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Financial Dependence and Innovation : The Case of Public versus Private Firms

Acharya, Viral V. - 2013

This paper examines the relationship between innovation and firms' dependence on external capital by analyzing the … innovation activities of privately-held and publicly-traded firms. We find that public firms in external finance dependent … in internal finance dependent industries do not have a significantly better innovation profile than matched private firms …

Persistent link: https://www.econbiz.de/10012458954

Financing Infrastructure in the Shadow of Expropriation

Acharya, Viral V.; Parlatore, Cecilia; Sundaresan, Suresh M. - National Bureau of Economic Research - 2022

We examine the optimal financing of infrastructure when governments have limited financial commitment and can expropriate rents from private sector firms that manage infrastructure. While private firms need incentives to implement projects well, governments need incentives to limit...

Persistent link: https://www.econbiz.de/10013334350

The Risk of Being a Fallen Angel and the Corporate Dash for Cash in the Midst of COVID

Acharya, Viral V. - 2020

Data on firm-loan-level daily credit line drawdowns in the United States expose a corporate "dash for cash" induced by the COVID-19 pandemic. In the first phase of the crisis, which was characterized by extreme precaution and heightened aggregate risk, all firms drew down bank credit lines and...

Persistent link: https://www.econbiz.de/10012481454

Aggregate Risk and the Choice between Cash and Lines of Credit

Acharya, Viral V. - 2010

We argue that a firm's aggregate risk is a key determinant of whether it manages its future liquidity needs through cash reserves or bank lines of credit. Banks create liquidity for firms by pooling their idiosyncratic risks. As a result, firms with high aggregate risk find it costly to get...

Persistent link: https://www.econbiz.de/10012462534

Cash Holdings and Credit Risk

Acharya, Viral V. - 2011

Intuition suggests that firms with higher cash holdings are safer and should have lower credit spreads. Yet empirically, the correlation between cash and spreads is robustly positive and higher for lower credit ratings. This puzzling finding can be explained by the precautionary motive for...

Persistent link: https://www.econbiz.de/10012461663

The Impact of the Dodd-Frank Act on Small Business

Bordo, Michael D. - 2018

There are concerns that the Dodd-Frank Act (DFA) has impeded small business lending. By increasing the fixed regulatory compliance requirements needed to make business loans and operate a bank, the DFA disproportionately reduced the incentives for all banks to make very modest loans and reduced...

Persistent link: https://www.econbiz.de/10012453215

The Future of EMU : What Does the History of Monetary Unions Tell Us?

Bordo, Michael D. - 1999

The creation of EMU and the ECB has triggered a discussion of the future of EMU. Independent observers have pointed to a number of shortcomings or hazard areas' in the construction of EMU, such as the absence of a central lender of last resort function for EMU, the lack of a central authority...

Persistent link: https://www.econbiz.de/10012471419

Kicking the Can Down the Road : Government Interventions in the European Banking Sector

Acharya, Viral V. - 2020

We analyze the determinants and the long-run consequences of government interventions in the eurozone banking sector during the 2008/09 financial crisis. Using a novel and comprehensive dataset, we document that fiscally constrained governments "kicked the can down the road" by providing banks...

Persistent link: https://www.econbiz.de/10012481392

Zombie Credit and (Dis-)Inflation : Evidence from Europe

Acharya, Viral V. - 2020

We show that cheap credit to impaired firms has a disinflationary effect. By helping distressed firms to stay afloat, "zombie credit" can create excess production capacity, and in turn, put downward pressure on markups and prices. We test this mechanism exploiting granular inflation and...

Persistent link: https://www.econbiz.de/10012481741

Do Enlarged Fiscal Deficits Cause Inflation : The Historical Record

Bordo, Michael D. - 2020

In this paper we survey the historical record for over two centuries on the connection between expansionary fiscal policy and inflation. As a backdrop, we briefly lay out several theoretical approaches to the effects of fiscal deficits on inflation: the earlier Keynesian and monetarist...

Persistent link: https://www.econbiz.de/10012482414