Asset Details
Do you wish to reserve the book?
Essays in Financial Economics
Hey, we have placed the reservation for you!
By the way, why not check out events that you can attend while you pick your title.
Oops! Something went wrong.
Looks like we were not able to place the reservation. Kindly try again later.
Are you sure you want to remove the book from the shelf?
Essays in Financial Economics
Do you wish to request the book?
Essays in Financial Economics
Please be aware that the book you have requested cannot be checked out. If you would like to checkout this book, you can reserve another copy
We have requested the book for you!
Your request is successful and it will be processed during the Library working hours. Please check the status of your request in My Requests.
Oops! Something went wrong.
Looks like we were not able to place your request. Kindly try again later.
Dissertation
Essays in Financial Economics
2016
Overview
This thesis studies how credit market frictions affect debt pricing and the behavior of borrowers and lenders. In the first chapter, I study the matching of corporate borrowers with banks and the implications of endogenous matching for credit provision. I find that bank-dependent firms borrow from well capitalized banks, while firms with access to the bond market borrow from banks with less capital. This matching improves access to credit during a crisis by pairing bank-dependent firms with stable banks. During the 2008 Financial Crisis, bank-dependent borrowers faced significantly greater loan supply from their relationship banks than they would have without this matching. In the second chapter, I investigate the pricing of bonds issued by states and local governments. I use three distinct, complementary approaches to decompose municipal bond spreads into default and liquidity components, finding that default risk accounts for 74% to 84% of the average municipal bond spread after adjusting for tax-exempt status. The price of default risk is high given the rare incidence of municipal default and implies a high risk premium. In the third chapter, I explore the nature of corporate capital structure adjustments. The third chapter is coauthored with Arthur Korteweg, a professor at the University of Southern California, and Ilya A. Strebulaev, my principal adviser. We show that the frequency of capital structure adjustment varies significantly across firms. Using new hand-collected data from detailed corporate filings, we find that frequently refinancing firms tend to use lines of credit, which have minimal adjustment costs, to fund operating losses and working capital needs. In contrast, infrequently refinancing firms use long-term debt and equity, which have higher issuance costs, to fund investment and rebalance capital structure. Our findings suggest that adjustment costs are an important determinant of firms' financing choices.
