The present study examines the impact of family involvement on the debt structure of family businesses. Family corporate involvement is considered in three related but distinct dimensions: capital ownership, firm’s management and corporate control. The marginal effect of each of these three dimensions is specified as a unique regression parameter in a conditional mean model for the proportion of medium- plus long-term debt to total debt. This general strategy calls for an appropriate modelling and estimation approach, taking due account of the response variable’s inherent fractional definition and consequential nonlinear functional form of its conditional expectation, given covariates. Such an approach, combining a probit model for the equation of interest with a control function estimation method, is applied to a panel data set on Portuguese family businesses. Estimation results confirm the uniqueness of the impact of each of the three considered dimensions of families’ corporate involvement on the debt structure of firms.

The present article studies the determinants of banking spreads, allowing for the possibility that the impact of some of these determinants on spreads may differ according to the particular loan type. This concern is fostered by both theoretical and empirical evidence supporting the general idea that the hetero-geneity of banks’ loan portfolios should be taken into account when studying the drivers of spread. This approach is distinct from previous work in the liter-ature, usually utilizing a single interest margin per bank, in order to measure the impact of its determinants. Using a dataset of observations on various per-sonal loan categories and the Difference GMM approach, the present study es-timates that marginal effects of, respectively, banks’ risk aversion, credit risk, and market share on spreads differ significantly according to whether the loan is a consumer loan, a paycheck-linked credit line or a revolving credit line for individuals. These findings suggest, accordingly, that central banks and regula-tory agencies should observe the composition of banks’ loans portfolios when writing their policies aiming at spread reduction.

This paper addresses measurement error (ME) of double bounded variables, of which fractional variables, defined on the interval [0,1], constitute a prominent example. The text discusses consequences of ME and suggests a specification test sensitive to ME of such variables. Given the latter’s bounded support, ME is not independent of the original error-free variate, a fact that invalidates classical ME assumptions as a framework for the test. This is circumvented with a score test of independence between the error-free variate and ME, under which the latter becomes degenerate at zero and their joint distribution, specified as a copula function, reduces to the original variable’s distribution. This procedure yields a specification test of the distribution of the error-free variable, valid under mild assumptions on the marginal distribution of ME and under departures from the specified copula. The test’s finite-sample behaviour is also evaluated through a set of simulation experiments.

The present text is focused on the evaluation of the influence that determinants of loan contracts’ design may have on loan renegotiation. This general purpose is faced with the possible simultaneity of determination of some such factors (namely the use of collaterals and loan interest rate) and the likelihood of contract renegotiation. Naturally, this simultaneity corresponds to an issue of endogeneity of these factors within econometric models of the conditional probability of renegotiation. If neglected, covariates’ endogeneity causes model misspecification, translating into unreliable empirical assessments of the marginal effects of all renegotiation determinants on the probability of loan redesign. Building on the theory of incomplete contracts, suggesting that the possibility of contract renegotiation is already anticipated at the contracting date, the empirical findings of the paper, based on a dataset provided by a Brazilian bank, provide strong indication that this can indeed be the case. Accordingly, the empirical assessment of the marginal contributions of important variables to the likelihood of renegotiation is revisited, thereby enabling a deeper understanding of renegotiation processes.

The present study investigates the effect of gender diversity on the impact of board members' political connections on banking performance. Using panel data on 83 banks supervised by the European Central Bank (ECB) for the period 2013-2017, our results suggest that when gender diversity is high, there is a U-shaped nonlinear relationship between political connections and banking performance. Empirical evidence also indicates that differentiating characteristics of women, such as greater ethical concern and risk aversion, help mitigate the negative effects of political connections on banking performance, safeguarding the institutions’ interests from the adverse effects of personal agendas. In addition, our results also suggest that a minimum of 14% gender diversity can actually contribute to a greater social justice and beneficial structural change. Overall, these general conclusions seem fairly robust, being drawn from several versions of the regression model adopted in the study, using different sets of control variates and different gender diversity measures.

This study investigates the effect of the political connections of members of banks' Boards of Directors on the remuneration of these boards, taking into account the gender diversity of their members. Using a panel of observations on 77 banks supervised by the ECB for the period 2013 to 2017, and the generalized method of moments (GMM), our results show that, when analyzing linear effects, political connections have a negative impact on the remuneration of the members of the banks' Boards of Directors, reducing them. However, when investigating the possible moderating effect, we found that when gender diversity is high, there is a non-linear, inverted U-shaped relationship between the political connections and the remuneration of members of the Boards of Directors of banks. Our results also show that the differentiating characteristics of the female gender, accentuate the negative effects of political connections on remuneration, making the institution's interests to be privileged at the expense of those of its personal agendas. Overall, these general results prove to be robust across different choices of the measures used for gender diversity.