I exploit the variation in labor market programs in Spain to show that the use of more flexible (shorter and cheaper-to-fire) employment contracts increases a firm's debt capacity by reducing its operating leverage and probability of default. I use specific institutional features to separate...

The starting point for estimating firm-specific steady-state growth, which is a critical assumption in implementing fundamental valuation, is the expected long-term growth rate of the economy in which the company operates. This study provides evidence that supports using the risk-free long-term...

We investigate the relation between corporate performance and overall economic growth in the United States. In particular, we focus on the impact of the U.S. corporate tax regime on this relation. Exploiting time-series variation and a tax shock, we document that the relatively higher corporate...

In a sample of 110 countries over the period 1960-2009, we document a positive relation between the volatility and skewness of growth in the cross-section. This novel stylized fact is related to two distinct mechanisms: sudden growth spurts in emerging markets, and sharp financial crises-driven...