Do Firms Adjust Toward a Target Leverage Level? Staff Working Paper 2007-50 Zhaoxia Xu This paper studies capital structure adjustment mechanisms of firms that experience substantial changes in leverage. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial markets, International topics JEL Code(s): G, G3, G32
Estimating and Comparing the Implied Cost of Equity for Canadian and U.S. Firms Staff Working Paper 2007-48 Jonathan Witmer, Lorie Zorn This paper estimates the implied cost of equity for Canadian and U.S. firms using a methodology based on the dividend discount model and utilizing firms' current stock price and analysts' forecasted earnings. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial markets, International topics JEL Code(s): G, G3, G30, G38
Cyclical Behavior of Debt and Equity Using a Panel of Canadian Firms Staff Working Paper 2007-44 Francisco Covas, Wouter den Haan We document the cyclical behavior of debt, equity, and retained earnings for different firm categories using firm-level Canadian data. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles JEL Code(s): E, E3, E32, G, G3, G32
Firms Dynamics, Bankruptcy Laws and Total Factor Productivity Staff Working Paper 2007-17 Hajime Tomura This paper analyzes endogenous fluctuations in total factor productivity (TFP) in a dynamic general equilibrium model with heterogeneous agents, and illustrates the interaction of credit market frictions, asset prices, the entry and exit of firms, and fluctuations in TFP in response to firm-level productivity and aggregate credit-market shocks. I also analyze the effect of bankruptcy and foreclosure laws on fluctuations in TFP through their effect on credit market frictions. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial stability, Productivity JEL Code(s): D, D2, D24, E, E4, E44, G, G3, G33
Stress Testing the Corporate Loans Portfolio of the Canadian Banking Sector Staff Working Paper 2006-47 Miroslav Misina, David Tessier, Shubhasis Dey Stress testing, at its most general level, is an investigation of the performance of an entity under abnormal operating conditions. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions, Financial stability JEL Code(s): C, C1, C15, G, G2, G21, G3, G33
The Role of Debt and Equity Finance over the Business Cycle Staff Working Paper 2006-45 Francisco Covas, Wouter den Haan The authors show that debt and equity issuance are procyclical for most listed U.S. firms. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Financial stability JEL Code(s): E, E3, G, G1, G3
Estimation of the Default Risk of Publicly Traded Canadian Companies Staff Working Paper 2006-28 Georges Dionne, Sadok Laajimi, Sofiane Mejri, Madalina Petrescu Two models of default risk are prominent in the financial literature: Merton's structural model and Altman's non-structural model. Content Type(s): Staff research, Staff working papers Research Topic(s): Credit and credit aggregates, Debt management, Econometric and statistical methods, Financial markets, Recent economic and financial developments JEL Code(s): G, G2, G21, G24, G28, G3, G33
Ownership Concentration and Competition in Banking Markets Staff Working Paper 2006-7 Alexandra Lai, Raphael Solomon Many countries prohibit large shareholdings in their domestic banks.The authors examine whether such a restriction restrains competition in a duopolistic loan market. Blockholders may influence managers' output decisions by choosing capital structure, as in Brander and Lewis (1986). Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions, Financial services, Financial system regulation and policies JEL Code(s): G, G2, G21, G28, G3, G32, L, L1, L10
Pre-Bid Run-Ups Ahead of Canadian Takeovers: How Big Is the Problem? Staff Working Paper 2005-3 Michael R. King, Maksym Padalko The authors study the price - volume dynamics ahead of the first public announcement of a takeover for 420 Canadian firms from 1985 to 2002. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial markets JEL Code(s): G, G1, G14, G18, G3, G34
Trade Credit and Credit Rationing in Canadian Firms Staff Working Paper 2004-49 Rose Cunningham Burkart and Ellingsen's (2004) model of trade credit and bank credit rationing predicts that trade credit will be used by medium-wealth and low-wealth firms to help ease bank credit rationing. Content Type(s): Staff research, Staff working papers Research Topic(s): Credit and credit aggregates, Financial markets JEL Code(s): G, G1, G14, G2, G21, G3, G32