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Becker, Bo

Works: 24 works in 106 publications in 2 languages and 531 library holdings
Roles: Author
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Publications about Bo Becker
Publications by Bo Becker
Most widely held works by Bo Becker
Does shareholder proxy Access improve firm value? : evidence from the business roundtable challenge by Bo Becker( Book )
12 editions published between 2010 and 2012 in English and held by 15 libraries worldwide
We use the Business Roundtable's challenge to the SEC's 2010 proxy access rule as a natural experiment to measure the value of shareholder proxy access. We find that firms that would have been most vulnerable to proxy access, as measured by institutional ownership and activist institutional ownership in particular, lost value on October 4, 2010, when the SEC unexpectedly announced that it would delay implementation of the Rule in response to the Business Roundtable challenge. We also examine intra-day returns and find that the value loss occurred just after the SEC's announcement on October 4. We find similar results on July 22, 2011, when the D.C. Circuit ruled in favor of the Business Roundtable. These findings are consistent with the view that financial markets placed a positive value on shareholder access, as implemented in the SEC's 2010 Rule -- National Bureau of Economic Research web site
Local dividend clienteles by Bo Becker( Book )
8 editions published in 2009 in English and held by 14 libraries worldwide
We exploit demographic variation to identify the effect of dividend demand on firm payout policy. Retail investors tend to hold local stocks and older investors prefer dividend-paying stocks. Together, these tendencies generate geographically-varying demand for dividends. Firms headquartered in areas in which seniors constitute a large fraction of the population are more likely to pay dividends, initiate dividends, and have higher dividend yields. However, the fraction of seniors is uncorrelated with share repurchases, investment, or profitability, suggesting that geographic variation in dividend payout is not driven by some unmeasured firm characteristic affecting the ability or willingness to distribute cash to shareholders. We also provide indirect evidence as to why firm managers may cater to the demand for dividends from local seniors. Overall, these results suggest that the composition of a firm's investor base affects corporate policy choices
Payout taxes and the allocation of investment by Bo Becker( Book )
11 editions published between 2010 and 2011 in English and held by 14 libraries worldwide
When corporate payout is taxed, internal equity (retained earnings) is cheaper than external equity (share issues). If there are no perfect substitutes for equity finance, payout taxes may therefore have an effect on the investment of firms. High taxes will favor investment by firms who can finance internally. Using an international panel with many changes in payout taxes, we show that this prediction holds well. Payout taxes have a large impact on the dynamics of corporate investment and growth. Investment is "locked in" to profitable firms when payout is heavily taxed. Thus, apart from any level effects, payout taxes change the allocation of capital
Reaching for yield in the bond market by Bo Becker( Book )
8 editions published between 2011 and 2013 in English and held by 14 libraries worldwide
Reaching-for-yield-investors' propensity to buy riskier assets in order to achieve higher yields-is believed to be an important factor contributing to the credit cycle. This paper presents a detailed study of this phenomenon in the corporate bond market. We show that insurance companies, the largest institutional holders of corporate bonds, reach for yield in choosing their investments. Consistent with lower rated bonds bearing higher capital requirement, insurance firms' prefer to hold higher rated bonds. However, conditional on credit ratings, insurance portfolios are systematically biased toward higher yield, higher CDS bonds. Reaching-for-yield exists both in the primary and the secondary market, and is robust to a series of bond and issuer controls, including bond liquidity and duration, and issuer fixed effects. This behavior is related to the business cycle, being most pronounced during economic expansions. It is also more pronounced for firms with poor corporate governance and for which regulatory capital requirement is more binding. A comparison of the ex-post performance of bonds acquired by insurance companies shows no outperformance, but higher systematic risk and volatility
Cyclicality of credit supply : firm level evidence by Bo Becker( Book )
9 editions published between 2010 and 2011 in English and held by 13 libraries worldwide
Theory predicts that there is a close link between bank credit supply and the evolution of the business cycle. Yet fluctuations in bank-loan supply have been hard to quantify in the time-series. While loan issuance falls in recessions, it is not clear if this is due to demand or supply. We address this question by studying firms' substitution between bank debt and non-bank debt (public bonds) using firm-level data. Any firm that raises new debt must have a positive demand for external funds. Conditional on issuance of new debt, we interpret firm's switching from loans to bonds as a contraction in bank credit supply. We find strong evidence of substitution from loans to bonds at times characterized by tight lending standards, high levels of non-performing loans and loan allowances, low bank share prices and tight monetary policy. The bank-to-bond substitution can only be measured for firms with access to bond markets. However, we show that this substitution behavior has strong predictive power for bank borrowing and investments by small, out-of-sample firms. We consider and reject several alternative explanations of our findings -- National Bureau of Economic Research web site
The effect of financial development on the investment-cash flow relationship : cross-country evidence from Europe by Bo Becker( Book )
6 editions published in 2006 in English and held by 13 libraries worldwide
Estimating the effects of large shareholders using a geographic instrument by Bo Becker( Book )
7 editions published between 2009 and 2011 in English and held by 11 libraries worldwide
Large shareholders may play an important role for firm performance and policies, but identifying this empirically presents a challenge due to the endogeneity of ownership structures. We develop and test an empirical framework which allows us to separate selection from treatment effects of large shareholders. Individual blockholders tend to hold blocks in public firms located close to where they reside. Using this empirical observation, we develop an instrument - the density of wealthy individuals near a firm's headquarters - for the presence of a large, non-managerial individual shareholder in a firm. These shareholders have a large impact on firms, controlling for selection effects
Fiduciary duties and equity-debtholder conflicts by Bo Becker( Book )
7 editions published in 2011 in English and held by 10 libraries worldwide
We use an important legal event as a natural experiment to examine the effect of management fiduciary duties on equity-debt conflicts. A 1991 Delaware bankruptcy ruling changed the nature of corporate directors' fiduciary duties in firms incorporated in that state. This change limited managers' incentives to take actions favoring equity over debt for firms in the vicinity of financial distress. We show that this ruling increased the likelihood of equity issues, increased investment, and reduced firm risk, consistent with a decrease in debt-equity conflicts of interest. The changes are isolated to firms relatively closer to default. The ruling was also followed by an increase in average leverage and a reduction in covenant use. Finally, we estimate the welfare implications of this change and find that firm values increased when the rules were introduced. We conclude that managerial fiduciary duties affect equity-bond holder conflicts in a way that is economically important, has impact on ex ante capital structure choices, and affects welfare
Insolvency Resolution and the Missing High Yield Bond Markets by Bo Becker( Book )
5 editions published in 2013 in English and held by 9 libraries worldwide
In many countries, bankruptcy is associated with low recovery by creditors. We develop a model of corporate credit markets in such an environment. Corporate credit is provided by either a bond market or risk-averse banks. Restructuring of insolvent firms happens out of court if in-court bankruptcy is inefficient, giving banks an advantage over bondholders. Riskier borrowers will use bank loans anywhere, but also bonds when bankruptcy is efficient. The model matches empirical debt mix patterns better than fixed-issuance-cost models. Across systems, efficient bankruptcy should be associated with more bond issuance by high-risk borrowers. This effect is small or absent for safe firms. We find that both predictions hold both cross-country and using insolvency reforms as natural experiments. Our empirical estimates suggest that a one-standard-deviation increase in the efficiency of bankruptcy is associated with an increase in the stock of corporate bonds equal to 5% of firm assets. This is equivalent to two thirds of the difference between the US and other countries
How did increased competition affect credit ratings? by Bo Becker( Book )
9 editions published in 2010 in English and held by 9 libraries worldwide
The credit rating industry has historically been dominated by just two agencies, Moody's and S & P, leading to longstanding legislative and regulatory calls for increased competition. The material entry of a third rating agency (Fitch) to the competitive landscape offers a unique experiment to empirically examine how in fact increased competition affects the credit ratings market. Increased competition from Fitch coincides with lower quality ratings from the incumbents: rating levels went up, the correlation between ratings and market-implied yields fell, and the ability of ratings to predict default deteriorated. We offer several possible explanations for these findings that are linked to existing theories
Replacing ratings by Bo Becker( Book )
5 editions published in 2013 in English and held by 7 libraries worldwide
Since the financial crisis, replacing ratings has been a key item on the regulatory agenda. We examine a unique change in how capital requirements are assigned to insurance holdings of mortgage-backed securities. The change replaced credit ratings with regulator-paid risk assessments by Pimco and BlackRock. We find no evidence for exploitation of the new system for trading purposes by the providers of the credit risk measure. However, replacing ratings has led to significant reductions in aggregate capital requirements: By 2012, equity capital requirements for structured securities were at $3.73bn compared to of $19.36bn if the old system had been maintained. These savings reflect the new measures of risk, and new rules allowing companies to economize on capital charges if assets are held below par. These book-value adjustments dilute the predictive power of the underlying risk measures, Our results are consistent with a regulatory change being largely driven by industry interests rather than maintaining financial stability
The effect of financial development on the investment cash flow relationship cross-country evidence from Europe ( file )
1 edition published in 2006 in English and held by 3 libraries worldwide
We investigate financing constraints in a large cross-country data set covering most of the European economy. Firm level investment sensitivity to cash flow is used to identify financing constraints. We find that the sensitivities are significantly positive on average, controlling for country and industry fixed effects, as well as firm level controls. Most importantly, the cash flow sensitivity of investment is lower in countries with better-developed financial markets. This suggests that financial development may mitigate financial constraints. This effect is weaker in conglomerate subsidiaries, which are likely to have access to internal capital markets and depend less on the outside financial environment, and possibly for firms in industries with highly liquid assets as well. This result sheds light on the link between financial and economic development
Non-rating revenue and conflicts of interest by Ramin Baghai-Wadji( Book )
3 editions published in 2016 in English and held by 3 libraries worldwide
Rating agencies produce ratings used by investors, but obtain most of their revenue from issuers, leading to a conflict of interest. We employ a detailed panel data set on the use of non-rating services, and the associated payments, in India, to test to what extent this conflict affects credit ratings. Rating agencies rate issuers that hire them for non-rating services 0.3 notches higher (than agencies that are not hired for such services). Also, within rating categories, default rates are higher for firms that have paid for non-rating services. Both these effects are larger the larger the amount paid for non-rating services is. These results suggest that issuers which hire agencies for consulting services receive higher ratings despite not having lower credit risk
Geographical segmentation of US capital markets by Bo Becker( Archival Material )
2 editions published in 2005 in English and held by 2 libraries worldwide
Den Svenska skulden ( Book )
2 editions published in 2015 in Swedish and held by 2 libraries worldwide
Estimating the effects of large shareholders using a geographic instrument by Bo Becker( Computer File )
2 editions published between 2008 and 2009 in English and held by 2 libraries worldwide
Financial repression in the European sovereign debt crisis by Bo Becker( Book )
2 editions published in 2017 in English and held by 1 library worldwide
At the end of 2013, the share of government debt held by the domestic banking sectors of Eurozone countries was more than twice the amount held in 2007. We show that increased domestic government bond holdings generated a crowding out of corporate lending. We find that loan supply was depressed by these domestic sovereign bonds only during the crisis period (2010-11). The pattern also holds across firms with different relationship banks within a given countries. These findings suggest that sovereign bond holdings negatively impact private capital formation. We show that direct government ownership, as well as government influence through banks' boards of directors, are among the channels used to influence banks
Equity-Debtholder conflicts and capital structure by Bo Becker( Computer File )
1 edition published in 2010 in English and held by 1 library worldwide
Reputation and competition : evidence from the credit rating industry ( Computer File )
1 edition published in 2008 in English and held by 1 library worldwide
Frihandel i fara : debatten om Nafta by Bo Becker( Book )
1 edition published in 1993 in Swedish and held by 1 library worldwide
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Alternative Names
Bo Becker Swedish economist and business theorist
Bo Becker Zweeds econoom
بو بيكر
English (99)
Swedish (3)
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