Pecking order models of international finance suggest that countries should become less reliant on international bank lending as they develop. Reduced information costs are one of the factors behind this trend towards disintermediation. This paper presents a simple model on the choice between bank debt and bond finance which builds on Rajan (1992), and it uses two new datasets to test the impli...

We test the predictions of the three main behavioral finance theories of market underand overreaction using out-of-sample data conditional on the nature of the news using the goingconcern audit opinion (bad news event) and its withdrawal (good news event). We find strong support for the Daniel, Hirshleifer and Subrahmanyam (1998) model for our bad news as well as the good news case suggesting t...

This paper studies the effect of credit market competition, measured by the bargaining power of banks, on the agency costs of debt finance. The threshold of obtaining loan finance is shown to be independent of the relative bargaining power of the financier, while intensified credit market competition leads to lower lending rates and investment return distributions with lower, but less risky ret...

Relative pay in the financial sector has experienced an extraordinary increase over the last few decades. A proposed explanation for this pattern has been that the demand for skilled workers in finance has risen more than in other sectors. We use Swedish administrative data, which include detailed cognitive and non-cognitive test scores as well as performance in high-school and university, to e...

Significant research challenges must be addressed in the cleaning, transformation, integration, modeling, and analytics of Big Data sources for finance. This article surveys the progress made so far in this direction and obstacles yet to be overcome. These are issues that are of interest to data-driven financial institutions in both corporate finance and consumer finance. These challenges are a...

I this paper we roughly quantify the degree of risk aversion induced by three rationales for corporate risk management: the cost of financial distress, costly external finance, and the principal-agent relationship between shareholders and management. In so doing, we provide a foundation for the use of corporate utility functions. However, we are unable to fully support the degree of risk aversi...

I discuss how aid can support growth in small, isolated economies. Small markets frustrate scale economies and competition. Combined with high transport costs, essential inputs become prohibitively expensive. Breaking the coordination problem requires pioneering investment. Since this generates externalities it will be undersupplied. Donors have both the finance and the long-term relationships ...

This article explores the principles that should guide efforts to raise finance for climate action in developing countries. The main conclusions are that, first, there is an important role for private finance, which would be facilitated by having pervasive and broadly uniform emissions pricing around the world. Second, public finance is warranted by a range of market – and policy – failures ass...

Corporate performance management (CPM) applications are primarily used by the office of finance to support the core financial processes of consolidation, reporting and budgeting; however, they're increasingly being used outside of corporate finance to help link corporate and operational plans, to provide wider access to financial analytics, and to help develop strategies that deliver in regard ...

The editorial is commendable and I agree with many of the points raised. Management is an important aspect of health system strengthening which is often overlooked. In order to build the capacity of management, we need to consider other factors such as, the environment within which managers work, their numbers, support systems and distribution. Effective leadership is an issue which cannot be o...