| 1. |
- Chala, Alemu Tulu, et al.
(författare)
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Does Collateral Reduce Loan-Size Credit Rationing? Survey Evidence
- 2018
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- In theory, the use of collateral in credit contracting should mitigate the information problems that are widely held to be the primary cause of credit rationing. However, direct empirical evidence of the link between collateral use and credit rationing is scant. This paper examines the relationship between collateral and credit rationing using survey data that provides clean measures of quantity and loan size rationing. We find that selection problems arising from the loan application process and co-determination of loan terms significantly influence the link between collateral and rationing. Accounting for these problems, our results suggest that collateral reduces the likelihood of experiencing loan-size credit rationing by between 15 and 40 percentage points, and that collateral also decreases the relative loan amount rationed.
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| 2. |
- Chala, Alemu Tulu
(författare)
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Essays on Banking and Corporate Finance
- 2017
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Doktorsavhandling (övrigt vetenskapligt/konstnärligt)abstract
- This doctoral dissertation comprises three independent essays on banking and corporate finance. The essays are preceded by an introduction to the thesis. The first essay explores whether refinancing risk is an important determinant of debt-maturity decisions. To this end, it investigates how firms with refinancing risk choose the maturity of new loans they obtain during the 2007--2009 financial crisis. The firms' refinancing risk is measured by the maturing portion of outstanding long-term debt. The result shows that firms with a high refinancing risk choose longer maturities.The second essay examines the association between a lead arranger's relationship with a firm and its retained share in the loan to that firms. While some literature indicates that lending relationships can help to alleviate ex post agency conflicts, others imply that relationship lead arrangers may use their information advantage to exploit syndicate participants. Using syndicated loans made to U.S. firms, this article shows that lead arrangers retain a smaller share in lending relationships with firms. The third essay (co-authored with Jens Forssbaeck) examines the relationship between collateral and credit rationing. In theory, the use of collateral in credit contracting should mitigate the information problems that are widely held to be the primary cause of credit rationing. However, direct empirical evidence on this link is scant. Using survey data that provides clean measures of quantity and loan size rationing, our results suggest that collateral reduces the likelihood of experiencing loan-size credit rationing.
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| 3. |
- Chala, Alemu Tulu
(författare)
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Refinancing Risk and Debt Maturity Choice during a Financial Crisis
- 2018
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- This paper explores whether refinancing risk is an important determinant of maturity decisions by investigating how firms with refinancing risk choose the maturity of new loans they obtain during the 2007-2009 financial crisis. The firms' refinancing risk is measured by the maturing portion of outstanding long-term debt. The result shows that firms with a high refinancing risk choose longer maturities. This effect is stronger for speculative-grade and low-cash-flow firms. There is also evidence that firms with refinancing risk obtain longer maturities from their relationship lenders.
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| 4. |
- Chala, Alemu Tulu
(författare)
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Syndicated Lending: The Role of Relationships for the Retained Share
- 2018
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- The finance literature offers ambiguous predictions about the impact of lending relationships on the share retained by lead arrangers in syndicated loans. While some literature indicates that lending relationships can help to alleviate post contractual agency conflicts, others imply that relationship lead arrangers may use their information advantage to exploit syndicate participants. Using syndicated loans made to U.S. firms, this article shows that lead arrangers retain a smaller share in lending relationships with firms. This result suggests that the agency-conflict-mitigating feature of a lending relationship outweighs the information-exploitation- facilitating feature. Consistent with the view that reputational concerns mitigate agency conflicts and make relationships less relevant, the impact on the retained share is stronger for non-top-tier and smaller lead arrangers. This article also shows that the effect of lending relationships is concentrated in loan contracts that include covenants.
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| 5. |
- Chala, Alemu Tulu
(författare)
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The Impact of Lending Relationships on the Lead Arrangers’ Retained Share
- 2023
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Ingår i: International Journal of Financial Studies. - : MDPI. - 2227-7072. ; 11:4
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Tidskriftsartikel (refereegranskat)abstract
- The lead arrangers of syndicated loans often have lending relationships with the borrowers, while other lenders participating in the syndicate largely engage in an arm’s length transaction. Relatively little is known about how these relationships affect the shares of syndicated loans that the lead arrangers retain in their portfolio. Using a random sample of 10,328 syndicated loans made to 7316 nonfinancial U.S. firms over the period 1987 to 2013, this paper investigates the impact of lending relationships on the shares of loans retained. The results show that lending relationships are associated with a significant reduction in retained shares. These results are robust to alternative estimation techniques, such as propensity score matching and binary endogenous treatment models, which are employed to address endogeneity concerns. Furthermore, the results provide additional evidence that the existence and strength of lending relationships lead to decreased retained shares, particularly for non-top-tier lead arrangers. Moreover, the findings also demonstrate that when lead arrangers have lending relationships with borrowers, they retain significantly smaller shares whether the loans are made to informationally opaque, small, or speculative-grade-rating firms. Overall, the findings of this paper have important implications for lenders seeking to reduce their risk exposure in syndicated loans.
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| 6. |
- Cialani, Catia, 1970-, et al.
(författare)
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7. Does governance explain growth? An empirical analysis on African countries
- 2024. - 1
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Ingår i: Good Governance and Economic Growth. - : Routledge. - 9781032870519 - 9781032697567
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Bokkapitel (refereegranskat)abstract
- In the discourse of development economics, it is argued that the quality of governance can play a central role for the economic growth. Literature in this area is extensive and many scholars have deeply investigated the importance of governance to explain why most of the developing countries have a weak economic performance. The present work investigates the impact of governance quality on per capita GDP (gross domestic product) growth for 45 African countries using World Bank data. Governance is expressed by six different proxy indicators called World Governance Indicators (WGI). In addition to Governance Indicators, other variables such as measures of primary school enrolment, degree of openness to trade, capital, foreign direct investment (FDI), and government expenditure as the control variables are used for a relatively long period of time, 2002 to 2021. We apply Generalized Method of Moments (GMM) as econometric method to estimate our model. The findings suggest that government effectiveness, rule of law, and regulatory quality and corruption are governance measures that influence economic growth.
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