Working papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded official Federal Reserve Bank of Cleveland publications. The views stated herein are those of the authors and are not necessarily those of the Federal Reserve Bank...

the aim of this study is to investigate the relationship between tax avoidance and firm value with an emphasis on agency cost and disclosure quality of firms listed in tehran stock exchange. the sample of this study consists of 68 firms for the period 2004 to 2015.this study is applied in purpose and correlation- descriptive in method. in this study to test the hypotheses, multivariate linear r...

We consider an overlapping generations economy where capital is produced from bank loans under stochastic constant returns to scale, and subject to idiosyncratic shocks whose realisations are costly to verify. Our formulation differs from earlier work in permitting investment projects to be in®nitely divisible and private agency costs to be convex. If there are external economies to ®nancial in...

We investigate Project Finance as a private response to ine¢ ciencies created by weak legal protection of outside investors. In the context of large investment projects, Project Finance o¤ers a contractual and organizational substitute for investor protection laws by making cash ‡ows veri…able, thereby enhancing debt capacity. Project Finance makes cash ‡ows veri…able through: (i) contractual a...

Menon and Williams indicate that many United States (US) over-the-counter (OTC) ®rms which form audit committees appear not to rely on them (cf. Menon, K., Williams, J.D. 1994. Journal of Accounting and Public Policy, 13(2), 121±139). Reliance on audit committees appears to depend upon board composition, while audit committee activity is associated with ®rm size. In this paper, we compare the U...

Evidence suggests that banks, like firms, face financial frictions when raising funds. The authors develop a quantitative, monetary business cycle model in which agency problems affect both the relationship between banks and firms and the relationship between banks and their depositors. As a result, bank capital and entrepreneurial net worth jointly determine aggregate investment, and are impor...

This paper proposes the yield spread between public bonds and bank loans of the same firm (the Bond-Bank spread) as a measure of compensation for agency costs that cannot be mitigated by bondholders but can be mitigated by banks due to their ability to monitor the firm and renegotiate the loan. In a model of debt pricing and choice, the tradeoff between firm moral hazard and bank opportunism, l...