DocumentCode
447270
Title
Liquidity risks and demands for earthquake insurances
Author
Onishi, Masamitsu ; Yokomatsu, Muneta ; Kobayashi, Kiyoshi
Author_Institution
Dept. of Urban Manage., Kyoto Univ., Japan
Volume
1
fYear
2005
fDate
10-12 Oct. 2005
Firstpage
221
Abstract
In this paper, a three-period model with debt overhang is proposed to analyze the mechanism that a risk-neutral firm calls for earthquake insurance. If the firm needs to make an additional investment to continue operation due to an earthquake, the firm must procure liquidity assets immediately. However, the firm may confront debt-overhang problem, which mean that the firm cannot procure for the additional investment. This paper shows earthquake insurance can alleviate such a debt-overhang problem.
Keywords
commerce; insurance; debt overhang; debt-overhang problem; earthquake insurance; earthquake insurances; liquidity assets; liquidity demands; liquidity risks; risk-neutral firm; three-period model; Earthquake engineering; Electric shock; Engineering management; Fluctuations; Insurance; Investments; Risk analysis; Risk management; Security; Systems engineering and theory; debt-overhang problem; earthquake insurance; liquidity risk; risk-neutral firm;
fLanguage
English
Publisher
ieee
Conference_Titel
Systems, Man and Cybernetics, 2005 IEEE International Conference on
Print_ISBN
0-7803-9298-1
Type
conf
DOI
10.1109/ICSMC.2005.1571149
Filename
1571149
Link To Document