This article presents one of the most comprehensive studies to date to employ filtering techniques to distinguish between routine and "investment spike" financing. This study documents significant heterogeneity in investment spike financing, particularly by firm size. Further, when spike size or...

We examine the effect of stock liquidity on the choice between debt and equity financing. Using three quasi-natural experiments, we show that increased stock liquidity increases firms' propensity to finance using debt. In addition, we document that liquidity reduces the cost of debt finance....