We examine leverage decisions in the context of national culture over the 1996–2010 period. Cultural characteristics … with high Individualism and Indulgence employ more debt. Firms located in countries with high Power Distance, Masculinity … less debt relative to non-capital-raising ADRs, and notably, in the post-cross-listing period. Interestingly, the home …

We observe a persistent increase in the percentage of firms with little or no debt in their capital structure over the … last three decades. The fraction of firms with less than five percent debt in their capital structure increases from 14 … methodologies, specifications, and time periods. Overall, these results suggest that the well-documented benefits of leverage are …

investments (financing asset sales) across the business cycle. Equity financed investment transfers wealth from equity to debt …, hence, transfer wealth back from debt to equity. Exploring the dynamics of the heretofore overlooked “asset sale versus …

establishment-level data, we show that firms that tightened their debt capacity in the run-up (“high-leverage firms”) exhibit a … significantly larger decline in employment in response to household demand shocks than firms that freed up debt capacity (“low-leverage … among establishments of high-leverage firms. At the county level, we find that counties with a larger fraction of …

An iconic model with high leverage and overvalued collateral assets is used to illustrate the amplification mechanism …

equity and debt in funding such assets. In contrast, the balance sheet management of financial intermediaries reveals that it … determined by the degree of leverage that is permitted by market conditions. The relative stickiness of equity reveals possible …

We provide a tradeoff model of the capital structure that allows leverage to be a function of a firm’s choice of tax … aggressiveness. The model’s testable implications are supported empirically. Debt use is inversely related to corporate tax … credit crisis period. For the most profitable firms, debt and tax aggression are complements. Our results extend the …

of a diffusion regime. The switching costs and the cash flow generated from the firm depend on a business cycle …