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We use a dynamic model of cash management in which firms face competitive pressure to show that competition increases … competition has first order effects on the cash holdings and financing decisions of constrained firms, in ways consistent with our … theory …
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We consider a dynamic model of investment in which a firm can hold inventory to mitigate the price risk of an input commodity. Our model predicts that inventory allows to hedge against net worth risk by smoothing investment in capital, irrespective of the level of current net worth. Savings...
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