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Financing Durable Assets
Rampini, Adriano A. - 2016
This paper studies the effect of durability on the financing of durable assets. We show that more durable assets … the price of an asset and hence the overall financing need more than its collateral value. This insight has implications … dominated technologies. More durable assets are more likely to be rented given their larger financing need. Legal enforcement …
Persistent link: https://www.econbiz.de/10012271598
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Decoupling and Recoupling
Korinek, Anton - 2010
We develop a stylized model that captures the phenomena of decoupling and recoupling in an environment where heterogeneous entrepreneurial sectors face financial constraints in their relationship with a common set of lenders. In response to adverse shocks, a financially constrained sector must...
Persistent link: https://www.econbiz.de/10012462744
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The Real Effects of Financial Constraints : Evidence from a Financial Crisis
Campello, Murillo - 2009
We survey 1,050 CFOs in the U.S., Europe, and Asia to assess whether their firms are credit constrained during the global credit crisis of 2008. We study whether corporate spending plans differ conditional on this measure of financial constraint. Our evidence indicates that constrained firms...
Persistent link: https://www.econbiz.de/10012463097
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A Theory of Firm Scope
Hart, Oliver - 2008
The existing literature on firms, based on incomplete contracts and property rights, emphasizes that the ownership of assets - and thereby firm boundaries - is determined in such a way as to encourage relationship-specific investments by the appropriate parties. It is generally accepted that...
Persistent link: https://www.econbiz.de/10012464034
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Outsourcing when Investments are Specific and Complementary
Lileeva, Alla - 2008
Using the universe of large Canadian manufacturing firms in 1988 and 1996, we investigate to what extent outsourcing decision can be explained by a simple property rights model. The unique availability of disaggregate information on outputs as well as inputs permits the construction of a very...
Persistent link: https://www.econbiz.de/10012464170
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Internal Finance and Firm Investment
Hubbard, R. Glenn - 1993
financing constraints cannot be rejected for firms with high (pre-sample) dividend payouts. However, it is decisively rejected … for firms with low (pre-sample) payouts (firms we expect to face financing constraints). Hem, investment is sensitive to …
Persistent link: https://www.econbiz.de/10012474561
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Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have
Myers, Stewart C. - 1984
several aspects of corporate financing behavior, including the tendency to rely on internal sources of funds, and to prefer … debt to equity if external financing is required. Extensions and applications of the model are discussed …
Persistent link: https://www.econbiz.de/10012477693
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Doubling Down on Debt : Limited Liability as a Financial Friction
Perla, Jesse - 2020
We investigate how a combination of limited liability and preexisting debt distort firms' investment and equity payout decisions. We show that equity holders have incentives to "double-sell" cash flows in default, leading to overinvestment, provided that the firm has preexisting debt and the...
Persistent link: https://www.econbiz.de/10012481295
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Financial Policies and the Financial Crisis : How Important Was the Systemic Credit Contraction for Industrial Corporations?
Kahle, Kathleen M. - 2010
average, the cumulative financing impact of the decrease in net equity issuance from the start to the peak of the crisis is …
Persistent link: https://www.econbiz.de/10012462347
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Liquidity Management and Corporate Investment During a Financial Crisis
Campello, Murillo - 2010
This paper uses a unique dataset to study how firms managed liquidity during the financial crisis. Our analysis provides new insights on the interactions between internal liquidity, external funds, and real corporate decisions, such as investment and employment. We first describe how companies...
Persistent link: https://www.econbiz.de/10012462348