We examine firms' simultaneous choice of investment, debt financing and liquidity in a large sample of US corporates between 1980 and 2014. We partition the sample according to the firms' financial constraints and their needs to hedge against future shortfalls in operating income. In contrast to...

The effect of uncertainty on equilibrium wage rates causes uncertainty to have a negative impact on marginal q. In turn, uncertainty reduces corporate investment and employment. Using a novel firm-level measure of cash flow uncertainty, we find empirically that uncertainty has a strong negative...

We highlight the role of cash flow uncertainty on corporate employment and investment. We find that a 1% increase in cash flow uncertainty leads to a 0.62% decrease in tangible investment, a 1.39% decrease in intangible investment, and a 3.67% decrease in corporate employment. Our results are...

Globally, the unravelling of the corporate scandals leading to big multinational firms stumbling down to bankruptcy suits caused enormous loss of wealth to the investors. This study explores how the earnings management and capital structure can signal an early stage of the distressed financial...