equilibrium model wherein firms face persistent shocks to aggregate and individual productivity. In our model economy, optimal …,s) firm-level investment policies.In the presence of persistent heterogeneity in capital, debt and total factor productivity … of capital that, in turn, imply large and persistent reductions in aggregate total factor productivity. We find that an …

equilibrium model in which there is a continuum of firms subject to idiosyncratic productivity shocks. We find that a dividend tax … cut raises aggregate productivity by reducing the frictions in the reallocation of capital across firms. Our baseline …

We analyze how increased access to financing affects firm total factor productivity (TFP) by exploiting a natural …

of financial distress. In theory, this should ease a firm's access to credit. Using a tax-based instrumental variable …

We survey the theory and evidence of behavioral corporate finance, which generally takes one of two approaches. The … on their decisions. We review relevant psychology, economic theory and predictions, empirical challenges, empirical …

Default probability plays a central role in the static tradeoff theory of capital structure. We directly test this … theory by regressing the probability of default on proxies for costs and benefits of debt. Contrary to predictions of the … theory, firms with higher bankruptcy costs, i.e., smaller firms and firms with lower asset tangibility, choose capital …