2021

Tradeoff Theory and Leverage Dynamics of High-Frequency Debt Issuers
B Espen Eckbo, Michael Kisser
Review of Finance, Volume 25, Issue 2, March 2021, Pages 275–324, https://doi.org/10.1093/rof/rfaa018

Do public industrial firms manage leverage towards a long-run target? We test three core predictions of dynamic tradeoff theory using a hitherto unexplored set of US public industrial companies: high-frequency net-debt issuers (HFIs).… Read more...

Gender Dynamics in Crowdfunding (Kickstarter): Evidence on Entrepreneurs, Backers, and Taste-Based Discrimination
Hadar Gafni, Dan Marom, Alicia Robb, Orly Sade
Review of Finance, Volume 25, Issue 2, March 2021, Pages 235–274, https://doi.org/10.1093/rof/rfaa041

This study focuses on the launch phase of the leading reward-based crowdfunding market – Kickstarter.… Read more...

The Effect of Regulatory Constraints on Fund Performance: New Evidence from UCITS Hedge Funds
Juha Joenväärä, Robert Kosowski
Review of Finance, Volume 25, Issue 1, February 2021, Pages 189 – 233, https://doi.org/10.1093/rof/rfaa017

In this paper we study the effect of regulatory constraints on fund performance and risk by comparing conventional and UCITS hedge funds.… Read more...

Default Option Exercise over the Financial Crisis and beyond
Xudong An, Yongheng Deng, Stuart A Gabriel
Review of Finance, Volume 25, Issue 1, February 2021, Pages 153 – 187, https://doi.org/10.1093/rof/rfaa022

Default on residential mortgages skyrocketed during the late-2000s, giving rise to widespread financial institution failure and global financial crisis.… Read more...

Credit Default Swaps and Bank Regulatory Capital
Chenyu Shan, Dragon Yongjun Tang, Hong Yan, Xing (Alex) Zhou
Review of Finance, Volume 25, Issue 1, February 2021, Pages 121 – 152, https://doi.org/10.1093/rof/rfaa021

A major development in bank capital regulation (Basel II and III) is the allowance of capital relief using credit derivatives such as credit default swaps (CDS).… Read more...

Sentiment in Central Banks’ Financial Stability Reports
Ricardo Correa, Keshav Garud, Juan M Londono, Nathan Mislang
Review of Finance, Volume 25, Issue 1, February 2021, Pages 85–120, https://doi.org/10.1093/rof/rfaa014

We use the text of financial stability reports (FSRs) published by central banks to analyze the relation between the sentiment they convey and the financial cycle.… Read more...

Making Room for the Needy: The Credit-Reallocation Effects of the ECB’s Corporate QE
Óscar Arce, Sergio Mayordomo, Ricardo Gimeno
Review of Finance, Volume 25, Issue 1, February 2021, Pages 43–84, https://doi.org/10.1093/rof/rfaa020

We analyse how the ECB’s purchases of corporate bonds under its Corporate Sector Purchase Programme (CSPP) affected the financing of Spanish firms.… Read more...

An Augmented q-Factor Model with Expected Growth
Kewei Hou, Haitao Mo, Chen Xue, Lu Zhang
Review of Finance, Volume 25, Issue 1, February 2021, Pages 1–41, https://doi.org/10.1093/rof/rfaa004

In the investment theory, firms with high expected investment growth should earn higher expected returns than firms with low expected investment growth, holding current investment and profitability constant.… Read more...