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All Outputs (10)

Can participation in IMF programs facilitate sovereign debt rescheduling? The role of program size (2024)
Journal Article
Bai, Y., Banerji, S., Wang, Z., & Zhang, W. (2024). Can participation in IMF programs facilitate sovereign debt rescheduling? The role of program size. Journal of International Money and Finance, 144, Article 103079. https://doi.org/10.1016/j.jimonfin.2024.103079

We develop a theoretical model to explain the possible inverted U-shaped relationship between IMF loan size and the probability of sovereign debt rescheduling. Given that the IMF is a de facto senior creditor, borrowing too much from the IMF leaves a... Read More about Can participation in IMF programs facilitate sovereign debt rescheduling? The role of program size.

Political connections, informational asymmetry, and the efficient resolution of financial distress (2022)
Journal Article
Aney, M. S., & Banerji, S. (2022). Political connections, informational asymmetry, and the efficient resolution of financial distress. Economic Modelling, 114, Article 105901. https://doi.org/10.1016/j.econmod.2022.105901

We show that securities issued by a distressed firm, often through exchange offers, provide the most efficient resolution of financial restructuring. Information asymmetry between the firm-bank coalition and small bondholders gives rise to other form... Read More about Political connections, informational asymmetry, and the efficient resolution of financial distress.

Money as a weapon: Financing a winner-take-all competition (2020)
Journal Article
Banerji, S., & Fang, D. (2021). Money as a weapon: Financing a winner-take-all competition. Journal of Corporate Finance, 66, Article 101783. https://doi.org/10.1016/j.jcorpfin.2020.101783

We study capital structure of pioneering startup firms who are often credited with opening of new markets and niches in the digital era and often face the threat of potential entry of successful, cash-rich firms from adjacent markets. Our analysis is... Read More about Money as a weapon: Financing a winner-take-all competition.

Firm boundaries and financing with opportunistic stakeholder behaviour (2019)
Journal Article
Aney, M. S., Appelbaum, E., & Banerji, S. (2019). Firm boundaries and financing with opportunistic stakeholder behaviour. Journal of Corporate Finance, 56, 437-457. https://doi.org/10.1016/j.jcorpfin.2018.12.003

We explore the impact of strategic behaviour of equity holders, debt holders and an opportunistic supplier of a critical input on the firm's capital structure, organisational design, and its outsourcing decision. We show that the supplier can trigger... Read More about Firm boundaries and financing with opportunistic stakeholder behaviour.

Political connections, bailout in financial markets and firm value (2016)
Journal Article
Banerji, S., Duygun, M., & Shaban, M. (2018). Political connections, bailout in financial markets and firm value. Journal of Corporate Finance, 50, 388-401. https://doi.org/10.1016/j.jcorpfin.2016.12.001

The paper shows that politically motivated interventions in the financial market in the form of bailing out borrowing firms reduce banks’ incentives to gather valuable information about firms’ projects. This loss of information is a hidden cost which... Read More about Political connections, bailout in financial markets and firm value.

Universal banking, asymmetric information and the stock market (2016)
Journal Article
Banerji, S., & Basu, P. (2017). Universal banking, asymmetric information and the stock market. Economic Modelling, 60, https://doi.org/10.1016/j.econmod.2016.09.009

This paper aims to explore the role of the universal banking system in contributing to the stock market bust in the wake of the financial crisis 2008–2009 when bankers might have incentive to hide information from shareholders. We set up a stylized m... Read More about Universal banking, asymmetric information and the stock market.

Corporate cash holdings: causes and consequences (2015)
Journal Article
Amess, K., Banerji, S., & Lampousis, A. (2015). Corporate cash holdings: causes and consequences. International Review of Financial Analysis, 42, https://doi.org/10.1016/j.irfa.2015.09.007

The considerable growth in corporate cash holdings around the world has prompted scholarly interest. Consequently, there is now a large academic literature examining cash holdings and their impact on corporate outcomes and firm values. This article r... Read More about Corporate cash holdings: causes and consequences.

Monitoring costs, credit constraints and entrepreneurship (2015)
Journal Article
Banerji, S., Raj, R. S., & Sen, K. (2016). Monitoring costs, credit constraints and entrepreneurship. Manchester School, 84(5), https://doi.org/10.1111/manc.12122

Access to finance is seen as a binding constraint on the growth of household enterprises in developing countries. We develop a principal-agent model of a household enterprise and show that limited access to finance and monitoring costs constrain the... Read More about Monitoring costs, credit constraints and entrepreneurship.

Borrower's moral hazard, risk premium, and welfare: a comparison of universal and stand-alone banking systems (2015)
Journal Article
Banerji, S., & Basu, P. (in press). Borrower's moral hazard, risk premium, and welfare: a comparison of universal and stand-alone banking systems. Journal of Economic Asymmetries, 12(1), https://doi.org/10.1016/j.jeca.2015.01.003

Does the unification of retail and investment banking necessarily heighten risk in financial markets? Using a simple two period intertemporal model with borrower's moral hazard and uninsured risk, we argue that the integration in financial service ma... Read More about Borrower's moral hazard, risk premium, and welfare: a comparison of universal and stand-alone banking systems.