Abstract We analyze rights and public offerings when informed shareholders strategically choose to subscribe. Absent wealth constraints, achieve the full information outcome dominate offerings. When some are constrained, lead more dilution of their stakes lower payoffs, despite income from selling these rights. In both offerings, there is a trade-off between investment efficiency transfers amon...

We study financial intermediation in which sufficient sorting is impossible. We identify a new type of market failure that may occur even when returns of investing entrepreneurs are verifiable. Moreover, we suggest that the nature of competition determines the contracts banks offer. A monopoly bank will offer equity contracts. In any pure strategy equilibrium when lenders compete à la Bertrand,...

Owner-managers of private companies are often highly underdiversified. We investigate the consequences of underdiversification at the company level. There is a strong positive relationship between underdiversification, measured as the share of personal net worth invested in the company, and profitability, measured as the return on equity. The analysis identifies two causes for this underdiversi...

This paper develops a real options model of imperfect competition with asymmetric information that analyzes firms’ exit decisions. Optimal exit decision is linked to firm characteristics such as financial leverage and efficiency. The model shows that informational asymmetries between product market rivals can lead more efficient and less leveraged firms to leave the product market prematurely. ...

Business credit lags GDP growth by about one year. This contributes to high leverage during recessions and slow deleveraging. We show that a model in which firms use risky long-term debt replicates this adjustment of firm debt. In the model, slow-moving has important effects for real activity. High levels issued expansions are only gradually reduced recessions. generates an adverse feedback loo...

The present study focuses on the results of cavitation resistance research samples obtained by Selective Laser Sintering technology. were made from polyamide powder reinforced with glass beads - PA 3200 GF. laser-sintered produced 100% new and recycled mixed 70% powder. tested under conditions using an ultrasonic vibration method a stationary sample according to ASTM G32 standard. Examination m...

I examine the role of debt-financed special payments to shareholders in defending incumbent managements during proxy contests. This role is based on shareholder preference for dividends and the consequent linkage between dividends and managerial security. The model is used to explain why the seemingly contradictory phenomena of (i) wealth losses to shareholders and (ii) lack of any substantial ...

This paper introduces a noncausal autoregressive process with Cauchy errors in application to the exchange rates of the Bitcoin electronic currency against the US Dollar. The dynamics of the daily Bitcoin/USD exchange rate series displays episodes of local trends, which can be modelled and interpreted as speculative bubbles. The bubbles may result from the speculative component in the on-line t...

The growth of the private equity industry has spurred concerns about its impact on the economy. This analysis looks across nations and industries to assess the impact of private equity on industry performance. We find that industries where private equity funds invest grow more quickly in terms of total production and employment, and appear less exposed to aggregate shocks. We perform a number o...