We study the effects of homebuyers’ beliefs about future house price changes on their mortgage leverage choice. We show that, from a theoretical perspective, the relationship between homebuyers’ beliefs and their leverage choice is ambiguous, and depends on the magnitude of a “collateral adjustment friction” that reduces homebuyers’ willingness to adjust their house size in response to beliefs ...

Tujuan dari penelitian ini adalah untuk mengetahui faktor-faktor yang signifikan mempengaruhi keputusan perusahaan properti dan real estat di Indonesia dalam menyesuaikan struktur modalnya, beserta speed of adjustment menuju nilai target. Faktor-faktor diuji meliputi profitabilitas, tangibilitas, ukuran, market-to-book value, industry median leverage, rate inflasi secara umum, market stock retu...

This paper examines the nonlinear connection between corporate governance (CG) and leverage. Our study applied dynamic panel threshold model (DPTM) to facilitate capture of effect CG on a firm’s leverage for Japanese listed companies. Additionally, our sought demonstrate linkage speed adjustment (SOA), particularly following reforms in Japan’s system, reach targeted level The empirical findings...

We characterize equilibrium leverage dynamics in a trade-off model which the firm can continuously adjust and cannot commit to policy ex ante. While ratchet effect leads shareholders issue debt gradually over time, asset growth maturity cause mean-revert slowly toward target. Investors anticipate future issuance raise credit spreads, fully offsetting tax benefits of new debt. Shareholders are t...

We empirically examine the influence of risk on firms’ capital structure adjustments. The process of adjustment is asymmetric and depends on the type of risk, its magnitude, the firm’s actual leverage with respect to its target, and its financial status. We show that firms with financial surpluses and above-target leverage adjust their leverage more rapidly when firm-specific risk is low and wh...

Frictions prevent banks to immediately adjust their capital ratio towards desired and/or imposed level. This paper analyzes (i) whether or not these frictions are larger for regulatory ratios vis-à-vis a plain leverage ratio; (ii) which adjustment channels use and (iii) how the speed of differ between large, systemic complex versus small banks. Our results, obtained using sample listed across O...