We analyze public interventions to alleviate debt overhang among private rms when the government has limited information and limited resources. We compare the e¢ ciency of buying equity, purchasing existing assets, and providing debt guarantees. With sym- metric information, all the...

We estimate the elasticity of exports to credit using matched customs and rm-level bank credit data from Peru. To account for non-credit determinants of exports, we compare changes in exports of the same product and to the same destination by firms borrowing from banks differentially affected by...

We estimate the elasticity of exports to credit using matched customs and rm-level bank credit data from Peru. To account for non-credit determinants of exports, we compare changes in exports of the same product and to the same destination by firms borrowing from banks differentially affected by...

A firm's termination generates bankruptcy costs. This may create incentives for a firm's owner to bail out a firm in bankruptcy and to curb the firm's risk taking outside bankruptcy. We analyze the role of such implicit guarantees in the context of financial institutions that sponsor money...

We show that nancial sector bailouts and sovereign credit risk are intimately linked. A bailout benets the economy by ameliorating the under-investment problem of the nancial sector. However, increasing taxation of the non-nancial sector to fund the bailout may be inecient since it weakens its...

I provide empirical evidence that badly governed firms respond more to aggregate shocks than do well governed firms. I build a simple model where managers are prone to over invest and where shareholders are more willing to tolerate such a behavior in good times. The model successfully explains...

The US economy has become more stable. At the same time, US firms have become more volatile. I present the evidence and I propose a common explanation, based on the idea that goods markets have become more competitive. Competition between firms magnifies the effects of idiosyncratic productivity...

I provide empirical evidence that badly governed firms respond more to aggregate shocks than do well governed firms. I build a simple model where managers are prone to overinvest and where shareholders are more willing to tolerate such a behavior in goodtimes. The model successfully explains the...

We study the consequences of earnings management for the allocation of resourcesamong firms, and we argue that fraudulent accounting has important economic consequences.We first build a model where the costs of earnings management are endogenous,and we show that, in equilibrium, bad managers...

We study investment options in a dynamic agency model. Moral hazard creates anoption to wait and agency conflicts affect the timing of investment. The model shedslight, theoretically and quantitatively, on the evolution of firms dynamics, in particular the decline of the failure rate and the...