Falling rates and rising superstars
WebFalling Rates and Rising Superstars Thomas Kroen, Ernest Liu, Atif R. Mian, and Amir Sufi October 2024 JEL No. E0 ABSTRACT Do low interest rates contribute to the rise in … WebEmpirical evidence presented in this paper suggests that falling rates, especially as rates get close to zero, disproportionately bene˙t “superstar” ˙rms. The growth of …
Falling rates and rising superstars
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WebJan 1, 2024 · This study provides a new theoretical result that a decline in the long‐term interest rate can trigger a stronger investment response by market leaders relative to … WebFalling rates raise the valuation of industry leaders relative to industry followers and this effect snowballs as the interest rate approaches zero. There are multiple channels …
WebAll three of these effects also snowball as the interest rate approaches zero. The findings provide empirical support to the idea that extremely low interest rates and the rise of superstar firms are connected. Keywords: interest; rates (search for similar items in EconPapers) JEL-codes: E43 (search for similar items in EconPapers) Date: 2024-10 WebJan 28, 2024 · The model provides a unified explanation for why the fall in long-term interest rates has been associated with rising market concentration, reduced dynamism, a widening productivity-gap between industry leaders and followers, and slower productivity growth.
WebJan 1, 2024 · This study provides a new theoretical result that a decline in the long‐term interest rate can trigger a stronger investment response by market leaders relative to market followers, thereby... WebJan 4, 2024 · The study demonstrates that the valuations of superstar companies rose, relative to their competition, when interest rates fell. Those valuations were boosted by three key benefits of falling rates, whose …
WebFalling Rates and Rising Superstars. September 2024 - NBER Working Paper No. 29368. September 2024. Working Paper. Payout Restrictions and Bank Risk-Shifting. September 2024. September 2024. Working Paper. Payout Policy Reform and Investor Horizons. August 2024. August 2024. Working Paper. Work in Progress.
WebFalling Rates and Rising Superstars Downloads 205 (215,312) 2 2. Payout Policy Reform and Investor Horizons Number of pages: 48 Posted: 13 Apr 2024 Last Revised: 19 Apr 2024 Thomas Kroen Princeton University, Department of Economics Downloads 128 (317,796) View PDF Download 3. Payout Restrictions and Bank Risk-Shifting mighty express tv showmighty express videoWebThere are multiple channels through which falling rates disproportionately benefit industry leaders: (i) the cost of borrowing falls more for industry leaders, (ii) industry leaders are able to raise more debt, increase leverage, and buyback more shares, and (iii) capital investment and acquisitions increase more for industry leaders. mighty express toys fall 2021WebFalling Rates and Rising Superstars. Using high frequency interest rate shocks, we find that falling rates in a low interest rate environment favor industry leaders. A fall in interest rate near the zero lower bound leads to a stronger decline in the borrowing rate for industry … mighty express mechanic miloWebThere are multiple channels through which falling rates disproportionately benefit industry leaders: (i) the cost of borrowing falls more for industry leaders, (ii) industry leaders are … mighty express youtube deutschWebwww.nber.org new treetops 5WebIn U.S. firm-level data, large firms increase their spending on customer capital significantly more than small firms following an interest rate decline. We interpret this evidence in a model with product market frictions where heterogeneous firms strategically advertise to build a customer base. mighty express toys amazon