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Information Aggregation, Security Design, and Currency Swaps

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  • Mark Grinblatt
  • Bhagwan Chowdhry
  • David Levine

Abstract

A security design model shows that multinational firms needing to finance their operations should issue different securities to investors in different countries in order to aggregate their disparate information about domestic and foreign cash flows. However, if the firm becomes bankrupt, investors may face uncertain costs of reorganizing assets in a foreign country and thus ma

Suggested Citation

  • Mark Grinblatt & Bhagwan Chowdhry & David Levine, 2002. "Information Aggregation, Security Design, and Currency Swaps," Yale School of Management Working Papers ysm38, Yale School of Management.
    • Handle: RePEc:ysm:somwrk:ysm38
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    File URL: http://icfpub.som.yale.edu/publications/2617
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    References listed on IDEAS

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    Cited by:

    1. Salvatore Cantale & Dmitry Lukin, 2012. "Multiple-Project Financing with Informed Trading," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 16(1), pages 1-28, Spring.
    2. Goswami, Gautam & Nam, Jouahn & Shrikhande, Milind M., 2004. "Why do global firms use currency swaps?: Theory and evidence," Journal of Multinational Financial Management, Elsevier, vol. 14(4-5), pages 315-334.
    3. Gersbach, Hans & Uhlig, Harald, 2006. "Debt contracts and collapse as competition phenomena," Journal of Financial Intermediation, Elsevier, vol. 15(4), pages 556-574, October.

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    JEL classification:

    • G0 - Financial Economics - - General
    • G1 - Financial Economics - - General Financial Markets

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