{"title":"Collateral requirements and corporate policy decisions","authors":"Kizkitza Biguri , Jörg R. Stahl","doi":"10.1016/j.jfi.2024.101104","DOIUrl":"10.1016/j.jfi.2024.101104","url":null,"abstract":"<div><p>We challenge the theorized trade-off between risk management and investment due to collateral constraints. We compile a unique dataset of derivative transactions and collateral for U.S. public firms. Exploiting exogenous variation in cash-collateral, we observe significant effects on hedging but no impact on investment. Variations in PPE-collateral, instead, impact investment but show no association with hedging. Our findings suggest that a firm’s assets should not be seen as interchangeable; they rather play distinct roles in the collateralization process.</p></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"60 ","pages":"Article 101104"},"PeriodicalIF":3.1,"publicationDate":"2024-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142129562","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Effects of financing constraints on maintenance investments in rent-stabilized apartments","authors":"Lee Seltzer","doi":"10.1016/j.jfi.2024.101103","DOIUrl":"10.1016/j.jfi.2024.101103","url":null,"abstract":"<div><p>This paper studies whether financing constraints adversely affect renters by reducing maintenance. Consistent with a sensitivity of maintenance to financial resources, housing code violations increased after a change in the law that effectively decreased cash flows available to maintain some rent-stabilized buildings in New York City. The effect is most severe when financing constraints are present. Moreover, results of panel regressions using a dataset of 45 cities obtained with Freedom of Information Act (FOIA) requests are consistent with a hypothesis that buildings with higher LTV ratio mortgages have more code violations. Together, the results provide evidence that financing constraints reduce maintenance, an outcome that exacerbates the unintended consequences of rent control.</p></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"59 ","pages":"Article 101103"},"PeriodicalIF":3.1,"publicationDate":"2024-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142002285","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Roberto Blanco, Miguel García-Posada, Sergio Mayordomo, María Rodríguez-Moreno
{"title":"Access to credit and firm survival during a crisis: The case of zero-bank-debt firms","authors":"Roberto Blanco, Miguel García-Posada, Sergio Mayordomo, María Rodríguez-Moreno","doi":"10.1016/j.jfi.2024.101102","DOIUrl":"10.1016/j.jfi.2024.101102","url":null,"abstract":"<div><p>Before the Covid-19 crisis, zero-bank-debt firms, especially risky ones, faced, due to their lack of credit history, more difficult access to bank loans than firms which previously had bank debt. These credit constraints were tightened by the Covid shock, irrespective of firms’ risk, arguably because of increased information asymmetries during a period of high macroeconomic uncertainty. Zero-bank-debt firms, even those which were safe and profitable, were also far more likely to leave the market during the pandemic than firms which previously had bank debt. However, those zero-bank-debt firms that did obtain new credit reduced their probability of exit.</p></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"59 ","pages":"Article 101102"},"PeriodicalIF":3.1,"publicationDate":"2024-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141993257","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Viral V. Acharya , Guillaume Plantin , Pietro Reggiani , Iris Yao
{"title":"Monetary easing, lack of investment and financial instability","authors":"Viral V. Acharya , Guillaume Plantin , Pietro Reggiani , Iris Yao","doi":"10.1016/j.jfi.2024.101100","DOIUrl":"10.1016/j.jfi.2024.101100","url":null,"abstract":"<div><p>Low monetary policy rates lower the cost of capital for firms, thereby spurring productive investment. Low interest rates however can also induce the private sector to enter into risky carry trades when they imply that the earned carry more than offsets liquidity risk. Such carry trades and productive investment compete for funds, so much so that the former may crowd out the latter. Below an endogenous lower bound, monetary easing generates only limited capital expenditures that come at the cost of large and destabilizing financial risk-taking. Absent the ability to regulate carry trades, monetary easing must be complemented with a restrictive emergency-lending policy in the form of higher lending rates so as to discourage risk-taking by relatively illiquid firms. Monetary easing, tepid investment response, and rollover risk for liquid firms then arise jointly (and optimally) in equilibrium.</p></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"59 ","pages":"Article 101100"},"PeriodicalIF":3.1,"publicationDate":"2024-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141846908","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Distortionary effects of PPP loans on business competition","authors":"Eva Steiner , Alexei Tchistyi","doi":"10.1016/j.jfi.2024.101099","DOIUrl":"https://doi.org/10.1016/j.jfi.2024.101099","url":null,"abstract":"<div><p>We study the effects of PPP loans on business competition. We start by introducing temporary cash subsidies into a model of monopolistic competition with differentiated products and heterogeneous production costs. We test the predictions of our model in a sample of U.S. airport hotels for which we observe daily demand, prices, output, and profits. Consistent with model predictions, less profitable businesses were more likely to apply for PPP loans. Businesses with active PPP loans reduced prices, boosting output and profits relative to non-PPP competitors. Those relative differences were reversed once PPP loans expired. We calculate that, for every dollar of PPP subsidies, PPP hotels earned 72.4 cents in extra profits and non-PPP competitors lost 71.4 cents in aggregate. Our results suggest that the PPP initiative distorted competition, imposing significant costs on businesses that chose to forgo these loans.</p></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"59 ","pages":"Article 101099"},"PeriodicalIF":3.1,"publicationDate":"2024-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141484100","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Financial technology and relationship lending: Complements or substitutes?","authors":"Mark J. Kutzbach, Jonathan Pogach","doi":"10.1016/j.jfi.2024.101101","DOIUrl":"10.1016/j.jfi.2024.101101","url":null,"abstract":"<div><p>We describe the dimensions along which bank technologies differ from fintech competitors and construct a novel measure of a bank’s technology based upon its overlap with fintech firms in terms of granular product installation data. A one standard deviation increase in our financial technology measure is associated with an 8.3 percentage point increase in Paycheck Protection Program (PPP) loans in 2020Q2. We show that smaller banks benefited more from marginal technology gains, that technology facilitated out-of-area lending, and that technology complemented small banks’ branch-based in-area lending. In a difference-in-differences analysis, we show an outsized increase in small business lending growth in 2020 for high tech small banks relative to their peers.</p></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"59 ","pages":"Article 101101"},"PeriodicalIF":3.1,"publicationDate":"2024-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142002284","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The informational impact of prudential regulations","authors":"Kebin Ma , Tamas Vadasz","doi":"10.1016/j.jfi.2024.101091","DOIUrl":"10.1016/j.jfi.2024.101091","url":null,"abstract":"<div><p>Banks take costly actions (such as capitalization, liquidity holding, and advanced risk management) to avoid financial distress and creditor runs. While directly affecting a bank’s risks, such actions can also signal the bank’s fundamentals. We show that prudential regulations have an informational impact: sufficiently tight regulations can eliminate inefficient separating equilibria in banks’ signaling game, thereby changing the information available to creditors and their incentives to run. When accounting for this informational impact, tightening regulations can improve banks’ payoffs and be considered bank incentive-compatible. We support this novel, information-based rationale for regulations with evidence from the US liquidity requirement.</p></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"59 ","pages":"Article 101091"},"PeriodicalIF":5.2,"publicationDate":"2024-05-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141055910","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The puzzling persistence of financial crises: A selective review of 2000 years of evidence","authors":"Charles W. Calomiris , Matthew Jaremski","doi":"10.1016/j.jfi.2024.101090","DOIUrl":"https://doi.org/10.1016/j.jfi.2024.101090","url":null,"abstract":"<div><p>The high social costs of financial crises imply that economists, policymakers, businesses, and households have a tremendous incentive to understand, and try to prevent them. And yet, so far we have failed to learn how to avoid them. In this article, we take a novel approach to studying financial crises. We first build ten case studies of financial crises that stretch over two millennia, and then consider their salient points of differences and commonalities. We see this as the beginning of developing a useful taxonomy of crises – an understanding of the most important factors that reappear across the many examples, which also allows (as in any taxonomy) some examples to be more similar to each other than others. From the perspective of our review of the ten crises, we consider the question of why it has proven so difficult to learn from past crises to avoid future ones.</p></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"58 ","pages":"Article 101090"},"PeriodicalIF":5.2,"publicationDate":"2024-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140622390","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Managerial structure in the hedge fund industry","authors":"Yuhao Chen , Huan Kuang , Bing Liang","doi":"10.1016/j.jfi.2024.101089","DOIUrl":"https://doi.org/10.1016/j.jfi.2024.101089","url":null,"abstract":"<div><p>This paper provides the first study on how management structure influences hedge fund performance and risk. We document that hedge funds less tied to traditional assets often choose solo management structures. Solo-managed funds outperform team-managed funds, exhibit better skills in market return, volatility, and crisis timing, and demonstrate greater activity in beta management, but have higher idiosyncratic and tail risks. They are also less likely to be liquidated, with fund flows less performance sensitive. Using a sample of switched funds, we find that fund performance, assets, and risk correlate with the management structure switching decision.</p></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"58 ","pages":"Article 101089"},"PeriodicalIF":5.2,"publicationDate":"2024-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140557918","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Getting tired of your friends: The dynamics of venture capital relationships","authors":"Qianqian Du , Thomas Hellmann","doi":"10.1016/j.jfi.2024.101088","DOIUrl":"10.1016/j.jfi.2024.101088","url":null,"abstract":"<div><p>We empirically examine how venture capitalists adjust coinvestor relationships over time. We identify a fundamental trade-off where the benefits of familiarity are weighed against the opportunity costs of coinvesting with other syndication partners. Using US data, we find that venture capitalists dynamically adjust their relationship intensities by gradually disengaging from overly deep relationships. More centrally networked investors are more cautious with disengaging. In hot investment markets investors disengage more readily from existing relationships, but new relationships forged in hot market are less enduring. Perhaps surprisingly, we find a negative relationship between deeper prior relationships and investment performance.</p></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"58 ","pages":"Article 101088"},"PeriodicalIF":5.2,"publicationDate":"2024-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S1042957324000160/pdfft?md5=7187d7eeac5775dc2431647e705f9426&pid=1-s2.0-S1042957324000160-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140147243","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}