Definitions of Corporate Finance and Stylized Types of Financing
In economics, companies can be analyzed in various ways. Among other approaches, researchers try to model the “value created” by a company. From the perspective of the value chain concept, value creation is thought of as a series of activities performed by the firm. In contrast for corporate finance, companies are modeled as a system of cash flows (Berk et al. 2020; Brealy, Myers and Allen 2013). These cash flows are related to the value chain activities of a company (measured in quantities) and exactly flow in the opposite direction. Inflows and outflows are increasing or decreasing the company’s inventory of cash. For the operational activities of running its business, a company must maintain its financial equilibrium and avoid financial distress. Consequently, corporate finance can be defined activity-based: Financing covers all direct activities in...
This is a preview of subscription content, log in via an institution to check access.
References
Agliardi, E., & Agliardi, R. (2021). Corporate green bonds: Understanding the Greenium in a two-factor structural model. Environmental and Resource Economics. https://doi.org/10.1007/s10640-021-00585-7.
Anson, M., Fabozzi, F., & Jones, F. (2011). The handbook of traditional and alternative investment vehicles. Hoboken: Wiley.
Awrey, D. (2011). Complexity, innovation, and the regulation of modern financial markets. Harvard Business Law Review, 2, 235–294.
Bagnoli, M., & Watts, S. (2020). On the corporate use of green bonds. Journal of Economics and Management Strategy, 29, 187–209.
Berk, J., Demarzo, P., & Harford, J. (2020). Fundamentals of corporate finance (5th ed.). Hoboken: Wiley.
Berman, A. (2008). Risks and realities of Mezzanine loans. New York Law School Legal Studies, Research paper series 07/08 #32.
Bernthal, J. (2018). The evolution of entrepreneurial finance: A new typology. Brigham Young University Law Review, 43, 773–858.
Brealy, R., Myers, S., & Allen, F. (2013). Principles of corporate finance (11th ed.). New York: McGraw-Hill.
Brigham, E. (1966). An analysis of convertible debentures: Theory and some empirical evidence. The Journal of Finance, 21, 35–54.
CBI (Ed.). (2020). Sustainable debt: Global state of the market 2020.
Constantinides, G., Harris, M., & Stulz, R. (Eds.). (2003). Handbook of the economics of finance. Amsterdam: Elsevier.
De Spiegeleer, J., et al. (2014). The handbook of hybrid securities: Convertible bonds, coco bonds, and bail-in. Hoboken: Wiley.
Demaria, C. (2020). Introduction to private equity, debt, and real assets: From venture capital to LBO senior to distressed debt, immaterial to fixed assets (3rd ed.). Hoboken: Wiley.
Dutordoira, M., et al. (2014). What we do and do not know about convertible bond financing. Journal of Corporate Finance, 24, 3–20.
Huerga, A., & Rodriguez-Monroy, C. (2019). Mandatory convertible bonds and the agency problem. Sustainability, 11, 1–21.
Juan, D., et al. (2019). Investment valuation model for sustainable infrastructure systems: Mezzanine debt for water projects. Engineering, Construction and Architectural Management. https://doi.org/10.1108/ECAM-03-2018-0095.
Liberadzki, M., & Liberadzki, K. (2019). Contingent convertible bonds, corporate hybrid securities and preferred shares. Cham: Springer.
Martin, M. (2015). Building impact businesses through hybrid financing. Entrepreneurship Research Journal, 5, 109–126.
Mishkin, F., & Eakins, S. T. (2018). Financial markets and institutions (9th ed.). London: Pearson.
Myers, S. T. (2003). Financing corporations. In G. Constantinides, M. Harris, & R. Stulz (Eds.), Handbook of the economics of finance (pp. 216–253). Amsterdam: Elsevier.
Nejad, M. (2016). Research on financial services innovations: A quantitative review and future research directions. International Journal of Bank Marketing, 34, 1042–1067.
Nejad, M. (2021). Research on financial innovations: An interdisciplinary review. https://ssrn.com/abstract=3895792.
Nijs, L. (2014). Mezzanine financing-tools, applications and total performance. Chichester: Wiley.
OECD (Ed.). (2015). New approaches to SME and entrepreneurship financing: Broadening the range of instruments. Paris: OECD Publishing.
OECD (Ed.). (2018). Alternative financing instruments for SMEs and entrepreneurs: The case of mezzanine finance. Paris: OECD Publishing.
Park, T. 2018. Investors as regulators: Green bonds and the governance challenges of the sustainable finance revolution. Stanford Journal of International Law, 54, 1–47.
Reynolds, P., & Hepinstall, P. (2017). Risk in capital markets. In G. Strumeyer & S. Swammy (Eds.), The capital markets – Evolution of the financial ecosystem (pp. 89–109). Hoboken: Wiley.
Schütze, F., & Stede, J. (2021). EU sustainable finance taxonomy – What is its role on the road towards climate neutrality? DIW Berlin discussion paper no. 1923.
Strumeyer, G., & Swammy, S. (Eds.). (2017). The capital markets – Evolution of the financial ecosystem. Hoboken: Wiley.
Tetrevova, L., & Svedik, J. (2018). Mezzanine financing instruments in comparison to the classic financing instruments. Business, Management and Education, 16, 133–146.
Tufano, P. (2003). Financial innovation. In G. Constantinides, M. Harris, & R. Stulz (Eds.), Handbook of the economics of finance (pp. 216–253). Amsterdam: Elsevier.
Zetzsche, D., & Anker-Sørensen, L. (2021). Regulating sustainable finance in the dark. University of Luxembourg Law working paper series 2021-007.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Section Editor information
Rights and permissions
Copyright information
© 2023 Springer Nature Switzerland AG
About this entry
Cite this entry
Merbecks, U. (2023). Mezzanine Finance. In: Idowu, S., Schmidpeter, R., Capaldi, N., Zu, L., Del Baldo, M., Abreu, R. (eds) Encyclopedia of Sustainable Management. Springer, Cham. https://doi.org/10.1007/978-3-030-02006-4_614-1
Download citation
DOI: https://doi.org/10.1007/978-3-030-02006-4_614-1
Received:
Accepted:
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-02006-4
Online ISBN: 978-3-030-02006-4
eBook Packages: Springer Reference Business and ManagementReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences