Contractual Savings, Capital Markets, and Firms' Financing Choices

The authors analyze the relationship between the development and asset allocation of contractual savings and firms' capital structures. The authors develop a simple model of firms' leverage and debt maturity decisions. They illustrate the...

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Main Authors:	Impavido, Gregorio, Musalem, Alberto R., Tressel, Thierry
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ADVERSE SELECTION ASSET BACKED SECURITIES ASSET MANAGEMENT ASYMMETRIC INFORMATION BALANCE SHEET BALANCE SHEETS BANK LOANS BANK RUNS BANKING SECTOR BANKING SYSTEM BANKRUPTCY BANKS BENCHMARK BONDS BORROWING CAPITAL FLOWS CAPITAL MARKETS CAPITALIZATION COMPARATIVE ADVANTAGE CONTAGION CONTRACTUAL SAVINGS INSTITUTIONS CORPORATE GOVERNANCE COST OF CAPITAL COUNTRY COMPARISONS DEBT DEVELOPMENT STRATEGIES DISCOUNTED VALUE DIVIDENDS ECONOMIC STABILITY ECONOMIES OF SCALE EMPIRICAL EVIDENCE EQUILIBRIUM EQUITY CAPITAL EQUITY INVESTMENTS EQUITY MARKETS EXPECTED RETURN EXPROPRIATION EXTERNAL FINANCING FACE VALUE FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL DEEPENING FINANCIAL INSTITUTIONS FINANCIAL RESOURCES FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL STRUCTURES FINANCIAL SYSTEMS FOREIGN CURRENCY FUTURE CASH FLOWS GDP GOVERNMENT BONDS HEDGE FUNDS HOUSING INSURANCE INSURANCE INDUSTRY INTEREST RATE INVESTMENT BANKS LIQUID ASSETS LIQUIDATION LIQUIDATION VALUE LIQUIDITY MACROECONOMIC MANAGEMENT MACROECONOMIC STABILITY MARKET POWER MONETARY POLICIES MORAL HAZARD MUTUAL FUNDS PERFECT INFORMATION POLICY MAKERS PORTFOLIO PORTFOLIOS PRESENT VALUE PRIVATE INFORMATION PRODUCTIVE ASSETS PROFITABILITY PROPERTY RIGHTS PUBLIC DEBT RETIREMENT RISK PREMIUM SAVINGS SAVINGS BEHAVIOR SECURITIES SECURITIES MARKETS SHAREHOLDERS SHORT TERM DEBT STOCK MARKETS TECHNOLOGICAL FACTORS TERM FINANCE TRADING SYSTEMS TRANSACTION COSTS TRANSPARENCY
Online Access:	http://documents.worldbank.org/curated/en/2001/06/2873678/contractual-savings-capital-markets-firms-financing-choices http://hdl.handle.net/10986/19653

id	okr-10986-19653
recordtype	oai_dc
spelling	okr-10986-196532021-04-23T14:03:43Z Contractual Savings, Capital Markets, and Firms' Financing Choices Impavido, Gregorio Musalem, Alberto R. Tressel, Thierry ADVERSE SELECTION ASSET BACKED SECURITIES ASSET MANAGEMENT ASYMMETRIC INFORMATION BALANCE SHEET BALANCE SHEETS BANK LOANS BANK RUNS BANKING SECTOR BANKING SYSTEM BANKRUPTCY BANKS BENCHMARK BONDS BORROWING CAPITAL FLOWS CAPITAL MARKETS CAPITALIZATION COMPARATIVE ADVANTAGE CONTAGION CONTRACTUAL SAVINGS INSTITUTIONS CORPORATE GOVERNANCE COST OF CAPITAL COUNTRY COMPARISONS DEBT DEVELOPMENT STRATEGIES DISCOUNTED VALUE DIVIDENDS ECONOMIC STABILITY ECONOMIES OF SCALE EMPIRICAL EVIDENCE EQUILIBRIUM EQUITY CAPITAL EQUITY INVESTMENTS EQUITY MARKETS EXPECTED RETURN EXPROPRIATION EXTERNAL FINANCING FACE VALUE FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL DEEPENING FINANCIAL INSTITUTIONS FINANCIAL RESOURCES FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL STRUCTURES FINANCIAL SYSTEMS FOREIGN CURRENCY FUTURE CASH FLOWS GDP GOVERNMENT BONDS HEDGE FUNDS HOUSING INSURANCE INSURANCE INDUSTRY INTEREST RATE INVESTMENT BANKS LIQUID ASSETS LIQUIDATION LIQUIDATION VALUE LIQUIDITY MACROECONOMIC MANAGEMENT MACROECONOMIC STABILITY MARKET POWER MONETARY POLICIES MORAL HAZARD MUTUAL FUNDS PERFECT INFORMATION POLICY MAKERS PORTFOLIO PORTFOLIOS PRESENT VALUE PRIVATE INFORMATION PRODUCTIVE ASSETS PROFITABILITY PROPERTY RIGHTS PUBLIC DEBT RETIREMENT RISK PREMIUM SAVINGS SAVINGS BEHAVIOR SECURITIES SECURITIES MARKETS SHAREHOLDERS SHORT TERM DEBT STOCK MARKETS TECHNOLOGICAL FACTORS TERM FINANCE TRADING SYSTEMS TRANSACTION COSTS TRANSPARENCY The authors analyze the relationship between the development and asset allocation of contractual savings and firms' capital structures. The authors develop a simple model of firms' leverage and debt maturity decisions. They illustrate the mechanisms through which contractual savings development may affect corporate financing patterns. In the empirical section, the authors show that the development and asset allocation of contractual savings have an independent impact on firms' financing choices. Different channels are identified. In market-based economies, an increase in the proportion of shares in the portfolio of contractual savings leads to a decline in firms' leverage. In bank-based economies, instead, an increase in the size of contractual savings is associated with an increase in leverage and debt maturity in the corporate sector 2014-08-26T14:26:19Z 2014-08-26T14:26:19Z 2001-06 http://documents.worldbank.org/curated/en/2001/06/2873678/contractual-savings-capital-markets-firms-financing-choices http://hdl.handle.net/10986/19653 English en_US Policy Research Working Paper;No. 2612 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ADVERSE SELECTION ASSET BACKED SECURITIES ASSET MANAGEMENT ASYMMETRIC INFORMATION BALANCE SHEET BALANCE SHEETS BANK LOANS BANK RUNS BANKING SECTOR BANKING SYSTEM BANKRUPTCY BANKS BENCHMARK BONDS BORROWING CAPITAL FLOWS CAPITAL MARKETS CAPITALIZATION COMPARATIVE ADVANTAGE CONTAGION CONTRACTUAL SAVINGS INSTITUTIONS CORPORATE GOVERNANCE COST OF CAPITAL COUNTRY COMPARISONS DEBT DEVELOPMENT STRATEGIES DISCOUNTED VALUE DIVIDENDS ECONOMIC STABILITY ECONOMIES OF SCALE EMPIRICAL EVIDENCE EQUILIBRIUM EQUITY CAPITAL EQUITY INVESTMENTS EQUITY MARKETS EXPECTED RETURN EXPROPRIATION EXTERNAL FINANCING FACE VALUE FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL DEEPENING FINANCIAL INSTITUTIONS FINANCIAL RESOURCES FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL STRUCTURES FINANCIAL SYSTEMS FOREIGN CURRENCY FUTURE CASH FLOWS GDP GOVERNMENT BONDS HEDGE FUNDS HOUSING INSURANCE INSURANCE INDUSTRY INTEREST RATE INVESTMENT BANKS LIQUID ASSETS LIQUIDATION LIQUIDATION VALUE LIQUIDITY MACROECONOMIC MANAGEMENT MACROECONOMIC STABILITY MARKET POWER MONETARY POLICIES MORAL HAZARD MUTUAL FUNDS PERFECT INFORMATION POLICY MAKERS PORTFOLIO PORTFOLIOS PRESENT VALUE PRIVATE INFORMATION PRODUCTIVE ASSETS PROFITABILITY PROPERTY RIGHTS PUBLIC DEBT RETIREMENT RISK PREMIUM SAVINGS SAVINGS BEHAVIOR SECURITIES SECURITIES MARKETS SHAREHOLDERS SHORT TERM DEBT STOCK MARKETS TECHNOLOGICAL FACTORS TERM FINANCE TRADING SYSTEMS TRANSACTION COSTS TRANSPARENCY
spellingShingle	ADVERSE SELECTION ASSET BACKED SECURITIES ASSET MANAGEMENT ASYMMETRIC INFORMATION BALANCE SHEET BALANCE SHEETS BANK LOANS BANK RUNS BANKING SECTOR BANKING SYSTEM BANKRUPTCY BANKS BENCHMARK BONDS BORROWING CAPITAL FLOWS CAPITAL MARKETS CAPITALIZATION COMPARATIVE ADVANTAGE CONTAGION CONTRACTUAL SAVINGS INSTITUTIONS CORPORATE GOVERNANCE COST OF CAPITAL COUNTRY COMPARISONS DEBT DEVELOPMENT STRATEGIES DISCOUNTED VALUE DIVIDENDS ECONOMIC STABILITY ECONOMIES OF SCALE EMPIRICAL EVIDENCE EQUILIBRIUM EQUITY CAPITAL EQUITY INVESTMENTS EQUITY MARKETS EXPECTED RETURN EXPROPRIATION EXTERNAL FINANCING FACE VALUE FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL DEEPENING FINANCIAL INSTITUTIONS FINANCIAL RESOURCES FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL STRUCTURES FINANCIAL SYSTEMS FOREIGN CURRENCY FUTURE CASH FLOWS GDP GOVERNMENT BONDS HEDGE FUNDS HOUSING INSURANCE INSURANCE INDUSTRY INTEREST RATE INVESTMENT BANKS LIQUID ASSETS LIQUIDATION LIQUIDATION VALUE LIQUIDITY MACROECONOMIC MANAGEMENT MACROECONOMIC STABILITY MARKET POWER MONETARY POLICIES MORAL HAZARD MUTUAL FUNDS PERFECT INFORMATION POLICY MAKERS PORTFOLIO PORTFOLIOS PRESENT VALUE PRIVATE INFORMATION PRODUCTIVE ASSETS PROFITABILITY PROPERTY RIGHTS PUBLIC DEBT RETIREMENT RISK PREMIUM SAVINGS SAVINGS BEHAVIOR SECURITIES SECURITIES MARKETS SHAREHOLDERS SHORT TERM DEBT STOCK MARKETS TECHNOLOGICAL FACTORS TERM FINANCE TRADING SYSTEMS TRANSACTION COSTS TRANSPARENCY Impavido, Gregorio Musalem, Alberto R. Tressel, Thierry Contractual Savings, Capital Markets, and Firms' Financing Choices
relation	Policy Research Working Paper;No. 2612
description	The authors analyze the relationship between the development and asset allocation of contractual savings and firms' capital structures. The authors develop a simple model of firms' leverage and debt maturity decisions. They illustrate the mechanisms through which contractual savings development may affect corporate financing patterns. In the empirical section, the authors show that the development and asset allocation of contractual savings have an independent impact on firms' financing choices. Different channels are identified. In market-based economies, an increase in the proportion of shares in the portfolio of contractual savings leads to a decline in firms' leverage. In bank-based economies, instead, an increase in the size of contractual savings is associated with an increase in leverage and debt maturity in the corporate sector
format	Publications & Research :: Policy Research Working Paper
author	Impavido, Gregorio Musalem, Alberto R. Tressel, Thierry
author_facet	Impavido, Gregorio Musalem, Alberto R. Tressel, Thierry
author_sort	Impavido, Gregorio
title	Contractual Savings, Capital Markets, and Firms' Financing Choices
title_short	Contractual Savings, Capital Markets, and Firms' Financing Choices
title_full	Contractual Savings, Capital Markets, and Firms' Financing Choices
title_fullStr	Contractual Savings, Capital Markets, and Firms' Financing Choices
title_full_unstemmed	Contractual Savings, Capital Markets, and Firms' Financing Choices
title_sort	contractual savings, capital markets, and firms' financing choices
publisher	World Bank, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2001/06/2873678/contractual-savings-capital-markets-firms-financing-choices http://hdl.handle.net/10986/19653
_version_	1764440179890716672

Contractual Savings, Capital Markets, and Firms' Financing Choices

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