliamsAbstract:This study examines the effect of bank loan monitoring on Public Bond contract design. We find that Bond yield spreads are lower and that Bond issuance amounts are larger when a borrower has recently obtained a private loan, consistent with Bond issuers benefiting from the screening and ongoing monitoring of banks. We find, however, that these Bonds include more covenants than Bonds issued without the cross-monitoring of banks, consistent with Bondholders wanting to protect themselves from private lenders. This effect is larger for firms with high information asymmetry and larger potential conflicts between different lender types. Our results are robust to a battery of sensitivity tests. Overall, our empirical results suggest that borrowers that precede their Public Bond issuances with private loan agreements receive more favorable Bond terms; however, these benefits are associated with the cost of increased monitoring by Public Bonds.
Efraim Benmelech - One of the best experts on this subject based on the ideXlab platform.
-
financial frictions and employment during the great depression
Journal of Financial Economics, 2019Co-Authors: Carola Frydman, Dimitris Papanikolaou, Efraim BenmelechAbstract:We provide new evidence that a disruption in credit supply played a quantitatively significant role in the unprecedented contraction of employment during the Great Depression. To analyze the role of financing frictions in firms' employment decisions, we use a novel, hand-collected dataset of large industrial firms. Our identification strategy exploits preexisting variation in the need to raise external funds at a time when Public Bond markets essentially froze. Local bank failures inhibited firms' ability to substitute Public debt for private debt, which exacerbated financial constraints. We estimate a large and negative causal effect of financing frictions on firm employment. Interpreting the estimated elasticities through the lens of a simple structural model, we find that the lack of access to credit may have accounted for 10% to 33% of the aggregate decline in employment of large firms between 1928 and 1933.
-
financial frictions and employment during the great depression
Journal of Financial Economics, 2019Co-Authors: Carola Frydman, Dimitris Papanikolaou, Efraim BenmelechAbstract:Abstract We provide new evidence that a disruption in credit supply played a quantitatively significant role in the unprecedented contraction of employment during the Great Depression using a novel, hand-collected dataset of large industrial firms. Our identification strategy exploits preexisting variation in the need to raise external funds at a time when Public Bond markets essentially froze. Local bank failures inhibited firms’ ability to substitute Public debt for private debt, which exacerbated financial constraints. We estimate a large and negative causal effect of financing frictions on firm employment. We find that the lack of access to credit likely accounted for a substantial fraction of the aggregate decline in employment of large firms between 1928 and 1933.