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Michelacci, Claudio; Quadrini, Vincenzo - Society for Economic Dynamics - SED - 2004

relation between the size of the firm and the average wages paid to workers (wage-firm size relation). The model also captures …

Persistent link: https://www.econbiz.de/10005085480

Leasing, Ability to Repossess, and Debt Capacity

Eisfeldt, Andrea; Rampini, Adriano - Society for Economic Dynamics - SED - 2006

This paper studies the role of leasing of productive assets. When capital is leased (or rented), it is more easily repossessed and hence leasing has higher debt capacity and relaxes financing constraints. However, leasing gives rise to an agency problem with regard to the care with which the...

Persistent link: https://www.econbiz.de/10005069226

Testing the q-Theory of Anomalies

Whited, Toni M.; Zhang, Lu - Society for Economic Dynamics - SED - 2006

by using GMM to minimize the difference between average stock returns in the data and average investment returns … constructed from observable firm characteristics. Under various specifications, the model-implied average returns display similar … dispersions in average returns among portfolios sorted on earnings surprises are somewhat smaller in magnitude than those observed …

Persistent link: https://www.econbiz.de/10005069243

Paying to Make a Difference: Executive Compensation and Product Dynamics

Falato, Antonio - Society for Economic Dynamics - SED - 2006

This paper develops an agency model of executive compensation in dynamic industry equilibrium. Firms differ in the quality of their products, and managers can make a difference as higher effort brings about product improvement. I show that there is an inverse relationship between the magnitude...

Persistent link: https://www.econbiz.de/10005069269

General option exercise rules, with applications to embedded options and monopolistic expansion

Boyarchenko, Svetlana; Levendorskii, Sergei - Society for Economic Dynamics - SED - 2006

This paper provides a general framework for pricing of real options in continuous time for wide classes of payoff streams that are functions of Levy processes. As applications, we calculate the option values of multi-stage investment/disinvestment problems (sequences of embedded options, which...

Persistent link: https://www.econbiz.de/10005069272

Comparing Financial Systems: A structural Analysis

Champonnois, Sylvain - Society for Economic Dynamics - SED - 2006

This paper investigates whether the financial markets are relatively more efficient than banks in the UK than in continental Europe. The UK channels a larger fraction of the financial flow to the firms through financial markets than continental Europe but this is explained by larger firms in the...

Persistent link: https://www.econbiz.de/10005069337

Corporate Governance Institutions, Investment, and the Macroeconomy

Falato, Antonio - Society for Economic Dynamics - SED - 2004

This paper evaluates quantitatively the macroeconomic implications of corporate governance institutions within a model where the size and distribution of firms and the structure of financial markets are jointly determined. If firms adapt their financing modes to economic conditions, aggregate...

Persistent link: https://www.econbiz.de/10005069570

Technology adoption under uncertainty in general equilibrium

Hugonnier, Julien; Morellec, Erwan; Pommeret, Aude - Society for Economic Dynamics - SED - 2006

Investment is often irreversible, especially at the aggregate level. This paper proposes and solves a general equilibrium model of technology adotpion when investment in the new technlogy is irreversible. In contrast to prior research, we consider a setup where the returns on technology adoption...

Persistent link: https://www.econbiz.de/10005051255

Enforcement and Firm Finance

Villamil, Anne; Krasa, Stefan; Sharma, Tridib - Society for Economic Dynamics - SED - 2004

The power to enforce rights and obligations in a society is essential. For simplicity, economists have focused on two extreme forms of enforcement: perfect ex-post enforcement of contracts by an exogenous un-modeled authority (a ``court'') or contracts that are ``self-enforcing.'' Models that...

Persistent link: https://www.econbiz.de/10005051417