systemic risk is the risk of collapse in the financial system. due to the financial crisis that hit the world economy in 2008, the study of systemic risk in the banking sector became more attractive for researchers. in this research we study systemic risk in the iranian banking sector by using a famous systemic risk measure, the ∆covar. to compute the measure, we employ dynamic conditional corr...

The banks’ response to their changes in leverage ratios is examined and evaluated in this paper. This reaction can be interpreted as if the coefficient of total debts to equity (lev1) and total assets to equity (lev2) are positive as anticipated in the banking network of Iran. The paper uses data from 31 Iranian banks’ annual databases during the course of 2006-13 in order to estimate an empiri...

This paper extends the stationary-leverage-ratio model to incorporate a time-dependent target leverage ratio. The theoretical hypothesis of the existence of a time-dependent target leverage ratio reflects the movement of a firm’s initial target ratio toward a long-term target ratio over time. Using some simple scenarios about the time-dependence of the target leverage ratio, the numerical resul...

In this paper I propose a model for two bidding firms competing to acquire a target. I show how the capital structures of the bidders determine the equilibrium outcome of the takeover contest. Notably, I demonstrate that there exists an asymmetric equilibrium with endogenous leverage, bankruptcy, and takeover terms. The model generates a number of predictions consistent with empirical evidence ...

In this paper, we examine the role of political connections by analyzing the short-and long-term performance of Chinese state owned enterprise (SOE) acquirers relative to private owned enterprise (POE) from 1994 to 2008. The empirical result shows that 1) SOE acquirers outperform the POE acquirer both in terms of long-run stock and operating performance; 2) announcement effect of POE acquirer t...