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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

The Sensitivity of Cash Savings to the Cost of Capital

Acharya, Viral V. - 2020

We show theoretically and empirically that in the presence of a time-varying cost of capital (COC), firms have a hedging motive to reduce the overall COC over time by saving cash when COC is relatively low. The sensitivity of cash savings to COC is especially pronounced with respect to the cost...

Persistent link: https://www.econbiz.de/10012481372

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

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

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

Foreign Currency Borrowing of Corporations as Carry Trades : Evidence from India

Acharya, Viral V. - 2020

We establish that macroprudential policies limiting capital flows can curb risks arising from corporate foreign currency borrowing in emerging markets. Using detailed firm-level data from India, we show that propensity to issue foreign currency debt for the same firm is higher when the...

Persistent link: https://www.econbiz.de/10012482315

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

Labor Laws and Innovation

Acharya, Viral V. - 2010

employees to pursue value-enhancing innovative activities. Using patents and citations as proxies for innovation, we identify … that within a country, innovation and economic growth are fostered by stringent laws governing dismissal of employees …, especially in the more innovation-intensive sectors. Firm-level tests within the United States that exploit a discontinuity …

Persistent link: https://www.econbiz.de/10012462173

Wrongful Discharge Laws and Innovation

Acharya, Viral V. - 2012

We show that wrongful discharge laws - laws that protect employees against unjust dismissal - spur innovation and new … employers' ability to hold up innovating employees after the innovation is successful. By reducing the possibility of hold …

Persistent link: https://www.econbiz.de/10012460145