Trust is an important determinant of start-up fi nancing. In a simple agentbased model it is determined what the best trusting strategy is for a collective of investors and whether it is rational for an individual investor to deviate from this collective optimum. Trust depends on a measure of social distance and is the precondition for investment. Trust increases and decreases based on whether ...

Article history: Received 16 June 2014 Received in revised form 24 September 2014 Accepted 2 October 2014 Available online 13 October 2014 I study the impact of Lehman Brothers' bankruptcy and resultant inability to honor its obligations as a lender under committed credit lines. Firms that lost access to a credit line committed by Lehman Brothers experienced abnormal stock returns of−3%, on ave...

We conducted a global study of the long-term issuer ratings of nonfinancial firms from Standard and Poor's Ratings Services (S&P) for the period 1998–2003. Specifically, we focused on the solicited versus unsolicited ratings and sample-selection bias in the analysis. Unlike the literature, we adopted an improved method using Wooldridge’s instrumentalvariable approach to mitigate the concern of ...

We study the effect of bank loan announcements on the borrowing firms’ bond and equity prices. Our sample consists of 896 loan deals signed between 1997 to 2003 involving 364 different U.S. firms. We report the first comprehensive evidence that also firm bond prices react to bank loan announcements. The cumulative abnormal reaction of bond credit spreads equals minus 11 bps on average in the tw...

It is often argued that certifiers have an incentive to offer inflated certificates, although they deny it. In this paper, we study a model in which a certifier is paid by sellers, and may offer them inflated certificates, but incurs costs if doing so. We find that the certifier may face a commitment problem: The certifier offers inflated certificates if the costs of offering the first inflated...

Using a sample of 204 UK initial public offerings (IPOs), we empirically analyze the motive for and the timing of IPO decision by examining the determinants of IPO structure. Linked to IPO structure, the determinants of underpricing and the pattern of seasoned equity offerings (SEOs) are also investigated. The data reveal that younger and smaller firms tend to go public primarily for financing ...

An impressive downward trend in cases of occupational skin diseases in hairdressers has occurred in Northern Bavaria over the past decade. This seems to reflect improvements in working conditions due to new legislation and intensified preventive measures rather than a change in the natural history of occupational skin disease. Because of the size of the region studied and the sampling scheme, t...

genetic resources constitute the building blocks of crop improvement programs. these provide the basic raw material as well as reservoir of genes for breeding high-quality cultivars. characterization of germplasm is the prerequisite for subsequent utilization of the resources. in this study, suckers of twenty six damask rose genotypes (rosa damascena mill.) were collected from some of the most ...

This paper explains why the evidence on the relation between litigation risk and initial public offering (IPO) underpricing is mixed. Two reasons are behind the nonstationary relation. First, the increasing usage of Directors and Officers’ liability insurance arguably reduces the need to use underpricing to insure against litigation liability to a limited extent. Second, class action lawsuits o...