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This article empirically analyzes the effect of foreign block acquisitions on U.S. target firms' credit risk as measured by their credit default swap (CDS) spreads. Foreign block purchases lead to a greater increase in the target firms' CDS premia post-acquisition compared to domestic block purchases. This effect is stronger when foreign owners are geographically and culturally more distant, and when they obtain majority control. The findings are consistent with an asymmetric information hypothesis, in which foreign owners are less effective monitors due to information barriers. [ABSTRACT FROM AUTHOR]

Two intermediary-based factors—a corporate bond dealer inventory measure and a broad intermediary distress measure—explain more than 40 |$\%$| of the puzzling common variation in credit spread changes beyond canonical structural factors. A simple intermediary-based model with partial market segmentation accounts for intermediary factors' explanatory power and delivers three further implications with empirical support. First, whereas bond sorts on risk-related variables produce monotonic loading patterns on intermediary factors, non-risk-related sorts produce no pattern. Second, dealer inventory comoves with corporate-credit assets only, whereas intermediary distress comoves with both corporate-credit and non-corporate-credit assets. Third, dealers' inventory responds to (instrumented) bond sales by institutional investors. [ABSTRACT FROM AUTHOR]

This article demonstrates that rating-based capital requirements, through their impact on insurers' investment demand, affect corporate bond prices. Consistent with insurers' low demand for investment-grade bonds with a rating close to noninvestment-grade, these bonds outperform. Consistent with insurers' high (low) demand for investment-grade bonds with high (low) systematic risk exposure, these bonds underperform (outperform). Insurer demand, measured by insurer holdings, explains most of these pricing effects. We identify rating-based capital requirements as the driver of insurer demand, and thus the pricing effects, by showing that the effects do not exist before these requirements' implementation in 1993. [ABSTRACT FROM AUTHOR]

The share of secured debt issued (as a fraction of total corporate debt) declined steadily in the United States over the twentieth century. This stems partly from financial development giving creditors greater confidence that high‐quality borrowers will respect their claims even if creditors do not obtain security upfront. Consequently, such borrowers prefer retaining financial flexibility by not giving security up front. Instead, security is given contingently—when a firm approaches distress. This also explains why, superimposed on the secular decline, the share of secured debt issued is countercyclical. [ABSTRACT FROM AUTHOR]

This paper analyzes the time‐varying causality between government bond and oil returns of the United States over the monthly period of 1859:10 to 2019:03, that is, the longest possible span of historical data, starting from the beginning of the modern era of the petroleum industry. While the standard constant parameter causality test fails to pick up any evidence of causality, the time‐varying framework shows evidence of bi‐directional spillovers over the entire sample period. The results are robust to the inclusion of stock returns as a control variable in the model. We also detect evidence of time‐varying causality‐in‐volatility between sovereign bond and oil markets, as well as spillovers in returns and volatility from the oil market to corporate bonds. [ABSTRACT FROM AUTHOR]

Fluctuations in the risk of a large increase in unemployment are examined. The analysis compares medium‐term risks—that is, risks at a 3‐year horizon—to those over a 1‐year horizon. The primary approach involves quantile regressions. Robustness exercises examine risks using a logistic regression to model the probability of a large increase in the unemployment rate. U.S. experience reveals an elevated risk of large increases in unemployment over the medium term when credit growth is high and when the unemployment rate is low. Near‐term risks to unemployment are closely tied to changes in corporate bond spreads or the slope of the yield curve, consistent with research on recession prediction, but these factors do not play a sizable role in medium‐term risks. These results highlight the value of considering different near‐ and medium‐term risk factors. [ABSTRACT FROM AUTHOR]

In this study, we empirically examine the relationship between U.S. immigrants' intentions to emigrate from the U.S. and their financial market participation. Researchers have explored several determinants of immigrants' financial market participation, namely the characteristics of the immigrants and their country of origin. However, one determinant that has not been explored, due to lack of data, is immigrants' intentions to emigrate from the host country. Using data from the New Immigrant Survey, we find that immigrants with intentions to emigrate from the U.S. are more likely to participate in the financial markets relative to their counterparts with no such intentions. The results also indicate that married immigrants with intentions to emigrate from the U.S. are less likely to own a checking or savings account than immigrants who are not married. In addition, immigrants with the intent to emigrate from the U.S. are more likely to purchase stocks, corporate bonds, or both as they get older. [ABSTRACT FROM AUTHOR]

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We examine the short‐term stock reactions to yield curve inversions. Our country‐level analysis reveals that including the United States, only 13 out of 41 countries exhibit significantly negative stock returns when yield curves invert. Hence, while inverted yield curves act as a negative signal in some countries, it is not a ubiquitous rule internationally. Our firm‐level analysis is the first of its kind. We find that company stocks exhibit strong responses with 3‐day cumulative abnormal returns averaging −1.22% globally and − 2.83% for US firms. The results suggest that corporate bond yield curves contain valuable information of firms' future performance. [ABSTRACT FROM AUTHOR]

The transportation and mobility landscape has changed at exponential rates in recent years. This is particularly evident in the spread and use of micromobility, primarily via e-scooters, in the United States. It is widely agreed that municipalities need to regulate the deployment of this new form of mobility to capture some of the benefits that these devices provide but also mitigate the impact and risks associated with their use. This paper evaluates commercial scooter deployment within municipalities in the United States, and seeks to identify policy trends for regulating e-scooters. As many communities do not have policies in place, the study seeks to benchmark and develop a policy dialogue addressing e-scooter use and deployment. The study focuses on three specific policy strategies cities are implementing: the use of pilot programs; vendor limits or caps; and the inclusion of equity policy. The study finds that tension between these policies has the potential to constrain or accelerate the market adoption of scooters and that very few communities are designing and adopting environment strategies to regulate scooter use. These policy dialogues are worth exploration as cities accelerate trends toward micromobility. [ABSTRACT FROM AUTHOR]