This paper investigates the determinants of sovereign debt crises by using cross-country data from 1977 to 2010. In particular, I focus on the structure of sovereign debt by analysing the debt composition (domestic versus external), maturity structure (short-term versus long-term), composition type (bank loans versus bond) and currency denomination (domestic currency versus foreign currency) of debts. I also assess whether the previous history of banking and currency crises affect the likelihood of a sovereign debt crisis. The results suggest that both the structures of debt and the past history of other financial crises are important determinants of debt crises. The results are robust when using alternative measures to understand the risks of sovereign debt. I also investigate the impacts of debt structure and past financial crises history on the levels and changes of foreign and local currency long-term debt credit ratings.

abstract: I study the relation between firm debt structure and future external financing and investment. I find that greater reliance on long-term debt is associated with increased access to external financing and ability to undertake profitable investments. This contrasts with previous empirical results and theoretical predictions from the agency cost literature, but it is consistent with predictions regarding rollover risk. Furthermore, I find that firms with lower total debt (high debt capacity) have greater access to new financing and investment. Lower leverage increases future debt issues and capital expenditures, and firms do not fully rebalance by reducing the use of external financing sources such as equity. Finally, my results support the view that greater reliance on unsecured debt can increase future debt financing. Overall, my paper offers new insights into how aspects of debt structure, in particular maturity, are related ex-post to firms' ability to raise new financing and invest. / Dissertation/Thesis / Doctoral Dissertation Business Administration 2017

Background: Sweden has a tradition of a concentrated ownership structure where many owners use dual asset classes to maintain corporate control by possessing small portions of the dividend rights. Financial literature has shown that these controlling owners find more incentives to divert corporate resources for private use, at the expense of shareholders. Recent studies also show that involvement in extraction of private benefits leads to long maturity debt as controlling owners avoid frequent monitoring by lenders. As this causes a conflict over corporate debt maturity between controlling and minority shareholders, we investigate if the presence of multiple large shareholders (MLS) mitigates this conflict through control contests. Purpose: The purpose of this thesis is to examine and analyze how different ownership structures affect the informative environment within a firm. In addition, the thesis investigates how ownership structure affect debt maturity structure and what this mean for large and minority shareholders. Method: The study uses a quantitative approach with panel data of 74 publicly traded non – financial Swedish firms over the period of 2006 – 2014. A deductive approach has been applied in order to explain empirical results from theory and previous literature. Results: We find evidence that controlling owners with a separation in control and cash flow rights tend to insulate themselves through long term debt, creating a bad informative environment with information asymmetry and agency costs. Furthermore, our results show robust evidence that MLS mitigates these problems since control contest between large shareholders leads to a shorter debt maturity, yielding a better informative environment. In addition, our results imply that MLS may be an important factor in facilitating financing as investors associate these firms with less risk of extraction of private benefits.

This thesis conducts empirical studies related to financial institutions and corporate finance. Specifically, I look at banks’ lending behavior, performance of leveraged buyouts (LBOs), and the cultural impact on cross-border LBOs. Following an introduction in Chapter 1, in Chapter 2, I study U.S. commercial banks’ herding behavior in their domestic loan decisions, where herding is defined as the extent to which banks deviate from the industry average lending decisions and collectively increase or decrease loans to certain categories. I find significant evidence that herding exists and that banks tend to herd more when the economic condition is less favorable, regulation is tight, and when banks are struggling . Overall, these findings support the hypotheses of information asymmetry and regulatory arbitrage as motivations for herding. Chapter 3 provides a comprehensive study of LBO deal characteristics, participants’ involvement, and their impact on target firms’ performance. I find that better post-buyout operating performance is associated with larger amounts of leverage added during the LBO process, tighter LBO loan covenants, and equity contribution by target firms’ incumbent management. LBOs are more likely to exit through an IPO or a sale if they use more bank debt with tighter covenants and are sponsored by private equity (PE) firms of high reputation. These results suggest that the main source of value creation in LBOs is the reduced agency costs through the disciplining effect of debt, closer monitoring by lenders, and the better aligned management incentives. PE reputation is also important in ensuring successful deal outcomes. Chapter 4 (co-authored) examines the impact of cultural differences between PE firms and target firms on the completion of cross-border LBOs. We find that cultural distance between PE and target firms reduces the likelihood of buyout completion and increases the time between buyout announcement and completion. We also find that club deals moderate the negative (positive) impact of cultural distance on the likelihood (the duration) of LBO completion. This mitigation effect is through the increased familiarity channel of club formation. Our findings contribute to the literature that underscores the importance of culture in economic outcomes. / Thesis (Ph.D, Management) -- Queen's University, 2014-06-24 08:59:00.0

Submitted by Andre Espozel (andre.espozel@gmail.com) on 2017-04-19T17:47:32Z No. of bitstreams: 1 Dissertação - Andre Espozel - FGV-EPGE.pdf: 856389 bytes, checksum: 16cd3a3bbe1de2cc9ab98b718b21acb8 (MD5) / Approved for entry into archive by GILSON ROCHA MIRANDA (gilson.miranda@fgv.br) on 2017-05-04T12:58:29Z (GMT) No. of bitstreams: 1 Dissertação - Andre Espozel - FGV-EPGE.pdf: 856389 bytes, checksum: 16cd3a3bbe1de2cc9ab98b718b21acb8 (MD5) / Made available in DSpace on 2017-05-12T13:05:06Z (GMT). No. of bitstreams: 1 Dissertação - Andre Espozel - FGV-EPGE.pdf: 856389 bytes, checksum: 16cd3a3bbe1de2cc9ab98b718b21acb8 (MD5) Previous issue date: 2017-03-22 / This papers tests theoretical predictions concerning to agent compensation, debt structure and investment in the models of dynamic agency in DeMarzo and Fishman (2007), DeMarzo and Sannikov (2006) and DeMarzo, Fishman, He and Wang (2012). The results related to agent compensation are consistent with the patterns predicted in the models, indicating that the firm-years that the models would have as more likely to pay dividends are indeed the ones more likely to pay; also, among firms that pay dividends, more profits generate higher dividend payments and higher executive compensation, as predicted in the models. The prediction that firms that go well and reach a payment threshold present marginal q equal to average q, and thus after controlling for average q cash flows would not explain investment is also supported by the tests in here. On the other hand, predictions related to the role of the credit line and to the debt structure are not compatible with the results in here. The credit line doesn’t seem to be the provider of financial slack that protects the firm from low cash flows and also doesn’t seem to have the dynamics of being paid when profits are high and being more used when profits are low.

[pt] O crescimento do volume de títulos indexados ao câmbio adicionou diversas questões a respeito da sustentabilidade da dívida pública. O objetivo deste trabalho é analisar a gestão da dívida pública ao longo dos anos de 1994 a 2003 quanto ao uso de títulos indexados à taxa de câmbio. Enfatiza-se o processo histórico do endividamento brasileiro e a evolução da composição da dívida interna. Através de um modelo de minimização de custos e riscos, estima-se a composição ótima da dívida interna para a economia brasileira com base em dados recentes. Analisa-se também a política monetária ótima frente a um choque externo em um país com elevado endividamento indexado à moeda estrangeira. Os resultados sugerem que a alocação da dívida deve ser predominantemente composta de títulos indexados a índices de preços e que frente a uma crise externa, a política monetária ótima deve ser restritiva, dado o elevado nível de endividamento indexado à moeda estrangeira. / [en] Concerning the composition of the public debt, the recent growth in the foreign currency linked debt provoked the debate about sustainability of the public debt. The objective of this work is to analyze the management of the foreign currency linked debt from 1994 to 2003. The evolution of the composition and its historical process is emphasized. A model that estimates the optimal internal debt composition through cost and risk minimization is applied to recent Brazilian data. It is also analyzed the optimal monetary police facing an external crises for a country that has a high level of foreign currency linked debt. The results suggest that the optimal composition of the public debt implies a massive use of price linked indexed bonds. And also, for facing an external crisis, the optimal monetary policy should be restrictive since the foreign currency linked debt is in such a high level.

The public debt is considered as an important indicator of the macroeconomic and financial stability of the domestic economy. It reflects a quality of the fiscal policy and the sustainability of the public finances. The public debt has been recently paid more attention in the context of the last financial and debt crisis initiated in 2008. A considerable amount of literature has been published on the topic of interconnections between budget balances and macroeconomic environment. However, the budget deficit is only a consequence of higher public expenditures than public revenues. Therefore, the debt is only an alternative source of financing the budget deficit. One of the main ideas of the doctoral thesis is that the macroeconomic effects of the fiscal policy represented by the budget deficits and effects of the public debt should differ. While activities of the fiscal policy effect the real economic indicators such as the GDP, an increase in the public debt effects the monetary indicators such as the exchange rate, the market interest rate and the money supply. The main object of the doctoral thesis is the analysis of the public debt development including the changes in the public debt structure broken down by debt instruments, currency, maturity and the holder profile. Besides, other main object is to analyse the macroeconomic effects of various forms of a public debt; firstly the attention is paid to different monetary effects of the domestic and the external public debt. The doctoral thesis suggests a new point of view to the analysis of the macroeconomic effects and sustainability of a public debt. The findings can be used in the decision making process; If a public deficit is supposed to be domestic debt or external debt financed. Apart from the effects of the changes in the outstanding debt, the effects of the changes in the public debt structure are examined.