New Research in Corporate Finance and Banking

by Biais, Bruno; Pagano, Marco

• ISBN13: 9780199243242
• ISBN10: 0199243247
• Format: Paperback
• Copyright: 2002-06-20
• Publisher: Oxford University Press

Summary

In recent years, European financial economists have been brought together, via research projects and bubble01ces, by the Centre for Economic Policy Research (CEPR). These fruitful interactions have contributed to the development of financial economics in Europe, and have generated a strongflow of interesting writing---both theoretical and empirical---in the fields of financial markets and corporate finance.One of the common questions posed by researchers in this field is why security markets have such different roles and importance relative to banks in different countries. A related issue is whether these different financial arrangements matter for the functioning of the real economy. The firstsection of this volume approaches these issues by focusing on the functioning of the primary equity market, or the process by which companies 'go public', which marks the transition from complete reliance on bank financing to partial reliance on security markets. The second section approaches theseissues at a 'systemic' level, attempting to identify the comparative advantages of banks and security markets in solving the information problems involved in financing companies. The third section explores the variety in the design of credit contracts and institutions, asking questions like: Why dosome companies borrow from a single bank and others from several banks? Why do some banks share information about their customers? The final section illustrates that the same informational frictions that explain the design of credit contracts and institutions can also affect real economicactivity.

Table of Contents

Introduction	vii
PART I. GOING PUBLIC
Why Do Companies Go Public? An Empirical Analysis	3	(36)
Marco Pagano
Fabio Panetta
Luigi Zingales
Underpricing, Ownership, and Control in Initial Public Offerings of Equity Securities in the UK	39	(22)
M. J. Brennan
J. Franks
Going Public and the Ownership Structure of the Firm	61	(30)
Antonio S. Mello
John E. Parsons
Toeholds and Takeovers	91	(26)
Jeremy Bulow
Ming Huang
Paul Klemperer
Underpricing and Entrepreneurial Wealth Losses in IPOs: Theory and Evidence	117	(28)
Michel A. Habib
Alexander P. Ljungqvist
PART II. FINANCIAL SYSTEM ARCHITECTURE
Financial System Architecture	145	(36)
Arnoud W. A. Boot
Anjan V. Thakor
Banking Scope and Financial Innovation	181	(32)
Arnoud W. A. Boot
Anjan V. Thakor
PART III. DESIGN OF CREDIT CONTRACTS AND INSTITUTIONS
Optimal Debt Structure and the Number of Creditors	213	(22)
Patrick Bolton
David S. Scharfstein
Information Sharing in Credit Markets	235	(24)
Marco Pagano
Tullio Jappelli
Endogenous Communication among Lenders and Entrepreneurial Incentives	259	(30)
A. Jorge Padilla
Marco Pagano
PART IV. CREDIT MARKET IMPERFECTIONS AND ECONOMIC ACTIVITY
Survival of the Fittest or the Fattest? Exit and Financing in the Trucking Industry	289	(34)
Luigi Zingales
Endogenous Cycles in a Stiglitz-Weiss Economy	323	(22)
Javier Suarez
Oren Sussman
Index	345