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Whereas Poterba and Summers (1995) find that firms use hurdle rates that are unrelated to their CAPM betas, Graham and Harvey (2001) find that 74% of their survey firms use the CAPM for capital budgeting. We provide an explanation for these two apparently contradictory conclusions. We find that...
Persistent link: https://www.econbiz.de/10013130550
This paper examines argues that while two distinct perspectives characterize the foundations of the public funding of research - filling a selection gap and solving a disclosure problem - in fact both the selection choices of public funders and their criteria for disclosure and commercialization...
Persistent link: https://www.econbiz.de/10013068134
The human capital construct is deep in the bones of economics and finds reference by many classical economists, even if … they did not use the phrase. The term “human capital,” seldom mentioned in economics before the 1950s, increased starting … to 2019, the use of human capital among NBER books increased from 5% to 25%, whereas all economics books changed from 3 …
Persistent link: https://www.econbiz.de/10014100574
Prior work has established that the financing environment can impact firm strategy. We argue that this influence can … model that the availability of/dependence on external financing can explain why high-growth firms are rarely eponymous. We … considerably more slowly than similarly profitable firms. Moreover, eponymy varies in accordance with the firm's financing …
Persistent link: https://www.econbiz.de/10012912538
secure persistently superior performance via investments in better management and organization. We empirically analyze the … management is driven by two key organizational trade-offs: employee initiative vs. coordination as well as exploration of novel …
Persistent link: https://www.econbiz.de/10013030140
When external capital markets are stressed they may not reallocate resources between firms. We show that resource allocation within firms' internal capital markets provides an important force countervailing financial market dislocation. Using data on US conglomerates we empirically verify that...
Persistent link: https://www.econbiz.de/10013117120
This paper studies the role of credit in the business cycle, with a focus on private credit overhang. Based on a study of the universe of over 200 recession episodes in 14 advanced countries between 1870 and 2008, we document two key facts of the modern business cycle: financial-crisis...
Persistent link: https://www.econbiz.de/10013118125
We evaluate and partially challenge the ‘household leverage' view of the Great Recession. In the data, employment and consumption declined more in states where household debt declined more. We study a model where liquidity constraints amplify the response of consumption and employment to...
Persistent link: https://www.econbiz.de/10013126217
suggests that although bank lending to firms declines during the crisis, bond financing actually increases to make up much of …
Persistent link: https://www.econbiz.de/10013101282
This paper analyzes the extent to which firms use trade credit to reallocate capital in response to tax incentives. Tax-induced differences in pretax returns encourage the use of trade credit to reallocate capital from firms facing low tax rates to those facing high tax rates. Evidence from the...
Persistent link: https://www.econbiz.de/10013106075