| 1. |
- Baum, Christopher F., et al.
(author)
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The Effects of Uncertainty on the Leverage of Non-Financial Firms
- 2009
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In: Economic Inquiry. - : John Wiley & Sons. - 0095-2583 .- 1465-7295. ; 47:2, s. 216-225
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Journal article (peer-reviewed)abstract
- This paper investigates the link between the optimal level of nonfinancial firms’ short‐term leverage and macroeconomic and idiosyncratic sources of uncertainty. We develop a structural model of a firm’s value maximization problem that predicts a negative relationship between uncertainty and optimal levels of borrowing. This proposition is tested using a panel of nonfinancial U.S. firms drawn from the COMPUSTAT quarterly database covering the period 1993–2003. The estimates confirm that as either form of uncertainty increases, firms decrease their levels of short‐term leverage. This effect is stronger for macroeconomic uncertainty than for idiosyncratic uncertainty.
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| 2. |
- Baum, Christopher F., et al.
(author)
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The impact of the financial system's structure on firms' financial constraints
- 2011
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In: Journal of International Money and Finance. - : Elsevier. - 0261-5606 .- 1873-0639. ; 30:4, s. 678-691
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Journal article (peer-reviewed)abstract
- We estimate firms’ cash flow sensitivity of cash to empirically test how the financial system’s structure and level of development influence their financial constraints. For this purpose we merge Almeida et al.’s work, a path-breaking design for evaluating a firm’s financial constraints, with that of Levine, who paved the way for comparative analysis of financial systems around the world. We conjecture that a country’s financial system, both in terms of its structure and its level of development, should influence the cash flow sensitivity of cash of constrained firms but leave unconstrained firms unaffected. We test our hypothesis with a large international sample of 30,000 firm-years from 1989 to 2006. Our findings reveal that both the structure of the financial system and its level of development matter. Bank-based financial systems provide constrained firms with easier access to external financing.
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| 3. |
- Baum, Christopher F., et al.
(author)
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Uncertainty Determinants of Corporate Liquidity
- 2008
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In: Economic Modelling. - : Elsevier. - 0264-9993 .- 1873-6122. ; 25:5, s. 833-849
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Journal article (peer-reviewed)abstract
- This paper investigates the link between the optimal level of non-financial firms' liquid assets and uncertainty. We develop a partial equilibrium model of precautionary demand for liquid assets showing that firms alter their liquidity ratio in response to changes in either macroeconomic or idiosyncratic uncertainty. We test this hypothesis using a panel of non-financial US firms drawn from the COMPUSTAT quarterly database covering the period 1993–2002. The results indicate that firms increase their liquidity ratios when macroeconomic uncertainty or idiosyncratic uncertainty increases.
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| 4. |
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| 5. |
- Menkveld, Albert J., et al.
(author)
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Nonstandard Errors
- 2024
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In: JOURNAL OF FINANCE. - : Wiley-Blackwell. - 0022-1082 .- 1540-6261. ; 79:3, s. 2339-2390
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Journal article (peer-reviewed)abstract
- In statistics, samples are drawn from a population in a data-generating process (DGP). Standard errors measure the uncertainty in estimates of population parameters. In science, evidence is generated to test hypotheses in an evidence-generating process (EGP). We claim that EGP variation across researchers adds uncertainty-nonstandard errors (NSEs). We study NSEs by letting 164 teams test the same hypotheses on the same data. NSEs turn out to be sizable, but smaller for more reproducible or higher rated research. Adding peer-review stages reduces NSEs. We further find that this type of uncertainty is underestimated by participants.
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| 6. |
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| 7. |
- Schäfer, Dorothea, et al.
(author)
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Entrepreneurship, windfall gains and financial constraints : Evidence from Germany
- 2011
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In: Economic Modelling. - : Elsevier. - 0264-9993 .- 1873-6122. ; 28:5, s. 2174-2180
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Journal article (peer-reviewed)abstract
- We investigate the link between the propensity to become an entrepreneur and the exogenous release from financial constraints in Germany. This is defined in terms of the movement from employment to self-employment on receipt of a financial windfall. A theoretical framework developing Evans and Jovanovic (1989) is set up and tested with panel data from German households. The results show that financial constraints do exist given that individuals are more likely to start a personal business after receiving a windfall gain. The value of windfall gains has a significant but non linear effect on the decision to become self employed. The data reveal that differences in ability and income affect the change in employment status. We also report that there is no evidence that becoming self-employed involves the anticipation of windfall gains.
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| 8. |
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| 9. |
- Stephan, Andreas, et al.
(author)
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Corporate Debt Maturity Choice in Emerging Financial Markets
- 2011
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In: Quarterly Review of Economics and Finance. - : Elsevier. - 1062-9769 .- 1878-4259. ; 51:2, s. 141-151
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Journal article (peer-reviewed)abstract
- This paper investigates the determinants of liability maturity choice in emerging markets using a unique panel of 4,500 Ukrainian firms during the period 2000-2006. Our estimates confirm the importance of agency costs, liquidity, signaling, and taxes for the liability term structure of firms operating in a transition economy. Firm creditworthiness and access to long-term nancing at bond markets are the key drivers of corporate debt structure. This study provides strong evidence that constrained and unconstrained companies react differently on liquidity risk and,hence, pursue different debt maturity strategies.
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| 10. |
- Stephan, Andreas, 1968-, et al.
(author)
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Corporate Debt Maturity Choice in Transition Financial Markets
- 2008
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Reports (other academic/artistic)abstract
- This paper investigates the determinants of liability maturity choice in transition markets. We formulate a model of firm value maximization that describes managers' choice of optimal debt structure. The theoretical predictions are tested using a unique panel of 4,300 Ukrainian firms during the period 2000-2005. Our estimates confirm the importance of liquidity, signaling, maturity matching, and agency costs for the liability term structure of firm operating in a transition economy. In addition, we find that companies do not react uniformly to determinants of debt maturity. Firms that mainly rely on external funds are sensitive to signaling and they consider the variability of firm value an important determinant of their debt maturity choice. For less constrained companies that rely more on internal funding, asset maturity is an essential determinant of debt structure.
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