Financial factors and ownership structure are both part of the determinants of corporate R&D investment. Considering listed firms in the R&D intensive industries during the 2000s, this paper examines whether financial factors and ownership structure explain R&D investment in Japan. Following the methodology of Brown et al. (2009), which extends the dynamic investment model of Bond and Maghir (1...

a r t i c l e i n f o Keywords: Estimation of term structure of interest rate Financial reforms Latent factor extraction Level Monetary policy Yield curve movements The article identifies principal reasons underlying the movements of yield curve for government debt market in India for the period Jul '97 to Dec '11. The study finds that though statistically Svensson's (SV) (1994) model outperfor...

Diamond (1991) also posits that firms with high leverage might prefer long-term debt to avoid suboptimal liquidation, thus predicting a positive relation between leverage (LEVERAGE) and debt maturity. Myers (1977) argues that agency costs between shareholders and bondholders can be reduced by matching the maturity of assets (ASSET_MAT) to the maturity of liabilities. All else equal, firms with ...

We compile and analyze detailed information on the debt structure and interest rate derivative positions of nonfinancial firms in 2000 and 2002. We find that differences in debt structure across firms and time tend to be counterbalanced by differences in derivative positions. In particular, among derivative users, smaller firms tend to have relatively more interest rate exposure from liabilitie...

The importance of currency and maturity mismatches in the debt structure of emerging markets is an issue that can hardly be overemphasized. Yet, while many papers have explained how imbalances in the asset and liability structure of emerging markets can cause currency and financial crises, the factors that may have triggered such imbalances in the first place have received relatively little att...

This paper examines to what extent credit ratings directly affect capital structure decisions. The paper outlines discrete costs/benefits associated with firm credit rating level differences, and tests whether concerns for these costs/benefits directly affect debt and equity financing decisions. The tests find that firms near a rating upgrade or downgrade issue less debt relative to equity than...

Loan spreads are analysed for two types of loans. The …rst takes losses at maturity only; the second one follows the formulation of CFOs (Collateralized Fund Obligations), with losses registered over the lifetime of the contract. In both cases, the implementation requires the choice of a process for the underlying asset value and the identi…cation of the parameters. The parameters of the proces...

Abstract. The evaluation of structured credit products like baskets and collateralized debt obligations (CDOs) most often relies on the simulation of correlated default times for the underlying pool of credit instruments. Given the distribution of a default time vector one can find the distribution of the corresponding (cumulative) default quote path for a portfolio. In this note we show that t...

Using data from publicly traded South Korean corporations for the period 1980-94, this paper finds evidence that increases in financial liberalization that accompanied the more general process of financial globalization have significantly reduced the maturity structure of corporate debt contracts, thus lending partial empirical support to the idea that financial liberalization can be well descr...

In this paper, we formally derive a version of the Minskian taxonomy of the firms’ financial structure (hedge, speculative, and Ponzi types), under the economic growth context in the long run. As for the economic growth, we formalize the mechanism of debt-led (debt-burdened) growth where the economy expands as the debt variables increase (decrease). By explicitly introducing the relationship be...