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...

We analyze the effect of an exogenous shock to the Italian mortgage market and we show that most households do not act rationally when it comes to take mortgage-refinancing decisions. Thanks to a new legislation passed in 2007, borrowers have been allowed to refinance their loans at no cost. This reform— along with the drop of interest rates occurred between 2008 and 2009—has produced a unique ...

Using Japanese firms that went public during the period 1998-2006, we find that independent venture capitalist-backed IPO firms are significantly younger and smaller than IPO companies backed by venture capital firms that are subsidiaries of financial institutions. Independent venture capitalists tend to make firms go public on stock exchanges with less strict listing requirements. Importantly,...

In the recent recession and current economic recovery, policymakers have supported housing prices, expecting that improvement in the balance sheets of banks and consumers will spur economic activity. Considering the period of 1988 through 2006, we document that banks which are active in strong housing markets increase mortgage lending and decrease commercial lending. Firms that borrow from thes...

We provide new rationales for corporate venturing (CV), based on competition for talented managers. As returns to venturing increase, …rms engage in CV for reasons other than capturing these returns. First, higher venturing returns increase managerial compensation, to which …rms respond by increasing the power of incentives. Managers increase e¤ort, prompting …rms to reallocate them to new vent...

I provide a micro-foundation for dynamically incomplete contracts that are renegotiated over time. The micro-foundation is based on showing that such contracts implement the optimal complete contract in a general dynamic model provided the players have “preference-for-robustness.” Preference-for-robustness is a way of modeling players perpetually having a fuzzy idea as time passes about events ...

We study the leverage of firms making large dividend increases. Over the five years following the dividend increase they raise leverage enough to finance the entire dividend increase for that period with debt. This is not explained by trade-off variables or the pecking order. The effect is greatest for big firms with low-powered incentives, suggesting an agency effect whereby they make large di...

This paper analyzes how property rights affect the allocation of firms’ available resources among different types of assets. In particular, we investigate empirically for a large number of countries whether firms in environments with more secure property rights allocate available resources more towards intangible assets and consequentially grow faster. We find that improved asset allocation due...

This paper examines how control and ownership structure affect share repurchases in an emerging market where controlling families derive large private benefits. Whereas firms with concentrated ownership often pay cash dividends, firms with weak control rights often repurchase shares. The magnitude of repurchase increases with weak control rights, but decreases with strong foreign ownership. The...

This paper studies the economic impact of the current global economic downturn on the household sector. Household budgets can be negatively affected by declines in nominal wages and increases in unemployment. We empirically test this effect for the Czech economy. As a result of the lack of individual data on the Czech household finances, micro data are simulated. Our analysis clearly points out...