How Issue Size, Risk, and Complexity are Influencing External Financing Costs: German IPOs Analyzed from an Economies of Scale Perspective

2003 ◽  
Vol 30 (3-4) ◽  
pp. 479-512 ◽  
Author(s):  
Christoph Kaserer ◽  
Marcus Kraft
Keyword(s):  
Economies Of Scale ◽  
External Financing ◽  
Financing Costs

scholarly journals Labor and Capital Dynamics under Financing Frictions*

2018 ◽  
Vol 23 (2) ◽  
pp. 279-323 ◽  
Author(s):  
Ryan Michaels ◽  
T Beau Page ◽  
Toni M Whited
Keyword(s):  
Wage Bargaining ◽  
Reduced Form ◽  
Probability Of Default ◽  
External Financing ◽  
Financing Costs ◽  
Financing Frictions ◽  
Investment And Financing ◽  
Unemployment Risk

Abstract We assemble a new, quarterly panel dataset that links firms’ investment and financing to their employment and wages. In the data, wages and leverage are negatively related, both cross-sectionally and within firms. This pattern contradicts models in which firms insure workers against unemployment risk. We reconcile this fact with a model that integrates factor adjustment frictions and wage bargaining with costly external financing. In the model, the probability of default rises with debt. Because default incurs deadweight costs, the expected surplus over which firms and workers bargain falls, thus depressing wages. We show that raising financing costs reduces employment and wages, in line with recent reduced-form evidence.

Does Political Uncertainty Increase External Financing Costs? Measuring the Electoral Premium in Syndicated Lending

2018 ◽  
Vol 54 (5) ◽  
pp. 2141-2178 ◽  
Author(s):  
Olivia S. Kim
Keyword(s):  
Developed Countries ◽  
Syndicated Loans ◽  
External Financing ◽  
Political Uncertainty ◽  
Large Sample ◽  
Financing Costs ◽  
Electoral Uncertainty ◽  
The Impact

This article investigates the impact of political uncertainty on contractual lending terms using a large sample of syndicated loans and a within-firm estimation approach to achieve identification. Firms pay 7 basis points (bps) more on loans originated when their lenders are undergoing an election relative to when their lenders are not undergoing an election. Lenders from less financially developed countries are more likely to pass political uncertainty costs to borrowers. Consistent with electoral uncertainty driving this premium, the most contested elections have the largest impact (17 bps). Overall, political uncertainty leads to a tangible increase in firms’ financing costs.

scholarly journals COMPETITIVE ADVANTAGE FROM OPERATIONAL CORPORATE REAL ESTATE DISPOSALS

2004 ◽  
Vol 8 (1) ◽  
pp. 11-24 ◽  
Author(s):  
Antti Louko
Keyword(s):  
Real Estate ◽  
Capital Structure ◽  
Large Scale ◽  
Economies Of Scale ◽  
Balance Sheet ◽  
External Financing ◽  
Corporate Real Estate ◽  
Internal Property ◽  
Knowledge Economies ◽  
Accounting Rules

The large‐scale operational corporate real estate disposals, which have lately become more and more common in Europe, can create many benefits to corporations. Firstly, the corporations can get an immediate capital injection without additional external financing to support growth or to better capital structure. Secondly, corporations can in the best case obtain more property industry knowledge, economies of scale, tax advantages and increased flexibility through property disposals. However, it is also important to notice that sometimes the best expert is an internal property manager and that large corporate real estate deals can be slow and costly to structure. Furthermore, if the outsourcing is not planned well, agency problems and inflexibility could arise. In addition, off‐balance sheet financing is becoming more difficult due to changes in accounting rules. In all, it is crucial to have a solid property strategy that supports the overall business goal before structuring large‐scale disposals.

External Financing and Customer Capital: A Financial Theory of Markups

2020 ◽  
Author(s):  
Winston Wei Dou ◽  
Yan Ji
Keyword(s):  
Continuous Time ◽  
Monopolistic Competition ◽  
External Financing ◽  
Financial Policies ◽  
Marginal Value ◽  
Corporate Liquidity ◽  
Customer Base ◽  
Financing Costs ◽  
Customer Capital ◽  
Industry Equilibrium

We develop a continuous-time industry equilibrium model of monopolistic competition to understand how product markups are determined in the presence of external financing costs and customer capital. Firms optimally set markups to balance the tradeoff between profiting from their existing customer base and developing their future customer base. We characterize how the equilibrium markups are determined by the interaction between the marginal value of corporate liquidity and the marginal value of customer base. Firms’ markups are more responsive to changes in their marginal value of corporate liquidity when the marginal value of customer base is higher. Moreover, the model predicts that greater product market threats lead to more conservative financial policies, which is supported by the data. This paper was accepted by Gustavo Manso, finance.

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