Conventional wisdom in the mortgage industry holds that loan-to-value (LTV) ratios are positively correlated with mortgage default rates. However, not all empirical studies of mortgage loan performance support this view. This paper offers a theoretical signaling model of why the correlation between LTV ratios and default risk is contingent upon the default costs of the borrower. Specifically, the model proposes that when default costs are high there exists a separating equilibrium in which risky borrowers will self-select into lower LTV loans to reduce the probability of facing a costly default, while safe borrowers will self-select into higher LTV loans as a signal of their enhanced creditworthiness. This adverse selection process gives rise to the possibility of higher default probabilities for lower LTV loans. Conversely, when default costs are low the conventional result, in which risky borrowers select higher LTV loans than safe borrowers, is obtained. Empirical results, based on a sample of 859 single-family residential mortgage loans drawn from the portfolio of a national mortgage lender, are consistent with the separating equilibria predicted by the model. 相似文献
Although the relationship between remittances and output is still inconclusive in literature, most studies find that remittances
have a positive effect on output in the long run. Contrary to this conventional direction of causality from remittances to
output, our study finds that output alone determined long-run movements in remittances in a positive direction in the Bangladesh
economy over the last 35 years from 1976 to 2010. We use the autoregressive distributive lag (ARDL) bounds testing approach
to cointegration to explore this long-run relationship. Surprisingly, remittances do not appear to be a long-run forcing variable
to the explanation of Bangladesh’s output over the same period. While examining the channels of this output–remittance mechanism
remains an area of research for the future, we hypothesize that the rise in remittances in response to increased income occurs
through higher import demand and greater investment opportunities. This finding implies that Bangladeshi policymakers can
influence remittances through national output in the long run. 相似文献
This paper tests the relationship between industry-level mergers and business cycle using panel tests that allow us to control
for macro-economic and industry-level determinants of merger activity. We find robust evidence that both related and unrelated industry-level mergers are pro-cyclical. However, the evidence is asymmetric between related and unrelated mergers. We also find strong evidence in support of two major theories of merger activity that have been proposed and tested
in the existing literature, namely, neoclassical theory and behavioral theory. The proxies of both neoclassical and behavioral
theories explain merger activity in general; however, the pro-cyclicality of mergers is not fully captured by any of these
proxies, individually or collectively. 相似文献
Coordination games can represent a wide range of issues in real estate. In this paper, we present the results of an experiment designed to investigate the impact of regulatory threats in a coordination game. The experiment consisted of two sessions. The first session included a simple coordination game. We found significant coordination failures among the players in this session. We then conducted a second session in which we introduced a new player who had the choice to either intervene and regulate the payoffs of the other players or not to intervene and let the other players' actions determine the outcome. Our objective was to test whether the introduction of such a regulatory authority would induce more cooperative play by the players and move the market to the Pareto superior outcome. We found this not to be the case. There was no statistically significant difference between the choices of subjects in the two sessions. 相似文献
The aim of this study is to compare the various Halal certification bodies around the world based on the criteria for Halal certification. As the process of awarding Halal certificates varies among the certification bodies, it is pertinent to identify the differences between these selected certification bodies to gauge the gap existing among them. This study will also identify the position of JAKIM, which is the main Halal certification body in Malaysia, among the other main certification bodies around the world. Nine categories were identified in awarding Halal certification to companies. Comparative analysis was then used to see the differences that exist between these certification bodies. The results of the analysis indicate that, based on the nine categories identified, JAKIM is the strictest body in awarding Halal certification to companies. 相似文献
ABSTRACTWith the growing importance of retailers and the realization that brands are among retailers’ most valuable assets, store equity has become a management priority. Store equity has been recognized as a key element that helps retailers build a sustainable competitive advantage. In this context, this study presents a conceptual model of store equity and identifies key dimensions that contribute to its formation. A comprehensive review of studies within the area of store equity was conducted to compare and analyze the dimensions of store equity as discussed in the existing literature. The findings show that store equity consists of two main dimensions: store awareness and store image, which comprises merchandise, atmosphere, and convenience. In addition, important areas for future research on store equity and related topics are highlighted. 相似文献
Using a panel of industry‐average implied cost of equity capital and the value of prior year aggregate industry mergers, we find strong evidence that the industry cost of equity capital is negatively associated with industry merger activity. Our evidence is consistent with greater media coverage, analyst following, or increase in investor attention associated with industry merger activity lowering the required return on equity for firms in an industry that is not involved in merger activity via the ‘information risk’ or ‘incomplete information’ channels. 相似文献
This study examines the impact of the regulatory changes introduced by the Federal Financial Institutions Examination Council (FFIEC) in 1999 and by the Securities and Exchange Commission and FFIEC in 2001 on the income smoothing approaches and mechanisms employed by the United States (US) banking industry. We find that the relationship between previous quarter charge-offs and current quarter recoveries that was prevalent in the 1990’s to be insignificant for homogeneous loans but for heterogeneous loans the relationship became significant in the years following the regulatory changes. Recoveries are positively and significantly associated with the surprise net interest margin or return on assets which implies recoveries are primarily determined by the economic realities of the charged-off loans. The regulatory changes have strengthened the relationship between current quarter recoveries from heterogeneous loans and current quarter charge-offs but for homogeneous loans this relationship weakened insignificantly. The new regulations reduced the surprise gross loan charge-offs suggesting that the enforcement improved the accuracy of the provision as a predictor of next quarter’s gross loan charge-offs.
In April 2012, Delta Air Lines (Delta) purchased a mothballed oil refinery. We use this case to illustrate when, how, and why vertical integration (VI) can hedge input price risk. First, we show that stockholders and creditors expected the move to create wealth. Consistent with their predictions, Delta's exposure to refining margins, cash flow volatility, cost of debt, and default probability all decreased, relative to peers, postacquisition. Our evidence is consistent with the refinery influencing Delta's operating strategies, especially in its most affected markets. The case demonstrates how asset specificity and financial hedging frictions can justify VI. 相似文献