No description available.

No description available.

The objectives of the study are: (1) to determine whether or not price-level changes will have an effect upon the selected firms' earned capital, (2) to determine if the Pffect of inflation on the earned capital of the public utility companies is less than equal to or more than the effect on the earned capital of other industries, and (3) to identify critical variables affecting the selected firms' earned capital erosion due to price-level changes.Subjects were 153 companies: 38 non-utility companies and 115 utility companies. Equal size observations were used in analyzing each group (approximately 380, or 190 each).To obtain data the study chose firms from COMPUSTAT tapes for the years 1977 through 1981. Although several adjusted information items were available, some adjustments were needed for analysis, such as depreciation and tax liabilities. Price-level adjustments were made in accordance with procedures recommended by the Financial Accounting Standards Board.For the statistical analysis, the following null hypotheses were tested at the .05 level of significance:Ho1 : The price-level change will not affect the firms' earned capital erosion.H02 : (1) There is no significant earned capital erosion of the non-utility industry due to price-level changes (lefttailed test).(2) There is significant earned capital erosion of the utility industry due to price-level changes (righttailed test).The Z test statistic was used to test each null hypothesis. Multiple regression analyses were done to identify the critical variables affecting the firms' earned capital erosion under the price-level changes by using taxation, depreciation, payout ratio, and rate of inflation variables.As a result of the hypotheses, null hypothesis 1 was rejected. It could be concluded that the price-level changes did affect the firms' earned capital erosion due to inflation.Null hypothesis 2 for the non-utility industry was rejected (p<.05). The analysis indicated that there is significant earned capital erosion of the non-utility industry due to price-level changes. The null hypothesis 2 for the utility industry was rejected also. It could be concluded that there was no significant earned capital erosion of the utility industry due to inflation.From these results the first and second objectives of the research were met. The price-level changes did affect the selected firms' earned capital, the direction of the earned capital erosion between non-utility and utility groups was completely opposite. The price-level changes do erode the firms' earned capital, but this is not the case for the utility industry. The results of regression analysis indicated that the critical variables affecting the firms' earned capital erosion were taxation, depreciation, payout ratio, and rate of inflation. However, the relative importance of the independent variables was slightly different between the two groups.For the non-utility group the most important variable was payout ratio, followed by taxation and rate of inflation. In the utility industry group the most important variable was taxation, followed by depreciation, rate of inflation, and payout ratio.The following recommendations are made for further research:1. This study should be linked with the analysis of general capital erosion including contributedcapital under the price-level changes.2. The inventory valuation method should be considered for the future analysis of capitalerosion by using dummy variables, although these were not used in this research. It willcertainly become a more powerful model if the inventory valuation method were considered.3. For the in-depth analysis different models should be used for the different industry groups,and not just a general model.4. A study on the microeconomic effects of the tax burden shift associated with capital erosion due to inflation behavior is recommended.5. Finally, any kind of action to be taken by the Congress should be designed to alleviate capital erosion due to inflation.It is strongly recommended that the utility industry not include monetary gains or losses in the calculation of taxable income to prevent corporations' capital from overpaying through income taxing.

KMBT_363 / Adobe Acrobat 9.53 Paper Capture Plug-in

Thesis (MDF)--Stellenbosch University, 2011. / ENGLISH ABSTRACT: A sound and favourable financial climate is necessary for any forward-looking economy to thrive. This, amongst others, includes the extent to which the commercial banks are able to discharge their intermediating role in the demand and supply of credit necessary to sustain commercial businesses. Indeed, in the last decade, the Nigerian banking industry has witnessed swings with the attendant effects on the business community. One of the downsides has been the incidence of loan default which led to many banks recording astronomical levels of bad loans in their 2008 financial reports. The drastic measures taken by the Central Bank of Nigeria of relieving eight CEOs of their jobs in September 2009 further highlights the import of this subject matter. This paper gives an overview of the concept of loan default in Nigerian commercial banks ranging from the causes to the remedies currently in place to checkmate it. A field survey on loan officers, credit analysts and credit risk managers in some select banks was carried out. The findings reveal that the banks have a rather cautious approach to lending with certain classes of loans classified. Causal factors leading to loan delinquencies categorised into environmental, bank specific and borrower specific factors were analysed to have contributed equally to causing loan default in Nigeria. Lastly, the regression results indicated that there was a significant relationship between measures adopted by the banks in the face of increa

published_or_final_version / Economics and Finance / Doctoral / Doctor of Philosophy

Thesis. 1978. M.S.--Massachusetts Institute of Technology. Alfred P. Sloan School of Management. / MICROFICHE COPY AVAILABLE IN ARCHIVES AND DEWEY. / Includes bibliographical references. / M.S.

This dissertation studies topics in the areas of empirical corporate finance, banking, and financial intermediation. In the first chapter, entitled Personal Relationships in Loan Renegotiation: Evidence from Corporate Loans, I estimate the effect of personal relationships between a loan officer and a firm on the probability to renegotiate a loan and the outcomes of the renegotiation. To identify this effect, I exploit a bank reorganization in Greece in the mid-2010s, which allows me to identify two types of firms: one, those whose personal relationships with loan officers were discontinued and those whose relationships were not. This paper’s main conclusion is that personal relationships mitigate the cost of distress for the firm in a loan renegotiation. The firm is worse off following the interruption of its loan officer relationship, as it is less able to renegotiate, and the firm also receives tougher loan terms on renegotiated loans. The insights from the second chapter, entitled Lending Relationships and Moral Hazard in Loan Renegotiation, can have important policy implications related to the rise of nonperforming loans (NPLs). Many banks operating in countries that were hit by the 2010 European debt crisis, faced a significant rise in NPLs. This rise became one of the main challenges that banks face, as high levels of NPLs tie up bank capital and thus reduce profitability and increase funding costs. In the second chapter, I provide empirical evidence that banks, through efficient renegotiation and strong relationships with firms, can prevent loan defaults. This analysis suggests that firms with more distant lending relatioships are more likely to strategically delay a loan payment in order to efficiently trigger a loan renegotiation. This strategic behavior gives rise to the moral hazard phenomenon. In the third chapter, entitled Securing the Unsecured: Do stronger creditor rights affect firms’ access to credit?, I seek to understand whether stronger creditor rights influence firms’ capital structure and access to finance. To answer this question, I use the passage of an enforcement on cash assets reform in Croatia that aimed to increase the collection of the unsecured debt. To identify exogenous variation across firms affected more by the reform versus those that were not, I use a novel dataset on courts’ efficiency in dealing with the specific type of cases affected by the reform. The conclusion of the paper is that firms maintain higher leverage and have easier access to credit when creditor rights are stronger. The firms that benefit the most are medium size and have limited access to tangible assets. When firms are able to borrow more, they invest more in fixed assets.

Choi Tsz Wang. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2004. / Includes bibliographical references (leaves 43-45). / Abstracts in English and Chinese. / Chapter 1 --- Introduction --- p.1 / Chapter 2 --- Review of Structural Models --- p.5 / Chapter 2.1 --- The Merton model --- p.5 / Chapter 2.2 --- The default barrier model of Black and Cox --- p.7 / Chapter 3 --- Estimating the Merton model --- p.10 / Chapter 3.1 --- The Variance Restriction (VR) method --- p.10 / Chapter 3.2 --- The Maximum Likelihood estimation (ML) method --- p.12 / Chapter 3.3 --- Comparison between VR and ML methods --- p.13 / Chapter 4 --- Implications of Using the Proxy in Default Barrier Estimation --- p.15 / Chapter 4.1 --- Rejection of SC framework --- p.16 / Chapter 4.2 --- Positive barrier implication --- p.17 / Chapter 4.3 --- Barier over debt implication --- p.17 / Chapter 4.4 --- Numerical illustration --- p.19 / Chapter 5 --- The Proposed Framework --- p.22 / Chapter 5.1 --- Maximum likelihood estimation --- p.23 / Chapter 5.2 --- Barrier-to-debt ratio specification --- p.25 / Chapter 5.3 --- Simulation checks --- p.26 / Chapter 5.4 --- Comments on the performance of α --- p.29 / Chapter 6 --- Estimation with Empirical Data --- p.33 / Chapter 6.1 --- Description of data --- p.33 / Chapter 6.2 --- Empirical results --- p.35 / Chapter 7 --- Conclusion --- p.41 / References --- p.43

This dissertation studies empirical corporate finance problems of regulations and monitoring. The dissertation is composed of three chapters. First, I study how firms deal with business regulations that limit their operations. In the first chapter I exploit a natural experiment in Argentina to show that the ownership structure of a firm affects its degree of compliance with regulations, with publicly listed firms complying more than privately held ones. In 2012 the Argentine government banned companies from transferring funds abroad from their domestic operations. Despite this limitation, companies trying to repatriate capital could still overprice products they import from their headquarters or affiliates. I find that after the regulation, private firms overprice imports by almost 10% and manage to repatriate up to 46% of the profits that would have otherwise remained locked in at the Argentine subsidiary. Listed companies do not exploit this mechanism, showing that listing status affects compliance. The second chapter studies whether the differential cost imposed on listed firms operating in emerging markets by these higher compliance rates is significant. The main empirical challenge is that the cost is firm-time-regulation specific, and, for that reason, it is empirically unfeasible to measure it. I take an alternative route and show that changes in the levels of market regulations impose compliance costs of such magnitude that they shape the patterns of M&A transactions. First, I show that after the regulation studied in Chapter 1, private firms acquired listed ones at an extraordinary pace, while listed firms stopped acquiring private ones. This evidence suggests that the regulation increased the cost of being public. Then, I show that this finding is not specific to the Argentine market but is common across emerging markets. I do so by analyzing the response of M&A transactions to changes in the regulatory intensity of each country. Finally, the third chapter, co-authored with Matthieu Chavaz, studies the effect of deposit insurance on market discipline in a close-to-ideal setting. We exploit the political relationship between the United Kingdom and its Crown Dependencies and use a novel dataset to test this effect. Tracking the price paid for thousands of deposit products between 2007 and 2015, we find that deposit insurance deters discipline. In addition, we provide the first direct test of the interaction between depositors’ attention, deposit insurance, and market discipline. We show that when attention increases, risky banks offer higher rates both to insured and uninsured depositors, but that the effect is stronger for uninsured depositors. These results suggest that discipline is imposed even in the presence of deposit insurance, but only when information becomes salient.